ALJDEC decisions subject to certification as final

06F-2290-ROC · Registrar of Contractors · 2007-06-25

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 5, 2007 APPEARANCES: Complainant: Jeff Rueb, corporate officer, appeared, pro per. Respondent: Respondent failed to appear either through authorized representative or counsel. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. The hearing convened at the time, date and place set forth in this tribunal’s March 22, 2007 Order Granting Continuance. 2. Complainant J L R Enterprises, Inc. (“Complainant”) is a corporation doing business in Arizona. Jeff Rueb (“J. Rueb”) is a corporate officer for the company. 3. Respondent Magnum Construction Inc. (“Respondent”) is a corporation which holds Arizona Contractor’s License No. 125895, Class B-03 (Residential General Remodeling and Repair) issued by the Registrar of Contractors (“ROC”) on July 28, 997. Mark Steven Borrelli (“Borrelli”) is a corporate officer and the qualifying party for the license. A review of the licensing database maintained by the Registrar of Contractors indicates that this license was suspended January 17, 2002 and lifted May 28, 2002 (G020071) and suspended August 1 through 7, 2003 (non-renewal), November 6, 2003 through July 1, 2004 (lack of bond), August 1 through November 3, 2005 (non-renewal) and August 17, 2006 (lack of bond). The license was cancelled April 29, 2007. 4. Complainant filed a complaint with the Registrar of Contractors on May 8, 2006 wherein it alleged that $2,639.77, including $76.37 in finance charges, is due and owing from Respondent for trusses provided and truss calculations/engineering performed and/or caused to be performed by Complainant for a residential project located at 5213 W. Saguaro Park Lane, Glendale, Arizona (“the Mentlick premises/project”). 5. On May 26, 2006, Respondent filed an answer with the Registrar of Contractors wherein it affirmatively asserted, inter alia, that it owes Complainant only $1,375.00 for trusses and a delivery charge pursuant to invoice 9001 and is willing to remit that sum upon the presentation of a corrected invoice. Respondent disputes its obligation to pay Complainant sales taxes of $105.00 due to Complainant having “had our tax information since 12/16/05.” 6. Complainant filed a request for hearing on June 4, 2006. 7. On August 3, 2006, the Registrar issued a CITATION AND COMPLAINT in Case No. 06-2290 charging Respondent with possible violations of A.R.S. §32-1154A 7 and 11. 8. On September 1, 2006, the Registrar issued its default Decision and Order due to Respondent’s failure to file a written answer to the complaint as required by law. 9. On December 12, 2006, the Registrar issued its Order Granting Request for Rehearing based on Respondent’s September 8, 2006 correspondence filed with the ROC wherein Respondent related ongoing problems with the United States Postal Service in El Mirage and its failure to receive notice of the certified mail sent by the ROC. 10. At the hearing, J. Rueb credibly testified and submitted Exhibits 1 and 1A through 11 which were marked, admitted and considered. Kerry Schrock (“Schrock”), truss designer/estimator, Bonnie Rueb (“B. Rueb”), controller, and Travis Rueb (“T. Rueb”), general manager, also credibly testified on behalf of Complainant. 11. Respondent failed to appear through any authorized representative or counsel. 12. Based on the uncontroverted evidence presented by Complainant, the following uncontroverted salient facts were established and are important to note: a. On or about November 17, 2005, Complainant provided Respondent with an estimate for trusses to be used on the Mentlick project for a total of $4,200.00 plus a $75.00 delivery charge. (Exhibit 1) b. On or about November 23, 2005, pursuant to changes requested by Respondent, Complainant provided Respondent with a Revised Truss Cost estimate (“revised estimate”) for a total $4,350.00 plus a $75.00 delivery charge. (Exhibit 1A) c. The revised estimate was signed November 28, 2005 by Mark Borrelli on behalf of Respondent and Respondent paid $4,200.00 toward the amount due thereunder. d. Based on the above-referenced payment and executed revised estimate, Complainant began production of the trusses based on the measurements provided by Respondent. e. Subsequently, upon commencement of the construction of the Mentlick project it was determined that Respondent had provided erroneous measurements for several portions of the structure which required recalculation and/or additional engineering for the trusses as well as the fabrication of new trusses. (Exhibits 2, 3, 4, 5, 6, 7 and 8) f. Respondent failed to provide Complainant with the requisite Arizona State tax form 5000 which therefore required Complainant to charge $118.71 in sales taxes to Respondent for the subject trusses. g. Respondent owes Complainant $2,639.77 for engineering, re- engineering and manufacture of trusses, sales taxes and late charges. (Exhibit 8)

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors in Case No. 06-2290 charged Respondent with possible violations of A.R.S. §32- 1154A 7 and 11. Those statutory sections require that the holder of a license or person listed on the license shall not commit the following:

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 or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with his operations as a contractor when he has the capacity to pay or, if he lacks the capacity to pay, when he has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over this matter pursuant to A.R.S. § 32-1101, et. seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondents, or either of them, violated any one, or more, of the statutory sections cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also, Culpepper v. State of Arizona, 187 Ariz. 43, 930 P.2d 508 (App. 1996). 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 (Rev. 6th ed. 1990). 3. The purpose of licensing Arizona contractors is to regulate the conduct of contracting and protect the public from unscrupulous acts. Beazer Homes Ariz., Inc. v. Goldwater, 196 Ariz. 98, 101, 993 P.2d 1062, 1065 (App. 1999); Better Homes Constr. v. Goldwater, 203 Ariz. 295, 300, 53 P.3d 1139 (App. 2002). The statutory purpose is to prevent unscrupulous or financially irresponsible contractors from deceiving and taking advantage of those who engage them to build. Sobel v. Jones, 96 Ariz. 297, 394 P.2d 415 (1964). 4. This tribunal determines and concludes that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent failed to remit to Complainant the sum of $2,639.77 for engineering, re-engineering and manufacture of trusses, sales taxes and late charges due on the Mentlick project in violation of A.R.S. §32-1154A (11). 5. This tribunal further determines and concludes that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent’s failure to remit to Complainant the above-referenced amount of $2,639.77 was wrongful and resulted in substantial injury to Complainant. Therefore, a violation of A.R.S. §32-1154A (7) has been proven as charged in the issued Citation in Case No.06-2290. 6. It is also determined and concluded that the weight of credible, probative and relevant evidence established that Respondent failed to act in good faith in consummating its contract with Complainant on the Mentlick project. Such absence of good faith is further demonstrated by Respondent’s failure to appear at the hearing which shall serve as a factor in aggravation in this matter.

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that commencing on the effective date of the Registrar’s Order entered in this matter, the Class B-03 license of Respondent be suspended until the Registrar of Contractors receives written proof that Respondent has remitted the sum of $2,639.77 to Complainant. IT IS FURTHER RECOMMENDED that, if Respondent remits the above- described amount to Complainant and provides written proof thereof to the Registrar of Contractors, no license suspension shall take place.[1] Done this day, June 25, 2007.

________________________ Brian E. Smith Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

Registrar of Contractors Fidelis V. Garcia Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

By __________________________ ----------------------- [1] 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 in this matter will be forty (40) days from the date of that certification.

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