ALJDEC decisions subject to certification as final

2010A-308475910-ROC · Registrar of Contractors · 2013-02-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COMPLIANCE HEARING: January 25, 2013 APPEARANCES: Complainant Arizona Shoring Co Inc did not appear. Respondent Pinnacle Restoration LLC was represented by Scott Wakefield, Esq. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________

FINDINGS OF FACT The Arizona Registrar of Contractors (“the Registrar”) issued License No. B- 1.208146-C to Pinnacle Restoration LLC (“Respondent”). Respondent contracted with Arizona Shoring Co Inc (“Complainant”) for the rental of shoring equipment to be used for the Arvizu Advertising project (“the Project”). Complainant filed a Complaint to the Registrar against Respondent for its alleged failure to pay equipment rental fees to Complainant. The Registrar issued a Citation and Complaint that charged Respondent with a violation of A.R.S. § 32-1154(A)(11). After Respondent failed to file a timely written answer, the Registrar issued a Default Decision and Order finding that, pursuant to A.R.S. § 32-1155(B), Respondent’s failure to answer was deemed an admission of the charge contained in the Citation and Complaint. The Registrar issued an Appeal Order, providing in relevant part as follows: On September 24, 2012, Judge McClennen issued a ruling in Maricopa County Superior Court Case No. LC2011-000390-001 DT, a copy of which is attached hereto, affirming the Registrar’s April 27, 2011 Order Denying Request for Rehearing and the Registrar’s January 18, 2011 Default Decision and Order. Judge McClennen remanded the matter to the Registrar.

On or about October 12, 2012, Counsel for Respondent filed a Request for Compliance Hearing with the Registrar maintaining, among other things, that Respondent “has sufficiently complied with its obligations to [Complainant], in that it has paid [Complainant] the amount for which [Complainant] offered to sell the equipment to [Respondent].”

In review and consideration of Respondent’s Request for Compliance Hearing, as well as the entire file in this mater, and with good cause appearing, IT IS ORDERED that a Compliance Hearing be scheduled in the expedited course of docketing in the Phoenix area.

At the Compliance Hearing, the parties may offer evidence and testimony as to whether or not Respondent has complied with the terms and conditions of the Registrar’s January 18, 2011 Default Decision and Order issued in this matter.

If it is determined that Respondent has failed to comply with the terms of the Registrar’s previously entered Order in this matter, Respondent’s B-1.208146-C License shall be subject to an immediate revocation. If it is determined that Respondent has fully complied with the terms and conditions of the Order, then Respondent’s License shall not be disciplined and the matter shall be closed.

(Alterations in original).

The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing on the issue of whether Respondent had complied with the Registrar’s Default Decision and Order. On January 25, 2013, a compliance hearing was held. Respondent submitted ten exhibits and presented the testimony of Brad Schultz, an employee. Respondent elicited testimony that the rental agreement was initially intended to last approximately six months, but because of problems that developed with the Project, the equipment was still in place at the time of the hearing and could not be removed. Evidence submitted established Respondent had paid Complainant a total of $11,045.92 in rental fees for the equipment from November 2006 through May 2009, in addition to the $3,000.00 initial payment. On February 20, 2008, Complainant offered Respondent the option to purchase the equipment for $6,922.00. Following the offer, Respondent continued making monthly rental payments to Complainant totaling $4,960.00 before stopping all payments in May 2009.[1] Complainant was dissolved by the Arizona Corporation Commission effective January 19, 2011, due to a failure to file an annual report. Floyd Whitaker and Michael T Whitaker were noted as Directors for Complainant. Complainant’s license from the Registrar was voluntarily cancelled on April 14, 2011. According to the Arizona Corporation Commission website, Arizona Shoring and Bracing LLC was incorporated on May 27, 2008. Floyd Whitaker is identified as the Manager, and Michael T Whitaker and Brian Tolford are identified as Members of Arizona Shoring and Bracing LLC. Arizona Shoring and Bracing LLC was initially licensed by the Registrar on December 1, 2009. The domestic addresses for both Complainant and Arizona Shoring and Bracing LLC were recorded with the Arizona Corporation Commission as 1440 E Hammond Lane, Phoenix, Arizona. Respondent acknowledged that it had not paid Complainant any of the $5,406.71 that the Registrar’s Default Decision and Order required it to pay as a condition of keeping its license in good standing following the date of the Default Decision and Order. Respondent alleged that it had paid Complainant far more than the actual value of the equipment and had paid more than the $6,922.00 asking price Complainant quoted for the sale of the equipment. Administrative notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. Such prior license record reflects that on February 14, 2013, Respondent’s license was current. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. Respondent bears the burden of proof to establish by a preponderance of the evidence that it either complied with the Registrar’s Default Decision and Order or that Complainant failed to provide reasonable access for it to do so. See A.A.C. R2-19-119(B)(2); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). As the Registrar’s Appeal Order informed the parties, the only issue at the compliance hearing was whether Respondent had complied with the Registrar’s Default Decision and Order. Respondent acknowledged that it had not complied with the Registrar’s Default Decision and Order. Respondent made no payments to Complainant after May 13, 2009. Respondent argued it had no obligation to pay Complainant while its appeal was pending in Superior Court and that Complainant no longer existed as a corporate entity when the September 24, 2012, ruling was issued affirming the Registrar’s Default Decision and Order. As such, Respondent claimed it was unable to comply with the Registrar’s Default Decision and Order to pay Complainant $5,406.71. The evidence established the successor corporation of Arizona Shoring and Bracing LLC was a mere continuation or reincarnation of the predecessor corporation Complainant. The change in corporate identity did not relieve Respondent of its obligation to pay $5,406.71 as ordered in the Registrar’s Default Decision and Order. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar immediately suspend Respondent Pinnacle Restoration’s License No. B- 1.208146-C until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it complied with the Registrar’s Default Decision and Order by paying Complainant Arizona Shoring Co Inc’s successor corporation, Arizona Shoring and Bracing LLC, $5,406.71 in certified funds. It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it complied with the Registrar’s Default Decision and Order by paying Complainant Arizona Shoring Co Inc’s successor corporation, Arizona Shoring and Bracing LLC, $5,406.71 in certified funds, the Registrar may close the Complaint in Case No. 2010-[number redacted]-ROC. 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 the date of that certification. Done this day, February 14, 2013.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] The evidence submitted by Respondent showed monthly payments of $335.73 during this time period including $310.00 in rental fees and $25.73 in tax collected.

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