ALJDEC decisions subject to certification as final

2008-21753805-ROC-rhg · Registrar of Contractors · 2011-05-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

REHEARING OF COMPLIANCE HEARING: May 18, 2011, at 1:00 p.m. APPEARANCES: Complainant Joe Blare did not appear; Respondent Caruso Mechanical Services, L.L.C. appeared through Richard W. Hundley, Esq., Berens, Kozub & Kloberdanz, P.L.C. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In July 2005, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC209578, Class L-39 for commercial air conditioning and refrigeration to Caruso Mechanical Services, L.L.C. (“Respondent”). On or about June 6, 2008, the Registrar received a complaint from Joe Blare (“Complainant”) regarding Respondent’s billings pursuant to a time-and- materials contract for work at a commercial property at 4825 West Glendale Avenue in Glendale, Arizona. The Registrar designated Complainant’s complaint as Case No. 08-2175. On or about June 30, 2009, the Registrar issued an order closing Case No. 08-2175 after the parties informed the Registrar that they had concluded a settlement agreement. On or about August 25, 2009, Complainant submitted written correspondence to the Registrar stating that Respondent had failed to pay the final installment of the settlement agreement. The Registrar redesignated Case No. 08-2175 as Case No. 2008-21753805. On February 25, 2010, after Respondent did not respond to Complainant’s August 25, 2009 correspondence, the Registrar issued an order reopening Case No. 2008-21753805. The Registrar referred Case No. 2008-21753805 to the Office of Administrative Hearings (“the OAH”), an independent state agency, to conduct a compliance hearing. A compliance hearing was held on May 18, 2010, in Case No. 2008-21753805 before Administrative Law Judge (“ALJ”) M. Douglas in the OAH. ALJ Douglas recommended that the Registrar revoke Respondent’s license because Respondent did not fully comply with the terms of the parties’ settlement agreement. On June 22, 2010, the Registrar substantially accepted ALJ Douglas’ recommendation and on June 23, 2010, revoked Respondent’s license. Respondent subsequently filed a petition for rehearing in Case No. 2008- 21753805. Complainant did not oppose the petition for rehearing. Instead, Complainant informed the Registrar that Respondent had paid $10,000.00 of the $15,000.00 that it owed before the May 18, 2010 compliance hearing and that Respondent subsequently agreed to pay $600.00 per week on its remaining $5,000.00 debt. To allow Respondent to be able to continue making the $600.00 weekly payments, Complainant urged that the Registrar reinstate Respondent’s commercial license “as quickly as possible.” Based on these communications, ALJ Douglas recommended that the Registrar grant Respondent’s petition for rehearing on the issue of compliance with the settlement in Case No. 2008-21753805. On or about September 29, 2010, Respondent requested in writing that the Registrar set aside the revocation of its license because it allegedly “had satisfied [its] debt to [Complainant].” On or about October 21, 2010, Complainant in writing informed the Registrar that “Respondent . . . has honored [its] commitment to [Complainant] and [Complainant] consider[s] this matter resolved and ha[s] no objections to the Respondent[’]s request to set aside the revocation imposed.” On March 15, 2011, the Registrar issued an Order Granting Request for Rehearing on Compliance Hearing in Case No. 2008-21753805, to be scheduled in the expedited course of docketing in the Phoenix area, limited to the following two issues: “(1) the presentation of the parties’ Settlement Agreement and (2) the reconsideration of the appropriate penalties to be imposed on Respondent’s License.” The Registrar referred Case No. 2008-21753805 to the OAH to conduct a rehearing on the issues set forth in the Order Granting Request for Rehearing on Compliance Hearing. On March 30, 2011, the Registrar issued a Notice of Limited Compliance Rehearing in Case No. 2008-21753805, setting a hearing on May 18, 2011, at 1:00 p.m. at the OAH. The Registrar mailed a copy of the Notice of Limited Compliance Rehearing to Complainant at his address of record and to his attorney. On the morning of May 18, 2011, Complainant sent a facsimile to the OAH, informing it that he would not be attending the limited compliance rehearing and that Respondent had paid him in full under the settlement agreement. Although Complainant complained that Respondent had not paid him in full until nearly two years after the date of the parties’ original agreement, Complainant acknowledged that the original agreement did not require Respondent to pay interest. Complainant did not appear, personally or through an attorney, at the limited compliance hearing. Complainant did not present any evidence to controvert Respondent’s evidence of compliance with the terms of the parties’ agreement. Hearing Evidence Louie Caruso, Respondent’s qualifying party and managing member, testified that Complainant’s complaint did not involve workmanship but only Respondent’s accounting errors under a time-and-materials contract. Mr. Caruso testified that after Complainant filed the complaint to the Registrar, he reviewed his accounting and determined that Respondent owed Complainant $15,000.00 and that Complainant agreed to accept $15,000.00 in full settlement of his complaint. Mr. Caruso testified that he paid $10,000.00 to Complainant but that when he was going through a divorce, he did not have funds immediately available to make the final payment that was due under the parties’ original agreement. Mr. Caruso testified that Respondent finished paying the remaining $5,000.00 that it owed to Complainant under the parties’ modified agreement in September 2010. Mr. Caruso testified that Complainant’s complaint is the only complaint that is pending or that resulted in discipline against Respondent’s license. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] The Notice of Limited Compliance Rehearing that the Registrar mailed to Complainant at his address of record and to his attorney was reasonable and it appears that Complainant actually received the Notice of Limited Compliance Rehearing.[2] Respondent bears the burden of proof and must establish that it fully complied with the terms of the parties’ settlement agreement 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] The record in this matter establishes that the parties agreed to modify their original settlement agreement after the May 18, 2010 compliance hearing to allow Respondent to make payments on its remaining debt to Complainant in the amount of $600.00 per week. Mr. Caruso’s testimony that Respondent has paid all monies that were owed to Complainant pursuant to the parties’ original and modified settlement agreements was credible and confirmed by the parties’ written statements in the record of Case No. 2008-21753805 (former Case No. 08-2175). Mr. Caruso’s testimony that the parties’ agreements did not require Respondent to pay interest or include any other penalty for late payment was also credible and confirmed by Complainant’s written statement. With respect to any lingering discipline, the Administrative Law Judge notes that the complaint in former Case No. 08-2175 did not involve workmanship and that Respondent did not dispute but, instead, quickly agreed to reimburse Complainant for the full amounts owed after Respondent became aware of accounting issues. Respondent’s acknowledged debt resulted from accounting errors, not from any attempt to defraud Complainant. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, the complaint in Case No. 2008-21753805 (former Case No. 08-2175) be closed against Respondent Caruso Mechanical Services, L.L.C.’s License No. ROC209578, Class L-39. It is further recommended that because Respondent has fully performed its settlement with Complainant Joe Blare, the Registrar set aside the revocation of Respondent’s license that the Registrar imposed after the May 18, 2010 compliance hearing in Case No. 2008-21753805 (former Case No. 08- 2175). 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, May 23, 2011. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: William A. Mundell, Director Registrar of Contractors ----------------------- [1] See 32-1101 et seq. [2] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [3] See A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, Ariz. 369, 372, 249 P.2d 837 (1952). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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