ALJDEC - Licensing

2025A-05966-NPC-ROC · Registrar of Contractors · 2025-09-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Pool Builders LLC,

COMPLAINANT,

v.

Dream House Construction & Renovations LLC

ROC License No. 342522,

RESPONDENT.

No. 2025A-05966-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 08, 2025 at 1:00 PM.

APPEARANCES: Dejan Miladinovic appeared on behalf of Arizona Pool Builders LLC (“Complainant”). Christopher J. Quick appeared on behalf of Dream House Construction & Renovations LLC (“Respondent”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the attached administrative file from the referring agency, and July 30, 2025, Hearing Order were admitted into the evidentiary record.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Arizona Register of Contractors (“Registrar”).

FINDINGS OF FACT

Background and Procedure

Pursuant to Arizona Administrative Code (“Ariz. Admin. Code”) R4-9-117, Administrative Notice is taken of Respondent’s license histories as reflected by the Registrar’s public website. On January 06, 2023, the Registrar issued ROC License No. 342522 for General Dual KB-2 Residential and Small Commercial contracting to Respondent. Although the license was renewed through January 31, 2027, it was suspended by the Registrar on August 19, 2025. Christopher James Quick is listed as the Qualifying Party and Member for the license. The address of record for the license is 4933 W. Desert Ln. Laveen, Arizona 85339. Respondent has an active $14,000.00 surety bond for the license issued by American Contractors Indemnity Company, effective November 21, 2023. The license has been disciplined by the Registrar on three (3) prior occasions, and has had two (2) other complaints settled or otherwise resolved against it. Currently, the license has three (3) open complaint against it; one of which is presumed to be related to this matter.

In or around mid-June 2025, the Registrar received a complaint from Complainant alleging nonpayment of services and/or materials against Respondent. Specifically, Complainant alleged that Respondent had failed to remit timely payment(s) on one (1) invoice totaling $17,250.00 regarding residential in-ground swimming pool construction located at 2138 E. Paradise Ln. Phoenix, AZ 85022 (“Paradise Ln”). The Registrar designated it Complaint No. 2025-05966 and assigned the case to their legal department for review.

On June 17, 2025, the Registrar issued a Notice of No Pay Complaint letter to Respondent providing notice of Complainant’s complaint, and informed Respondent that it was free to raise any affirmative defense(s) or provide additional information by June 24, 2025.

On June 24, 2025, Respondent replied, in pertinent parts, that “core construction” had been completed to industry standards, and that Respondent considered work in the Paradise Ln. project substantially complete. Respondent noted that the pool’s water feature experienced leaks, which it opined was a defect and fell under “post-construction warranty obligations.” Respondent stated that it was not willing to release Complainant’s final payment because work remained incomplete and deficient. Specifically, Respondent offered that once Complainant addressed the water feature leak, their final payment would be processed.

On July 09, 2025, the Registrar issued a Citation to Respondent for an alleged violation of Arizona Revised Statute (“Ariz. Rev. Stat.”) § 32-1154(A)(10). Respondent was notified that a failure to provide an Answer by July 24, 2025, would be deemed as an admission of Respondent’s commission of the act(s) charged in the underlying complaint, pursuant to Ariz. Rev. Stat. § 32-1155(B), and could result in discipline against Respondent’s license including suspension or revocation.

On July 12, 2025, the Registrar received Respondent’s timely Answer whereby Respondent argued, overall, as follows:

The basis for withholding final payment for the pool project is solely due to the current status of the work, which has not yet passed inspection and remains incomplete. As per industry standards and contractual obligations, final payment is contingent upon the satisfactory completion and official approval of the project.

On July 18, 2025, this matter was referred to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on September 08, 2025. Per the July 28, 2025, Notice of Hearing the issue to be determined is whether the Registrar has cause to discipline Respondent’s license based on the following charge(s) alleged in the Citation:

Charge 1: A violation of A.R.S. § 32-1154(A)(10).

Hearing Evidence

Dejan Miladinovic testified on behalf of Complainant. Christopher J. Quick testified on behalf of Respondent. The substantive facts of record are as follows:

On May 15, 2024, the parties entered into a $48,400.00 residential in-ground pool constructing agreement for the Paradise Ln. project. Terms included 15% due before excavation, 25% due after excavation, 25% due after shotcrete, due 25% after decking, and a 10% balance due before interior finish.

15% of the contract amount is a deposit of a $7,260.00 due, which was paid by Respondent.

25% progress payments on the contract required three (3) payments of $12,100.00, totaling $36,300.00.

10% final payment on the contract was $4,840.00.

The following term was also included:

Completion shall be in accordance with industry standards and to the approval of the Client, not to be unreasonably withheld.

In late-October 2024, a permit for the underlying project was issued by the local building authority.

On October 29, 2024, Complainant issued Invoice No. 240053 to Respondent for excavation. Respondent paid $14,360.00 in full to Complainant for the invoice.

On December 03, 2024, Complainant issued Invoice No. 240059 to Respondent for shotcrete. Respondent paid $12,100.00 in full to Complainant for the invoice.

On January 29, 2025, Complainant issued Invoice No. 240064 to Respondent for the water feature including electrical, pool fence, and permits. Respondent refused to pay the final $17,250.00 invoice.

On March 03, 2025, the Paradise Ln. project passed inspection by the local building authority.

On March 07, 2025, Complainant finished its scope of work on the Paradise Ln. project.

On April 01, 2025, Respondent informed Complainant that money for its final payment was in escrow and would be disbursed once the project was complete. Later that some month, Respondent informed Complainant via text message that it was unable to pay the final invoice on the Paradise Ln. project due to lack of business funds.

In late-May/early-June 2025, Respondent notified Complainant of the leak in the Paradise Ln. project’s water feature. Complainant was not scheduled to perform corrective work.

Additional Evidence

Mr. Quick testified that Respondent failed to pay Complainant’s final invoice because the Paradise Ln. project owner was unable to pay Respondent’s final invoice. Per Mr. Quick, he obtained a letter from said owner avowing as to such, but did not provide it to the Tribunal. Mr. Quick admitted that he did not inform Complainant, in large part, because he believed that income from other projects would cover payment for Complainant’s outstanding invoice.

Mr. Quick clarified that the money in escrow he previously referenced to Complainant was not exclusive, its contents was for all subcontractors working on the Paradise Ln. project – issued on a “first come, first served” basis. Funds were depleted by the time Respondent received Invoice No. 240064.

Closing Arguments

In closing, Respondent opined that its inability to pay Complainant’s $17,250.00 invoice was solely attributable to the owner of Project Ln. not paying monies owed to Respondent. As such, Respondent argued that it was excused from paying the underlying debt at issue.

In closing, Complainant argued that it completed its scope of work without complaint or issue from Respondent, and opined Respondent’s affirmative defense was disingenuous as Respondent had previously alleged that nonpayment was due to Complainant’s alleged poor work. Complainant opined that it sustained its evidentiary burden, and as such, was entitled to an order of restitution.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction and has been properly brought before OAH for adjudication.

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

The Registrar may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.

Complainant bears the burden of proof to establish cause for the Registrar to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Statutes should be interpreted to provide a fair and sensible result. Statutes shall be liberally construed to affect their objects and to promote justice.

Ariz. Rev. Stat. § 32-1129.02(A) provides, in pertinent part, that “[p]erformance by a subcontractor in accordance with the provisions of a construction contract entitles the subcontractor to payment from the party with whom the subcontractor contracts.”

Ariz. Rev. Stat. § 32-1129.02(B) provides, in pertinent part, that “[i]f a subcontractor has performed in accordance with the provisions of a construction contract, the contractor shall pay to its subcontractors within seven days of receipt by the contractor of each progress payment, retention release or final payment, the full amount received for such subcontractor’s work and materials supplied based on work completed or materials supplied under the subcontract.”

Ariz. Rev. Stat. § 32-1129.02(E) provides, in pertinent part, that “[i]f a contractor chooses to withhold the application or certification for all or a portion of a subcontractor’s billing, the contractor must prepare and issue a written statement within fourteen days to the applicable subcontractors stating the reasons for withholding the application or certification from the owner.”

Ariz. Rev. Stat. § 32-1129.02(F) provides, in pertinent part, that “[i]f the owner issues a written statement stating that the owner declines to certify or approve all or a portion of the contractor’s billing and if the amounts to be paid from that billing by the contractor to any subcontractors are affected by the owner’s decision not to certify or approve, the contractor shall send a copy of that written statement within seven days after the receipt to any affected subcontractors or material suppliers.”

Ariz. Rev. Stat. § 32-1154(A)(10) holds, in pertinent part, that among the grounds for suspension or revocation of a contractor’s license is a “[f]ailure by [the] licensee . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.”

In the case at bar, the Tribunal is tasked with determining how much money Complainant is owed by Respondent, if any, and if so, whether said debt(s) constitute a violation of Ariz. Rev. Stat. § 32-1154(A)(10) for which Respondent’s license should be lawfully disciplined by the Registrar.

Upon review of the record, the relevant evidence establishes that Complainant has sustained its burden of proof by the requisite evidentiary standard.

Here, the record clearly illustrates that the parties had a $48,400.00 residential in-ground swimming pool installation subcontract agreement whereby Complainant bid on the project beforehand, having reviewed the project’s plans and specifications, and completed its scope of work as evidenced by the fact that the project passed inspection by the local building authority. The record also illustrates that Respondent paid Complainant $33,720.00 towards their agreement. The record further illustrates that Respondent did not accuse Complainant of poor work on the underlying project until approximately three (3) to four (4) months after Complainant completed its scope of work. In April Respondent told Complainant payment could not be made on Invoice No. 240064 due to lack of funds, but in June and July of 2025 Respondent told the Registrar that payment was intentionally withheld due to Complainant’s alleged poor work – which differed from Mr. Quick’s testimony in September 2025.

Therefore, the only issue remaining is whether Respondent raised a sufficient justification or excuse for failing to tender the balance due on the underlying subcontract agreement to Complainant for the Paradise Ln. project. Based on a review of the credible and relevant evidence of record, the Tribunal finds that Respondent did not establish an affirmative defense(s) for failing to do so. Respondent’s prior assertions regarding the underlying reason for nonpayment of the invoice at issue are inconsistent, and Mr. Quick failed to provide the alleged admission letter from the project’s owner to substantiate or otherwise corroborate his position. Nothing in the record supports Respondent’s rationale for failing to tender final payment on the Paradise Ln. project.

Notably, the outstanding balance for Invoice No. 240064 is $14,680.

Because Complainant has established that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10) by a preponderance of the evidence, Complainant has also established cause or grounds for the Registrar to discipline ROC License No. 342522.

RECOMMENDED ORDER

In light of the foregoing,

IT IS RECOMMENDED that on the effective date of the Final Order in this matter, Respondent Dream House Construction & Renovations LLC, ROC License No. 342522, shall be suspended and remain in an inactive status until Respondent provides the Registrar with sufficient proof that $14,680.00 has been tendered to Complainant in certified funds as restitution.

IT IS FURTHER RECOMMENDED that after the Registrar has received Respondent’s proof of payment to Complainant, Complaint No. 2025-05966 shall be closed.

NOTICE

Pursuant to Ariz. Rev. Stat. § 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, September 28, 2025.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Dream House Construction & Renovations LLC

4933 W. Desert Ln.

Laveen, AZ 85339

[email redacted]

Arizona Pool Builders, LLC

c/o Dejan Miladinovic, Agent

9224 W. John Cabot Rd.

Peoria, AZ 85382

[email redacted]

Arizona Pool Builders, LLC

c/o Christopher J. Quick, Agent

2 N. Central Ave., Ste. 1800

Phoenix, AZ 85004

[email redacted]

By: OAH Staff