ALJDEC - Licensing
2025A-07284-NPC-ROC · Registrar of Contractors · 2026-05-07
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Desert Environments Landscape and Design
LLC
COMPLAINANT,
v.
Equinox 7 LLC
DBA: Aspect Fine Homes,
License No. ROC 287304,
RESPONDENT.
No. 2025A-07284-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: November 10, 2025 and March 20, 2026, with the record held open until April 17, 2026, for the sole purpose of receiving written closing statements.
APPEARANCES: Everett S. Butler, Esq. appeared on behalf of Design Environments Landscape and Design, LLC. Kurt E. Hammond, Esq. appeared on behalf of Equinox 7, LLC DBA: Aspect Fine Homes.
ADMINISTRATIVE LAW JUDGE: Administrative Law Judge Sam Fox presided over the hearing that was held on November 10, 2025. Administrative Law Judge
Velva Moses-Thompson presided over the hearing that was held on March 20, 2026, and issues this recommended decision.
EXHIBITS ADMITTED INTO EVIDENCE: Exhibits 1 through 13 submitted by Design Environments Landscape and Design, LLC. Exhibits 1 through 5 submitted by Equinox 7 LLC DBA: Aspect Fine Homes.
_____________________________________________________________________
FINDINGS OF FACT
Equinox 7, LLC DBA: Aspect Fine Homes (Aspect) Aspect entered into a
contract to build a custom home for the Deems (hereinafter “Deems project”).
Aspect hired Design Environments Landscape and Design, LLC (DELD)
to perform hard and landscaping work on the Deems project.
On July 23, 2025, DELD filed a complaint with the Arizona Registrar of
Contractors (Registrar), alleging that Aspect failed to pay $98,227.50 for labor and materials provided to Aspect in connection with its operations as a contractor for the Deems project. Specifically, DELD alleged that Aspect did not pay a balance of $98,227.40 based upon invoice #108572 for 60,100.00, invoice # 108573 for $19,080.00, and invoice #108580 in the amount of $158,525.00.
On September 3, 2025, the Registrar issued a Citation against Aspect’s
license for an alleged violation of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(10).
Aspect filed a timely response to the Citation.
The matter was referred to the Office of Administrative Hearings for an
evidentiary hearing.
On October 2, 2025, the Registrar issued a Notice of Hearing setting the
above-captioned matter for hearing on November 10, 2025 at the OAH in Phoenix, Arizona.
8. A hearing was held on November 10, 2025.
9. A further hearing was held on March 20, 2026.
10. At the hearing on November 10, 2025 and March 20, 2026, DELD presented the testimony of Michael Kiesler (Mr. Kiesler), the qualifying party for DELD.
11. At the hearing on March 20, 2026, Aspect presented the testimony of John Smieszek (Mr. Smieszek), the qualifying party for Aspect.
12. Before Aspect hired DELD, Aspect solicited bids from various contractors to submit to the Deems.
13. Aspect provided a packet with specific instructions to various contractors, including DELD.
14. Aspect only accepts fixed bids and anticipated receiving fixed bids from the contractors.
15. Aspect submitted plans for the project to DELD that were specific and plants were listed in every space. The plans provided for the provision and installation of several items, including, but not limited to, trees, shrubs, accents and planter pots.
See the Agency Record at 279.280. The plans were approved by the City of Scottsdale and the Deems’s homeowners’ association (HOA).
16. Mr. Smieszek walked the job-site with Mr. Kiesler. Mr. Kiesler understood the revegetation and planting needed for the project. Mr. Kiesler told Mr. Smieszek that he could complete and manage the project on a fixed price.
17. Mr. Smieszek made clear to Mr. Kiesler that the homeowners expected very lush full landscaping and did not want small plants.
18. DELD submitted an estimate to Aspect for hard and landscaping for $117,887.00. See Aspect’s Exhibit 4. Mr. Kiesler testified at the hearing that after
Mr. Smieszek received the estimate, Mr. Smieszek said that the amount was too low and suggested that DELD increase the bid by $50,000.00.
19. Mr. Kiesler gave a bid that he considered to be low because he believed that the plans were incorrect and he, “just wanted to get the job.” See Aspect’s Exhibit 1 at 11. Aspect submitted into evidence a text message from Mr. Kiesler related to the bids that he submitted for the Deems Project that provided, in relevant part, as follows:
“I think my initial bit [sic] of 117k was way too low. I had not worked with John in a while and did not know who I was bidding against or a budget. So I came in on the lower end of my [s]pectrum. Just trying to get the job. When John received the bid he informed me he thought too low so I pretty much just had to guess at some numbers to increase plant sizes. I should have started at 167K then added 50k to it. As the project progressed I knew we were going over budget with all of the reveg plants and cactus I added. After the native comment from the deems I assumed that’s what they wanted....I thought it would take to make the job exceptional! I did not realize we were going as far over budget as we were. I should have been doing better accounting as the job was progressing. That is my fault. It was a challenge just keeping up with the day-to-day changes and add-ons.”
[See id.]
20. On or about August 18, 2024, DELD submitted a second estimate to Aspect totaling $166,677.50 for the provision of hard and landscaping work on the Deems residence. See Aspect’s Exhibit 2, the Agency Record at 155-156). DELD’s estimate was based upon landscaping drawings dated November 11, 2021. See the hearing audio record 11/10/25 1367107 00:16:38-00:18:09; Agency Record at 239).
Mr. Smieszek agreed that DELD’s scope of work was defined by the Estimate and the landscape plans. (3/20/26 OAH 1407382 01:28:04-01:28:27).
21. Aspect accepted DELD’s estimate totaling $166,677.50.
22. Aspect has paid DELD $166,677.50.
23. Mr. Kiesler explained at hearing that after the second estimate was accepted by Aspect, he met with Mrs. Deems and she explained that she wanted more mature plants and trees. Mr. Kiesler said that Mrs. Deems wanted a “totally different” plant pallet than what was available. Mr. Kiesler said that it was a challenge to determine what DELD could use and what was acceptable. Kiesler alleged that he could not generate a fixed number because he did not have the correct set of plans.
24. As a result, Mr. Kiesler stated that DELD began installing and providing additional hard and landscaping that was outside of the scope of the second estimate. Aspect submitted into evidence text messages from Mr. Kiesler showing that he bought extra material to enhance the appearance of the project and create what it repeatedly described as a “wow factor.” The text messages provided, in relevant part, as follows:
I added extra boulders as I felt some of the areas of importance needed a little more enhancement. I tried to give the key spots as much WOW factor as I could. I might have gotten a little carried away in some areas but I felt that’s what it would take to make the project like the homeowners expected. We also had to add another Zone to the irrigation system and increase the size of the timer. It would have worked without adding a Zone but I felt it would work better if we did.”
...............................
As the project progressed I knew we were going over budget with all the reveg plants and cactus I added. After the negative comments from the deems [homeowner] I assumed that’s what they wanted. As far as the increase in the other plants and trees what I selected was what I thought it would take to make the job exceptional! I did not realize we were going as far over budget as we were. I should have been doing a better accounting as the job was progressing. That is my fault.
25. Mr. Kiesler said at hearing that Lindsay Schultz, an Interior Designer, requested that he install additional trees and plants. Mr. Kiesler testified to the effect that he believed that Ms. Schultz worked for DELD.
26. Mr. Smieszek stated that Ms. Schultz was hired by the Deems.
Mr. Smieszek denied that Lindsay Schultz worked for Aspect.
27. DELD through its closing statement contended that DELD hired interior designers as consultants and was paid a fee to manage and oversee their work as shown in its Exhibit 4. The document in Exhibit 4 is an agreement between DELD and the Deems wherein DELD agrees to manage interior design. The agreement includes a consultant fee estimate for interior design that is “TBD.” However, there is no written or testimonial evidence that Aspect hired Lindsay Scultz as an interior design consultant. Mr. Kiesler provided credible testimony that Aspect did not hire Ms. Shultz.
28. Upon consideration of the evidence presented at hearing, the Administrative Law Judge finds that Aspect nor Mr. Smieszek asked that DELD provide additional hard and landscaping that was not included in the second estimate.
29. Mr. Kiesler contended that the parties had a cost plus contract.
Mr. Kiesler explained that under a cost plus contract, the contractor is paid additional compensation if the costs are more than anticipated. However, Mr. Kiesler provided no written evidence to support his assertion that the parties entered into a cost plus contract.
30. Mr. Kiesler contended that the parties had a fixed price contract, and any changes would require written change orders. Mr. Kiesler testified to the effect that he believed that DELD provided added labor and materials because he wanted to improve the appearance of the work.
31. It is in disputed that Aspect has not been paid by the Deems for the additional charges for $98,227.50. It is also undisputed that Aspect has paid DELD of $ 166,677.50.
32. DELD does not contend that the balance owed reflects work that was requested by Mr. Smieszek or DELD, except for DELD’s argument that Lindsay Schultz was an agent of DELD. DELD asserts that because it performed added labor and provided the extra material, he is entitled to compensation.
33. Mr. Kiesler testified to the effect that he has worked with many other contractors who paid for added labor and work that he provided to a project that was not included in a prior estimate or contract. In addition, DELD contends that Aspect was aware of the added work and never told DELD that it would not pay for the added work.
34. Aspect contended that it never requested or agreed to pay for any added labor and material that exceeded the amount of the second estimate, performed DELD as shown in the balance of $98,227.50.
CONCLUSIONS OF LAW
This matter lies within the Registrar’s jurisdiction.
DELD bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.The Administrative Law Judge may consider the Registrar’s administrative
record. See A.A.C. R4-9-118.
“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.”
A.R.S. § 32-1154(A)(10) includes among the grounds for suspension or revocation against a contractor’s license, “[f]ailure by a licensee or agent or official of a 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 or, 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.”
Although Aspect has not been paid the $98,227.00 that DELD is requesting, Aspect has failed to establish by a preponderance of the evidence that it lacks the capacity to pay DELD.
DELD contends that the balance of $98,227.50 is owed for labor and materials that it provided for the Deems project that was beyond the scope of the work described in the second estimate. However, DELD did not submit any written change orders for the additional labor and material. The record shows that Aspect did not express to DELD that it would not pay any amount other than the price stated in the second estimate. However, Aspect’s omission is not deemed an acceptance of the additional work and materials provided by DELD.
Furthermore, the preponderance of the evidence does not show that the agreement between the parties was a cost-plus contract.
DELD argues that Aspect violated the Prompt Pay Act by failing to object to DELD’s invoice in the amount of $98,227.00 in 14 days. However, an alleged violation of the Prompt Pay Act was not pleaded in the complaint, and it was not the basis for the Citation. Therefore, the Administrative Law Judge lacks jurisdiction to hear the claim.
Therefore, the Administrative Law Judge concludes that payment in the amount of $98,227.50 in question did not become due for labor and materials
DELD did not establish cause to suspend or revoke Aspect’s license under A.R.S. § 32-1154(A)(10).
RECOMMENDED ORDER
Based on the foregoing, it is ordered that thirty days after the effective date of the final order in this matter, Desert Environments Landscape and Design LLC’s complaint against Equinox 7 LLC DBA: Aspect Fine Homes, License No. 287304 shall be dismissed.
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 7, 2026.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted electronically to:
Tom Cole, Director
Registrar of Contractors
Everett S. Butler, Esq.
Butler Law Firm
[email redacted]
Kurt E. Hammond, Esq.
Rudolph & Hammond, LLC
[email redacted]