ALJDEC decisions subject to certification as final

2008A-37030094-ROC · Registrar of Contractors · 2010-06-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COMPLIANCE HEARING: May 28, 2010 at 8:00 a.m. APPEARANCES: Complainant V W Dig LLC appeared through Philip Woody, Operations Manager, and Cindy DeGrado, Accounting Manager; Respondent Pinnacle Southwest LLC did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On January 29, 2005, the Arizona Registrar of Contractors (“the Registrar”) issued the following four contractor’s licenses to Complainant V W Dig LLC, a limited liability company: (1) No. ROC203837, Class A-12 for commercial sewers, drains and pipe laying; (2) No. ROC203838, Class A-5 for commercial excavating, grading and oil surfacing; (3) No. ROC203839, Class C-37R for residential sewers, drains and pipe laying; and (4) No. ROC203840, Class C- for residential excavating, grading and oil surfacing. On May 4, 2006, the Registrar issued License No. ROC219738, Class A-17 for commercial electrical and transmission lines to Complainant. On April 23, 2007, the Registrar issued License No. ROC231930, Class KB-01 for dual building contracting to Respondent Pinnacle Southwest LLC, a limited liability company. James McLemore is one of Respondent’s members. Respondent’s address of record is 2051 W. Northern Ave., Phoenix, AZ 85021-5179. On April 11, 2008, the Registrar received a complaint from Complainant against Respondent’s license, which alleged that Respondent had failed to pay Complainant $4,078.55 for work that Complainant had performed pursuant to a subcontract with Respondent on a utility trench at Sunset Trails subdivision in Glendale. Complainant requested a hearing on the complaint and, on November 19, 2008, the Registrar issued a Citation and Complaint against Respondent’s license, charging A.R.S. § 32-1154(A)(11). Respondent failed to file a timely written answer to the Citation and Complaint and, on March 11, 2009, the Registrar issued a Default Decision and Order. The Order required that Respondent’s Class KB-01 License No. ROC 231930 be suspended on the effective date of the Order until Respondent provided proof to the Registrar that it had appropriately rectified the issues involved and detailed in the Citation and Complaint. The effective date of the Registrar’s final Decision and Order was April 20, 2009. On or about April 20, 2009, Complainant submitted written correspondence to the Registrar that stated that the parties had “agreed upon a payment plan with the understanding if the promise is broken, [Complainant] will request our case be reopened.” On or about May 4, 2009, the Registrar closed Complainant’s complaint as resolved, settled, or withdrawn. On or about July 27, 2009, Complainant submitted written correspondence to the Registrar, stating that Respondent had breached the terms of the parties’ settlement agreement. On August 11, 2009, the Registrar provided Respondent with an opportunity to respond to Complainant’s correspondence, but Respondent failed to respond. On March 30, 2010, the Registrar issued an order reopening Complainant’s complaint and requiring that a compliance hearing be scheduled in the expedited course of docketing in the Phoenix area. The Registrar referred Complainant’s complaint to the Office of Administrative Hearings, an independent agency, to schedule and to conduct a compliance hearing. On April 27, 2010, the Registrar issued a Notice of Compliance Hearing setting a hearing on May 28, 2010 at 8:00 a.m. in the Office of Administrative Hearings. The Registrar mailed the Notice of Compliance Hearing to Respondent at its address of record. A hearing was held on May 28, 2010 at 8:00 a.m. Complainant’s representatives appeared and testified at the duly noticed hearing. Although the beginning of the hearing was delayed fifteen minutes to allow Respondent additional travel time, it did not contact the Office of Administrative Hearings to request that the hearing be continued or that the start of hearing be further delayed and did not appear through an authorized member, employee, or attorney. Respondent did not present any evidence to defend its license. Complainant appeared through Cindy DeGrado, its Accounting Manager, and Philip Woody, its Operations Manager. Ms. DeGrado testified that, after Respondent made the initial payment pursuant to the settlement, Respondent owed Complainant $3,865.00. Respondent had made the following three additional payments: (1) On April 7, 2009, $2,000.00; (2) On April 20, 2009, $400.00; and (3) On April 25, 2009, $1,000.00. Ms. DeGrado testified that Respondent’s bank had later returned the April 25, 2009 check for $1,000.00 to Complainant for insufficient funds. After Respondent initially had failed to make good on the check, Complainant had informed the Registrar that Respondent had breached the settlement agreement. Ms. DeGrado testified that, on May 18, 2010, after the Registrar issued the Notice of Compliance Hearing, Respondent had paid Complainant an additional $1,000.00. On the date of the compliance hearing, Respondent still owed Complainant $465.00 pursuant to the settlement agreement. The Registrar’s record shows that, on the date of hearing, Respondent’s license was current and in good standing. One other complaint against Respondent’s license had been closed as resolved, settled, or withdrawn. Two complaints were pending against the license. CONCLUSIONS OF LAW 1. The Notice of Compliance Hearing that the Registrar mailed to Respondent at its address of record was reasonable and it is deemed to have received it.[1] 2. Complainant bears the burden of proof and must establish statutory violations by a preponderance of the evidence.[2] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] 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.”[4] 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 . . . .” [Emphasis added.] 5. Complainant has established that Respondent still owes $465.00 under the parties’ settlement and, therefore, that Respondent has breached the settlement agreement. 6. Respondent owed Complainant more that $750.00 when Complainant filed the initial complaint against Respondent’s license, which gave the Registrar jurisdiction over this dispute. Even though the amount that Respondent still owes is now less than $750.00, the Registrar retains jurisdiction over the issue of Respondent’s compliance with the settlement agreement.[5] Otherwise, contractors such as Respondent would have no reason to pay the final $749.00 owed under a settlement agreement. 7. Complainant therefore has borne its burden to establish that Respondent violated A.R.S. § 32-1154(A)(11) by failing to pay Complainant $465.00, as required by the parties’ settlement agreement. RECOMMENDED ORDER Based on the contracting law violation that was proven in this matter, it is recommended that, on the effective date of the final order in this matter, the Registrar of Contractors should suspend License No. ROC231930, Class KB-1 previously issued to Respondent Pinnacle Southwest LLC until Respondent pays $465.00 to Complainant V W Dig LLC. 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 $465.00 to Complainant by cashier’s or certified check, the Registrar should not suspend Respondent’s license but, instead, should close the complaint in Case No. 2008-37030094. 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, June 14, 2010.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [2] 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). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] Black’s Law Dictionary at page 1220 (8th ed. 1999). [5] See 32-1101 et seq.

-----------------------

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