ALJDEC decisions subject to certification as final

07F-M1199-ROC · Registrar of Contractors · 2007-09-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 13, 2007 APPEARANCES: Walter and Kelly Merly, on behalf of Complainant; no one appeared for Respondent. ADMINISTRATIVE LAW JUDGE: Michael K. Carroll _____________________________________________________________________

On November 29, 2006, a Complaint was filed with the Registrar of Contractors (“ROC”) alleging that Respondent failed to pay Complainant for work performed pursuant to a contract between the parties. On May 1, 2007, a Citation was issued by the ROC alleging that Respondent had violated A.R.S. §32-1154A (7) and (11). FINDINGS OF FACT AND CONCLUSIONS OF LAW Findings of Fact: (1) In August, 2006, Complainant entered into a contract with Respondent to perform periodic backflow testing of commercial fire systems for Respondent. (2) In August and September, 2006, Complainant conducted five tests for Respondent for which Respondent owed Complainant a total of $750.

(3) In October, 2006, Respondent sent Complainant a check for $600 which was returned by the bank due to insufficient funds. Exhibit C6. (4) On October 30, 2006, Respondent sent Complainant a fax in which it apologized for the inconvenience, and informed Complainant that it had sent Complainant a cashier’s check in the amount of $817. Exhibit C7. At the hearing, Complainant acknowledged receipt of the cashier’s check, but testified that the cashier’s check represented money owed for jobs other than the five tests that formed the basis of the Complaint. (5) Complainant testified that it never received payment from Respondent for the $750 it was owed. Conclusions of Law: (1) Complainants have the burden of proof and must establish statutory violations by a preponderance of the evidence. A.A.C. R2-19-119. A “preponderance of the evidence” is proof sufficient to persuade the fact finder that a proposition is more likely true than not. (2) Alleged violation of A.R.S. §32-1154A (7): Violations of this statutory provision are classified as criminal offenses under A.R.S. §32-1164A (1). As such, they appear to be outside the purview of this administrative proceeding. However, assuming that alleged violations of this statutory provision are cognizable in an administrative proceeding and subject to a lesser evidentiary standard than that applicable in a criminal proceeding, there was sufficient evidence to establish that Respondent’s failure to pay constituted a “wrongful act.” The term “wrongful act” is not defined in the statutes which govern the regulation of contractors, A.R.S. §§32-1101, et seq.; nor does there appear to be any case law in Arizona which defines the term. Black’s Law Dictionary, Sixth Edition, defines “wrongful act” as Any act which in the ordinary course will infringe upon the rights of another to his damage, unless it is done in the exercise of an equal or superior right. Term is occasionally equated to term “negligent,” but generally has been considered more comprehensive term, including criminal, willful, wanton, reckless and all other acts which in ordinary course will infringe upon rights of another to his damage. Citation omitted.

Applying the broad definition cited above to the facts of this case, Respondent’s failure to pay Complainant for work performed was a “wrongful act.” Furthermore, the injury suffered by Complainant, the loss of $750, was substantial. If violations of A.R.S. §32-1154A (7) are not limited by A.R.S, §32-1164A (1) to criminal acts, which would require evidence of scienter and proof beyond a reasonable doubt, Respondent’s failure to pay Complainant in this case was a violation of A.R.S. §32-1154A (7). (3) Alleged violation of A.R.S. §32-1154A (11): Violations of this provision require proof that the amount owed exceeded $750. The amount in this case was exactly $750. The evidence did not support a finding that Respondent violated this provision. RECOMMENDED ORDER If the ROC interprets the term “wrongful act” in A.R.S. §32-1154A (7) to include conduct which would not be classified as a class 1 misdemeanor under A.R.S. §32-1164A (1), it is recommended that, beginning the effective date of the order in this case,[1] Respondent’s Class K-05 license be suspended until Respondent provides proof to the ROC that it has paid restitution to Complainant in the amount of $750. Done this day, September 14, 2007.

______________________________________ Michael K. Carroll Administrative Law Judge

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

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

By ___________________________

----------------------- [1] Pursuant to A.R.S. §41-1092.08D, failure by the Registrar of Contractors to accept, reject or modify this Decision within 30 days of receipt by the agency will result in this Decision being certified by the Office of Administrative Hearings as the final administrative decision. In the event of certification of this Decision by the Office of Administrative Hearings, the effective date of the Order in this matter will be 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