ALJDEC decisions subject to certification as final

2010A-22286054-ROC · Registrar of Contractors · 2010-05-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 14, 2010 APPEARANCES: Charles Hultstrand, Esq. appeared for the Complainant. Chuck Rogers, Qualifying Party and Member, appeared for the Respondent. ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. This matter came on for hearing as scheduled. 2. There is no substantive dispute between the parties regarding the facts of the case. 3. Over an extended period of time, the Respondent, a limited liability company, (LLC) obtained lumber materials from the Complainant for the framing of new homes being constructed primarily in Scottsdale, Arizona. 4. On December 18, 2009 the Complainant filed a Complaint with the Registrar of Contractors (ROC) alleging $148,435.45 as the amount owed by the Respondent. The claimed amount included accrued interest. 5. At the hearing the Complainant presented evidence that the principal of the claimed amount is $111,183.34 for lumber provided to the Respondent for various construction projects from approximately June of 2007 to October, 2008[1]. 6. The Respondent’s Qualifying Party and LLC Member Chuck Rogers (Rogers) does not contest the principal amount claimed as owing to the Complainant, or that the Respondent has an obligation to pay that amount. Rogers acknowledges the Respondent was paid for the various projects which utilized the materials upon which the Complaint is based. 7. According to Rogers, in 2005, he discovered that fellow LLC Member Jason Chouinard (Chouinard) was not paying payroll taxes[2] and possibly other obligations to governmental entities. 8. Rogers testified the Internal Revenue Service (IRS) claimed that he (Rogers) as the Qualifying Party of the Respondent owed approximately $160,000.00 (including interest and penalties). 9. Rogers testified he paid the IRS from payments received for various projects which used the Complainant’s materials. According to Rogers, he has paid the IRS approximately $130,000.0o but still owes $30,000.00. 10. The Respondent’s license is still active although the business is not in operation. 11. The Complainant seeks revocation of the Respondent’s license. 12. There is no reasonable likelihood the Respondent can pay the Complainant any significant sums on the principal amount owed. Conclusions of Law The Citation and Complaint alleges violation of A.R.S. §32-1154: (A)(11), failure to pay money in excess of $750.00 for the services or materials related to contracting when capable of paying or when paid. 1. The Complainant has the burden of proof and the standard of proof on all issues is by a preponderance of the evidence. Vazzano v. Superior Court, 74 Ariz. 369, 249 P.2d 837 (Ariz. 1952); Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). 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). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is evidence, which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary, 1182 (6th ed. 1990). 2. The evidence in an administrative hearing must be “substantial reliable and probative” (A.R.S. §41-1092.07(F)(1)). This means the Complainant has the affirmative responsibility to present sufficient competent evidence to meet the preponderance standard. 3. “Substantial evidence is evidence possessing something of substance and relevant consequence and which furnishes substantial basis of fact from which issues tendered can be reasonably resolved.” Black’s Law Dictionary Special Deluxe Fifth Edition, (St. Paul Minn.: West Publishing Co., 1979) p. 1281, citing State v. Green, 218 Kan. 438, 544 P. 2d 356, 362. 4. A.R.S. §32-1129.02 (D) allows for interest on unpaid balances due and owing. That statutory provision also requires the posting of a bond if a complaint is filed under it. A.R.S. §32-1154(A)(11) has no such provisions, and interest and penalties are therefore excluded from consideration. 5. The evidence is not contested. For the reasons stated, the Respondent had to choose between sanctions which can be imposed by the IRS and the ROC. The Respondent chose a course of action (payment to the IRS) resulting in what he deems as the less onerous sanctions. 6. Although the Respondent may have been victimized by a business associate, the violation is proven and the following recommendation is submitted. Recommended Order Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: On the effective date of the Order entered in this matter, Respondent Extreme Framing LLC’s Class C-07 license (No. 194205) shall be revoked. 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 17, 2010.

/s/ Allen Reed Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Small portions of the amount claimed as owed may have accrued outside this time frame. [2] According to Rogers, at one point the Respondent had approximately 30 employees.

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