ALJDEC decisions subject to certification as final

09F-A0227W-ROC · Registrar of Contractors · 2009-10-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 1, 2009 at 1:15 p.m. APPEARANCES: Complainant Trinity Masonry Inc. appeared through Charles Christopher Rish, its President and Qualifying Party; Respondent Shelly Construction LLC did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On July 22, 1996, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC115997, Class B-01 for commercial general contracting to Respondent Shelly Construction LLC, a limited liability company. Respondent’s address of record was 2164 E. Broadway Rd., Ste. 300, Tempe, AZ 85282. Respondent’s current address of record is P.O. Box 1407, Mesa, AZ 85211- 1407. On July 22, 1996, the Registrar issued License No. ROC115998, Class B- for residential general contracting to Respondent. On May 3, 1999, the Registrar issued License No. ROC144732, Class L-31 for commercial masonry to Complainant Trinity Masonry Inc., a corporation. On May 16, 1999, the Registrar issued License No. ROC145075, Class C-31 for residential masonry to Complainant. On November 26, 2008, the Registrar received a complaint against Respondent’s license from Complainant. According to the complaint, Respondent general contractor owed Complainant masonry subcontractor $45,103.52 for its performance of subcontracts for masonry work in the Pronghorn Ranch subdivision. Complainant attached to its complaint eleven invoices dated September 15, 2008 and November 15, 2008, which totaled $45,103.52. The Registrar referred the complaint to Respondent for its immediate attention. On December 26, 2008, the Registrar received Complainant’s request that a citation be issued against Respondent’s licenses because Respondent had not responded to the complaint. On April 30, 2009, the Registrar issued a Citation and Complaint against Respondent’s licenses, charging A.R.S. § 32-1154(A)(7) and (11). Respondent timely filed a written answer to the Citation and Complaint, which admitted that it owed Complainant money but affirmatively alleging that it had suspended operations due to a termination of bank financing and that it was looking for additional financing from other lenders. The address on the letterhead on which Respondent’s answer was written was 2164 E. Broadway Road, Suite 300, Tempe, Arizona 85282. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, to schedule and to conduct a fair hearing. On July 29, 2009, the Registrar issued a Notice of Hearing, setting a hearing on October 1, 2009 at 1:15 p.m. The Registrar sent a copy of the Notice of Hearing via certified mail to Respondent at P.O. Box 1407, Mesa, AZ 85211-1407. On August 12, 2009, Respondent notified the Office of Administrative Hearings that, because it “[had] suspended operations and terminated employment of all operational personnel,” no one would be available to attend the hearing. The former address of record on Respondent’s letterhead had been scratched out and replaced with “P.O. Box 1407, Mesa, AZ 85211-1407.” On August 12, 2009, the Administrative Law Judge issued a minute entry, informing the parties that the administrative hearing would proceed on the date at the time scheduled, regardless of whether Respondent appeared. A copy of the minute entry order was mailed to Respondent at P.O. Box 1407, Mesa, AZ 85211-1407. A hearing was held on October 1, 2009. Complainant’s qualifying party Charles Rish testified. Respondent did not appear through a duly authorized employee or attorney, did not contact the Office of Administrative Hearings to request a continuance or that the time for the hearing be further delayed, and did not present any evidence to defend its license. Mr. Rish testified to establish foundation for the invoices that Complainant had attached to its complaint. He testified that sales had closed on the houses on the lots on which Complainant had performed masonry work, but Respondent had not paid Complainant anything. Mr. Rish testified that he delayed filing a complaint to the Registrar for non-payment because, in the past, Complainant had a good working relationship with Respondent. He filed the complaint after he received a letter from Dave Brown of Brown Family Communities, the developer that employed Respondent, informing Complainant in relevant part as follows: As you are aware we are in a deep recession, and as a result of these conditions Brown Family Communities must close its doors. We survived many downturns in the market and we were prepared for another, but no one could have predicted the depth and length of this recession. The banks called on all our loans and have since July 2008 collected all proceeds from all of our closings which was [sic] our only source of revenue. I have attempted to keep the company alive with my own money; however, we are out of business. I have been proud of our past reputation since I have built over 18,000 homes; and have been proud of our relationships with our partners. Needless to say, this has deeply affected both my family and our employees who have partnered with me over these many years. [Emphasis in original.] The Registrar’s record reveals that both of Respondent’s licenses are current and in good standing. One complaint is pending against Respondent’s License No. ROC115997, Class B-01; nineteen complaints are pending against Respondent’s License No. ROC115998, Class B-. CONCLUSIONS OF LAW 1. The notice of the hearing that the Registrar mailed to Respondent at its address of record was reasonable and it appears that Respondent actually received it.[1] 2. This matter lies within the Registrar’s jurisdiction.[2] 3. Complainant bears the burden of proof and must establish statutory violations by a preponderance of the evidence.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] 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.”[5] 4. 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 . . . .” 5. Respondent has never disputed that it owes $45,103.52 to Complainant for materials used in its contracting business. Complainant therefore has borne its burden to establish that Respondent violated A.R.S. § 32- 1154(A)(7)[6] and (11) by failing to pay Complainant $45,103.52. 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 Nos. ROC115997, Class B-01 and ROC115998, Class B- previously issued to Respondent Shelly Construction, LLC, unless prior thereto the Registrar receives written proof from Respondent that it has paid Complainant Trinity Masonry Inc. $45,103.52 by certified or cashier’s check. It is further recommended that, if before the effective date of the Registrar’s final order, the Registrar receives proof from Respondent that it has paid $45,103.52 to Complainant by cashier’s or certified check, the Registrar shall not suspend Respondent’s licenses but, instead, close Case Nos. A09-0227 and A09-0227W. 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, October 6, 2009.

______________________________________ Diane Mihalsky Administrative Law Judge

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

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

By ___________________________. ----------------------- [1] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [2] See 32-1101 et seq. [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] Black’s Law Dictionary at page 1220 (8th ed. 1999). [6] 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.”

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