ALJDEC decisions subject to certification as final

09F-P0222-ROC · Registrar of Contractors · 2010-02-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 5, 2010 APPEARANCES: Heaven Flooring, L.L.C. was represented by its authorized representative, Douglas Malden. Progressive Floor Coverings, Inc., doing business as Fantasia Interiors, was represented by its authorized representative, Yvonne Wyman. 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. Progressive Floor Coverings, Inc., doing business as Fantasia Interiors (“Respondent”), is the holder of License No. 090160, a Class C-08 contracting license issued by the Registrar of Contractors (“Registrar”). 2. Heaven Flooring, L.L.C. (“Complainant”) is the holder of License Nos. 230667 and 230668 issued by the Registrar. 3. On January 13, 2009, Complainant filed a written Complaint with the Registrar alleging nonpayment by Respondent in the amount of $4,433.25 for work performed by Complainant on the Moore/Meyer Lot #3, Rim Club Cottages, in Payson, Arizona. The Registrar designated Complainant’s Complaint as Case No. P09-0222. 4. The Registrar issued a Citation and Complaint in Case No. P09-0222 alleging violations by Respondent of A.R.S. § 32-1154(A) (7), (11), (13), specifically A.R.S. § 32-1124(B) and (15). 5. The Registrar forwarded Case No. P09-0222 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 6. It is undisputed that Respondent owes Complainant the sum of $4,433.25 for the work it performed for Respondent. 7. Respondent contends that it has not received payment from the project’s owner, Rim Club Cottages, L.L.C. and, therefore, it has not paid Complainant. 8. Complainant paid for the materials and labor for its scope of work. 9. On December 11, 2009, Respondent obtained a Default Judgment Against Defendants Michael G. Duffy and Susan E. Duffy in the Superior Court of Maricopa County in Case No. CV2009-031424. Michael G. Duffy is the sole member of Rim Club Cottages, L.L.C. and Susan E. Duffy is his wife. 10. Complainant’s member and qualifying party, Douglas Malden, testified that Respondent is still in business and, therefore, it has the capacity to pay Complainant. 11. There is no evidence that the parties entered into a contract containing a “pay when paid” clause. 12. Respondent is found to have failed to pay any portion of the outstanding balance of $4,433.25 owed to Complainant. There is no credible evidence that Respondent lacks the capacity to pay that debt. Rather, Respondent does not intend to pay the debt until it receives payment from the project owner or enforces its judgment against the Duffys. However, there is no legal justification for Respondent’s nonpayment. 13. Respondent’s failure to pay Complainant constitutes a wrongful act resulting in substantial injury to Complainant. Complainant has been denied the use of its earned money. 14. Although the issue was not addressed by the parties at the hearing, there is documentary evidence to support the charged violation that Respondent failed to properly list its contracting license number on documents, as required. 15. There is no evidence that Respondent failed to contract in the name appearing on its contracting license number, as charged in the Citation and Complaint. 16. A review of the Registrar’s official electronic licensing records reveals that Respondent’s License No. 090160 was suspended by operation of law for lack of bond on April 12, 2009. Those records further reveal that Respondent is also the holder of License No. 111833, a Class C-48 contracting license, which is in good standing. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.R.S. § 32-1154(C), the suspension of Respondent’s License No. 090160 does not deprive the Registrar of the authority to impose discipline upon that license for proven statutory violations in this matter. 3. A.R.S. § 32-1129.01 cited by Respondent does not provide a statutory basis for Respondent to only pay Complainant after it receives payment from the project’s owners or the Duffys. 4. Respondent violated the provisions of A.R.S. § 32-1154(A) (11), as charged in the Citation and Complaint issued by the Registrar. The above Findings of Fact and Conclusion of Law No. 3 support this conclusion. 5. Respondent violated the provisions of A.R.S. § 32-1154(A) (7), as charged in the Citation and Complaint issued by the Registrar. The above Findings of Fact support this conclusion. 6. Respondent violated the provisions of A.R.S. § 32-1154(A) (13), specifically A.R.S. § 32-1124(B), as charged in the Citation and Complaint issued by the Registrar. The above Finding of Fact No. 14 supports this conclusion. 7. The evidence of record does not support the allegation that Respondent violated the provisions of A.R.S. § 32-1154(A) (15), as charged in the Citation and Complaint issued by the Registrar. RECOMMENDED ORDER Respondent’s License No. 090160 shall be revoked on the effective date of the Order entered in Case No. P09-0222. If Respondent pays the sum of $4,433.25 to Complainant on or before the effective date of the Order entered in Case No. P09-0222, then the above-provided license revocation shall not take place, but instead Respondent’s License No. 090160 shall be placed on disciplinary probation for a period of 90 days. This alternative penalty shall commence, if at all, on the effective date of the Order entered in Case No. P09-0222. 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, February 24, 2010.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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