ALJDEC decisions subject to certification as final

09F-0204-ROC · Registrar of Contractors · 2009-04-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 18, 2009 APPEARANCES: Donald and Mary Smith appeared on behalf of Complainant Central Arizona Supply. Brooke Blair appeared on behalf of Respondent Elysium Custom Homes, L.L.C. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The question presented by this matter is whether Respondent Elysium Custom Homes, L.L.C. (“Elysium”) is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154(A). Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. Elysium is the holder of a Class KB-01 license (No. 217081) issued by the Registrar of Contractors (“ROC”). Brooke Blair is Elysium’s qualifying party and member. Elysium filed its Articles of Organization with the Arizona Corporation Commission on July 16, 2004. See Exhibit B. Mr. Blair is Elysium’s Statutory Agent and member. Id. 2. On or about January 6, 2005, Elysium Homes, L.L.C. (“Elysium Homes”), an investment company, submitted an Application and Agreement for Business Credit (“Application”) to Complainant Central Arizona Supply (“CAS”). See Exhibit 1. CAS is a supplier of plumbing, air conditioning, and heating materials. The Application lists Mr. Blair as a Manager/Member of Elysium Homes, and Mr. Blair’s father, Bill Blair, as a Member. Id. The nature of the business is listed as “build custom homes”. Id. Both Blairs signed the Application. Id. The business address listed for Elysium Homes is 4333 N. Civic Center Plaza, #500, Scottsdale, Arizona 85251. Id. 3. Elysium Homes filed its Articles of Organization with the Arizona Corporation Commission on August 19, 2005. See Exhibit A. Mr. Blair is Elysium Homes’ Statutory Agent and member. Id. 4. On July 11, 2008, CAS filed a complaint against Elysium with the ROC alleging that Elysium failed to pay CAS in the amount of $3,656.80 for plumbing, air conditioning, and heating materials from February 28, 2007 through June 19, 2007. CAS indicated on its complaint form that Elysium’s business mailing address is 1544 West Las Palmaritas, Phoenix, Arizona 85021. 5. Donald Smith, CAS’s President, testified that he understands the economic hardship that certain contractors are facing, however, CAS has made repeated requests for payment from Elysium, and Elysium has not responded to the requests. As such, Mr. Smith felt that CAS had no alternative but to file an ROC complaint against Elysium. 6. Mr. Blair testified that the account with CAS was created for Elysium Homes, not Elysium. Mr. Blair further testified that Elysium was the developer for the two homes in question, and that Allcho Builders was the contractor that constructed one of the homes that happens to be Mr. Blair’s personal residence. Mr. Blair testified that all invoices were directed to Elysium Homes, and that either Elysium Homes or Mr. Blair personally paid the invoices. Mr. Blair testified that Elysium was not licensed until March 5, 2006. See Exhibit C. Mr. Blair does not dispute that the monies are owed to CAS, however, he contends that Elysium is not the entity that owes the monies as it was not the contractor that constructed the homes in question, but rather Elysium Homes or Allcho Builders owes monies to CAS. 7. The Administrative Law Judge finds, based on the weight of the credible evidence of record, that CAS is owed the sum of $3,656.80. However, CAS failed to establish that Elysium is the entity that owes such sum for the following reasons: i) the Application was submitted by Elysium Homes, not Elysium; ii) Elysium was not the contractor of record for at least one of the two homes in question, and CAS failed to establish that Elysium was the contractor of record for the other home; and iii) CAS failed to establish that Elysium was the entity that purchased the materials and failed to pay for those materials. Nothing herein should be construed as precluding CAS from pursuing a claim against Elysium in a court of competent jurisdiction. CONCLUSIONS OF LAW 1. In this proceeding, CAS bears the burden to prove, by a preponderance of the evidence, that Elysium is subject to discipline for violations of A.R.S. § 32-1154(A)(7) and/or (A)(11) as charged by the ROC in its December 18, 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 CAS failed to meet its burden of proof as to both of the ROC's charges. 4. Under A.R.S. § 32-1154(A)(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 in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.” The instant record fails to demonstrate that Elysium failed to pay CAS, as CAS failed to establish that Elysium was the entity that purchased the materials from CAS. Accordingly, under all of the facts and circumstances presented herein, Elysium is not in violation of A.R.S. § 32-1154(A)(11). 5. Under A.R.S. § 32-1154(A)(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 CAS failed to establish that Elysium committed a wrongful act that substantially injured CAS. Therefore, Elysium is not in violation of A.R.S. § 32-1154(A)(7). 6. The Administrative Law Judge concludes, based upon the weight of the evidence of record, that no grounds exist to impose discipline against Elysium’s license. The ROC’s Citation in Case Number 09-0204, and the Complaint upon which it is based, should be dismissed. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: It is recommended that no discipline be imposed against Elysium’s license, and that the Citation issued in Case Number 09-0204, together with the Complaint upon which it is based, be dismissed. 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 40 days from the date of that certification. Done this day, April 6, 2009.

______________________________________ Sondra J. Vanella Administrative Law Judge

Original transmitted by mail this ____ day of April, 2009, to:

William A. Mundell, Director Registrar of Contractors 3838 North Central Avenue Phoenix, AZ 85012

By ___________________________ -----------------------

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