ALJDEC

00F-M1022-ROC · Registrar of Contractors · 2000-09-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 15, 2000. APPEARANCES: Henry L. Freeman, an officer of Complainant corporation, appeared on behalf of Complainant. Art Thurston, II, an officer of Respondent corporation, appeared on behalf of Respondent. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________ The hearing in this matter was held on August 15, 2000. The record was held open pursuant to the request of the parties until September 8, 2000, to allow additional evidence , a copy of a canceled check in the amount of $4,125.00, to be submitted. The copy of the canceled check in the amount of $4,125.00 was submitted in a timely fashion and is admitted as evidence into the record. The issues in this matter focus on Complainant’s allegations that Respondent violated A.R.S. § 32-1154(A)(7)(engaging in a wrongful or fraudulent act that results in substantial injury to another) and A.R.S. §32-1154(A)(11)(failure of a licensee to pay monies in excess of $750.00 when due for materials or services rendered in connection with his operations as a contractor when he has the capacity to pay). Complainant has shown by a preponderance of the evidence that Respondent violated both provisions of the statute. For the reasons that follow, it is recommended that the Director of the Registrar of Contractors suspend Respondent’s license unless, on or before the effective date of the Director’s order, Respondent pays or tenders to Complainant the amount of $9,059.00. FINDINGS OF FACT 1. Complainant is a properly licensed roofing contractor in the State of Arizona. At all times material to this matter, Respondent was a properly licensed general contractor in the State of Arizona, operating under a Class B license, Number 120950. 2. Over a span of approximately five months, Complainant and Respondent entered into 4 separate contracts which called for Complainant to act as a subcontractor and install roofing on four homes being built by Respondent as a general contractor. The specifics of the four contracts were as follows: A. The first contract, denominated by Complainant as Job #189, and entered into on July 28, 1998, called for Complainant to roof a home and be compensated in the amount of $6,938.00. B. The second contract, denominated by Complainant as Job#192, and also entered into on July 28, 1998, called for Complainant to roof a different home and be compensated in the amount of $7,820. 00. C. The third contract, denominated by Complainant as Job#204, and entered into on September 30, 1998, called for Complainant to complete roofing of yet a third home and be compensated in the amount of $8,811.00. D. The fourth and last contract in question, denominated by Complainant as Job#206, and entered into on November 6, 1998, called for Complainant to complete partial roofing of a fourth home and be compensated in the amount of $1,800.00.

3. At the hearing in this matter, Complainant and Respondent agreed that Respondent had failed to pay a total of $9,059.00 on the four contracts. Complainant at first contended that the amount due was $13,184.00. Complainant’s representative agreed, however, that if Respondent produced a copy of a canceled check in the amount of $4,125.00 which Respondent contended it had paid in partial satisfaction of the debt owed as a result of Job #204, then Complainant would agree that the amount due to Complainant was $9,059.00. Respondent in fact produced a copy of the canceled check before the record in this matter closed. The undersigned , therefore, finds that the amount owed is $9,059.00 4. Respondent agreed that it did not pay the $9,059.00 amount. Respondent claimed, however, that Complainant’s poor workmanship provided a defense to this failure to pay. Complainant steadfastly, and credibly, contended that there was no problem with Complainant’s workmanship. Based on the testimony adduced, the undersigned finds that Complainant’s workmanship was not deficient and did not entitle Respondent to any offset. Neither, therefore, did the issue of Complainant’s work provide any legal excuse for the Respondent’s failure to pay. 5. Respondent’s testimony regarding the alleged poor workmanship on the part of the Complainant was not credible. Respondent’s testimony was undermined by the fact that Respondent made substantial payments on the amounts owed several months after the completion of Complainant’s work and several months after Respondent indicated that it became aware of alleged problems with Complainant’s workmanship. There was no indication in the evidence that any of the partial payments made by Respondent were at any time made under protest. 6. The undersigned has reviewed and considered Respondent’s two year complaint history in arriving at the recommended disposition in this case. CONCLUSIONS OF LAW 1. A.R.S. §32-1154(A) provides in pertinent part:

A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: * * * (7). The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. * * * (11). Failure by 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 * * *

2. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A "preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not." Morris K. Udall, Arizona Law of Evidence, §5 (1960). It "is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not." Black's Law Dictionary, 1182 (6th ed. 1990). 3. By statute, the fact that a respondent’s license has been previously suspended does not deprive the Office of the Registrar of Contractors from proceeding with action against that license. A.R.S. §32- 1154(D). 4. As demonstrated by Finding of Fact paragraph numbers one through five above, Respondent has failed to pay Complainant $9,059.00 when due in connection with Respondent’s operation as a contractor. Thus, Complainant has demonstrated by a preponderance of the evidence that Respondent violated A.R.S. §32-1154(11). Furthermore, the failure to pay is a wrongful act which has resulted in substantial injury to Complainant, namely, the loss of $9,059.00 dollars in money due to Complainant. Complainant has, therefore, also demonstrated that Respondent violated A.R.S. §32-1154(A)(7). RECOMMENDED DECISION Based on the foregoing, it is recommended that Respondent’s license be suspended unless, prior to the effective date of the Director’s final order in this matter, written proof is received by the Director that Respondent has paid or tendered to Complainant the amount of $9,059.00. In the event such proof is received on or before the effective date of the order, then it is recommended that the citation and complaint issued in this matter be closed. Done this day, September 27, 2000.

______________________________________ Gregory L. Hanchett Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2000, to:

Registrar of Contractors Michael P. Goldwater ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826