ALJDEC decisions subject to certification as final

2010A-308471580-ROC · Registrar of Contractors · 2011-01-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 19, 2010 at 8:00 a.m.; at the parties’ request, the record was held open until January 7, 2011. APPEARANCES: Complainant Nicholas Consolidated, Inc. appeared through Mark A. Kirkorsky, Esq.; Respondent Wahl Brothers Air Conditioning, L.L.C. appeared through Neal Wahl, its qualifying party and managing member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure Complainant Nicholas Consolidated, Inc. provides HVAC and other construction supplies to contractors. In September 2005, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC211880, Class L-39 for commercial air conditioning and refrigeration to Respondent Wahl Brothers Air Conditioning, L.L.C. In March 2010, the Registrar received a complaint from Complainant against Respondent that alleged that Respondent had failed to pay Complainant $2,088.20 for construction materials purchased on credit. In April 2010, Complainant requested that the Registrar issue a citation against Respondent. On July 13, 2010, the Registrar issued a Citation and Complaint against Respondent’s license, charging a violation of A.R.S. § 32-1154(A)(11). Respondent timely answered the Citation and Complaint. Respondent did not deny that it owed Complainant money, but affirmatively alleged that Complainant agreed to a payment plan and accepted payments that Respondent made pursuant to the plan, including $100.00 that Respondent paid in February 2010. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A hearing was held on October 19, 2010. Hearing Evidence Between September 25, 2009, and October 20, 2009, Respondent purchased on credit from Complainant $1,970.00 in HVAC supplies for contracting jobs. Over the next five months, Respondent paid only $50.00 on its account. Pursuant to the credit agreement, Complainant charged Respondent $118.20 in interest on the unpaid balance of its account. After Complainant filed the complaint to the Registrar, Respondent paid $50.00 in April 2010, $100.00 in May 2010, and $50.00 in June 2010, for a total payment of $200.00. Complainant’s attorney avowed that if Respondent had continued to make payments, Complainant would have withdrawn its complaint. Neal Wahl, Respondent’s qualifying party and managing member, testified that he was experiencing severe financial difficulties that had resulted in his 21-year marriage ending in divorce and the loss of his home. Mr. Wahl testified that he did not have any money to pay the outstanding balance of Respondent’s account with Complainant. At the parties’ request, the Administrative Law Judge left the record open for 80 days for Mr. Wahl to reorganize his finances and to pay Complainant what was owed. During the 80-day period, Complainant did not inform the OAH that Respondent had resolved its outstanding debt. According to the Registrar’s record, on the dates of the hearing and when the record was closed, Respondent’s license had been suspended for non- renewal. Complainant’s complaint was the only complaint pending against Respondent’s license. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] 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.[2] Complainant bears the burden of proof and must establish Respondent’s statutory violation by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[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] Respondent acknowledged that it owed Complainant for the materials that it provided in September and October 2009. Respondent did not allege that it had not been paid for the projects on which it used the materials or raise any other affirmative defense. Therefore, Complainant established that Respondent violated A.R.S. § 32- 1154(A)(11)[6] by failing to pay more that $750.00 for materials used in its contracting business. With respect to the amount owed, the legislature has not empowered the Registrar to award interest in administrative proceedings against a contractor’s license.[7] Therefore, Complainant is entitled to recover only the value of the materials that Respondent purchased, less the payments that it made, or $1,720.00. 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 Wahl Brothers Air Conditioning, L.L.C.’s License No. ROC211880, Class L-39. It is further recommended that if prior to the effective date of the Registrar’s final order, the Registrar receives satisfactory written proof from Respondent that it has paid Complainant Nicholas Consolidated, Inc. $1,720.00 by cashier’s or certified check, the Registrar not revoke Respondent’s license but, instead, close Case No. 2010-[number redacted]. 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, January 11, 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. § 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 . . . .” [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] 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.” [7] 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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