ALJDEC - Licensing

2024A-11177-NPC-ROC · Registrar of Contractors · 2025-05-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Trafficade Service, LLC,

COMPLAINANT,

Lejas Corporation

License No. ROC 192323,

RESPONDENT.

No. 2024A-11177-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 30, 2025 at 3:00pm and May 6, 2025 at 2:00pm

APPEARANCES: Attorney Megan Schandle representing Complainant Trafficade Service LLC with witness Nino Zepeda; Attorney Evan Tompkins representing Respondent Lejas Corporation with witness Randy Ringleb

ADMINISTRATIVE LAW JUDGE: Nicole Robinson

EXHIBITS ADMITTED INTO EVIDENCE: Arizona Registrar of Contractors Notice of Hearing Packet (“Packet”); Complainant Exhibits 1 through 9; Respondent Exhibits 1 through 2.

_____________________________________________________________________

FINDINGS OF FACT

Lejas Corporation (“Respondent”) is the holder of License No. ROC 192323 issued by the Registrar of Contractors (“Registrar”).

Respondent contracted with the United States Department of Park Services around October 2023 to install a new guard rail in Chinle, Arizona, along the highway. To install a guard rail, Respondent needed a barricade shoulder set up on the highway to protect workers who would perform the guard rail installation off the highway shoulder.

Respondent called a few companies, but ultimately decided to hire Trafficade Service LLC (“Complainant”). Randy Ringleb, Respondent’s President, spoke with Nino Zepeda, Complainant’s Account Manager, about the project.

On October 16, 2023, Mr. Ringleb electronically signed a credit application, which was a part of Complainant’s process to check credit history, provide a line of credit to Respondent, and invoice. The credit application included the following term and condition:

Our terms are net 30 days regardless of your company policy or receipt of your payment on the job. The undersigned will pay all collection costs, including attorney’s fees incurred by our company in respect to the undersigned’s account. Accounts 60 days and older are subject to service charges of 1.5% per month (18% per annum).

Under the Continuing Personal Guarantee section of the application, it stated in part, the following:

In consideration of the extension of credit to Customer by [Complainant], and as an inducement to [Complainant] to continue to extend credit to said Customer, the undersigned (hereinafter “Guarantors”) jointly and severally, unconditionally guaranty the payment of any and all sums of money as are now, or at any time hereafter may be owing to [Complainant] by said Customer, as a result of [Complainant’s] extension of credit, including attorneys’ fees and costs which may be incurred by [Complainant] to enforce this Guaranty and/or to enforce its claims against Customer.

On October 17, 2023, Complainant sent a crew to Chinle, Arizona to set up the barricades. Complainant’s crew discovered that the guard rail on the highway barricades could not be set up because the road was only two lanes in that area. Respondent would need a flagger set up instead of a barricade set up. A barricade shoulder set up would consist of setting up the barricades and leaving them for the duration of the project. A flagger set up would consist of at least two flagger laborers directing traffic for the duration of the project.

An agreement was made between Mr. Ringleb and Mr. Munoz to hire the flagger set up. No estimate, costs, or amounts were provided to Respondent. Complainant’s crew was stationed at the Holbrook, Arizona location and they worked the project for approximately three weeks which consisted of 13 work days. Complainant’s crew provided tickets on a daily basis for timekeeping purposes which included travel time and actual work time.

Complainant provided three invoices to Respondent. The invoices included were: Invoice #1 dated October 22, 2023 which covered the period from October 17, 2023 through October 22, 2023, in the amount of $4,375.56; Invoice #2 dated October 31, 2023 which covered the period from October 23, 2023 through October 31, 2023, in the amount of $18,771.08; and Invoice #3 dated November 15, 2023 which covered the period from November 1, 2023 through November 9, 2023, in the amount of $24,663.66.

On September 5, 2024, Complainant’s attorney sent a Demand Letter to Respondent in the amount of $47,810.30.

On or about October 1, 2024, Complainant filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $47,810.30 for flagger crew set up on the Chinle, Arizona project.

The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a Citation alleging a possible violation of Ariz. Rev. Stat. § 32-1154(A)(10).

Hearing Evidence

Mr. Zepeda testified that once he realized a flagger set up was needed, he spoke with Mr. Ringleb, advised him of the situation, and told him that he could get a quote. Mr. Zepeda testified that Mr. Ringleb told him that he did not need a quote and needed the flagger set up right away. Mr. Zepeda testified that he did not provide Mr. Ringleb with any estimate for services.

On the credit application in the Company Use Only portion, Mr. Zepeda testified that this portion was not filled out by Complainant’s credit department and this section would have included whether Respondent’s application was approved and what the credit limit would have been.

Mr. Ringleb testified that he received an estimate from a subcontractor named “Brown & White,” and they quoted the job at $23,000.00. Mr. Ringleb testified that he spoke with someone from Trafficade at the office located in Holbrook, Arizona, prior to his conversation with Mr. Zepeda, and he told Mr. Ringleb that Trafficade “[w]ould not have any problem doing it for less money than that.” Mr. Ringleb’s understanding was that if the project went 21 days, then the job would cost less than $23,000.00. Complainant worked on the project for 13 days.

Mr. Zepeda further testified that he did not “remember” how the invoices were sent to Respondent, but typically they would be sent via postal mail or email but Complainant billing would have handled that task. Mr. Ringleb testified that he had no idea what he was being charged for the work. Mr. Ringleb argued that he received an email from Complainant about the outstanding invoices in late February 2024. Shortly thereafter, Mr. Ringleb called Complainant’s office in Tucson, Arizona, and informed them that the invoices were too high and that was not the agreed upon amount. Mr. Ringleb testified that if he knew that Complainant was going to charge him $47,000.00, he would not have hired them. Mr. Ringleb received advice that if there was no contract then Respondent should be charged market price. Mr. Ringleb received two estimates for a two person flagger job, the quotes provided as follows:

Estimate #1 – AWP Safety, a division of Trafficade Service LLC’s Flagstaff, Arizona location. The quote totaled $5,210.40 for five days of service, plus travel/per diem for two employees over five days equated to $1,450.00.

Estimate #2 – Southwest Safety, provided a quote that totaled $1,008.12 for one day of service.

Mr. Zepeda testified that Respondent was charged by way of the “New Account Price Code,” but Respondent was never provided with these amounts beforehand.

Finally, Mr. Ringleb did not assert that Respondent lacked the capacity to pay the amount nor did it refuse to pay but was always willing to pay a reasonable amount for the work performed.

CONCLUSIONS OF LAW

The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence.

A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.”

Ariz. Rev. Stat. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license,

[f]ailure by a licensee or agent or official of a licensee to pay monies in excess of $750 when due for materials or services rendered in connection with the licensee's operations as a contractor unless the licensee proves that the licensee lacks the capacity to pay and has not received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

The preponderance of the evidence shows that Respondent owed Complainant more than $750.00 for materials/services provided in connection with Respondent’s operations as a contractor. Complainant argued that Respondent owed a total of $47,810.30. However, in this case, there was no contract between the parties which designated how much Respondent would pay for the work. In fact, Respondent received two other quotes which gave the Tribunal some grasp on what would be a reasonable amount for this type of project and $47,810.30 is unreasonable.

It was clear from the evidence and testimony provided that Mr. Ringleb was willing to pay at least $23,000.00 for the equipment and services provided from Complainant. Although the two quotes provided by Mr. Ringleb fell slightly under the $23,000.00 amount, Respondent has paid nothing to date, which was certainly not what the statute intended.

Therefore, Complainant established that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10) by failing to pay Complainant, however, $47,810.30 was not a contracted amount and unreasonable having compared the same work with the two quotes that Respondent received. As such, Respondent is liable to pay Complainant $23,000.00, for services or materials rendered in connection with this project.

Hence, Respondent’s license should be suspended until it pays to Complainant $23,000.00.

RECOMMENDed order

Based on the foregoing,

It is recommended that the Registrar suspend Respondent’s License No. ROC 192323 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $23,000.00 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $23,000.00 in certified funds, the Registrar may close the Complaint in Case No. 2024A-11177.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of that certification.

Done this day, May 27, 2025.

/s/ Nicole Robinson

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

Registrar of Contractors

Richard C. Gramlich, Esq.

TIFFANY & BOSCO, P.A.

[email redacted]

Megan N. Schandle

Lang Thal King & Hanson PC

[email redacted]

By: OAH Staff