ALJDEC - Licensing

2025A-07645-NPC-ROC · Registrar of Contractors · 2025-11-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Precision Pool Techs LLC,

COMPLAINANT

v.

Garry Edward Kohler

DBA: AZ Fabrication & Design,

License No. ROC 348862,

RESPONDENT

No. 2025A-07645-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: November 7, 2025

APPEARANCES:

Complainant: Fred Visser

Mike Klistoff

Respondent: Garry Kohler

ADMINISTRATIVE LAW JUDGE: Nedra-Su Kawasaki

EXHIBITS ADMITTED INTO EVIDENCE: Administrative notice was taken of the Notice of Hearing Packet submitted by the Registrar of Contractors.

Complainant Exhibits 1-5.

Respondent Exhibit A.

_____________________________________________________________________

FINDINGS OF FACT

Procedural History

AZ Fabrication & Design (Respondent) was the holder of License No. 348862 issued by the Arizona Registrar of Contractors (Registrar) on November 27, 2023.

On or about August 1, 2025, Complainant filed a Non-Payment Complaint Form with the Registrar, claiming Respondent had failed to pay invoice #4549, amounting to $6,821.96.

On or about August 8, 2025, the Registrar notified Respondent that it had received a complaint and Respondent could raise issues and defenses by August 15, 2025.

On September 2, 2025, the Registrar issued a Citation, alleging that Respondent violated Arizona Revised Statutes (A.R.S.) § 32-1154 (A)(10). Respondent timely submitted an Answer on September 16, 2025, asserting:

Garry Kohler, “G.K.” and “A.K.” own a general contracting company in Colorado, (KGCLLC) (Kohler General Contracting LLC) and three other fabrication companies in three states. [KGC] [was] helping the owner of the property in the said disputed contract. Their business and primary residence is in the same small town as ours in Colorado. [KGC] found the pool contractor to construct a pool in the AZ property as [KGC] travel back and forth to AZ to verify subcontractors and make payments after completion. The name of our company is listed in the contract as KGC LLC and the pool contractor listed our AZ fabrication and design company secondary. All billings and invoices were addressed and billed to the Colorado company not our AZ Fabrication & Design. They knew they were dealing with a CO company and now trying to use the ROC to receive a final payment. The work took over 3 months longer then stated, site meetings, issues, written requests, non-licensed subs and punch list not completely address. Refusal to finish the project or even meet to go over issues in person, caused us to hold any billing for a final payment. The contract attached to the complaint is not fully initialed and invoice example only one is addressed to KGCLLC in Colorado (NOT AZ Fabrication & Design). AZ Fabrication & Design has not received a single payment for work or paid out a single payment to (PPT) Precision Pool Techs. All contracts, and invoice were all to and thru KGCLLC, a Colorado company which paid $47k+ progress payments to PPT. The KGC LLC had substantial cost to correct issues with the PPT workmanship, delays and overall issues. Our opinion is the contract states arbitrations as a means if disagreement occurs (Not Attempted), and elements we feel are missing that ROC requires for a valid contract in AZ. We feel the owner of PPT is trying to use the ROC and AZ Laws to benefit them.

AZ Fabrication and Design has been in AZ as an ROC contractor for two years and has worked for HOA, School Districts, homeowners, veterans, and completed 100's of projects, estimates and designs all trying to follow the ROC standard and be a quality AZ contractor. We feel this is a dispute between our GC company and PPT and should not include our AZ fabrication & Design company.

[Garry Kohler] [has] been a GC and subcontractor for projects for over 27 years in multiple states, multi-million-dollar projects, Millions of Square feet completed, provided engineering seminars for continued educational credits, and expert witness in construction default cases. We are talking about our ability to help make sure a project is fair and final for all, and it is roughly 10% of the entire contract. PPT is a paper GC pool contractor, We are only holding a very small amount of their profit to get resolutions, and obviously they don't agree.

The matter was referred to the Office of Administrative Hearings for an administrative hearing. The Notice of Hearing was issued on September 26, 2025, setting the hearing for October 30, 2025.

A hearing continuance was granted because Respondent did not timely receive the Notice of Hearing.

A hearing was held on November 7, 2025.

Findings of Fact

On or about December 15, 2024, Precision Pool Techs, LLC (Complainant) entered into a contract with Garry Kohler for, among other things, a swimming pool install.

The contract was drafted as between “KGC LLC & AZ Fabrication and Design” as Buyer, and Precision Pool Techs LLC as Builder. It was signed by Mike Klistoff on November 26, 2024, and Garry E. Kohler, Member as “Buyer” on December 15, 2024. Additional specifications were noted in the contract to include that the payment procedure would include each scope after completion as notated and the warranties as stated in the contract were transferrable to the owner of the property from AZ Fabrication.

The contract agreed to a total cost of $56,887.00 to be paid on the following schedule:

15% down payment on execution of the contract ($8,533.05)

25% payment on completion of excavation ($14,221.75)

25% payment on completion of shotcrete ($14,221.75)

25% payment on completion of installation of deck materials ($14,221.75)

10% before application of finishing interior materials/on pool fill

($5,688.70).

On or around December 16, 2024, on Mr. Kohler’s request, the payment schedule was amended as follows:

Down payment on execution of the contract ($4,000.00)

Payment on completion of excavation ($15,335.01)

Payment on completion of shotcrete ($15,335.01)

Payment on completion of installation of deck materials ($15,335.01)

Before application of finishing interior materials/on pool fill.

($6,821.96).

The down payment of $4,000.00 and three payments of $15,335.01 were paid and are not in dispute.

The pool was filled on or about April 10, 2025.

On an unspecified date, but prior to April 19, 2025, Mr. Kohler made Complainant aware that there was an issue with the construction, specifically a crack/chip in the concrete deck.

A repair for the concrete crack was scheduled for April 28, 2025.

On April 28, 2025, Mr. Kohler was not present on site for the repair. Mr. Visser met the repairman at the property to provide instruction as to how Mr. Kohler wanted the repair completed. Mr. Visser also instructed the repairman to take and send a close-up photo of the repair per Mr. Kohler’s request. Mr. Visser then left the jobsite and was not present during the repair.

On May 22, 2025, Complainant submitted to KGC LLC invoice #4549 for final payment in the amount of $6,821.96.

On May 22, 2025, Mr. Kohler replied to Complainant’s request for payment noting specific issues still remaining and requesting a jobsite walk-through.

On May 27, 2025, Respondent provided a punch-list of six outstanding corrections needed to close out the pool project. The punch-list included the following:

Pool West – Chunk of concrete completely loose and cracked. Was told by Fred that it was getting removed, reformed, and poured to correct, they filled it and top coated same day.

Pool West Deck – Still no skimmer basket, also no skimmer diverter. I mentioned this multiple times we still have received it.

Pool West Deck – Automatic fill cap does not sit flush into retainer ring. Edges of concrete are rough. This was mentioned with skimmer cap only one was repaired.

Pool South Wall – Wall plumbing, not capped missing vacuum port, heavy suction from this opening is a hazard.

Concrete Sidewalk W – Concrete sidewalk chipped by excavation, and/or backfill equipment. Most likely, skid bucket, HOA requires all concrete chipped or broken to be replaced.

Front Yard West – Repaired sprinkler leak surfacing, repair is not leaking but the splice in the line was not buried deep enough and the coupling was installed to create a bow in pipe.

Punch-list item 4 was corrected and not in dispute. Punch-list items 1, 2, 3, 5, and 6 remained in dispute.

Separate from the punch-list items, the finished elevation of the pool also remained in dispute and an element of Respondent’s withholding final payment.

Complainant Hearing Testimony

Regarding punch-list item 1—the cool deck—Complainant testified that it was initially scheduled to be installed on April 19, 2025, but was rescheduled because Mr. Kohler wanted the crack repaired prior to the deck installation and to be on site when it was repaired. Mr. Visser testified that Mr. Kohler was “quite clear” that because he could not be on site at the time of the repair he wanted a close-up picture of the work. Despite Mr. Visser’s instructions, a close-up picture was not taken.

Regarding punch-list item 3—the automatic fill cap—Mr. Visser testified that prior to the hearing he believed it was completed. However, Mr. Visser acknowledged in the hearing that, after Mr. Kohler’s testimony, he agreed the edges were still rough and could look better.

Regarding punch-list items 5 and 6—chipped sidewalk and repaired sprinkler line—Mr. Visser and Mr. Klistoff testified that per the contract these items were not the responsibility of Complainant. Mr. Visser further testified that the sprinkler line had been damaged during the project; potentially by an excavator. Though it was not Complainant’s responsibility, Mr. Visser had it repaired. He explained that the line should be buried deeper and not exposed.

Regarding punch-list item 2—skimmer basket—Complainant contends this item was completed.

Regarding the elevation on grade issue, Mr. Visser explained the pool has to be the highest point in the yard for drainage. The pool must sit higher so when it rains it pitches slightly away from the pool. The deck was never meant to be at one inch over. The bond beam was poured at one inch over and the deck sat on top of the bond beam which was why it was higher. The concrete was poured on February 26, 2025, and no issues with the elevation were mentioned to Complainant at that time. However, when Mr. Visser and Mr. Kohler were on site, sometime thereafter, Mr. Kohler mentioned the elevation looked a little high, so Complainant took off one-half inch of concrete. Mr. Visser testified he was not advised of any further complaint until the request for final payment was submitted. Mr. Visser reiterated that because the pool would always be higher, if there were other features in the yard, it would require grading away and using fill material. Mr. Visser explained that Complainant only had two feet of concrete to work with so Complainant could not do much grading.

Respondent Hearing Testimony

Mr. Kohler testified that he did not dispute that $6,821.96 was the correct amount owed per the contract. He argued as to the validity of parts of the contract, specifically as they related to lack of signatures or initials on some sections, as well as the identity of the parties to the contract. Mr. Kohler argued that the contract at issue was signed between KGC LLC and Complainant and that AZ Fabrication and Design was not a party to the contract. He further testified extensively regarding the quality of work issues encountered and argued that these issues were the reason for withholding final payment. Mr. Kohler detailed the punch-list items as noted above and the issue with the pool elevation as it related to the original agreement and project plans.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bore the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. Respondent bore the burden of proof to establish an affirmative defense 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.”

The evidence on record may be given more or less weight toward establishing a preponderance depending on the indicia of credibility associated with that evidence and its source. When a source is proven untrustworthy, its evidence shall be considered less probative of the truth.

A.R.S. § 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.

Under A.R.S. §§ 32-1182 and 32-1183, owners and contractors, respectively, may decline to certify or withhold such application of certification, if any of the following apply, in relevant part:

Defective construction work or materials not remedied.

Disputed work materials.

Damage to the owner or contractor.

In Arizona, when construing statutes, we look first to a statute’s language as the best and most reliable index of its meaning. If the statute’s language is clear and unambiguous, we give effect to that language and apply it without using other means of statutory construction, unless applying the literal language would lead to an absurd result. Words should be given “their natural, obvious, and ordinary meaning,” unless defined by the legislature.

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

Ambiguous contracts should be interpreted against the drafter.

Upon review of the evidence submitted this case, Complainant failed to establish that any monies were “due” for materials or services rendered to Respondent in connection with Respondent’s operations as a licensed contractor.

In the instant matter, in identifying the parties and the relationships thereof, the Complainant-drafted contract was ambiguous. KGC/AZ Fabrication and Design were listed as buyers, and the contract on its face appeared to be contemplated as between an owner/contractor rather than a contractor/subcontractor. The undersigned Administrative Law Judge (ALJ) notes it was undisputed that Mr. Kohler was a member of both KGC and AZ Fabrication and Design. All payment requests and invoices were mailed to KGC and payments were received by Complainant as requested, with exception only of the final payment at issue. In construing these facts as against Complainant, the evidence does not support that Respondent was acting in connection with its operations as a contractor. The undersigned ALJ makes no final determination as to the true identity and relationship of the parties to the contract. However, such a determination on this issue is not dispositive in this matter.

In addition to requiring that the materials or services rendered be related to the licensees operations as a contractor, A.R.S. § 32-1154(A)(10) also requires that monies were due at the time of failure to pay. In this case, there is a genuine dispute between the parties as to workmanship and potential damages as a result thereof. A.R.S. §§ 32-1182 and 32-1183 permit owners and contractors to withhold payment under certain conditions. Neither the conditions provided in the referenced statutes, nor the issue of workmanship are before the Tribunal in this matter. Because there exists a genuine dispute regarding whether conditions apply to allow Respondent to withhold payment, the undersigned ALJ does not find payment was due.

The preponderance of the evidence did not show that Respondent violated A.R.S. § 32-1154(A)(10) as alleged.

Therefore, the Administrative Law Judge did not find grounds to impose discipline against Respondent’s license.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, Complainant’s complaint be closed.

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, November 28, 2025.

/s/ Nedra-Su Kawasaki

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Precision Pool Techs LLC

[email redacted]

[email redacted]

Garry Edward Kohler

DBA: AZ Fabrication & Design

[email redacted]

By: OAH Staff