ALJDEC decisions subject to certification as final

2011A-2797-ROC · Registrar of Contractors · 2011-10-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 26, 2011, at 8:00 a.m. APPEARANCES: Complainant Ross Equipment Rentals and Sales appeared through Lynne Welton, Credit Manager; Respondent Lloyd Wilfred George and Joseph Wesley Butcher dba Sur Way Mechanical did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT In May 2000, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC155598, Class L-39 for commercial air conditioning and refrigeration to the partnership of Lloyd Wilfred George and Joseph Wesley Butcher doing business as (“dba”) Sur Way Mechanical (“Respondent”). Respondent’s address of record is 129 North 30th Avenue, Phoenix, Arizona 85009-5096. Ross Equipment Rentals and Sales (“Complainant”) is in the business of renting and selling construction equipment to contractors such as Respondent. On May 13, 2011, the Registrar received a complaint from Complainant against Respondent alleging that it owed $2,446.02 in principal for equipment that Complainant rented to Respondent to use in its contracting business at jobs located at 5757 West Lower Buckeye (“the Kraft Foods project”) and at 1875 North Central Avenue (“the United Methodist Church project”) in Phoenix, Arizona. With the interest and finance fees that Respondent’s credit agreement with Complainant allowed, Complainant stated that Respondent owed a total of $2,608.17. The Registrar subsequently received Complainant’s request for hearing. On June 11, 2011, the Registrar issued a Citation and Complaint against Respondent, charging a violation of A.R.S. § 32-1154(A)(11). The Registrar mailed a copy of the Citation and Complaint to Respondent at its address of record. On June 21, 2011, the Registrar received a written answer to the Citation and Complaint from Mr. Butcher, on Respondent’s behalf. Respondent’s written answer was on letterhead that showed Respondent’s address of record. Mr. Butcher in the written answer acknowledged that Respondent owed Complainant money but alleged that Respondent was owed more than $100,000.00 for the United Methodist Church project and further alleged that when Respondent was paid, it would pay Complainant. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. On August 15, 2011, the Registrar issued a Notice of Hearing setting a hearing on September 26, 2011, at 8:00 a.m. at the OAH. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. The Registrar’s Notice of Hearing advised the parties that they should address motions to continue to the Administrative Law Judge at the OAH, who would notify the parties if the motion was granted. A hearing was held on September 26, 2011. Lynne Welton, Complainant’s Credit Manager, testified. At the hearing, Ms. Welton provided to the Administrative Law Judge a copy of Respondent’s September 21, 2011 motion to continue, addressed to the Registrar, but not to the OAH. According to the motion, Mr. Butcher requested the continuance because the Respondent was required to attend a mandatory on-site meeting at Davis-Monthan Air Force Base in Tucson to bid a job. Ms. Welton, on Complainant’s behalf, opposed Respondent’s motion to continue. On the record, the Administrative Law Judge denied Respondent’s motion to continue because it was untimely under A.A.C. R2-19-106(C) and because Mr. Butcher’s motion did not state any reason why his partner, Mr. George, could not represent Respondent at the hearing. Respondent did not request to appear telephonically at the hearing. Although the start of the duly noticed hearing was delayed fifteen minutes to allow Respondent additional travel time, Respondent did not appear, through an authorized partner or attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend its license. Ms. Welton testified that Respondent rented certain equipment from Complainant between August 2009 and December 2009, that the terms of the credit agreement was net 30 days, and that Complainant did not maintain job accounts. Ms. Welton testified that with the interest and finance fees that Respondent agreed to pay when it signed the credit agreement, Respondent owed Complainant a total of $2,608.17. Ms. Welton testified that although Complainant had given Respondent time to make arrangements to pay its debt, Respondent failed to communicate with Complainant except through the Registrar’s complaint process. The Registrar’s record shows that Respondent’s license is current and in good standing. This appears to be the only complaint pending against the license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[1] 2. The Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable and it appears that Respondent actually received notice of the hearing.[2] 3. Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] 4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] 5. 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 licensee’s lack of capacity to pay and nonpayment by the owner or general contractor on a project are affirmative defenses that the licensee bears the burden to establish. 6. By failing to appear or to offer any evidence at the duly noticed hearing, Respondent failed to establish that it lacks the capacity to pay and that it has not received payment on either the Kraft Foods project or the United Methodist Church project. 7. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(11) by failing to pay Complainant $2,608.17 for rental, interest, and finance charges for equipment that it used in its contracting business. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, the Registrar suspend Respondent Lloyd Wilfred George and Joseph Wesley Butcher dba Sur Way Mechanical’s License No. ROC155598 until Respondent pays $2,608.17 to Complainant Ross Equipment Rentals and Sales. It is further recommended that if on or before the effective date of the order, the Registrar receives from Respondent proof that is satisfactory to the Registrar that Respondent has paid $2,608.17 to Complainant by cashier’s or certified check, the Registrar not suspend Respondent’s license but, instead, close the complaint in Case No. 2011- 2797. 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, October 13, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See 32-1101 et seq. [2] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [3] 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). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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