ALJDEC decisions subject to certification as final

07F-M1275-ROC-com · Registrar of Contractors · 2009-01-20

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COMPLIANCE HEARING: January 15, 2009 at 1:30 p.m.

APPEARANCES: >Complainant appeared through Jeffrey R. Howes, its qualifying party and a member of the LLC entity. >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 convened following receipt of notification from Complainant that Respondent had breached the terms of the parties’ settlement agreement that had effectively cut short a previously scheduled administrative hearing on the merits and had resulted in the entry of the Registrar’s Order of Closing.

2. Pursuant to the concluded terms of the prior settlement agreement, Respondent had agreed to execute and deliver to Complainant an assignment of its monetary rights under an

identified arbitration award. The credible, uncontroverted testimony at the Compliance Hearing revealed that no such assignment was ever delivered by Respondent despite numerous and repeated requests and demands by or on behalf of Complainant. Moreover, it further appeared that the Respondent’s reported entitlement to any arbitration award in its favor was wholly untrue, and in point of fact, the identified award was made against, and not in favor of, Respondent.

3. It is determined that Respondent has materially and prejudicially breached the parties’ settlement agreement by failing to honor its applicable obligations thereunder. Such breach is further determined to effectively constitute a failure of consideration to support the aforesaid settlement agreement, thereby leaving the Complainant free, as the non- breaching party, to assert and pursue its claims under the previously filed complaint in this case.

4. Complainant had served as the selected plumbing subcontractor on a commercial project for which Respondent had been acting as the project’s general contractor. The agreed subcontract total cost price was $23,200.00. Although the amount set forth in the filed complaint as remaining unpaid and owing was $15,544.00, the credible testimony at the Compliance hearing demonstrated that Respondent had subsequently tendered monetary payments equal to somewhat over $5,600.00 directly to Complainant’s suppliers plus a further payment of $3,000.00 made directly to Complainant. The resulting unpaid and long past due balance was shown to be not less than $6,900.00. No further payments were transmitted by Respondent to or for the benefit of Complainant.

5. In addition to constituting a failure on the part of Respondent to pay sums when due in connection with its contracting activities, the ongoing failure or refusal of Respondent to pay the remaining balance owed under the subcontractual arrangements is additionally found to constitute a wrongful act resulting in financial detriment to Complainant within the meaning of another contracting law provision charged as having been violated by Respondent. The demonstrated breach of the parties’ settlement agreement that was entered into during the originally scheduled administrative hearing is further determined to constitute another wrongful act, bordering on being fraudulent as well, by this Respondent.

6. Notice is taken of the Registrar’s license files which reveal that Respondent’s Class KB-01, held by a Limited Liability Corporation (L.L.C.) entity, was revoked in another matter under Case Number M07-2349 on May 16, 2008. Such license revocation neither precludes the Complainant from pursuing its administrative remedies nor prevents the Registrar from conducting these administrative disciplinary proceedings which are expressly authorized by statute.[1] However, since at this time, compliance by Respondent with any reasonable payment conditions otherwise deemed to be appropriate for inclusion in the Order to be entered hereunder would not serve to restore the revoked license, it is determined that no such conditions be included.

7. As expressly stated in the Registrar’s Order reopening the complaint and setting a Compliance hearing in this matter and also in the Notice of Compliance hearing, Respondent’s license may be subjected to the immediate imposition of discipline on and after a finding that Respondent has failed to comply with the terms of the parties’ settlement agreement.

8. By the failure of Respondent to appear at and participate in the scheduled compliance hearing of this matter, no evidence in defense or in mitigation of the charged violations was presented to the tribunal.

CONCLUSIONS OF LAW

1. The undisputed evidence of record adequately established that Respondent has failed to comply with its obligations under the settlement agreement.

2. The evidence further supported a determination that Respondent has violated the wrongful act and the non-payment provisions set forth in A.R.S.§32-1154(A) (7) and (11), as charged in the originally issued Citation.

3. In light of the already-revoked status of Respondent’s contracting license, no valid reason is found to exist for the inclusion in the Registrar’s Oder herein any payment conditions that would serve to reduce of eliminate any otherwise appropriate disciplinary penalty. Another revocation penalty against Respondent’s license is determined to be fully warranted.

RECOMMENDED ORDER ON COMPLIANCE HEARING

In view of the foregoing, it is recommended that Respondent’s Class KB-01 license shall be revoked on the effective date of the Registrar’s Order 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: January 21, 2009. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

Armando Contreras, Director Registrar of Contractors 3838 North Central Avenue (Suite 400) Phoenix, AZ 85012 - 1906 ----------------------- [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