ALJDEC decisions subject to certification as final

2011A-3955-ROC · Registrar of Contractors · 2012-10-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 3, 2012, at 1:00 p.m. APPEARANCES: BLT Companies LLC/Brian Thomas (hereinafter “Complainant”) appeared through its attorney, Suzanne Nicholls Miner, Esq., Byrne & Benesch, P.C. Bozrah Builders Incorporated (hereinafter “Bozrah”) appeared through its qualifying party and officer, James Eugene Riley. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. Bozrah is the holder of License No. KB-1.179826-D issued by the Registrar of Contractors. 2. Complainant is a material supplier that furnished concrete to Bozrah on October 31, 2009, for a construction project where Bozrah was performing construction work as a licensed contractor for the total sum of $6,217.94. The invoice included $390.44 for sales tax.[1] 3. On November 10, 2009, Complainant furnished concrete materials to Bozrah for a construction project where Bozrah was performing construction work as a licensed contractor for the total sum of $305.00.[2] 4. The $305.00 includes a minimum load fee of $50.00 but does not include claimed interest or sales tax. 5. On November 20, 2009, Complainant furnished block material to Bozrah for a construction project where Bozrah was performing construction work as a licensed contractor for the total sum of $450.00.[3] 6. The $450.00 does not include claimed interest or sales tax. 7. On November 24, 2009, Complainant furnished ABC material to Bozrah for a construction project where Bozrah was performing construction work as a licensed contractor for the total sum of $439.90.[4] 8. The $439.90 does not include claimed interest or sales tax. 9. Complainant initiated a civil action against Bozrah to collect $8,451.90, plus costs and attorney’s fees, on January 13, 2009.[5] 10. On or about July 12, 2011, Complainant filed a formal complaint against Bozrah with the Registrar of Contractors alleging that Bozrah owed Complainant the sum of $9,485.46 for various construction materials furnished to Bozrah.[6] 11. Complainant also filed a claim with Bozrah’s bond company seeking to recover $9,000.00 for construction materials furnished to Bozrah.[7] 12. On September 15, 2011, the parties entered into a “Workout Agreement” wherein Bozrah agreed that it owed Complainant the sum of $7,770.00 on unpaid invoices. Bozrah agreed to satisfy the debt to Complainant by paying $2,770.00 on October 7, 2011, making a second payment of $2,500.00 on or before November 7, 2011, and making a final payment of $2,500.00 on or before December 7, 2011. 13. Bozrah made the first payment of $2,770.00 to Complainant. Bozrah failed to make the additional payments and failed to comply with the terms of the parties’ Workout Agreement. 14. In its written Answer to the Complaint, Bozrah acknowledged that “the amount remaining to be paid to [Complainant] is approximately $5,000.00, down from an original total amount due of approximately $9,500.00.”[8] 15. Complainant’s owner, Brian Lee Thomas (hereinafter “Mr. Thomas”), testified that the invoices provided to Bozrah were true and correct. Mr. Thomas stated that Complainant provided construction materials to Bozrah based upon Bozrah’s agreement to pay for the construction materials in a good-faith manner.[9] 16. Complainant’s Office Manager, Cristy Thomas (hereinafter “Ms. Thomas”), testified that the invoices provided to Bozrah were true and correct. Ms. Thomas stated that after Bozrah failed to pay the invoices, Complainant repeatedly called Bozrah to obtain payment. Ms. Thomas testified that Complainant filed a civil action against Bozrah in an attempt to collect on the unpaid invoices.[10] 17. Ms. Thomas testified Bozrah paid Complainant five payments that totaled $1,000.00 in 2010. Ms. Thomas stated that Bozrah stopped making payments in 2010. Complainant then filed the Complaint at issue. After the Complaint was filed, Bozrah contacted Complainant in 2011, and delivered a Workout Agreement, prepared by Bozrah, with payment terms that Complainant accepted. Ms. Thomas acknowledged Bozrah paid the first payment of $2,770.00, in 2011. Ms Thomas testified that Bozrah failed to make any additional payments.[11] 18. Ms. Thomas acknowledged that Bozrah was exempt from paying sales tax. Ms. Thomas testified that the $390.44 in sales tax shown in Invoice No. 616856 (Exhibit No. C-2) should be removed from the invoice.[12] 19. Ms. Thomas acknowledged that Bozrah paid Complainant a $1,000.00 in 2010, and that Bozrah paid an additional $2,770.00 in 2011, for a total of $3,770.00.[13] 20. Bozrah’s qualifying party and officer, James Eugene Riley (hereinafter “Mr. Riley”), testified that Bozrah requested that it be allowed to purchase construction materials on a credit basis. Mr. Riley stated that due to problems in his personal life, he had not examined Complainant’s invoices prior to the day of the hearing. Mr. Riley testified that he now disputed three of the invoices because he did not recognize the signature on the invoices. Mr. Riley acknowledged that he was aware of the disputed invoices when he prepared the Workout Agreement.[14] 21. Mr. Riley testified that Bozrah is not responsible for the payment for any of the four invoices at issue. Mr. Riley stated that he does not believe that Bozrah ordered the construction materials listed in the three invoices.[15] 22. Mr. Riley testified that Bozrah is not responsible for the payment for invoice number 616856 because the concrete material was delivered to Mr. Riley’s personal address for the construction of a swimming pool for Mr. Riley. Mr. Riley stated that the construction of his swimming pool had nothing to do with Bozrah’s operations as a licensed contractor. Mr. Riley testified that he did not have the capacity to pay. Mr. Riley stated that if he had the financial capacity to pay, he would comply with the terms of the Workout Agreement.[16] 23. Mr. Riley’s testimony is not found to be credible. 24. Administrative notice is taken of Bozrah’s prior license record as reflected on the Registrar of Contractors’ public website on October 17, 2012. Such prior license record reflects that License No. KB-1.179826-D of Bozrah is current with two open complaints and one complaint closed as resolved/settled/withdrawn. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. A.R.S. § 32-1154(A)(11) provides, in pertinent part, as follows: Failure by a licensee or agent or official of 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.

4. Here, Complainant has alleged an outstanding balance that includes finance charges. A.R.S. § 32-1154(A)(11) does not authorize the Registrar of Contractors to award finance charges in an administrative proceeding against a contractor’s license. 5. No credible evidence was presented to support Bozrah’s contention that Bozrah lacked the capacity to pay for the construction materials that Complainant rendered to Bozrah in connection with Bozrah’s operations as a licensed contractor. 6. The materials that Complainant rendered on Bozrah’s credit account to Mr. Riley for construction of his personal swimming pool, as well as the materials furnished to Bozrah’s jobs for others, were materials rendered in connection with Bozrah’s operations as a contractor. The total of the four invoices for the construction material rendered to Bozrah is the sum of $7,022.40.[17] Bozrah paid five payments totaling $1,000.00 to Complainant in 2010. Bozrah paid an additional $2,770.00 to Complainant in 2011. Deducting the total sum of $3,770.00 paid by Bozrah from the principal balance of $7,022.40 leaves the sum of $3,252.40 as due and owing from Bozrah to Complainant for construction materials rendered by Complainant to Bozrah in connection with Bozrah’s operations as a licensed contractor.[18] Bozrah has failed to pay Complainant the remaining principal sum of $3,252.40[19] that is due and owing to Complainant. 7. Bozrah’s preparation of the Workout Agreement is deemed an admission that it owed monies to Complainant. Its breach of the Workout Agreement is considered a factor in aggravation of the recommended penalty. 8. This Tribunal concludes that Bozrah violated the charged provision of A.R.S. § 32-1154(A)(11) by failing to pay the remaining principal sum of $3,252.40 to Complainant when due for materials rendered in connection with Bozrah’s operations as a licensed contractor. RECOMMENDed order In view of the foregoing, it is recommended that commencing on the effective date of the Registrar’s Order, License No. KB-1.179826-D of Bozrah shall be suspended until the Registrar of Contractors receives and accepts written proof that Bozrah has paid the sum of $3,252.40 in certified funds to Complainant. It is further recommended that if on or before the effective date of the Registrar’s Order, Bozrah provides acceptable written proof that it has paid the above-described sum of money in certified funds to Complainant, then the aforementioned indefinite license suspension shall not take place and that, instead, License No. KB-1.179826-D of Bozrah shall be placed on probation for a period of 120 days. In the event of certification of this 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 the certification. Done this day, October 19, 2012.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit No. C-2 (Invoice No.616856). [2] See Exhibit No. C-4 (Invoice No. 616970). [3] See Exhibit No. C-5 (Invoice No. 38859). [4] See Exhibit No. C-6 (Invoice No. 617143). [5] See Exhibit No. C-7 (Complaint No. J1401CV20100/485). The record does not contain any judgment in the civil action. [6] See Exhibit No. C-8 (Complaint No. 2011-2955). [7] See Exhibit No. C-9 (8/3/11 letter). [8] See Exhibit C-12 (Answer to Citation and Complaint). [9] 10/3/12 Hearing Record (hereinafter “H.R.”) at (9:00-44:22). [10] H.R. at 44:39-54:195. [11] H.R. at 54:20-1:02:30. [12] H.R. at 1:15:20-1:15:45. [13] H.R. at 1:22:07-1:22:50. [14] H.R. at 1:38:15-1:54:07. [15] H.R. at 2:16:30-2:20:58. [16] H.R. at 2:20:59-2:30:08. [17] Invoice No. 616856 for $6,217.94 less $390.44 for improperly imposed sales tax, Invoice No.616970 for $305.00, Invoice No. 38859 for $450.00, and Invoice No. 617143 for $439.90 [18] $7,022.40 - $3,770.00 = $3,252.44. [19] $7,022.40 - $3,770.00 = $3,252.40

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