ALJDEC decisions subject to certification as final

2010A-1852270-ROC · Registrar of Contractors · 2012-11-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 15, 2012 APPEARANCES: Complainant Romualdo S Stucco Inc appeared through Marian Jaquez, Vice President. Respondent R T R Builders Inc did not appear. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________

FINDINGS OF FACT 1. R T R Builders Inc (Respondent) is the holder of License No. B.149897- R issued by the Registrar of Contractors (the Registrar). Respondent’s current address of record on the Registrar’s public website is 4751 N. 15th St., Phoenix, AZ 85014-3707. 2. Complainant performed stucco work for Respondent on a property located at 30502 N. 58th Street, Cave Creek, Arizona (the Savard project). Complainant completed its work and presented its invoice in the sum of $34,500.00 for the completed construction work to Respondent on September 12, 2007. 3. Respondent paid Complainant $22,500.00 towards the invoice. 4. When Respondent failed to comply with Complainant’s repeated requests for the remaining balance, on July 15, 2009, Complainant filed a formal Complaint against Respondent with the Registrar. 5. After the Complaint was filed, Respondent made additional payments to Complainant totaling $300.00. 6. After Respondent did not fully resolve Complainant’s complaint, the Registrar issued a Citation and Complaint against Respondent charging violations of former A.R.S. § 32-1154(A)(7), A.R.S. § 32-1154(A)(11), and former A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1124(B). 7. On February 11, 2010, the parties entered into a Settlement Agreement and submitted a Stipulation to Dismiss Complaint Without Prejudice and Request to Vacate Hearing. The Settlement Agreement included the following terms: [Respondent] hereby promises to pay in lawful money of the United States of America, to [Complainant] the sum of $11,700.00 (hereinafter “the principal sum”) in monthly installment payments of $100.00 or more, payable on or before the 5th day of every month beginning on March 1, 2010. In addition to the principal sum, [Respondent] shall pay all interest presently being charged to [Complainant] by its supplier for unpaid materials purchased for the Savard project. [Complainant] warrants that the amount owed for the unpaid materials purchased for the Savard project presently totals $2649.30. Should there be a default, interest on the principal sum shall accrue at ten percent (10%) per annum from March 1, 2010 until the principal sum and all interest charges are paid in full. Should [Respondent] fail to [pay Complainant] on or before the 10th day of each month, a late fee of $10.00 shall be charged that day and an additional late charge will accrue at $5.00 per day until paid.

8. Following the Settlement Agreement, Respondent made payments totaling $1,250.00 on the following dates: March 5, 2010 $100.00 June 11, 2010 $300.00 August 7, 2010 $200.00 November 12, 2010 $200.00 January 20, 2011 $150.00 March 17, 2011 $300.00. 9. On February 23, 2012, Complainant submitted a letter to the Registrar requesting the case be reopened due to Respondent’s failure to comply with the Settlement Agreement. 10. On March 15, 2012, the Registrar mailed a copy of Complainant’s letter to Respondent at its address of record and indicated that Respondent had “10 days to file any written response or objections” to the letter. 11. Respondent did not file a response or objections to the letter. 12. The Registrar referred the matter to the Office of Administrative Hearings (OAH), an independent state agency, for an evidentiary hearing. The Order Reopening Complaint and Setting Administrative Hearing provided, in pertinent part, as follows: On March 1, 2010, the Registrar issued an Order of Closing in this matter providing that this matter be closed as settled.

On or about February 23, 2012, Complainant submitted written correspondence in this matter providing, among other things, that “[s]ome payment[s] were made, but payments have stopped. [Complainant] was later told that [Respondent] may file bankruptcy.” The Registrar treated this submission as [a] Request to Reopen.

On March 15, 2012, the Registrar sent a copy of Complainant’s Request to Reopen to Respondent, providing Respondent an opportunity to file a Response thereto. As of the date of this Order, no Response has been received.

Note: A review of the Registrar’s files and the PACER website reveals that as of the date of this Order, Respondent has not filed for bankruptcy protection with the U.S. Bankruptcy Court, District of Arizona.

Upon review and consideration of Complainant’s Request to Reopen, as well as the entire file in this matter, and with good cause appearing, IT IS ORDERED that Case No. 2010-1852270 be REOPENED. IT IS FURTHER ORDERED that an Administrative Hearing be scheduled in the expedited course of docketing in the Phoenix area. At the Administrative Hearing, the parties may offer evidence and testimony as to whether or not Respondent has engaged in conduct in violation of A.R.S. § 32-1154(A)(7), (11) and (13), namely A.R.S. § 32-1124(B), as was alleged in the Registrar’s September 24, 2009 Citation and Complaint and/or breached the terms set forth in the parties’ settlement agreement. If the assigned Administrative Law Judge recommends that discipline is to be imposed upon Respondent’ [sic] License, and the Registrar adopts such recommendation, the discipline may be imposed immediately, based upon a finding that Respondent violated any of the provisions cited.

13. The Registrar issued a Notice of Hearing setting a hearing at 8:00 a.m. on October 15, 2012. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. The Registrar’s Notice of Hearing advised the parties that failure to attend the hearing would likely result in an adverse ruling against them. 14. A hearing was held on October 15, 2012. Marian Jaquez, Complainant’s Vice President, submitted three exhibits and testified. 15. Respondent did not request to appear telephonically at the hearing or to continue the hearing. Although the start of the duly noticed hearing was delayed 35 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 to defend its license. 16. Ms. Jaquez testified and submitted payment records and testimony to establish that Respondent owed Complainant $10,450.00 in principal for work that Complainant performed on the Savard project.[1] 17. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on October 25, 2012. Such prior License record reflects that Respondent’s License was suspended for non-renewal on December 1, 2011. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. See A.R.S. §§ 32- 1151 to 32-1169. Respondent’s administratively suspended license does not deprive Complainant of its right to prosecute its complaint or prevent the Registrar from determining the merits of the complaint. See A.R.S. § 32- 1154(D). The Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable. Respondent is deemed to have received notice of the hearing. See A.R.S. §§ 41-1092.04; 41-1092.05(D). Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. 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). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). Former A.R.S. § 32-1154(A)(7) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “the doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.”[2] 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.

Complainant established that Complainant performed work on the Savard project totaling $34,500.00, for Respondent and that Respondent had paid only $24,150.00 leaving an unpaid balance of $10,350.00. Therefore, Complainant established that Respondent violated A.R.S. § 32- 1154(A)(11) by failing to pay Complainant $10,350.00 for work that Complainant performed for Respondent in connection with its contracting business. Complainant also established that Respondent committed a wrongful act in violation of former A.R.S. § 32-1154(A)(7). No evidence was submitted to establish Respondent violated A.R.S. § 32- 1124(B). Based upon the above violations of the provisions of A.R.S. § 32-1154(A), grounds exist to impose discipline against 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 License No. B.149897-R previously issued to Respondent R T R Builders Inc. It is further recommended that if on or before the effective date of the Order, the Registrar receives from Respondent written proof that is satisfactory to the Registrar that Respondent has paid $10,350.00 to Complainant in certified funds, the Registrar not revoke Respondent’s license but, instead, close the complaint in Case No. 2010-1852270. 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, November 5, 2012.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Ms. Jaquez testified that the outstanding balance was $11,703.38, which did not include any interest or late fees. However, the principal balance identified in the Settlement Agreement of $11,700.00 less the payments received totaling $1,250.00 resulted in a principal balance of $10,450.00. [2] As of September 30, 2009, A.R.S. § 32-1154(A)(7) was amended to remove the word “wrongful” from the statute. However, because the Citation and Complaint issued herein pre-dates the amendment, and because the Registrar advised in its Order Reopening Complaint and Setting Administrative Hearing that the hearing was being held to determine whether Respondent had violated the provisions of A.R.S. § 32-1154(A) “as was alleged in the Registrar’s September 24, 2009 Citation and Complaint,” the Administrative Law Judge applied the statutory language that was in effect at the time the Citation and Complaint was issued.

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