ALJDEC decisions subject to certification as final

06F-M2518-ROC-com · Registrar of Contractors · 2007-12-20

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COMPLIANCE HEARING: December 20, 2007 at 1:30 p.m.

APPEARANCES: >The Complainants appeared through Jamie Dinsmore. >The Respondent failed to appear.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order on Compliance Hearing are made.

FINDINGS OF FACT

1. The instant compliance hearing was duly scheduled on advance written notice duly sent to both parties. Although the start of the scheduled hearing was delayed for over twenty-five minutes to afford added time in which to make an appearance, the Respondent failed to appear either through any authorized member of the LLC entity or through any proper legal representative.

2. The primary issue to be determined hereunder was whether or not Respondent has substantially complied with the terms of a previously concluded settlement agreement that resulted in a prior Order of the Registrar closing the within Citation and Complaint.

3. Complainants’ uncontroverted evidence revealed that the parties had entered into a settlement agreement at the previously scheduled administrative disciplinary hearing pursuant to which agreement Respondent had expressly agreed to pay a total sum of $5,280.00 to Complainants by way of several periodic payments in the form of cashier’s checks to be delivered on or before specified deadline dates. The parties’ entry into the aforesaid settlement agreement prompted the assigned Administrative Law Judge to vacate the balance of the hearing and to remand the matter to the Registrar, as the forwarding agency, for appropriate further action in terminating the pending disciplinary proceeding.

4. The first agreed installment payment was to be in the amount of $500.00 and was delivered to Complainants by a personal check tended prior to the adjournment of the prior hearing session held on February 6, 2007. Complainants were shown to have taken such check to a financial institution to exchange same for a bank or cashier’s check.

5. The second installment check was in the form of a cashier’s check in the amount of $1,000.00 and was delivered several days late on March 9, 2007. This was the last payment received by Complainants despite the fact that the parties’ settlement agreement had provided for two further installment payments in the respective amounts of $2,000.00 and $1,780.00, due respectively on April 6, 2007 and May 6, 2007, in the combined aggregate monetary amount of $3,780. This remaining amount under the settlement agreement has not been paid by Respondent despite repeated and numerous requests and demands by Complainants, most all of which were ignored on the part of Respondent.

6. The credible testimony at the Compliance Hearing demonstrated that Complainants had been induced to agree to accept a settlement amount significantly less than their claim for damages resulting from Respondent’s non-performance of the construction contract and failure to return monies paid in advance for the contemplated work. The proven breach by Respondent of the parties’ settlement agreement is found and determined not only to warrant treatment by the Registrar as a circumstance in aggravation but also to constitute a failure of consideration to support the settlement agreement, thereby effectively relieving Complainants, as the non-breaching party, from any obligation to accept a lesser amount than their initial claim and entitling them to assert their entitlement to greater damages. Stated alternatively, it is manifestly unfair to limit a complaining party to the monetary sum set forth in a settlement agreement consisting of payment of a specified total amount that is ultimately never fully paid by one party in material breach of applicable settlement duties.

7. Notice is taken of the Registrar’s license files which reveal that Respondent’s Class K-21 license, held by a Limited Liability Corporation (L.L.C.) entity, was revoked for cause on May 24, 2007 under Case Number M07-1054 and again revoked for cause on November 7, 2007 under Case Number M07-1718. Such license revocations do not prevent the Registrar from conducting these administrative disciplinary proceedings which are expressly authorized by statute.[1] Nor are the Complainants precluded from continuing to pursue their available administrative remedies. Moreover, since the Respondent’s contracting license may not be restored even if belated compliance by Respondent with the payment terms of the settlement agreement is demonstrated, it is determined that no useful purpose would be served by including any conditions in the Registrar’s Order on Compliance Hearing that would reduce or eliminate any otherwise appropriate penalties. Instead, the imposition of an outright penalty of an unconditional license revocation appears to be appropriate and fully warranted in this case.

CONCLUSIONS OF LAW

1. The undisputed evidence of record as presented at the Compliance Hearing adequately established that Respondent has not fully or substantially complied with the payment terms of the parties’ settlement agreement that was concluded at the prior hearing and that had prompted the early termination of the disciplinary proceedings, leading to an Order of Closing.

2. Under all the circumstances, it is deemed appropriate to modify the previously entered Closing Order by the Registrar by converting the terms thereof to provide for the revocation of Respondent’s contracting license. Further, in light of the present revoked posture of Respondent’s license, the inclusion of remedial payment or work conditions in the Order that would otherwise serve as a means to reduce or eliminate the disciplinary penalty does not appear to be warranted.

RECOMMENDED ORDER ON COMPLIANCE HEARING

In view of the foregoing, it is recommended on Compliance Hearing that Respondent’s Class K-21 license shall be revoked on the effective date of the Order of the Registrar of Contractors entered in this matter.

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 will be forty (40) days from the date of that certification.

Dated: December 24, 2007. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

Fidelis V. Garcia, Director Registrar of Contractors Legal Department 800 West Washington Street (6th Floor) Phoenix, AZ 85007 ----------------------- [1] See A.R.S.§32-1154(C).

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