ALJDEC decisions subject to certification as final

2010A-1361339-ROC · Registrar of Contractors · 2010-06-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 4, 2010 at 10:00 a.m. APPEARANCES: Complainant Probuild appeared through Camille King, Accounts Specialist; Respondent Mingus Mountain Masonry LLC did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On April 12, 2004, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC195039, Class K-31 for dual masonry to Respondent Mingus Mountain Masonry LLC, a limited liability company. Thomas Newton is Respondent’s qualifying party and managing member. Respondent’s address of record is 4625 E. Silver Leaf Trl., Cottonwood, AZ 86326-7709. Complainant Probuild is in the business of supplying building materials to contractors like Respondent. On December 10, 2009, the Registrar received a complaint from Complainant against Respondent’s license, which alleged that Respondent owed $8,625.89 for unpaid invoices for materials that Respondent had used in its contracting business. The Registrar referred the complaint to Respondent for its immediate attention. On December 29, 2009, the Registrar received Complainant’s request that a citation be issued against Respondent’s license because, although Complainant had made many attempts to contact Respondent and collect the debt, Respondent had not returned any calls. On February 17, 2010, the Registrar issued a Citation and Complaint against Respondent’s license, charging A.R.S. § 32-1154(A)(11). The Registrar mailed a copy of the Citation and Complaint to Respondent at its address of record. On February 26, 2010, the Registrar received Respondent’s written answer to the Citation and Complaint, which did not deny that Respondent owed money to Complainant but alleged that Respondent had not received the second and third draws in the amount of $10,577.50 each on a large commercial project. Respondent’s qualifying party also stated that Respondent had a few jobs and offered to pay Respondent $2,000.00 and to make payments. The letterhead on which Respondent’s answer was written showed its address of record. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent agency, to schedule and to conduct a fair hearing. On April 15, 2010, the Registrar issued a Notice of Hearing, setting a hearing on May 28, 2010 at 8:00 a.m. at the Registrar’s Flagstaff office. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. According to the Registrar’s record, on May 1, 2010, the Registrar administratively suspended Respondent’s license after it failed to renew the license. On May 10, 2010, OAH received Complainant’s request that venue for the hearing be changed to Phoenix. Respondent did not respond to Complainant’s motion to change venue and, on May 14, 2010, the Administrative Law Judge granted Complainant’s motion and scheduled a hearing on June 4, 2010 at 10:00 a.m. at the Phoenix office of OAH. The order changing venue and continuing the hearing was mailed to Respondent at its address of record. On May 25, 2010, OAH received a letter to the Administrative Law Judge from Mr. Newton on Respondent’s behalf, in relevant part as follows: I am writing this letter to inform you that this complaint is to Suspend my Contractors license which my license has already expired. I have no money to renew it.

I am talking to a Lawyer for a bankruptcy so I am writing to see if it is necessary to have this hearing or if I need to attend?

The complaint is for a material bill when I didn’t get paid on a job for $21,000.00 so I couldn’t pay it.

I have nothing left and they already repossessed my 2 trucks.

On May 25, 2010, the Administrative Law Judge issued a minute entry order, informing Respondent that, if it failed to appear for the duly noticed continued hearing, the hearing would proceed in its absence and Respondent would not have an opportunity to present evidence to establish the affirmative defense under A.R.S. § 32-1154(A)(11) that it was unable to pay Complainant’s bill and that Respondent had not been paid for the job for which the materials had been used. A hearing was held on June 4, 2010 at 10:00 a.m. Complainant’s representative Camille King, Accounts Specialist, testified and submitted nine exhibits at the duly noticed continued 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’s representative presented evidence to establish that, between October 28, 2008, and January 15, 2009, Complainant had provided construction supplies worth $8,270.30 to Respondent on credit. Respondent had paid only $820.00 on its account. The remaining amount claimed was for interest. Ms. King explained that Complainant calculated interest at a rate of 10% per annum, even though the credit agreement allowed Complainant to assess interest at a rate of 18% per annum. Ms. King testified that, after filing the written answer, Respondent had not contacted Complainant to arrange a payment schedule, had not paid the $2,000.00 offered in the written answer, and had not paid anything further on its account. The Registrar’s record shows that, on the date of the continued hearing, Respondent’s license remained administratively suspended and had not been reinstated. This is apparently the only complaint pending against the license. CONCLUSIONS OF LAW 1. The notice of the continued hearing that OAH mailed to Respondent at its address of record was reasonable it appears that Respondent actually received notice of the continued hearing.[1] 2. This matter lies within the Registrar’s jurisdiction.[2] 3. Complainant bears the burden of proof and must establish Respondent’s statutory violations by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] 4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] 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.”[6] 5. The suspended status of Respondent’s license does not preclude Complainant from pursuing its administrative remedy nor preclude the Registrar from conducting these disciplinary proceedings.[7] If Respondent fails to comply with any condition that the Registrar sees fit to include in its final Decision and Order in this matter, Respondent’s suspended license will be revoked. 6. If the Registrar accepts this recommendation and, as a result of Respondent’s failure to comply with the Registrar’s final decision in this matter, the Registrar revokes Respondent’s license, in due course the revocation will lead to revocation of any other license on which Respondent or the persons listed on its license may be also listed[8] and may prevent any new license from being issued.[9] 7. A.R.S. § 32-1154(A)(11) 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 contractor’s inability to pay and nonpayment by the owner or general contractor on a project are affirmative defenses that the contractor bears the burden to prove in a materialman’s administrative complaint under A.R.S. § 32-1154(A)(11). Respondent’s failure to appear at the duly noticed hearing or to present any evidence to defend its license prevents any finding that it has established this affirmative defense. 9. Similarly, Respondent must show that a claim is subject to the automatic stay or that the claim has been discharged in bankruptcy. The mere suggestion that Respondent is contemplating bankruptcy without any document from the bankruptcy court does not prevent the Registrar from penalizing Respondent’s license for proven contracting law violations. 10. Respondent has never disputed that it owes money 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)(11) by failing to pay Complainant $7,450.30, the total of the invoices provided by Complainant at the hearing less the amounts that Respondent has paid. 11. With respect to the additional amounts claimed for interest, the legislature has not empowered the Registrar to award interest in administrative proceedings against a contractor’s license, [10] even though such relief would be available in a judicial forum. 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 revoke License No. ROC195039, Class K-31 previously issued to Respondent Mingus Mountain Masonry LLC unless Respondent provides proof that it has paid $7,450.30 to Complainant Probuild. It is further recommended that, if on or before the effective date of the order, the Registrar receives written proof from Respondent that it has paid $7,450.30 to Complainant or otherwise resolved Respondent’s outstanding account, the Registrar should not revoke Respondent’s license but, instead, should close the complaint in Case No. 2010-1361339. 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 7, 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 32-1101 et seq. [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] Black’s Law Dictionary at page 1220 (8th ed. 1999). [7] See A.R.S. § 32-1154(C). [8] See A.R.S. § 32-1154(A)(21). [9] See A.R.S. § 32-1122(E). [10] See Semple v. Tri-City Drywall, Inc., 172 Ariz. 608, 611-612, 838 P.2d 1369, 1372-73 (App. 1992) (Prevailing party in administrative claim before Registrar of Contractors was not entitled to attorney’s fees from its opponent under A.R.S. § 12-341.01(A) because administrative hearing is not an “action”); cf. A.R.S. § 12-347 (entitling court clerk to include in judgment costs and “interest on the verdict from the time it was rendered”).

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