ALJDEC decisions subject to certification as final

09F-2694-ROC · Registrar of Contractors · 2009-09-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 21, 2009 at 1:30 p.m. APPEARANCES: Complainant Double D Painting Inc. appeared through its owner, Paula Stone; Respondent Shelly Construction LLC did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On July 22, 1996, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC115998, Class B- for residential general contracting to Respondent Shelly Construction, LLC, a limited liability company. On December 2, 1996, the Registrar issued License No. ROC119404, Class C-34 for residential painting and wall covering to Complainant Double D Painting Inc., a corporation. Respondent’s current address of record is P.O. Box 1407, Mesa, Arizona 85211-1407. On November 13, 2008, the Registrar received Complainant’s complaint against Respondent’s license, which alleged that Respondent owed Complainant $12,195.00 for work on several different houses in three different subdivisions that Respondent was constructing. Complainant attached to its complaint copies of Respondent’s purchase orders for the work, which were signed by Respondent’s supervisors, and of Complainant’s invoices. The Registrar referred the complaint to Respondent for its immediate attention. On December 1, 2008, Complainant placed its license on inactive status. On December 2, 2008, Complainant requested that the Registrar issue a citation against Respondent’s license because it had not responded to the complaint. On April 15, 2009, the Registrar issued a Citation and Complaint against Respondent’s license, charging A.R.S. § 32-1154(A)(11), (7), and (13) (namely A.R.S. § 32-1124(B)). Respondent timely answered the Citation and Complaint, admitting that it owed Complainant money and affirmatively alleging that Respondent had suspended operations and was attempting to negotiate a line of credit with lenders. The address on the letterhead of Respondent’s answer was the Registrar’s current address of record. The letterhead of Respondent’s answer to the Citation and Complaint contained its license number preceded by the acronym “ROC.” The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, to schedule and to conduct a fair hearing. On August 5, 2009, the Registrar issued a Notice of Hearing on Complainant’s complaint, setting a hearing on September 21, 2009 at 1:30 p.m. The Registrar sent a copy of the Notice of Hearing via certified mail to Respondent at its current address of record. On August 12, 2009, Respondent informed the Office of Administrative Hearings that no one was available to attend the hearing on its behalf because it had “suspended operations and terminated employment of all operational personnel.” A hearing was held on September 21, 2009 at 1:30 p.m. Although the beginning of the duly noticed hearing was delayed fifteen minutes to allow Respondent additional travel time, it did not appear through a duly authorized officer, employee, or attorney and did not contact the Office of Administrative Hearings to request a continuance or that the time for the hearing be further delayed. Respondent presented no evidence at the hearing to defend its license. Complainant’s owner testified to establish foundation for the documents attached to its complaint and to establish the amount that Respondent owed to Complainant for the purchase orders. The Registrar’s records reveal that, if the Registrar accepts this recommended decision, it will be the only final order against Respondent on the current record. The Registrar’s record also shows that there are 20 complaints pending against Respondent. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[1] 2. The notice of the hearing that the Registrar mailed to Respondent at its address of record and the address provided on its answer to the Citation and Complaint was reasonable and Respondent is deemed to have received the Notice of Hearing.[2] 3. Complainant bears the burden of proof and must establish Respondent’s contracting law violations by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] 4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[6] 5. A.R.S. § 32-1154(A)(11) specifically includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure by a licensee . . . 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 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.” 6. A general contractor’s inability to pay and nonpayment by the owner on a project are affirmative defenses that the general contractor bears the burden to prove in a subcontractor’s administrative complaint under A.R.S. § 32-1154(A)(11). 7. Respondent has never disputed that it owes Complainant for its work pursuant to the purchase orders. Respondent did not present any evidence to establish the affirmative defenses of its inability to pay or of the owner’s failure to pay. 8. Complainant therefore has borne its burden to establish that Respondent violated A.R.S. § 32-1154(A)(7)[7] and (11) by failing to pay Complainant $12,195.00. 9. The letterhead of Respondent’s answer to the Citation and Complaint contained its license number preceded by the acronym “ROC.” Because the Administrative Law Judge’s attention was not called to any other document, the record in this matter does not establish Respondent’s violation of A.R.S. § 32-1154(A)(13).[8] RECOMMENDED ORDER Based on the contracting law violations that were proven in this matter, it is recommended that, on the effective date of the final order in this matter, the Registrar of Contractors suspend License No. ROC115009, Class B- previously issued to Shelly Construction LLC unless Respondent pays $12,195.00 to Complainant Double D Painting, Inc. It is further recommended that, if on or before the effective date of the order, the Registrar receives proof from Respondent that it has paid $12,195.00 to Complainant by cashier’s or certified check, the Registrar not suspend Respondent’s license but, instead, close the complaint in Case No. 09-2694. If the Director of the Office of Administrative Hearings certifies this Administrative Law Judge Decision, the effective date of the order will be forty days from the date of certification. Done this day, September 21, 2009.

______________________________________ Diane Mihalsky Administrative Law Judge

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

William A. Mundell, Director Registrar of Contractors c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________ ----------------------- [1] See 32-1101 et seq. [2] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] Black’s Law Dictionary at page 1220 (8th ed. 1999). [7] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” [8] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure in any material respect to comply with this chapter.” The specific statute violated is A.R.S. § 32-1124(B), which requires that licensed contractors to include their license number, which “shall be preceded by the acronym ‘ROC,’“ on “all written bids submitted by the license and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.”

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