Vacate: Settlement Recommendation

2010A-308472959-ROC · Registrar of Contractors · 2011-02-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Buena Vista Plumbing, L.L.C. (“Complainant”) filed two complaints to the Arizona Registrar of Contractors (“the Registrar”) against Jeffery C. Stone, Inc. dba Summit Builders (“Respondent”) for non-payment under A.R.S. § 32-1154(A)(11), which the Registrar designated as Case Nos. 2010- [number redacted] and 2010-[number redacted]. After Complainant requested hearings in both matters, the Registrar referred them to the Office of Administrative Hearings (“the OAH”) and issued Notices of Hearing that informed the parties that “[a]ny case which is resolved or settled by the parties, or which is withdrawn by the Complainant without objection from Respondent after notice, will be listed on the Registrar of Contractors website and its records under the category: ‘Closed Complaints – Resolved/Settled/Withdrawn.’” On January 25, 2011, Respondent filed a prehearing memorandum in Case No. 2010A-[number redacted]-ROC, stating that it had not been fully paid by the owner on the project at issue, had spent attorneys’ fees to institute litigation against the owner, and had recovered $1,025,000 against the owner through settlement of the litigation, which was less than the amount owed but that in light of certain risks was “probably the most it would recover on its lien.” Respondent stated that it paid all its subcontractors on the project 94% of the amounts owed, which was the same percentage of the amount owed that it had recovered from the owner in the settlement. Respondent stated that Complainant’s complaints were for the difference between the 94% paid and the amount technically owed under the subcontract, and argued that the “pay-when-paid” clause in the subcontract created a valid condition precedent that precluded Complainant’s complaints to the Registrar under L. Harvey Concrete, Inc. v. Agro Constr. & Supply Co., 189 Ariz. 178, 181-82, 939 P.2d 811, 814-15 (App. 1997). Case No. 2010A-[number redacted]-ROC proceeded to a hearing on the merits in the OAH before Administrative Law Judge (“ALJ”) Eric A. Bryant on January 27, 2011. At the hearing, the parties informed ALJ Bryant that because Case Nos. 2010A-[number redacted]-ROC and 2010A-[number redacted]-ROC involved the same issues and same parties, the cases should be consolidated for hearing. ALJ Bryant agreed and consolidated the two matters for a hearing on the merits in the OAH before the undersigned ALJ on this date. On January 28, 2011, Complainant filed a “Notice of Voluntary Dismissal” in the consolidated matters. Respondent did not respond to the “Notice of Voluntary Dismissal” in the time allowed under A.A.C. R2-19- 106(D) or appear for the duly noticed hearing that had been scheduled on this date. Therefore, IT IS ORDERED vacating the hearing on the merits that had been scheduled in these consolidated matters on this date at 8:00 a.m. IT IS FURTHER ORDERED remanding these matters under A.A.C. R2-19- 111(3) to the Director of the Arizona Registrar of Contractors with the recommendation that they be closed as Resolved/Settled/Withdrawn. Done this day, February 3, 2011.

_________________________________ Diane Mihalsky Administrative Law Judge Copy transmitted by mail this _____ day of February, 2011 to: William A. Mundell, Director Registrar of Contractors c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012

John Randall Jefferies, Esq. Matthew A. Lensch, Esq. Fennemore Craig P.C. 3003 North Central Avenue, Suite 2600 Phoenix, AZ 85012-2913

S. Gregory Jones, Esq. Pak & Moring, P.L.C. 8930 East Raintree Drive, Suite 100 Scottsdale, AZ 85260

By _______________________________ -----------------------

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