ALJDEC

01F-2795-ROC · Registrar of Contractors · 2001-12-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 26, 2001. APPEARANCES: Guy Knoller, Esq., appeared on behalf of Complainant C.J. Downs. Charles Firestein, Esq., appeared on behalf of Respondent Air Sciences. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________ In this matter, Complainant alleges that the Respondent licensee Air Sciences, Inc., has violated A.R.S. §32-1154(A)(7) (committing a wrongful or fraudulent act that results in substantial harm to another), A.R.S. §32- 1154(A)(11) (failure to pay monies in excess of $750.00 when due and owing), and A.R.S. §32-1154(A)(13) (failure in any material respect to comport with the provisions of Chapter Ten, Title 32). Based on the evidence adduced at the hearing, the following findings of fact, conclusions of law, and recommended decision are made. FINDINGS OF FACT 1. Complainant is the assignee of accounts payable to Crown Technical Services. Crown Technical Services was, at all times material to this matter, in the business of providing skilled and unskilled temporary labor to contractors. 2. Respondent has at all times material to this complaint held various licenses, among those, a Class K-37 plumbing license, license number 146219, and a Class B-01 general contracting license, license number 141528, the license at issue in this case. Between April, 2000 and May, 2000, the Class K-37 license named Ricky Lee Cox as president of the entity holding the K-37 and Harold Lee Jordan as the qualifying party. Between the above mentioned dates, the Class B-01 license named Ricky Lee Cox as the president and Gary Charles Stephens as the qualifying party. 3. This case involves invoices submitted by Complainant to Air Sciences, Inc. for work done by its temporary laborers at various construction sites around the valley during April and May, 2000. There is no dispute between the parties as to the amount due for the services: $10,583.28. 4. The issue in this matter focuses on Respondent’s contention that Air Sciences, Inc. is not responsible for the outstanding invoices as Air Sciences, Inc., according to Respondent, did not contract for the services. 5. At the hearing in this matter, Complainant testified that Crown Technical provided temporary manpower to Air Sciences, Inc. Complainant further testified that Ricky Lee Cox is the owner of Air Sciences, Inc. Complainant further testified that he and Cox talked during October, 2000 approximately five times. At no time during these conversations did Cox deny that the amount sought by Crown Technical was inaccurate. At no time did Cox deny that Air Sciences, Inc. was responsible to pay for the invoices. Complainant further testified that Cox indicated that he would make the payments. 6. At the hearing, Cox testified that he had sold Air Sciences, Inc. in March, 2000, to three of his former partners, Walter McBee, Harold Jordan, and Gary Stephens. Cox contended that these three persons then contracted for the temporary services which have become the focus of this case. Cox admitted at the hearing that he continued to be named on the license which is the subject of the instant disciplinary proceeding. Cox also admitted that he failed to comply with A.R.S. §32-1151.01 as he never sent in any notice of resignation or change of ownership to the Registrar of Contractors. The evidence shows that Cox never notified the Arizona Corporation Commission of the alleged change of ownership. . . . 7. The Registrar’s license records show that Harold Jordan remained on license number 146219 during April and May, 2000. The Registrar’s license records also show that Gary Stephens remained on license number 141528 during April and May, 2000. This evidence, taken in conjunction with the testimony of Complainant as well as that of Darrell Willis, demonstrates that the employment services contracted for in this case were undertaken under the license involved in this case and were contracted for by Air Sciences, Inc. 8. Cox contends he has no liability because he sold Air Sciences, Inc. to McBee, Stephens and Jordan in March, 2000. Cox also testified that he took back ownership of Air Sciences after McBee, Stephens, and Jordan defaulted on the purchase after September, 2001, a date subsequent to the time when Air Sciences, Inc. contracted with Crown Technical for the services which are at issue in this case. 9. The undersigned has reviewed the respondent licensee’s two year complaint history in considering the recommended disposition in this matter. That history is unremarkable except for the issuance of Citation number 01-0632 for an alleged failure to pay. That matter was resolved before hearing when the parties stipulated to dismissal of the matter. CONCLUSIONS OF LAW 1. 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). . . . . . . . . . 2. 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 for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay. . . * * * (13). Failure in any material respect to comply with this chapter.

* * * 3. In this matter, as demonstrated by the findings of fact above, the licenses were used to obtain services for Air Sciences, Inc. While Respondent contends that he obtained no benefit, he in fact has. The entity which Respondent got back was in fact enriched by the services provided by Complainant. Further, Respondent has failed to set forth any law which would absolve Air Sciences, Inc., of the duty to pay for the services rendered by Crown Technical since it was Air Sciences, Inc. that contracted for the services even though Bobby Lee Cox may not have owned Air Sciences at the time. It is incontrovertible that Air Sciences Inc. contracted for the services using the license which hangs in the balance in this case. Both the policy and the language of A.R.S. §32-1154(A)(11) demonstrate that the statute’s provisions are applicable to this case and that a violation has been established by Complainant. Furthermore, to hold otherwise would be to encourage less than scrupulous contractors to play a shell game with their licenses in order to avoid payment of legitimate debt. Such a construction of the statute should not be countenanced as to do so would undermine the very purposes of this statute. 4. The failure to pay Complainant for the services rendered in this matter also amounts to wrongful conduct on the part of the Respondent. Complainant has been . . . injured by the loss of over $10,000.00. Accordingly, Complainant has demonstrated a violation of A.R.S. §32-1154(A)(7). 5. Complainant has also demonstrated a violation of A.R.S. §32- 1154(A)(13) by showing that Respondent has violated A.R.S. §32-1154(A)(11).

RECOMMENDED DECISION Based on the foregoing, it is recommended that on the effective date of the final order issued in this matter that the Director of the Registrar of Contractor’s suspend Respondent’s license until such time as Respondent has paid or tendered to Complainant the amount of $10,583.28. In the event that Respondent pays or tenders said amount to Complainant on or before the effective date of the final order issued in this matter, then it is recommended that the citation and complaint be closed. Done this day, December 13, 2001.

______________________________________ Gregory L. Hanchett Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2001, 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