ALJDEC decisions subject to certification as final

06F-2622-ROC · Registrar of Contractors · 2006-12-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 11, 2006 APPEARANCES: Teresa Ito, Credit Manager, appeared for the Complainant. Bill Buxton, Qualifying Party, appeared fro the Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. The Complainant filed the Complaint with the Registrar of Contractors (ROC), on June 26, 2006. The amount claimed as owed by the Respondent, was $9,832.39. 2. There is no dispute in this case. At the time of the hearing, the Respondent owed $6,913.72, to the Complainant for materials used by the Respondent in contracting. Based on the figures presented at the hearing, the Respondent has paid $2,918.67 since the Complaint was filed. 3. In addition to non payment, the Complainant’s other issue is that the Respondent has given the Complainant a number of NSF (No Sufficient Funds) checks.[1] 4. The Respondent testified he was given a check for $16,900.00 by MDJ Custom Construction Inc. (MDJ) for this project. After depositing the check in his account, and writing the checks to the Complainant, the Respondent learned that the MDJ check was not honored thereby resulting in the NSF checks[2]. In addition the Respondent testified his wife became seriously ill this past summer and he owes medical bills of approximately $100,000.00. Conclusions of Law The Notice of Hearing alleges violation of A.R.S. §32-1154(A)(7), a wrongful act with substantial injury and (A)(11), failure to pay in excess of $750.00 due for materials or services in connection with contracting when the licensee has the ability to pay or has received sufficient funds for the project for which the materials were purchased. 1. The Complainant has the burden of proof by a preponderance of the evidence under Culpepper v. State, 187 Ariz. 431 (1996 App.)[3] and A.A.C. R2-19-119. 2. 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. The evidence in an administrative hearing must be “substantial, reliable, and probative” (A.R.S. §41-1092.07(F)(1)). This means the Complainant has the affirmative responsibility to present sufficient competent evidence to meet the preponderance standard. The less demanding evidentiary standard in the administrative hearing does not mean that any type of evidence is entitled to serious consideration or significant weight. 4. “Substantial evidence is evidence possessing something of substance and relevant consequence and which furnishes substantial basis of fact from which issues tendered can be reasonably resolved.” Black’s Law Dictionary, Special Deluxe Fifth Edition, (St. Paul Minn.: West Publishing Co., 1979) p. 1281, citing State v. Green, 218 Kan. 438, 544 P. 2d 356, 362. 5. Based on the evidence, the Respondent did not have the capacity and presently does not have capacity to pay the Complainant for the materials. The Respondent has not been paid for the project for which the materials were purchased. There is no violation of A(11)[4]. 6. The final issue is whether in light of the NSF checks issued by the Respondent, there has been a violation of (A)(7). The Respondent testified he was unaware that the MDJ check deposited in the Respondent’s account had been dishonored. The evidence shows that checks written to the Respondent between April 24, 2006 and May 9, 2006, were returned for NSF. The Respondent’s credibility on this issue is suspect because it would seem the Respondent would have learned of the NSF problem within this two week period. More significant is the fact that two different accounts at two banks were used by the Respondent resulting in NSF checks to the Complainant. It is unlikely, and the Respondent did not testify, that he split his MDJ check between these accounts. Therefore, the Respondent could not have been relying on the MDJ check when writing NSF checks from the account in which the MDJ check was not deposited. Writing NSF checks in the total amount of over $9,000.00 is a wrongful act and the amounts involved clearly satisfy the requirement for substantial injury. The violation of (A)(7) is proven. 7. The Respondent’s license is currently suspended for non renewal effective December 1, 2006.

Recommended Order It is recommended commencing the effective date of the Order issued in this matter[5] that the Respondent’s license be placed on probation for a period of 180 days. Done this day, December 19, 2006

______________________________________ Allen Reed Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2006, to:

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

By ___________________________

----------------------- [1] The hearing file and Complainant’s exhibits contain copies of NSF checks dated April 24, 2006 for $1,439. 87 (Bank of America account), May 2, 2006 for $1,153.96 (Bank of America account) a check in the same amount of $1,153.96 dated May 11, 2006 (Wells Fargo account), a May 4, 2006 check for $1,295.78 (Bank of America account), check 1031 in the amount of $1,140.00 (Bank of America account) with a partially obscured 2006 date, and a May 9, 2006 check in the amount of $3,498.82 (Wells Fargo account). [2] The Respondent has filed a Complaint against MDJ with the case yet to be heard (See OAH Docket Nos.06F-G1810 and 1810 W) [3] The Culpepper case applies to an administrative agency. However, since any violation established in this case may result in a sanction by the agency, the ruling in the case applies equally to the Complainant. [4] This conclusion in no way relieves the Respondent of the legal obligations to pay on the acknowledged debt. [5] Forty (40) days from the date of the Order or if certified by the Director of the Office of Administrative Hearings, forty (40) days from the date of certification.

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