ALJDEC - Licensing

2025A-11792-NPC-ROC · Registrar of Contractors · 2026-04-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Flooring Team LLC,

COMPLAINANT

v.

All Lines Construction, LLC,

License No. ROC 333001,

RESPONDENT

No. 2025A-11792-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 24, 2026.

APPEARANCES:

Complainant: Isaac Lopez

Respondent: Amber Tate

Sunday Stanley

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.

Respondent Exhibit 1-3.

_____________________________________________________________________

FINDINGS OF FACT

Procedural History

All Lines Construction, LLC. (Respondent) was the holder of License No. 333001 issued by the Arizona Registrar of Contractors (Registrar) on April 13, 2021.

On or about November 10, 2025, Complainant filed a Non-Payment Complaint Form with the Registrar, claiming Respondent had failed to pay invoices INV-1135, INV-1158, INV-1119, and INV-1143, amounting to $29,984.40.

On December 16, 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 December 23, 2025, requesting to schedule a settlement conference.

The matter was referred to the Office of Administrative Hearings for an administrative hearing. The Notice of Hearing was issued on January 15, 2026, setting the hearing for February 24, 2026.

A hearing was held on February 24, 2026.

Hearing Evidence

Isaac Lopez testified, on behalf of Complainant, that the only invoice still at issue was INV-1135, which reflected a balance due of $17,984.80.

Mr. Lopez further testified that Complainant had adjusted the amount owed for the Hardiebacker, shower floor install, shower wall install, Spark white, and self-level, which brought the current balance due to $16,073.29.

Respondent worked with a third-party administration, TPA, from which Respondent received insurance claim work. When Respondent accepted such work, the insurer provided the scope of work and an estimate of the claim amount covered.

Typically, after the insurer provided the estimate, Respondent negotiated the scope of work and contract amount in person with the subcontractor (Complainant). The subcontractor then submitted a quote via email to Respondent which would be approved and signed.

The quote must be approved by signature from Respondent’s project manager (PM) and owner prior to a subcontractor beginning work.

Complainant Hearing Testimony

At hearing, Mr. Lopez testified in support of the process as detailed above regarding scope of work and quote submission. Mr. Lopez testified that typically, Nick (Respondent’s PM with whom Complainant worked) would have Complainant send a quote with prices and then have Complainant “markup” the price for the insurer. Complainant did this for each area of work individually, for example, shower work was quoted separately from floors, etc. Mr. Lopez further testified that Complainant never received approvals via email nor quotes signed by Respondent. Complainant would receive a call or text from Nick advising that Complainant was free to begin the job on a specific date. In the case of INV-1135, on September 5, 2025, Nick sent a text advising that demolition work could begin the following Wednesday. Mr. Lopez testified that the one item for which Complainant took accountability was the carpet, as it was supposed to be dammed and was not. Complainant had offered to replace the material and labor.

Respondent Hearing Testimony

Ms. Stanley testified, on behalf of Respondent, that because Nick was “let go” shortly before the INV-1135 project was completed and no longer worked for Respondent, Respondent could only rely on information found in Nick’s files. Respondent had no concerns with the other invoices submitted by Complainant and they were paid. However, in this case, Respondent had concerns regarding Complainant’s workmanship as well as administrative issues, such as quotes, invoicing, and change orders. Specifically, on August 13, 2025, Complainant submitted two quotes for the shower installation. A note found in Nick’s files on a copy of Complainant’s shower installation quote #1180 read, “this is marked up?” and “in order to do this we’d have to do a supplement.” Ms. Stanely explained that a supplement was a request sent to the insurer which required a change order. Another note stated, “needed to adjust for a 25% amount sent into insurance as a bid.” Complainant’s first quote was $4,302.00 and the second was $5,670.00. The only discernable difference Ms. Stanley noticed between the quotes was that the second one included demolition and disposal of Hardiebacker, as well as shower prep walls. Ms. Stanely testified, that neither of the quotes was signed or approved nor were any change orders submitted.

Ms. Stanley testified that Respondent’s concerns with Complainant’s workmanship included self-leveling, shower pan installation, quality of the shower installation, and tile issues separate from, but related to self-leveling. Ms. Stanely explained that the insurance quote allotted only certain areas for self-leveling because the plumbing collapsed under slab. Those areas had to be trenched out, and the plumber did so within 1/8th inch close to the existing pad. Complainant only had to self-level the trenched-out areas. Instead, however, Complainant self-leveled the whole floor, without submitting and receiving approval of a change order, which caused damage to the home. Specifically, Ms. Stanley explained, Complainant did not properly dam where the self-leveling flowed into the bedroom carpeted areas which resulted in the carpet being so stuck to the pad it could not even be lifted. Complainant stated it would install new carpet.

Ms. Stanley testified that the shower pan liner was installed incorrectly. She explained that a shower pan must go up a minimum of nine inches and Respondent could not verify it was done. Additionally, the pan liner must have blocking and be folded correctly in each corner. Blocking must be placed between each stud, and the shower pan liner must be adhered to the stud. The shower pan liner installed by Complainant did not have blocking behind it; it was just screwed to the stud. The liner at issue was only adhered to the backing and then to each stud with a screw.

Ms. Stanley testified that Respondent also had concerns regarding the quality of the shower installation because the shower floor had a basic pattern and it was installed incorrectly. Ms. Stanley explained that shower floor tile was installed in sheets based on the pattern. In this case it was a very simple pattern, but the installer got it wrong.

Ms. Stanely further testified that, as a result of Complainant self-leveling the entire floor, the tile flooring in the home was a 1⁄4-inch higher than the threshold coming into the house, without even level slopes down to the other side, which caused an injury to the homeowner.

Ms. Stanley stated that Respondent had filed a workmanship complaint with the Registrar regarding the concerns. Although Complainant expressed interest in re-doing the work, Ms. Stanely noted the homeowner did not want Complainant back in her home. Ms. Stanley testified that Respondent was willing to pay the insurance-allotted amount for self-leveling, but the shower installation charge had to be removed from payment because Complainant’s improper work had to be removed and a new shower installed.

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.”

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.

Change orders protect both parties to a contract. They ensure that the service-providing contractor has a record of work done and a documentary basis for payment; they also ensure that the service-receiving contractor consents to work being done and amount charged for the service. Material increases in work or costs without consent from both parties may not be enforceable or a basis for discipline. Accordingly, if a service-providing contractor knowingly failed to include material costs in an estimate or contract and failed to provide change orders to reflect such costs, the service-receiving contractor may not be responsible for those charges.

In the instant matter, there was a genuine dispute between the parties as to contract terms, including scope of work, workmanship, and the costs thereof. The workmanship issues alleged by Respondent were not before the Tribunal in this matter. However, because there existed a genuine dispute regarding whether the work was completed, the undersigned Administrative Law Judge (ALJ) did not find payment was due at the time of complaint filing.

Upon review of the evidence submitted in this case, Complainant failed to establish that any monies were “due” for materials or services rendered to Respondent.

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

Therefore, the undersigned ALJ 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, April 14, 2026.

/s/ Nedra-Su Kawasaki

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Flooring Team LLC

[email redacted]

All Lines Construction, LLC

[email redacted]

By: OAH Staff