ALJDEC decisions subject to certification as final

08F-2526-ROC · Registrar of Contractors · 2008-12-11

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 2, 2008 APPEARANCES: Complainant was represented by authorized employees Cindy DeGrado and Justin Naylor; Respondent Cornerstone Homes and Development, Inc. failed to appear. ADMINISTRATIVE LAW JUDGE: Michael G. Wales _____________________________________________________________________ The issue presented by this matter is whether Respondent Cornerstone Homes and Development, Inc. (“Cornerstone”) is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154A. Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

PROCEDURAL BACKGROUND On October 30, 2008, the Registrar of Contractors issued a Notice of Hearing in Case No. 08-2526 advising the parties that the scheduled hearing in this matter would convene on December 2, 2008 at 1:30 p.m. On the date and at the time scheduled for the consolidated hearing, authorized employees Cindy DeGrado and Justin Naylor appeared for Complainant VW Dig, LLC. No one appeared on behalf of Cornerstone. The Administrative Law Judge delayed the commencement of the hearing for approximately fifteen minutes to allow for the appearance of Cornerstone, or the receipt of any information that would constitute good cause for Cornerstone’s absence or delay. No such information was received. Therefore, the hearing proceeded in Cornerstone’s absence.

FINDINGS OF FACT Cornerstone is the holder of a Class B- license (No. 130985) issued by the Registrar of Contractors (“ROC”).[1] Cindy DeGrado, accounts manager for Complainant VW Dig, LLC, testified that on and between November 5, 2007 and January 14, 2008, Cornerstone contracted with VW Dig, LLC for VW Dig, LLC to perform the underground utility work at three subdivisions, Rogers Ranch, Sienna Estates and Annecy, that Cornerstone, as the developer and general contractor, was constructing. VW Dig, LLC performed all of the work it was contracted to perform at the three subdivisions, yet Cornerstone has not paid VW Dig, LLC the balance of $8,280.00 owing for the work performed. Cornerstone has not complained in any way about the work, but has simply not paid, despite repeated billings and verbal requests for payment by VW Dig, LLC. On or about February 15, 2008, VW Dig, LLC filed a complaint against Cornerstone with the ROC, alleging that Cornerstone has failed to pay VW Dig, LLC for the services VW Dig, LLC performed at the three subdivisions, in the amount of $8,280.00. The Administrative Law Judge finds, based on the weight of the credible evidence of record, that the total sum of $8,280.00 is the proper balance due and owing to VW Dig, LLC from Cornerstone for the underground utility work performed by VW Dig, LLC, pursuant to an agreement with Cornerstone, at Rogers Ranch, Sienna Estates and Annecy subdivisions on and between November 5, 2007 and January 14, 2008. Notwithstanding repeated attempts and billings over a prolonged period of time, said balance remains unpaid. CONCLUSIONS OF LAW 1. In this proceeding, Complainant VW Dig, LLC has the burden to prove, by a preponderance of the evidence, that Cornerstone is subject to discipline for violations of A.R.S. § 32-1154A(7) and/or (11), as well as (15) and (13) (namely A.R.S. § 32-1124(B)), as charged by the ROC in its August 15, 2008 Citation and Complaint. See Arizona Administrative Code 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). 3. The Administrative Law Judge concludes that VW Dig, LLC met its burden of proof as to the charges of A.R.S. § 32-1154A(7) and (11). VW Dig, LLC, however, presented no evidence in support of the ROC’s allegations that Cornerstone violated A.R.S. § 32-1154A(15) and (13)(namely A.R.S. § 32-1124(B)). 4. Under A.R.S. § 32-1154A(11), a contractor is subject to discipline for the “failure . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered . . . 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 . . .” The instant record demonstrates that Cornerstone failed to pay, when due, the sum of $8,280.00 to VW Dig, LLC. Accordingly, under all of the facts and circumstances presented herein, Cornerstone’s conduct is found to constitute a violation of A.R.S. § 32-1154A(11). 5. Under A.R.S. § 32-1154A(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act . . . as a contractor resulting in another person being substantially injured.” The Administrative Law Judge concludes, from the evidence presented, that Cornerstone committed wrongful acts that substantially injured VW Dig, LLC by failing to pay for all of the underground utility work performed by VW Dig, LLC. Therefore, Cornerstone violated A.R.S. § 32- 1154A(7). 6. Based upon the above violations of the provisions of A.R.S. § 32- 1154A(7) and (11), grounds exist to impose discipline against Cornerstone’s license. 7. Upon consideration of all of the facts and circumstances presented by this case, including Cornerstone’s failure to appear for hearing and suspended license status, the Administrative Law Judge concludes that Cornerstone’s Class B- license (No. 130985) should be revoked. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: On the effective date of the Order entered in this matter, Cornerstone’s Class B- license (No. 130985) shall be revoked.

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.

Done this day, December 11, 2008.

Office of Administrative Hearings

__________________________ Michael G. Wales Administrative Law Judge

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

Registrar of Contractors Armando Contreras 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________ ----------------------- [1] A review of the ROC’s official records revealed that Cornerstone’s contracting license no. 130985 was suspended on October 16, 2008 for lack of bond. Such suspended license status does not preclude this tribunal from conducting these administrative proceedings. 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