ALJDEC decisions subject to certification as final

2010A-308472456-ROC · Registrar of Contractors · 2011-08-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 11, 2011

APPEARANCES: Complainant appeared on his own behalf and was represented by attorney Tony Gonzales; Respondent was represented attorney Tony Cullum, accompanied by corporate President and Qualifying Party Ray Lemus.

WITNESSES: John Unale, Jr. Ken Sayre, Complainant’s business partner Ray Lemus John Unale, Sr., Complainant’s father

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that he is owed $12,630.00 from Respondent for installation services Complainant performed when Respondent hired him to work on a project that Respondent was building as a general contractor. Respondent denies that it hired Complainant and claims that Complainant, who is not a licensed contractor, was hired by the owner of the property. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with Complainant’s Exhibits C1 to C5 and Respondent’s Exhibits R1 to R5. The parties presented evidence and testimony at the hearing. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding no violation.

FINDINGS OF FACT 1. Respondent is the holder of license B.215088-R, a general residential contracting license issued by the Registrar of Contractors (“ROC”). The license authorizes Respondent to operate as a general contractor for residential projects. Ray Lemus is the Qualifying Party. 2. Complainant operates under the business name “AZ Custom Plastics,” fabricating plastics for various uses. Complainant is not a licensed contractor. 3. Under a contract dated March 9, 2009, Respondent built an underground “Storage Shed/Cold Storage” unit for Linda Suhler on her property.[1] Respondent mainly interacted with Suhler’s fiancée John van Wyke, who was acting has her representative for the project. The contract between Respondent and Suhler specifically excluded the building of an “Escape Tube” for the underground shelter, and stated that the escape tube was to be done by a separate contract between the owner and “an outside contractor.”[2] Indeed, the contract specifically states that Respondent was not responsible for that portion of the job. 4. Complainant presented testimony that he was hired by Respondent to install the escape tube after he had fabricated it for the owner. As support for his position, he submitted Exhibits C1 and C5, invoices for his work. Those invoices, however, are addressed to John van Wyke. No invoices addressed to Respondent are present in the record. Moreover, Complainant did not establish any agreement between himself and Respondent as to an hourly wage he was to be paid, even though he testified that Respondent agreed to pay him by the hour. 5. In addition, Complainant submitted Exhibit C2, which shows seven payments (cancelled checks) made to Complainant. Except for one of those checks, all were written by Respondent to Complainant. According to the testimony of Ray Lemus, along with two written statements and an affidavit from John van Wyke submitted as Exhibits R1, R2, and R5, Respondent made the six payments to Complainant on behalf of the owner because Suhler and van Wyke, who are frequent travelers and were not present for much of the work, asked Respondent to make the payments in their absence. 6. Complainant testified that he knew that he could not do any installation work without a license. He testified that Respondent contacted him to do the installation of the escape tube and stated that he could do so under Respondent’s license. Complainant testified that he believed the statement and performed the installation. Complainant testified that Ray Lemus was present as Complainant was doing the installation and that Respondent assisted him with the installation. 7. Ray Lemus testified that Complainant was hired by the owners, and not Respondent, to do the installation of the escape tube. He testified that Complainant was never an employee of Respondent and was not a subcontractor of Respondent. He admitted that he knew that Complainant was doing the installation at the time. Finally, he testified that he did not know that Complainant was an unlicensed contractor until after the work was completed. 8. The weight of the credible evidence shows that Complainant was an unlicensed contractor performing contracting at the behest of the owner and her agent. The evidence does not show that Complainant worked for Respondent. In addition, the evidence shows that Respondent knew or should have known that Complainant was an unlicensed contractor. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[3] Further, the standard of proof at hearing is by preponderance of the evidence.[4] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[5] Complainant has not met that burden. 2. The Citation and Complaint for this case cites only the “no pay’ provision found in Arizona Revised Statutes (A.R.S.) § 32-1154(A)(11) that prohibits the failure of a licensee to pay monies in excess of $750 “when due for materials or services” rendered in connection with a licensee’s operations when the licensee has the capacity to pay or when the licensee has been paid for the project. There is no citation for aiding and abetting an unlicensed contractor. 3. The evidence does not show that Complainant was hired by Respondent. Therefore, Respondent does not owe Complainant any amount. 4. This matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that the Citation and Complaint against Respondent The Lemus Group, Inc. in case 2010- [number redacted] be dismissed.

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, August 26, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit R3. [2] Id. at ¶7. [3] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [4] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [5] See Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996) (moving party bears burden of proof by preponderance of evidence in an administrative hearing).

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