ALJDEC decisions subject to certification as final

07F-M1947-ROC · Registrar of Contractors · 2008-04-03

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 2, 2008 APPEARANCES: Complainant Rabago Electric, LLC was represented by Jaime Rabago, managing member; Respondent Dahl Luxury Homes, LLC was represented by Derek Dahl, managing member and qualifying party. ADMINISTRATIVE LAW JUDGE: Michael G. Wales _____________________________________________________________________ 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. This matter convened for hearing at the time, date and place set forth in the Registrar of Contractors’ Notice of Hearing dated February 29, 2008. 2. Complainant Rabago Electric, LLC (“Complainant”) is a limited liability company which holds Arizona Contractor’s License No. 125175, Class C-11 (Residential Electrical). Jaime Rabago (“Mr. Rabago”) is the managing member of the limited liability company and the qualifying party for the license. 3. Respondent Dahl Luxury Homes, LLC (“Respondent”) is a limited liability company which holds Arizona Contractor’s License No. 218291, Class B-, (General

Residential Contractor). Derek Dahl (“Mr. Dahl”) is the managing member of the limited liability company and the qualifying party for the license. 4. Complainant filed a complaint with the Registrar of Contractors (“ROC”) on April 3, 2007 wherein Complainant alleged, inter alia, that Respondent “does not want to pay subcontractor, all work has been completed as stated in contract.” 5. On August 16, 2007, Complainant filed correspondence with the Registrar of Contractors wherein Complainant requested a hearing. 6. On November 8, 2007, the Registrar issued a Citation and Complaint in Case No. M07-1947 charging Respondent with possible violations of A.R.S. § 32-1154A (7) and (11). 7. November 19, 2008 Mr. Dahl, on behalf of Respondent, filed an answer to the Citation and Complaint wherein he asserted, inter alia, “Dahl Luxury Homes LLC never entered into a contract with Rabago. Dahl Luxury Homes LLC is a separate entity with other members and has yet to do any contracting work. I hired Rabago separately as an owner/builder…” 8. At the hearing, Mr. Rabago testified on behalf of Complainant and submitted Exhibits C-1 and C-2 which were marked, admitted and considered.

9. Mr. Dahl testified on behalf of Respondent and submitted Exhibit R-1 which was marked, admitted and considered. 10. From the evidence elicited at the hearing, the following salient facts are important to note: a. Mr. Rabago testified that on June 14, 2006 he, on behalf of Complainant Rabago Electric, LLC, entered into a contract to perform electrical work at a home under construction by Mr. Dahl. Mr. Rabago indentified Exhibit C-1 as the June 14, 2006 contract between the parties. The contract states the work was to be performed on a home on Lot 24, Copper Canyon subdivision, in Mesa, Arizona. b. Mr. Rabago testified that, due to a disputed claim as to whether or not Rabago Electric abandoned the job, Mr. Dahl refused to pay the remaining 30% of the contract balance for a sum of $8,211.80. Mr. Rabago denied abandoning the job and seeks payment of the $8,211.80 plus $1,289.35 interest. c. Mr. Rabago testified that the parties to the contract were Rabago Electric, LLC and Mr. Dahl, not Dahl Luxury Homes, LLC. Exhibit C- 1, the contract at issue, identifies the only parties to the contract as Rabago Electric, LLC and Derek Dahl. d. Mr. Rabago admitted on cross-examination that he has no evidence to show that Rabago Electric contracted with Respondent Dahl Luxury Homes, LLC rather than with Mr. Dahl personally. e. Mr. Rabago also admitted that the only reason he brought a complaint against Respondent Dahl Luxury Homes, LLC was because Mr. Dahl was refusing to pay him under the contract. f. Mr. Dahl, managing member for Respondent, testified that Respondent Dahl Luxury Homes, LLC was not the contractor of record for the home on Lot 24. Mr. Dahl further testified that he was building his personal residence on Lot 24 as an owner-builder and he personally entered into the contract with Complainant Rabago Electric, LLC. Mr. Dahl further testified he did not enter into any contract with Rabago Electric, LLC on behalf of Respondent Dahl Luxury Homes, LLC.

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors in Case No. M07-1947 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.

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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, Complainants must demonstrate by a preponderance of the evidence that Respondent 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. This tribunal determines and concludes that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (7). Complainant presented no evidence to establish that the Respondent, acting as a contractor, committed a wrongful act. No evidence was presented that Respondent Dahl Luxury Homes, LLC entered into a contract with Complainant or that Respondent Dahl Luxury Homes, LLC was legally obligated to pay monies to Complainant. The evidence, in fact, established the opposite; that Respondent Dahl Luxury Homes, LLC was not a party to the contract with Complainant and is not legally obligated to pay monies to Complainant. As such, Respondent did not commit any wrongful act by its refusal to pay any monies demanded by Complainant in regards to work performed by Complainant on Lot 24. 4. This tribunal also determines and concludes that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (11). Complainant presented no evidence to establish that Respondent Dahl Luxury Homes, LLC failed to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with its operations as a contractor. No evidence was presented that Respondent Dahl Luxury Homes, LLC was the contractor for the residence at Lot 24; that Respondent was legally obligated to pay monies to Complainant; or that Respondent failed to pay monies for any services rendered in connection with its operations as a contractor. In fact, the evidence at the hearing established that the Complainant brought the complaint against the Respondent Dahl Luxury Homes, LLC solely for the purposes of pressuring a member of that LLC to pay his personal debt to Complainant.

RECOMMENDED ORDER

On the basis of the foregoing, IT IS RECOMMENDED that the entire Citation and Complaint in Case No. M07-1947 be dismissed.[1] Done this day, April 3, 2008. Office of Administrative Hearings

______________________________________ Michael G. Wales Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Registrar of Contractors Fidelis V. Garcia 3838 N. Central Ave., Ste. 400 Phoenix, AZ 85012-1906

----------------------- [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