ALJDEC - Licensing

2024A-12561-NPC-ROC · Registrar of Contractors · 2025-05-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Nikola Roofing LLC,

COMPLAINANT,

v.

Gurr Brothers Construction LLC

License No. ROC 322089,

RESPONDENT.

No. 2024A-12561-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 4, 2025 at 3:00pm and April 14, 2025 at 1:00pm

APPEARANCES: Nathan Finch, Esq. appeared on behalf of Complainant Nikola Roofing LLC with Bridgette Nieves and Darcy Myers as witnesses. Samuel Wang, Esq. appeared on behalf of Respondent Gurr Brothers Construction LLC with Tyson Lewis and Rylan Stewart as witnesses.

ADMINISTRATIVE LAW JUDGE: Nicole Robinson

EXHIBITS ADMITTED INTO EVIDENCE: Registrar of Contractors Notice of Hearing Packet (“Packet”), Complainant Exhibits 1, 5 through 7. Respondent Exhibits A, E, F, L and I.

_____________________________________________________________________

FINDINGS OF FACT

Gurr Brothers Construction LLC (“Respondent”) is the holder of License No. ROC 322089 issued by the Registrar of Contractors (“Registrar”).

On or about November 12, 2024, Nikola Roofing LLC (“Complainant”) filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $15,319.50 for a new foam roof replacement.

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

On July 9, 2024, Complainant provided a quote to Respondent for a new foam roof installation in the amount of $10,500.00 at a residential address located in Tucson, Arizona. The contract contained the following language in pertinent part, “[T]his quote is for 1 layer of roof membrane. Any additional layers found on the roof upon removal, will be billed extra based on square footage of the project. . . . This proposal includes (2) sheets of plywood. Any additional sheets will be additional $120/sheet . . . [u]ntil payment is made, and Owner shall be liable to Nikola for interest thereon at the rate of two percent (2%) per month from the date said monies become due, until paid. In the event of any default, Owner agrees to pay reasonable collection charges and/or attorneys’ fees in addition to amounts otherwise due hereunder.”

On July 9, 2024, Respondent approved the quote in the amount of $10,500.00 which included the following language, “You may now convert this quote into a job.”

On July 13, 2024, Complainant began the roofing project. During the course of the project, Complainant replaced 32 sheets of plywood due to rotted decking.

On July 16, 2024, Complainant completed the roofing job.

On July 17, 2024, Complainant invoiced Respondent an extra $3,840.00 for the replacement of decking. As such, the total amount of the project amounted to $14,340.00.

On July 17, 2024, Bridgette Nieves, Sales Manager for Complainant, texted with Tyson Lewis of Respondent and informed him, “Hi Tyson, I heard there was some issues with the roofer stepping thru the deck . . . . I sent an invoice for the job completion yesterday, but I didn’t include that detail because I was just made aware.”

On July 22, 2024, Ms. Nieves texted Mr. Lewis which stated the following, “Hi Tyson, can you please give me an update on the payment status for the completed project at 1538 N. Yavapai St. It’s now past due.” Mr. Lewis responded, “Seems like we just need the subcontractor packet filled out. My office just asked for the owners first and last name and good email so we can send that over.” Ms. Nieves responded “Maria Zavala,” and provided her email address to Mr. Lewis.

On July 23, 2024, Maria Zavala, office staff with Complainant, signed off on Respondent’s Subcontractor Master Agreement as Bill King, the Qualifying Party of Complainant.

Ms. Nieves testified that on August 16, 2024, she went to Respondent’s physical office and spoke with a Nick Saldo. Ms. Nieves testified that Mr. Saldo informed her that the “check is being issued or it was issued.” Ms. Nieves informed Mr. Saldo that they had not received a check and that she would be speaking to their attorney about this matter, then she left the office.

Ms. Nieves testified that sometime after the complaint was filed, Samuel Wang, Respondent’s attorney, informed her that they could settle the matter for $10,000.00. Ms. Nieves informed Mr. Wang, “I’m not authorized to make the decision,” and directed him to Complainant’s attorney, Nathan Finch.

On February 19, 2025, Respondent sent a check to Complainant by way of certified mail. The check was dated August 16, 2024, in the amount of $13,600.00, and paid to the order of Complainant from Respondent. Complainant did not cash the check.

Ms. Nieves testified that Complainant was never given the opportunity to fix the repair to the ceiling and only saw pictures when they received the ROC Notice of Hearing packet. Respondent provided an estimate to repair the ceiling to Scott Gamboa (Roofing) in the amount of $750.00. Rylan Stewart, owner on behalf of Respondent, testified that the “roofer stepped through the roof,” and that drywall repair needed to be made along with it being sanded, painted and texturized. Darcy Myers, part owner on behalf of Complainant, testified that on occasion, roofers make errors and repairs to the ceiling needs to be made. Mr. Myers reiterated Ms. Nieves testimony in that Complainant was never given the opportunity to make the repair and when Complainant had done those types of repairs in the past, the drywall repair was approximately a $50.00 to $100.00 job. Mr. Myers testified they would subcontract sheetrock work because Complainant roofers do not perform that type of task.

In regards to the replacement decking, Mr. Steward argued that there was no change order for the replacement decking which consisted of 32 sheets. Mr. Myers testified that there was a signed order for the additional plywood that was needed. Mr. Myers testified that he was informed for the need of the rotted decking by his crew, he spoke to Respondent superintendent, and the superintendent gave the okay to replace it all. As such, Complainant picked up the plywood and provided a picture to Respondent about the amount of wood that was needed and billed them appropriately.

Respondent did not assert that it lacked the capacity to pay the amount Complainant asserted was due. Mr. Stewart testified that they would like to settle with Complainant in the amount of $13,600.00 which was $740.00 less than the total amount for the drywall repair and did not include late fees and such.

Complainant argued that Respondent owed $17,436.36 for work performed and for non-payment of that work with accrued late fees plus attorney fees.

Respondent argued that they would like to settle with Complainant

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.

Because Ariz. Rev. Stat. § 32-1154(A)(10) only includes a licensee’s failure to pay for materials or services rendered in connection with the licensee’s operations as a contractor, not late fees, interest, or other consequential or contractual damages, the Administrative Law Judge does not recommend that Respondent be required to pay late fees as a condition of keeping its contractor’s license in good standing.

In this case, the evidence established that Respondent owed a total of $14,340.00 for the roofing project plus the replacement of rotted sheets. Respondent failed to establish by a preponderance of the evidence that it lacked the ability to pay Complainant for the work performed.

However, there is the matter of the roofer drywall mistake, Complainant was put on notice by Respondent text on July 17, 2025. The parties completely disagreed on how much the repairs cost and Respondent did not give Complainant the opportunity to fix the hole. As such, splitting the difference of the $740.00 Respondent estimate and Mr. Myers’ testimony that the repair cost on the high end would have been $100.00, equates to a difference of $370.00. Thus, the $14,340.00 for the roofing project plus the replacement of rotted sheets less the drywall repair of $370.00, leaves a total amount owed to Complainant of $13,970.00.

Therefore, Complainant established that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10) by failing to pay Complainant $13,970.00 for services or materials rendered in connection with Respondent’s contracting business.

Based upon Respondent’s violation of the provisions of Ariz. Rev. Stat. § 32-1154(A)(10), grounds exist to impose discipline against Respondent’s license.

In this matter, both parties filed briefs regarding attorney’s fees. Respondent was ready to settle back in February 2025 in the amount of $13,600.00. This Administrative Law Judge’s recommended amount owed to Complainant is $370.00 more than the most recent settlement offer. In Semple v. Tri-City Drywall, Inc., the Arizona Court of Appeals held that a proceeding before the Registrar is not an “action” under Ariz. Rev. Stat. §12-341.01(A) and the prevailing party is therefore not entitled to an award of its attorney’s fees under the statute. In Keystone Floor & More, LLC v. Arizona Registrar of Contractors, an “action” is “a proceeding before a court of law,” and the Office of Administrative Hearings is an administrative agency and not a “court of law” and does not constitute an “action” under Ariz. Rev. Stat. § 12-341.01(A).

RECOMMENDed order

Based on the foregoing,

It is recommended that the Registrar suspend Respondent’s License No. ROC 322089 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $13,970.00 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $13,970.00 in certified funds, the Registrar may close the Complaint in Case No. 2024A-12561.

It is further recommended that both parties are responsible for their own attorney’s fees.

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 22, 2025.

/s/ Nicole Robinson

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Nathan Finch

The Cross Law Firm, P.L.C.

[email redacted]

Samuel Wang

Law Offices of Samuel Wang PLLC

[email redacted]

By: OAH Staff