ALJDEC decisions subject to certification as final

2010A-22498227-ROC · Registrar of Contractors · 2011-03-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 24, 2011, at 1:00 p.m. APPEARANCES: Complainant C and H Roofing, Inc. appeared through Nick High, its qualifying party and president; Respondent W S Builders, Inc. did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT In January 1971, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC033129, Class C-42 for residential roofing to C and H Roofing, Inc. (“Complainant”). In March 2005, the Registrar issued License No. ROC205564, Class B for residential general contracting to W S Builders, Inc. (“Respondent”). Respondent’s address of record is 8145 East Indian Bend Road, Suite 100, Scottsdale, Arizona 85250-4825. The persons listed on Respondent’s license are Malcolm Kerr Matheson as qualifying party/employee, Brian Keith Regehr as an officer, and Brian Regehr as an officer. On December 22, 2009, the Registrar received a complaint from Complainant against Respondent alleging that Respondent owed $19,630.00 pursuant to a subcontract for work that Complainant performed on a house at 6302 Cactus Wren Road, Paradise Valley, Arizona (“the project”). The Registrar designated Complainant’s complaint as Case No. 10-2249. The Registrar subsequently redesignated Case No. 10-2249 as Case No. 2010- 22498227 and Complainant requested a hearing. On October 13, 2010, the Registrar issued a Citation and Complaint in Case No. 2010-22498227 against Respondent, charging a violation of 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 October 19, 2010, the Registrar received Respondent’s written answer to the Citation and Complaint, admitting that it still owed Complainant $7,630.00 but affirmatively alleging that it would pay Complainant the remaining balance due under the subcontract before December 31, 2010. On November 12, 2010, the Registrar allowed Complainant ten days to respond to Respondent’s claim to have settled the complaint. On November 16, 2010, the Registrar received Complainant’s request that its complaint remain open. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. On January 31, 2011, the Registrar issued a Notice of Hearing setting a hearing on March 24, 2011, at 1:00 p.m. at the OAH. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. A hearing was held on March 24, 2011. Nick High, Complainant’s qualifying party and president, testified and submitted one exhibit. Respondent did not request to appear telephonically at the hearing and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed fifteen minutes to allow Respondent additional travel time, Respondent did not appear, either in person or through an authorized officer, 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. Mr. High submitted copies of the parties’ subcontract and change orders and Respondent’s checks to Complainant to establish that Complainant billed Respondent a total of $91,190.00 for work performed on the project pursuant to the subcontract and change orders, Respondent paid Complainant a total of $83,560.00, and Respondent still owed $7,630.00 to Complainant for its work on the project. The Registrar’s record shows that Respondent’s license was suspended by operation of law for non-renewal on April 1, 2009. Two complaints are pending against the license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[1] 2. The Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable and Respondent is deemed to have received notice of the hearing.[2] 3. The administratively suspended status of Respondent’s license does not preclude Complainant from pursuing its administrative remedy nor preclude the Registrar from conducting this disciplinary proceeding.[3] 4. Complainant bears the burden of proof and must establish Respondent’s statutory violation by a preponderance of the evidence.[4] 5. Complainant established that Respondent violated A.R.S. § 32-1154(A)(11)[5] by failing to pay $7,630.00 to Complainant for contracting work that it performed pursuant to its subcontract with Respondent. 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 Respondent W S Builders, Inc.’s License No. ROC205564 unless Respondent pays $7,630.00 to Complainant C and H Roofing, Inc. It is further recommended that if on or before the effective date of the order, the Registrar receives satisfactory proof from Respondent that it has paid $7,630.00 to Complainant by cashier’s or certified check, the Registrar not revoke Respondent’s license but, instead, close the complaint in Case No. 2010-22498227. It is further recommended that if the Registrar revokes Respondent’s license as a result of the statutory violation that Complainant established in this case, the Registrar commence disciplinary action under A.R.S. § 32- 1154(21)[6] against any license on which the persons[7] who are listed on Respondent’s license also are listed,[8] and that the Registrar not issue any new license under A.R.S. § 32-1122(D)[9] to any entity that consists of any of those persons unless they tender proof of payment to Complainant in the amount of $7,630.00. 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, March 29, 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.R.S. § 32-1154(C), which provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [4] 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). [5] This statutory subsection 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.” [6] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[h]aving a person named on the license who is named on any other license in this state or in another state which is under suspension or revocation unless the prior revocation was based solely on a violation of this paragraph.” [7] A.R.S. § 32-1101(A)(5) provides that “‘[p]erson’ means an applicant, an individual, a member of a limited liability company, a qualifying party, any partner of a partnership or limited liability partnership or any officer, director, qualifying party, trustee of a trust, beneficiary of a trust or owner of at least twenty-five per cent of the stock or beneficial interest of a corporation.” [8] According to the Registrar’s record, the persons listed on Respondent’s license are also listed on the following licenses: (1) License No. ROC177334 issued to W S Builders that was suspended for non-renewal on August 1, 2010 (Malcolm Kerr Matheson, Brian Keith Regehr, and Brian Regehr); (2) License No. ROC265592 issued to Rite Way Thermal USA, Inc. that is current and in good standing (Brian Keith Regehr); (3) License No. ROC103630 issued to the Ohio Trust, L.L.C. that expired on August 1, 2005 (Malcolm Kerr Matheson); and (4) License No. ROC188626 issued to the Ohio Trust, L.L.C. that became inactive on November 4, 2008 (Malcolm Kerr Matheson). [9] This statute provides that to obtain or renew a license, “each person shall be of good character and reputation,” and that “[l]ack of good character and reputation may be established by showing that a person has . . . committed any act that, if committed or done by any licensed contractor, would be grounds for suspension or revocation of a contractor’s license . . . .”

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