ALJDEC decisions subject to certification as final

2011A-1757-ROC · Registrar of Contractors · 2011-08-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 10, 2011, at 8:00 a.m. APPEARANCES: Complainant Elite Woodworking appeared through Kathy Walker, Corporate Secretary; Respondent 813, Inc. dba Complete Custom Cabinets appeared through Scott Bennett, its qualifying party and officer. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT In May 2002, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC174796, Class K-60 for dual finish carpentry to 813, Inc. doing business as (“dba”) Complete Custom Cabinets (“Respondent”). Elite Woodworking (“Complainant”) fabricates custom cabinets for installation by contractors like Respondent. On March 23, 2011, the Registrar received Complainant’s complaint against Respondent that alleged that Respondent owed Complainant $8,592.96 for custom cabinets that Complainant fabricated for Respondent to install at its job at 2135 West Melinda Lane, #A, in Phoenix, Arizona. Complainant requested a hearing. On May 13, 2011, the Registrar issued a Citation and Complaint against Respondent, charging a violation of A.R.S. § 32-1154(A)(11). Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violation and affirmatively alleging that it lacked the capacity to pay and never received full payment for the project. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on August 10, 2011. Respondent’s qualifying party, Scott Bennett, acknowledged that it had ordered and failed to pay for custom cabinets from Complainant. Mr. Bennett testified that Respondent’s license has expired and it is no longer in business. Mr. Bennett testified that Respondent has been unable to pay Complainant ever since it ordered the cabinets. Mr. Bennett testified that the cabinets were in Respondent’s shop when its former landlord evicted Respondent for nonpayment of rent. Because Respondent’s landlord changed the locks, it could not access the cabinets to finish the job. Mr. Bennett testified that Respondent was not paid anything for the job. Mr. Bennett acknowledged that Respondent was four months behind on rent when it ordered the cabinets. When Complainant’s corporate secretary, Kathy Walker, asked Mr. Bennett why he did not return the cabinets so that Complainant could use them as a sample at least, Mr. Bennett responded that it did not occur to him because the cabinets were partially stained. Mr. Bennett testified that Complainant was “in a long line of people” to whom Respondent owed money. CONCLUSIONS OF LAW This dispute lies within the Registrar’s jurisdiction to resolve.[1] Complainant bears the burden of proof and must establish Respondent’s statutory violations by a preponderance of the evidence.[2] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] A.R.S. § 32-1154(A)(11) 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.” A contractor’s inability to pay and nonpayment by the owner or general contractor on a project are affirmative defenses that the general contractor bears the burden to prove in a material supplier’s administrative complaint under A.R.S. § 32-1154(A)(11). Mr. Bennett acknowledged that Respondent owed Complainant more than $750.00 for materials furnished for its contracting business. However, because Mr. Bennett credibly testified that Respondent was unable to pay Complainant and had not been paid for the project on which the cabinets were to be used, Complainant did not establish a violation of A.R.S. § 32-1154(A)(11). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, Case No. 2011-1757 against Respondent 813, Inc. dba Complete Custom Cabinets’ License No. ROC174796, Class K-60 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 30, 2011. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1101 et seq. [2] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] See A.A.C. R2-19-119(B)(2). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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