ALJDEC decisions subject to certification as final

2011A-3898-ROC · Registrar of Contractors · 2012-07-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 3, 2012, at 8:00 a.m. APPEARANCES: Complainant RSVP Arizona LLC appeared through Patricia Rubel, its co-owner; Respondent Flooring 2 Day LLC appeared through Christine Herth, its Customer Service Manager. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. The Arizona Registrar of Contractors (“the Registrar”) issued License No. C-8.220301-R to Flooring 2 Day LLC (“Respondent”). 2. RSVP Arizona LLC (“Complainant”) is a direct-mail advertising company. Complainant filed a complaint with the Registrar alleging that Respondent failed to pay $9,045.00 for direct-mail advertising services that Complainant performed pursuant to the parties’ May 19, 2011 oral and written contract. 3. The Registrar issued a Citation and Complaint against Respondent charging a violation of A.R.S. § 32-1154(A)(11). 4. Respondent filed a timely written answer with the Registrar denying any statutory violation. 5. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 6. A hearing was held on July 3, 2012. Complainant submitted seven exhibits and presented the testimony of four witnesses: (1) Chad Dankberg, Complainant’s salesperson; (2) Scott Rubel, Complainant’s co- owner; (3) Nicholas Spade, Complainant’s Production Coordinator; and (4) Patricia Rubel, Complainant’s other co-owner. Respondent presented the testimony of one witness, Christine Herth, its Customer Service Manager. 7. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on July 16, 2012. Such prior License record reflects that Respondent’s license was current. Hearing Evidence 8. Ms. Herth is not listed on Respondent’s license. No one who is listed on Respondent’s license attended the hearing.[1] 9. Mr. Dankberg testified that before the parties made the contract at issue, he met with Brian Patrick Collins, Respondent’s qualifying party and member, and Adam Nebeker, Respondent’s employee, to discuss whether Respondent was interested in securing Complainant’s advertising services. Mr. Dankberg testified that he saw Ms. Herth while he was at Respondent’s office. 10. Mr. Dankberg testified that May 19, 2011, was the day that advertisements for the direct-mail advertising packet that Complainant was assembling had to be submitted to the printer. Mr. Dankberg testified that at about 2:00 p.m. on May 19, 2012, Mr. Nebeker informed Mr. Dankberg that Respondent might be interested in having an advertisement on the back page of the packet if the price was right. Mr. Dankberg testified that he referred Mr. Nebeker’s inquiry to Mr. Rubel. 11. Mr. Rubel testified that he called Respondent’s office and spoke to Ms. Herth. Mr. Rubel testified that he and Ms. Herth reached an agreement that Respondent’s advertisement would be included on the back page of Complainant’s packet. Mr. Rubel testified that he informed Ms. Herth that the deadline was firm because he had a family vacation scheduled for the next day. 12. Ms. Herth denied that she ever reached an agreement on Respondent’s behalf to pay for advertising in Complainant’s direct-mail packet on May 19, 2011. 13. Mr. Rubel testified that after he reached an agreement with Ms. Herth, he instructed Mr. Dankberg to send a contract to her via e-mail that showed the full contract price of $9,045.00.[2] Mr. Dankberg testified that the contract price included substantial discounts. 14. Ms. Herth testified that she never saw the contract until Complainant submitted it to the Registrar as an attachment to its complaint. 15. Mr. Spade testified that during the afternoon of May 19, 2011, he contacted Ms. Herth about the artwork that Respondent wanted for the advertisement on the back page of the packet. Ms. Herth provided photographs to be used in the advertisement. 16. On May 19, 2011, at 7:04 p.m., Mr. Spade sent an e-mail to Ms. Herth, to which he attached an advertisement for her approval. 17. On May 19, 2011, at 7:06:48 p.m., Ms. Herth responded to Mr. Spade’s e-mail, “Ad is approved; thank you again for staying late.”[3] Complainant also submitted a log showing that between 4:22 p.m. and 6:18 p.m. on May 19, 2011, Complainant modified and transmitted the proposed advertisement for Ms. Herth’s approval numerous times.[4] 18. Ms. Herth testified that her job with Respondent is to approve advertisements and that she is not authorized to negotiate price or approve contracts on Respondent’s behalf. Ms. Herth testified that in the e-mail, she meant to approve the advertisement, not the contract. 19. Ms. Herth testified that after she presented Respondent’s price for the advertisement to Mr. Miller and to Mr. Nebeker, they told her that they did not approve the contract. 20. Mrs. Rubel testified that Complainant provided the packet to Respondent as soon as it was printed. Mrs. Rubel testified that Respondent elected to have a call source number on the advertisement, which is a unique telephone number that allowed Respondent to track calls it received from the advertisement. Mrs. Rubel testified that Respondent’s advertisement was mailed to 200,000 residential addresses[5] and resulted in 99 telephone calls to Respondent at the call source number, with an average length of three minutes.[6] Mrs. Rubel testified that Respondent’s advertisement in Complainant’s direct-mail packet generated business leads for Respondent. CONCLUSIONS OF LAW 1. This dispute lies within the Registrar’s jurisdiction.[7] 2. Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[8] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[9] 3. Ms. Herth’s testimony that Respondent approved the advertisement, but not the contract, was not credible. Therefore, Complainant established that on May 19, 2011, Respondent agreed to include its advertisement in Complainant’s direct-mail packet for a price of $9,045.00. Respondent’s failure to pay Complainant anything for its advertising services violated A.R.S. § 32-1154(A)(11).[10] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, Respondent Flooring 2 Day LLC’s License No. C- 8.220301-R be suspended until Respondent has paid $9,045.00 to Complainant RSVP Arizona LLC. It is further recommended that if on or before the effective date of the Order, the Registrar receives written proof from Respondent that is satisfactory to the Registrar that Respondent has paid Complainant $9,045.00 in certified funds, no license suspension take place and, instead, the complaint in Case No. 2011-3898 be closed. 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, July 17, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Ms. Herth twice moved to continue the hearing because she allegedly had suffered a series of strokes. The Administrative Law Judge denied the second motion to continue but informed Ms. Herth that she could request a further hearing to enable a person who was listed on Respondent’s license to defend it and to present Ms. Herth’s testimony telephonically. Ms. Herth did not request that a further hearing be scheduled. [2] See Complainant’s Ex. 2. [3] Complainant’s Ex. 1. [4] See Complainant’s Ex. 3. [5] See Complainant’s Ex. 5. [6] See Complainant’s Ex. 6. [7] See A.R.S. §§ 32-1151 to 32-1169. [8] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [9] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [10] 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.”

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