ALJDEC decisions subject to certification as final

2010A-308472913-ROC · Registrar of Contractors · 2011-02-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 1, 2011, at 8:00 a.m. APPEARANCES: Complainant R J Fritz Construction, Inc. appeared through Robert Fritz, its president; Respondent Yarborough Development, Inc. did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT In November 1992, the Registrar issued License No. ROC095495, Class C-2 for residential excavating, grading, and oil surfacing to R J Fritz Construction, Inc. (“Complainant”). In June 2000, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC154609, Class B-1 for commercial general contracting to Yarborough Development, Inc. (“Respondent”). Respondent’s address of record is 7671 W. Quachila Ct., Tucson, AZ 85743. On May 5, 2010, the Registrar received a complaint from Complainant against Respondent that it owed $5,505.47 for excavation that Complainant had performed on a residential property located at 6825 N. Calle Mechero in Tucson. The Registrar referred the complaint to Respondent for its immediate attention. After Respondent failed to pay Complainant, it requested that the Registrar issue a citation against Respondent. On September 9, 2010, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(11) and (17). The Registrar mailed a copy of the Citation and Complaint to Respondent at its address of record. On September 13, 2010, the Registrar received Respondent’s written answer to the Citation and Complaint. In the answer, Respondent acknowledged that it owed money to Complainant, but alleged that it could not pay Complainant because a developer had not paid Respondent. With respect to the charged violation of A.R.S. § 32-1154(A)(17), Respondent alleged that it had been acting as an owner-builder on the residential property. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. On December 8, 2010, the Registrar issued a Notice of Hearing setting a hearing on February 1, 2011, at 8:00 a.m. at the OAH. The Registrar mailed the Notice of Hearing to Respondent at its address of record. A hearing was held on February 1, 2011, at 8:00 a.m. Complainant’s representative appeared and testified at the duly noticed hearing. Although the beginning of the hearing was delayed thirty 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 employee or attorney. Respondent did not present any evidence to defend its license. Complainant’s representative testified that it performed excavation work on a spec house that Respondent was constructing in January and March 2009, and that it had submitted invoices to Respondent for the amount owed for the work. Complainant’s representative testified that Respondent did not pay anything to Complainant for the work that it had performed at Respondent’s request. According to the Registrar’s record, Respondent’s license is current and in good standing.

CONCLUSIONS OF LAW 1. The notice of the hearing that the Registrar mailed to Respondent at its address of record was reasonable and it is deemed to have received it.[1] 2. Complainant bears the burden of proof and must establish statutory violations by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] 3. Respondent has never disputed that it owes $5,505.47 to Complainant for work that Complainant performed at Respondent’s request at the house that Respondent was constructing at 6825 N. Calle Mechero in Tucson. Respondent did not present any evidence at the hearing to establish the affirmative defense that it is unable to pay Complainant and that Respondent has not been paid for the project. Therefore, Complainant established that Respondent violated A.R.S. § 32- 1154(A)(11)[4] by failing to pay Complainant $5,505.47. 4. With respect to the charged violation of A.R.S. § 32- 1154(A)(17),[5] the owner-builder exception set forth in A.R.S. § 32-1121(A)(5) to the licensure requirement does not authorize licensed contractors to perform work that is outside the scope of their licenses. Even if it did, however, the exception requires that the owner-builder must intend to occupy the structure that he is building. Because the evidence showed that Respondent built the house at issue on speculation for eventual sale to a member of the public for profit, Complainant established that Respondent violated A.R.S. § 32-1154(A)(17) by constructing a residential structure under its commercial license. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, the Registrar suspend License No. ROC154609, Class B-1 previously issued to Respondent Yarborough Development, Inc. until Respondent has paid $5,505.47 to Complainant R J Fritz Construction, Inc. It is further recommended that if on or before the effective date of the final order, the Registrar receives satisfactory written proof from Respondent that it has paid $5,505.47 to Complainant by cashier’s or certified check, the Registrar not suspend Respondent’s license but, instead, close the complaint in Case No. 2010-[number redacted]. It is further recommended that, in addition to any license suspension that may result from this matter, Respondent’s Class B-1 license be placed on disciplinary probation for a period of 30 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 16, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [2] 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). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] 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.” [5] This statutory subsection includes among the grounds for suspension, revocation, and other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.”

-----------------------

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