ALJDEC

01F-L0216-ROC · Registrar of Contractors · 2001-10-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 15, 2001; at 1:30 p.m. APPEARANCES: The Complainant appeared through its authorized representative, Gerb DeVries. The Respondent failed to appear. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. Respondent is the holder of a Class K-09 License issued by the Registrar of Contractors. Respondent’s License was placed on suspended status on April 11, 2001 for the Respondent’s failure to post an additional $2,500.00 bond. 2. This is a commercial matter where the Respondent performed construction work as a concrete contractor for the Complainant. The Respondent constructed concrete foundations, concrete slabs, and flat wall driveways. 3. During the course of construction, the Respondent signed numerous waiver and release statements indicating that the Respondent warranted that it either has already paid or will use the moneys it received from this progress payment to promptly pay in full all of its laborers, subcontractors, material men and suppliers. 4. As the construction work neared completion, the Complainant received a notice of a lien by Campbell Redi-Mix for materials supplied to the Respondent that were utilized during the construction project for the sum of $47,499.50. 5. The Complainant also received a lien for material and work performed by Long’s Laser Floors for the sum of $8,800.00. 6. There was no dispute that the Complainant was required to pay the total sum of $56,299.50 to satisfy the two liens. 7. There was no dispute that the Complainant had already paid the Respondent for the material and labor set forth in the two liens and that the Respondent had failed to pay Campbell Redi-Mix and Long’s Laser Floors for their work and material despite warranting that it either had or would do so upon receipt of payment of its submitted progress invoices to the Complainant. 8. The Complainant asserts that the Respondent should be given credit for “testing” in the sum of $4,750.00 leaving Complainant’s total actual damages, for resolving the liens placed on the project, at $51,549.50. 9. The Respondent’s actions, in repeatedly representing that it either had paid or would pay its material suppliers and subcontractors upon receipt of progress payments and in repeatedly failing to do so, are found to constitute a wrongful act. 10. Credible undisputed testimony established that the Respondent knew it had failed to pay its material suppliers and subcontractors when it was signing lien waivers for the project and knew that the lien waivers were erroneous and either knew or should have known that a substantial amount of unpaid bills were accumulating on the project. The Respondent’s wrongful actions were shown to have resulted in financial damage to Complainant in the sum of $51,549.50. 11. The Respondent’s actions are found to constitute a fraudulent act. 12. Notice is taken of the Respondent’s prior License record with the Registrar of Contractors. . . . . . . CONCLUSIONS OF LAW 1. The credible evidence of record established violations by the Respondent of the provisions of A.R.S. (32-1154 (A) (7) and (11). RECOMMENDED ORDER In view of the foregoing, it is recommended that the Respondent’s Class K-09 License be revoked. Done this day, October 30, 2001.

________________________________ M. Douglas Administrative Law Judge

Original transmitted by mail this ____ day of October, 2001, to:

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

By _______________________________ -----------------------

Office of Administrative Hearings 100 N. Stone Ave., Suite 704 Tucson, Arizona 85701 (520) 628-5488