ALJDEC decisions subject to certification as final

2010A-308476559-ROC-com · Registrar of Contractors · 2012-03-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 29, 2012 APPEARANCES: R and A Floor Covering, L.L.C. was represented by its authorized representative, Rogelio Armendariz. S M Surfaces, Inc. was represented by its attorney, Jerry D. Krumwiede, Esq., Krumwiede Law offices PLLC ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully ___________________________________________________________________ Based upon the record in the above-entitled matters, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order on Compliance: FINDINGS OF FACT 1. On February 23, 2011, the Registrar of Contractors (“Registrar”) issued Orders of Closing in Case Nos. 2010-[number redacted] and 2010- [number redacted] in accordance with the Administrative Law Judge’s Minute Entry Vacating Hearing in those matters. The evidentiary hearing had been vacated due to a settlement agreement reached by the parties. 2. On or about June 14, 2011, Complainant requested that the Registrar reopen the two cases due to Respondents’ breach of the settlement agreement by failing to pay the outstanding debt owed to Complainant. 3. On June 21, 2011, the Registrar sent Respondents a copy of Complainant’s request to reopen, providing Respondents with the opportunity to file a response to it. Respondents did not file a response. 4. Subsequently, the Registrar issued Orders Reopening Complaint and Setting Compliance Hearing in Cases No. 2010-[number redacted] and 2010- [number redacted] before the Office of Administrative Hearings, an independent agency. 5. At the hearing, Respondents’ counsel explained that after the parties entered into their settlement agreement, Respondents made several payments to Complainant on the outstanding debt owed by Respondents. On June 24, 2011, Respondents filed a Voluntary Petition for Chapter bankruptcy under their corporate identity. Complainant was listed in the petition as a creditor of S M Surfaces, Inc. However, Complainant did not file a claim with the bankruptcy court. 6. S M Surfaces, Inc.’s bankruptcy was later changed to a Chapter 7 liquidation. The bankruptcy was closed on December 8, 2011. 7. After a conference between Respondents’ counsel and Complainant’s qualifying party and member, Rogelio Armendariz, which occurred outside the presence of the Administrative Law Judge, Mr. Armendariz stated on the record that he understood the ramifications of the bankruptcy discharge on the debt owed to his company. CONCLUSIONS OF LAW 1. Respondents have the burden of establishing that they complied with the parties’ settlement agreement or that they had legal justification for not complying with it. See A.A.C. R2-19-119. 2. The evidence of record established that the repayment of Respondents’ debt to Complainant pursuant to the parties’ settlement agreement was discharged in S M Surfaces, Inc.’s bankruptcy. Therefore, Respondents did not breach the parties’ settlement agreement. / / / / / / RECOMMENDED ORDER ON COMPLIANCE Case Nos. 2010-[number redacted] and 2010-[number redacted] shall be closed on the effective date of the Order(s) entered in these matters. 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(s) will be 40 days from the date of that certification.

Done this day, March 13, 2012.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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