ALJDEC

01F-M0273-ROC · Registrar of Contractors · 2001-01-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 25, 2001 APPEARANCES: Richard L. Cobb, Esq. on behalf of the Complainant Claudine Grieme, Customer Service Manager, on behalf of the Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Preliminary Matters The Notice of Hearing in this case was issued on December 21, 2000. The hearing was scheduled to commence at 9:00 a.m. on January 25, 2001. By motion dated January 12, 2001 (date stamped as received by ROC on January 17, 2001), the Respondent requested a continuance of the hearing. The motion was received by the Office of Administrative Hearings (OAH), on January 23, 2001. The Administrative Law Judge (ALJ) reviewed the motion on January 24, 2001. The motion was denied but in view of the time constraints, no written Order denying the motion was entered. The motion was denied on the record at the hearing. The grounds for the motion to continue were that due to employee turnover, the Respondent was unable to assemble a defense of some of the claims and the Respondent’s operations manager was going to be out of town on the day of the hearing. A copy of the motion was never sent to the opposing side as required by A.A.C. R2-19-108. On September 25, 2000, the Respondent had submitted a response to the complaint, to the Registrar, and asserted in part that that the Respondent lacked the staff to perform the exhaustive analysis for the case and that it was in the middle of changing accounting procedures. This claim was restated on November 16, 2000, as part of the Answer to the Citation and Complaint. It appears that the Respondent is merely attempting to delay the hearing. The needed analysis has not been done for four months, and it does not appear to be forthcoming. The Respondent’s failure to prepare a defense and failure to inform its representative at the hearing of the nature and requirements of the case, does not constitute good cause for a continuance.

The Respondent informed its representative Claudine Grieme (Grieme), on the morning of the hearing that she was to appear on behalf of the Respondent. The Respondent had not prepared Grieme for the case and she did not present any evidence to controvert the Complainant’s evidence. Findings of Fact 1. On July 8, 1999, the Respondent submitted a commercial credit application to the Complainant who is located in the Payson-Star Valley area. 2. The application was approved and the Respondent began purchasing building supplies and materials from the Complainant, for construction in the Payson area. 3. Over the period of a year, the Respondent’s payments for materials was not timely. The Respondent’s last payment to the Complainant was on July 19, 2000, and by August, 2000, the Respondent owed over $74,000.00 to the Complainant. This was after the Respondent had received credits in excess of $4,400.00 due to certain charging errors by the Complainant. 4. On August 30, 2000, the Complainant filed the complaint with the Registrar of Contractors (Registrar). 5. The Complainant obtained payment of some of the amounts after putting liens on some of the properties. As of the date of hearing, the amount owed to the Complainant by the Respondent is $34,543.11 excluding any interest charges for late payment. The Complainant has filed a claim with the Respondent’s surety but anticipated payment ($5,000.00), from the surety has not been received. Conclusions of Law The allegations in the Citation and Complaint concern A.R.S.§32- 1154(A)(7), wrongful act resulting in substantial injury and (A)(11), failure to pay money in excess of $750.00 for materials related to the licensee’s operations. 1. The evidence is not contested and no defense has been offered on behalf of the Respondent. It is concluded that the Respondent is in violation A.R.S. §32-1154(A)(11). 2. An independent violation of A.R.S. §32-1154(A)(7), wrongful conduct only, is found because no defense or mitigation has been presented on behalf of the Respondent. In fact, it appears from the record that the Respondent has been repeating the same excuse for not paying the Complainant without any attempt to do the purported analysis that is cited as the excuse, for a four month period. This strongly suggests bad faith, misrepresentation and sustains the independent violation. 3. Given the facts and conclusions of this case, it is apparent the Respondent is not giving this matter serious attention. The Recommended Order is intended to require the Respondent to do what the law requires and to impress upon the Respondent that the violations of the statutes governing licensed contractors can result in serious consequences. 4. The Complainant is informed that it is responsible for properly deducting any amounts which are received from the Respondent’s surety prior to any payment by the Respondent, from the amount found to be owing to the Complainant.

Recommended Order In view of the foregoing it is recommended commencing on the effective date of the Order entered in this matter that the Class B License No. 111187 shall be revoked; It is further recommended that if the Complainant pays or tenders payment of $34,543.11 (or lesser amount upon deducting any amount paid on behalf of the Respondent by the surety), to the Complainant on or before the effective date of the Order entered in this matter then the aforementioned revocation shall not take place and the Citation and Complaint upon which it is based shall be closed.

Done this day, January 29, 2001

______________________________________ Allen Reed 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