ALJDEC decisions subject to certification as final

2011A-2951-ROC · Registrar of Contractors · 2011-10-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 12, 2011, at 8:15 a.m. APPEARANCES: Complainant Desert Rat Excavating, Inc. appeared through Jason Craven, an officer; Respondent Spire Engineering, L.L.C. did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT In October 1996, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC118033, Class A for commercial general engineering to Desert Rat Excavating, Inc. (“Complainant”). In February 2006, the Registrar issued License No. ROC217020, Class A for commercial general engineering to Spire Engineering, L.L.C. (“Respondent”). Respondent’s address of record is 1811 South Alma School Road, Suite 283, Mesa, Arizona 85210-3001. In May 2011, the Registrar received a complaint from Complainant against Respondent alleging that Respondent had failed to pay amounts owed to Complainant for its performance of the parties’ subcontract at Indian Wells Elementary School in Indian Wells, Arizona (“the project”). The Registrar subsequently received Complainant’s request for hearing. On July 28, 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 August 4, 2011, the Registrar received Respondent’s written answer to the Citation and Complaint, denying any statutory violation and affirmatively alleging that the architect on the project had withheld the 10% retention on Complainant’s work due to its poor workmanship. Respondent’s written answer showed Respondent’s address of record. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. On August 25, 2011, the Registrar issued a Notice of Hearing setting a videoconference hearing on October 12, 2011, at 8:15 a.m. at the Registrar’s office in Show Low, Arizona. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. A videoconference hearing was held on October 12, 2011, at 8:15 a.m. Jason Craven, Complainant’s officer, testified. Respondent did not request to appear telephonically at the hearing and did not request that the hearing be continued. 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 member, employee, 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. Mr. Craven established the following: (1) In March 2010, Respondent accepted Complainant’s proposal to perform certain work on the project for a contract price of $30,000.00; (2) Respondent subsequently issued change orders to Complainant in the total amount of $4,850.00; (3) Complainant fully performed the work described in the original proposal and the change orders; and (5) Respondent paid Complainant only $30,000.00. Mr. Craven testified that as of the date of the hearing, Respondent owed $4,850.00 to Complainant for its work on the project. The Registrar’s electronic record shows that as of this date, Respondent’s license is current and in good standing. Seven complaints are pending against the license, and three complaints have been resolved, settled, or withdrawn. / / / / 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 Respondent is deemed to have 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.” 6. A general contractor’s inability to pay and nonpayment by the owner on a project are affirmative defenses that the general contractor bears the burden to prove in a subcontractor’s administrative complaint to the Registrar under A.R.S. § 32-1154(A)(11). Similarly, a general contractor also bears the burden to establish the affirmative defense that a subcontractor’s poor workmanship excuses the general contractor from paying the subcontractor. 7. Respondent’s failure to appear or to present any evidence at the hearing precludes any finding that Respondent’s failure to pay Complainant any portion of the contract price is excused by the architect’s retention of the monies that otherwise would be due to Complainant or Complainant’s poor workmanship. 8. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(11) by failing to pay Complainant $4,850.00 for its work on the project. 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 Spire Engineering, L.L.C.’s License No. ROC217020 until Respondent pays $4,850.00 to Complainant Desert Rat Excavating, Inc. It is further recommended that if on or before the effective date of the order, the Registrar receives satisfactory proof from Respondent that it has paid $4,850.00 to Complainant by cashier’s or certified check, the Registrar not suspend Respondent’s license but, instead, close the complaint in Case No. 2011-2951. 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 31, 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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