ALJDEC decisions subject to certification as final

2010A-27919225-ROC · Registrar of Contractors · 2011-06-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 6, 2011 APPEARANCES: Kermit Lennick appeared personally. Modern Image Development, Inc. was represented by its authorized representative, Robert Bart Suchowian. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. Modern Image Development, Inc. (“Respondent”) is the holder of License No. 181262, a Class B contracting license issued by the Registrar of Contractors (“Registrar”). 2. Respondent and Kermit Lennick (“Complainant”) entered into a written agreement dated December 8, 2009, for work to be performed at a residence located at 815 E. Cavaliere, Phoenix, Arizona. 3. On February 19, 2010, Complainant filed a written Complaint with the Registrar that alleged statutory and regulatory violations by Respondent on the subject project. 4. The Registrar originally designated Complainant’s Complaint as Case No. 2010-2791, but later re-designated it as Case No. 2010-27919225. 5. The Registrar issued a Citation and Complaint in Case No. 2010- 27919225 charging Respondent with violating the provisions of A.R.S. § 32-1154(A) (3), namely A.A.C. R4-9-108, (4), and (7). 6. The Registrar forwarded Case No. 2010-27919225 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 7. Respondent commenced work on the project on December 8, 2009. Respondent was terminated by Complainant on December 16, 2009. 8. At hearing, Complainant presented documentary evidence that established that Respondent’s insurance coverage expired on December 27, 2009. Therefore, Respondent had insurance coverage while performing work on the subject project. 9. Complainant failed to establish that Respondent did not have workers compensation, social security, or unemployment insurance during the subject project. 10. Complainant failed to establish that Respondent committed a fraudulent act resulting in substantial injury to Complainant. Complainant alleges that Respondent committed fraud by not having insurance coverage during the subject project. However, there is credible evidence from Respondent’s insurance carrier that Respondent’s insurance coverage expired on December 27, 2009. Complainant also failed to establish the element of substantial injury. 11. Complainant failed to establish that Respondent was not authorized to conduct business as a corporation in the State of Arizona. 12. A review of the Registrar’s official electronic licensing records reveals that Respondent’s License No. 181262 was suspended by operation of law for lack of bond on February 12, 2011. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19-119(A). 3. Complainant failed to sustain his burden of proving that Respondent violated the provisions of A.R.S. § 32-1154(A) (3), namely A.A.C. R4-9- 108, as charged in the Citation and Complaint issued by the Registrar. Complainant failed to establish that Respondent failed to perform its scope of work in a workmanlike manner, especially given Complainant’s termination of Respondent. 4. Complainant failed to sustain his burden of proving that Respondent violated the provisions of A.R.S. § 32-1154(A) (4), as charged in the Citation and Complaint issued by the Registrar. Complainant’s allegation that Respondent did not have proper insurance during the subject project was not supported by Complainant’s own documentary evidence showing that Respondent had insurance coverage while Respondent performed its scope of work. 5. Complainant failed to sustain his burden of proving that Respondent violated the provisions of A.R.S. § 32-1154(A) (7), as charged in the Citation and Complaint issued by the Registrar. Complainant did not establish the elements of fraud and/or substantial injury. On the contrary, Complainant established that Respondent had insurance coverage during the subject project. RECOMMENDED ORDER The Citation and Complaint in Case No. 2010-27919225 shall be dismissed on the effective date of the Order entered in that matter. 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, June 27, 2011.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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