ALJDEC decisions subject to certification as final

2007A-4768676-ROC-com · Registrar of Contractors · 2011-07-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COMPLIANCE HEARING: July 5, 2011, at 10:00 a.m. APPEARANCES: Complainant Worksmart Enterprises, Inc. dba Neumann High Country Doors appeared through June Hawkins, its qualifying party and co-owner; Respondent 3 Mag Group, L.L.C. did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT In June 2001, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC166284, Class K-5 for dual garage doors and openers to Worksmart Enterprises, Inc. doing business as (“dba”) Neumann High Country Doors (“Complainant”). In September 2004, the Registrar issued License No. ROC200088, Class B for residential general contracting to 3 Mag Group, L.L.C. (“Respondent”). Respondent’s address of record is 2145 West Hidden Acres Trail, Prescott, Arizona 86305-8851. On or about March 23, 2007, the Registrar received a complaint from Complainant alleging that Respondent owed $8,862.00 for Complainant’s work at Lots 74, 45, 66, and 19 in the Creekside subdivision in Prescott pursuant to its subcontract with Respondent. The Registrar designated Complainant’s complaint as Case No. A07-0476. Complainant subsequently requested that the Registrar issue a citation against Respondent in Case No. A07-0476. On August 29, 2007, the Registrar issued a Citation and Complaint, charging Respondent with violations of A.R.S. § 32-1154(A)(11) and former A.R.S. § 32-1154(A)(7). The Registrar referred Case No. A07-0476 to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. A hearing was held at the OAH before Administrative Law Judge (“ALJ”) Brian E. Smith on January 24, 2008. At the hearing in Case No. A07-0476, Respondent agreed to execute a promissory note in favor of Complainant in the amount of $8,862.00, and to pay the amount of the promissory note upon receipt of payment from Lewis & Walraven Enterprises, Inc., whom Respondent had sued in Yavapai Superior Court Case No. CV2007-0299, and in return, Complainant agreed to withdraw its complaint. ALJ Smith vacated the hearing on the merits and recommended that the Registrar close Case No. A07-0476 as settled. On March 5, 2008, the Registrar adopted ALJ Smith’s order. On or about July 29, 2009, Complainant submitted correspondence to the Registrar, requesting that the Registrar reopen the complaint in Case No. A07-0476 because Respondent had not made any payments to Complainant pursuant to the settlement. Although the Registrar sent a copy of Complainant’s correspondence to Respondent, it failed to file a response. The Registrar redesignated Case No. A07-0476 as Case No. 2007-4768676. In March 2011, the Registrar issued an Order Reopening Complaint and Setting Compliance Hearing in Case No. 2007-4768676, and referred the matter back to the OAH for an evidentiary hearing. On May 24, 2011, the Registrar issued a Notice of Compliance Hearing in Case No. 2007-4768676, setting a hearing on July 5, 2011, at 10:00 a.m. at the Registrar’s office in Flagstaff, Arizona. The Registrar mailed a copy of the Notice of Compliance Hearing to Respondent at its address of record. A videoconference compliance hearing was held in Case No. 2007-4768676 on July 5, 2011, at 10:00 a.m. June Hawkins, Complainant’s qualifying party and co-owner, appeared and testified. Respondent did not request to appear telephonically at the compliance hearing in Case No. 2007-4768676 and did not request that the compliance hearing be continued. Although the start of the duly noticed compliance hearing was delayed fifteen minutes to allow Respondent additional travel time, Respondent did not appear, through an authorized member, employee, or attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence that it complied with the settlement agreement in former Case No. A07-0476. Ms. Hawkins testified that Respondent had not made any payments pursuant to the settlement agreement. The Registrar’s record shows that on March 30, 2009, Respondent’s license was revoked. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[2] 2. The Notice of Compliance Hearing that the Registrar mailed to Respondent at its address of record was reasonable and Respondent is deemed to have received notice of the hearing.[3] 3. The revoked status of Respondent’s license does not deprive Complainant of its right to enforce Respondent’s settlement or prevent the Registrar from determining whether Respondent complied with the terms of the settlement and if not, disciplining Respondent’s license.[4] 4. The settlement was for payment of monies that Respondent owed to Complainant “for materials or services rendered in connection with [Respondent’s] operations as a contractor . . . .”[5] Respondent bears the burden to establish by a preponderance of evidence that it fully complied with the settlement agreement that it entered at the hearing in Case No. A07-0478 on January 24, 2008.[6] 5. Respondent did not present any evidence to establish that it complied with the settlement agreement that it entered at the hearing in Case No. A07-0478. Therefore, Respondent’s failure to pay $8,862.00 to Complainant pursuant to the parties’ settlement in Case No. A07-0478 constitutes cause under A.R.S. § 32-1154(A)(11)[7] and former A.R.S. § 32-1154(A)(7)[8] for the Registrar to discipline Respondent’s license. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, the Registrar revoke Respondent 3 Mag Group, L.L.C.’s License No. ROC200088. It is further recommended that if on or before the date of the final order, the Registrar receives satisfactory written proof from Respondent that it has paid Complainant Worksmart Enterprises, Inc. dba Neumann High Country Doors $8,862.00 by certified or cashier’s check, the Registrar not revoke Respondent’s license but, instead, close Case No. 2007-4768676 (former Case No. A07-0476). 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, July 22, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The Administrative Law Judge has amended the caption in this matter to show Complainant’s full name as it appears on its contractor’s license. [2] See 32-1101 et seq. [3] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [4] See A.R.S. § 32-1154(C). That statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [5] See A.R.S. § 32-1154(A)(11). [6] See A.A.C. R2-19-119(2); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [7] This statutory subsection 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 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.” [8] A.R.S. § 32-1154(A)(7) formerly included 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.” The former statute applies to the original complaint and to the settlement.

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