ALJDEC decisions subject to certification as final

08F-G0224-ROC · Registrar of Contractors · 2008-07-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 2, 2008. APPEARANCES: True Value Drywall, Inc. was represented by its attorney, Casson Mathis, Esq. D M I Contracting Inc., doing business as Destany Homes by D M I Contracting, was represented by its attorney, Thomas Luikens, Esq. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT

1. D M I Contracting, Inc., doing business as Destany Homes by D M I Contracting (“Respondent”), is the holder of License No. 163478, a Class B- contracting license, issued by the Registrar of Contractors (“Registrar”). 2. True Value Drywall, Inc. (“Complainant”) is the holder of License No. 192724 issued by the Registrar. 3. Respondent was the general contractor for a project located at 15907 W. Deanne, Waddell, Arizona (“Waddell Project”) 4. Respondent subcontracted with Complainant for drywall installation on the Waddell Project. 5. The parties’ contract provided that Complainant would be paid a contract price in the amount of $13,790.00 for the Waddell Project. 6. Complainant performed its scope of work on the Waddell Project. Complainant provided materials and labor. 7. Respondent was the general contractor for another project located at 14598 E. Corrine Drive, Scottsdale, Arizona (“Scottsdale Project”). 8. Respondent subcontracted with Complainant for drywall installation on the Scottsdale Project. 9. The parties’ contract provided that Complainant would be paid a contract price in the amount $23,300.00 for the Scottsdale Project. 10. Complainant performed its scope of work on the Scottsdale Project. Complainant provided materials and labor. 11. On or about August 13, 2007, Complainant filed a written Complaint with the Registrar due to Respondent’s failure to pay the contract prices for the Waddell Project and the Scottsdale Project. 12. On or about August 14, 2007, Complainant filed a Verified Complaint in Case No. CV2007-014592 in the Superior Court seeking damages due to Respondent’s failure to pay the contract prices for the Scottsdale Project and the Waddell Project. 13. As a result of negotiations between the parties, Complainant filed a Notice of Dismissal without prejudice. The parties had agreed that Complainant would do that in return for Respondent paying a portion of the outstanding debt immediately and the balance in approximately four weeks. There is no credible evidence that Complainant had agreed to seek a dismissal of its Registrar case against Respondent. 14. There is no credible evidence that Respondent’s promise to pay the outstanding balance owed for the Scottsdale Project was conditioned upon it receiving payment from the property owner. 15. Respondent failed to timely pay the remaining balance of $23,300.00 to Complainant. As a result of Respondent’s failure to pay the outstanding balance pursuant to the settlement agreement, Complainant reopened the civil lawsuit. 16. Respondent has received payment in the amount of approximately $550,000.00 out of a total contract price of approximately $850,000.00 from the owner of the Scottsdale Project. 17. Respondent’s secretary/treasurer, Joel Fredericks, testified that Respondent has a monetary dispute with the owner of the Scottsdale Project. He testified that Respondent has not, and will not, file a civil lawsuit against the owner for the balance of the contract price. 18. Respondent’s failure to pay the outstanding balance to Complainant is a wrongful act that substantially injured Complainant. 19. Respondent failed to present credible evidence to support its lack of capacity to pay the balance owed to Complainant. 20. The parties’ monetary dispute should be resolved in their civil litigation. 21. A review of the Registrar’s official online records reveals that Respondent has 11 open complaints and 6 resolved/settled/withdrawn complaints against its contracting license.

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in this matter. The standard of proof is preponderance of the evidence. A.A.C. R2-19-119(A). 3. Respondent violated the provisions of A.R.S. § 32-1154(A) (7), as cited in the Citation and Complaint issued by the Registrar. 4. Respondent violated the provisions of A.R.S. § 32-1154(A) (7), as cited in the Citation and Complaint issued by the Registrar. 5. Respondent violated the provisions of A.R.S. § 32-1154(A) (11), as cited in the Citation and Complaint issued by the Registrar.

RECOMMENDED ORDER

Respondent’s License No. 163478 shall be revoked on the effective date of the Order entered in Case No. G08-0224. 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 45 days from the date of that certification. Done this day, July 22, 2008

______________________________________ Brian Brendan Tully Administrative Law Judge

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

Fidelis V. Garcia, Director Registrar of Contractors 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________

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