ALJDEC decisions subject to certification as final

2010A-308471586-ROC · Registrar of Contractors · 2011-02-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 7, 2011, at 1:00 p.m. APPEARANCES: Complainant King Insulation of Arizona, L.L.C. appeared through Gary Schneider, its qualifying party and managing member; Respondent Polaris Construction, L.L.C. appeared through Isaias Hernandez, its employee. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT In June 2007, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC234613, Class K-40 for dual insulation to King Insulation of Arizona, L.L.C. (“Complainant”). In October, 2008, the Registrar issued License No. ROC249814, Class KB-1 for dual building contracting to Polaris Construction, L.L.C. (“Respondent”). On March 18, 2010, the Registrar received a complaint from Complainant against Respondent, alleging that Respondent owed $540.00 for work that Complainant had performed pursuant to its subcontract, plus lien costs, and $215.00 for attorney’s fees that Complainant had incurred to collect the $540.00. The Registrar referred the complaint to Respondent for its immediate attention. After Respondent did not resolve the complaint, Complainant requested a hearing. On August 17, 2010, the Registrar issued a Citation and Complaint against Respondent, charging a violation of A.R.S. § 32-1154(A)(11). On September 1, 2010, the Registrar received Respondent’s written answer to the Citation and Complaint. Respondent admitted that it owed monies to Complainant, but alleged that the project for which the monies were owed had been halted by the bank after the property went into receivership and that the receiver would not pay Respondent’s draw requests because the project was incomplete. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. According to the Registrar’s file, on October 18, 2010, the Registrar received Complainant’s letter informing the Registrar that it had returned Respondent’s check for $540.00 and that Complainant wanted to proceed to hearing for the following reasons: [T]he court granted a default judgement [sic] in favor of King Insulation and a writ of execution was ordered.

Since the judgement [sic] amount substantially exceeds the original invoice amount; [sic] and, since Polaris restricted endorsement by putting “paid in full” on the check, it was returned to them uncashed. . . .

A hearing was held on February 7, 2011. Complainant’s representative testified. Respondent’s representative testified and submitted one exhibit. Respondent submitted a copy of Complainant’s attorney’s Satisfaction of Judgment Against Garnishee Defendant Wells Fargo Bank, N.A. in Complainant’s action against Respondent in Dreamy Draw Justice Court Case No. CC2010-136357-RC, filed on January 4, 2011 (“Satisfaction of Judgment”). According to the Satisfaction of Judgment, Complainant requested that the clerk of the court “make proper entries to effect the full satisfaction of the Judgment Against Garnishee Defendant and releasing Garnishee Defendant from any further obligations under said Judgment.” Complainant’s representative agreed that the Satisfaction of Judgment precludes the Registrar from finding that cause currently exists under A.R.S. § 32-1154(A)(11)[1] to discipline Respondent’s license. Complainant’s representative declined to withdraw its complaint, however, because he felt that contractors should not have to go to court or to the Registrar to get paid. Therefore, Complainant’s representative requested that a record be made of the extraordinary measures that it had to take to obtain payment from Respondent. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[2] 2. Complainant bears the burden of proof and must establish cause for the Registrar to discipline Respondent’s license by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] 3. Complainant’s representative acknowledged at the hearing that the Satisfaction of Judgment precludes it from obtaining any further relief from the Registrar against Respondent. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, the Registrar close Complainant King Insulation of Arizona, L.L.C.’s complaint in Case No. 2010-[number redacted] against Respondent Polaris Construction, L.L.C.’s License No. ROC249814, Class KB-1. 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, February 22, 2011. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: William A. Mundell, Director Registrar of Contractors ----------------------- [1] 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.” [2] See 32-1101 et seq. [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).

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