ALJDEC decisions subject to certification as final

2010A-308472169-ROC · Registrar of Contractors · 2011-02-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 4, 2011, at 1:00 p.m. APPEARANCES: Complainant Echo Storage Options appeared through Jim Hodges, its managing member; Respondent A M N Mechanical, Inc. did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On July 21, 2009, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC257310, Class L-39 for commercial air conditioning and refrigeration to A M N Mechanical, Inc. (“Respondent”). James Walker is Respondent’s qualifying party, officer, and the only person listed on Respondent’s license. Respondent’s address of record is 10 W. Wyoming Ave., Las Vegas, NV 89102-2716. Echo Storage Options (“Complainant”) is in the business of providing mobile storage units to other businesses, such as Respondent. On September 14, 2010, the Registrar received a complaint from Complainant against Respondent, alleging that Respondent owed $1,556.01 pursuant to a contract that Respondent had made on July 1, 2009, to rent a storage unit for use at a job at 3675 E. Andy Devine Ave. in Kingman, Arizona. The Registrar referred the complaint to Respondent for its immediate attention. After Respondent failed to resolve the complaint, Complainant requested a hearing. On September 14, 2010, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(11) and (20). On September 28, 2010, the Registrar received Respondent’s written answer to the Citation and Complaint. Respondent admitted that it owed $1,556.01 to Complainant, and stated that it would contact Complainant to arrange for payment. Respondent’s written answer showed Respondent’s address as P.O. Box 25704, Las Vegas, Nevada 89126-0704. The Registrar referred the matter to the Office of Administrative Hearing (“the OAH”), an independent agency, for an evidentiary hearing. On December 16, 2010, the Registrar issued a Notice of Hearing setting a hearing on February 4, 2011, at 1:00 p.m. at the Registrar’s office in Kingman. The Registrar mailed the Notice of Hearing to Respondent at its address of record. On January 4, 2011, the OAH issued a minute entry order in this matter. The minute entry order stated that “[y]our hearing in the above-entitled matter will be held from February 4, 2011 at 1:00 pm to 5:00 pm . . . .” The OAH mailed the minute entry order to Respondent at its address of record. After the United States Postal Service (“USPS”) returned the minute entry order as undeliverable, on January 14, 2011, the OAH resent the minute entry to Respondent at the address shown on its written answer. The USPS did not return as undeliverable the minute entry that the OAH sent to Respondent at the address on its written answer. A hearing was held on February 4, 2011, at 1:00 p.m. Complainant’s managing member, Jim Hodges, testified and submitted 23 exhibits. Although the beginning of the duly noticed hearing was delayed fifteen minutes to allow Respondent additional travel time, it did not contact the OAH to request that the hearing be continued or that the start of hearing be further delayed, and did not appear through an authorized officer, employee, or attorney. Respondent did not present any evidence to defend its license. Mr. Hodges submitted documents to establish the following: 15.1 On or about June 30, 2009, Respondent submitted a credit application to Complainant, with credit references; 15.2 On or about July 1, 2009, Respondent’s agent signed a rental agreement to rent a 40’ mobile storage unit from Complainant at a cost of $150.00 per month, $50.00 for delivery to Respondent’s jobsite for the Mohave Development Services Center on 3675 E. Andy Devine Ave. in Kingman, $50.00 for pickup, and applicable sales tax; 15.3. After Complainant delivered the mobile storage unit to the jobsite on July 19, 2009, it sent the following invoices to Respondent for charges incurred under the rental agreement: |Date |Invoice # |Amount | |August 31, 2009 |2332 |$ | | | |211.78[1] | |September 30, 2009|2376 |$ 161.78 | |October 29, 2009 |2416 |$ 161.78 | |November 23, 2009 |2457 |$ 161.78 | |December 31, 2009 |2515 |$ 161.78 | |January 29, 2010 |2554 |$ 161.78 | |February 27, 2010 |2603 |$ 161.78 | |March 24, 2010 |2624 |$ | | | |373.55[2] | |TOTAL | |$1,556.01 |

15.4 Complainant later made a claim for the amount that Respondent owed under the rental agreement to Platte River Insurance Company (“Platte River”) against Respondent’s bond, but Platte River denied the claim because payment under the bond was “restricted to [claims for] deficiencies in work or damage resulting from violations of a construction code or Registrar-approved construction standards.” Mr. Hodges testified that Complainant has not been paid for any portion of Respondent’s debt. According to the Registrar’s record, Respondent’s license was suspended by operation of law on July 16, 2010, for lack of bond. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[3] 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 the Notice of Hearing.[4] Even if such notice was not reasonable, because the OAH’s minute entry setting forth the date and time of the hearing was mailed to the alternative address that Respondent provided on its written answer, it appears that Respondent received actual notice of the hearing. 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.[5] 4. Complainant bears the burden of proof and must establish cause for the Registrar to discipline Respondent’s license by a preponderance of the evidence.[6] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[7] 5. Respondent admitted its debt to Complainant in its written answer. Complainant at hearing also established cause for the Registrar to discipline Respondent’s license under A.R.S. § 32-1154(A)(11)[8] for failing to pay Complainant $1,556.01. 6. Complainant also established that Respondent engaged in contracting activities before the Registrar issued its license and that at the time that the license was issued, Respondent had an outstanding debt that was related to its contracting activities. Therefore, Complainant also established cause for the Registrar to discipline Respondent’s license under A.R.S. § 32- 1154(A)(20).[9] 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 License No. ROC257310, Class L-39 previously issued to Respondent A M N Mechanical, Inc. No future license shall be issued to any entity consisting of the persons associated with Respondent as defined in A.R.S. § 32-1101(A)(5), and the Registrar may commence disciplinary proceedings under A.R.S. § 32- 1154(A)(21) against any previously issued license on which such persons are listed.[10] It is further recommended that if Respondent provides to the Registrar satisfactory written proof that Respondent has paid $1,556.01 by certified or cashier’s check to Complainant Echo Storage Options, the Registrar not revoke Respondent’s license but, instead, place Respondent’s license on disciplinary probation as a result of the violations established in Case No. 2010-[number redacted] for a period of 90 days, commencing on the effective date of the Registrar’s order or the date on which Respondent files notice of compliance, whichever is later. 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] Invoice #2332 included the $50.00 delivery charge. [2] Invoice #2624 included rent for March and April 2010, and the $50.00 pickup charge. [3] See 32-1101 et seq. [4] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [5] 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 . . . .” [6] 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). [7] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [8] 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.” [9] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[s]ubsequent discovery of facts which if known at the time of issuance of a license or the renewal of the license would have been grounds to deny the issuance or renewal of the license.” [10] The Registrar issued License No. ROC142783, Class K-39 to James Arthur Walker, III, doing business as Tubb’s Heating and Cooling, in Lake Havasu City. The record does not show whether Respondent’s qualifying party is the same person as the Lake Havasu licensee.

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