ALJDEC decisions subject to certification as final

2011A-4074-ROC · Registrar of Contractors · 2012-01-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 22, 2011, at 1:00 p.m. APPEARANCES: Complainant Williams Mechanical Services, L.L.C. appeared through Timothy Scott Williams, its qualifying party and member; Respondent Azra Home Services, L.L.C. dba Azra Commercial Development did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT In January 2008, the Arizona Registrar of Contractors (“the Registrar”) issued License No. B-2.241854-C for general small commercial contracting to Azra Home Services, L.L.C., doing business as (“dba”) Azra Commercial Development (“Respondent”). Respondent’s address of record is 4408 East Maldonado Drive, Phoenix, Arizona 85042-5357. In December 2008, the Registrar issued License No. K-39.251244-D for dual air conditioning, refrigeration, and heating to Williams Mechanical Services, L.L.C. (“Complainant”). On or about July 14, 2011, the Registrar received a complaint from Complainant against Respondent alleging that Respondent owed Complainant $12,750.00 for Complainant’s work pursuant to its subcontract with Respondent on a commercial project at 15147 North Scottsdale Road, Suite H1- 100, in Scottsdale, Arizona. On September 20, 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. 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 Complainant and that the owner had not paid Respondent in full for the project. The return address on the envelope in which Respondent mailed its written answer was 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 November 8, 2011, the Registrar issued a Notice of Hearing setting a hearing on December 22, 2011, at 1:00 p.m. at the OAH. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. A hearing was held on December 22, 2011, at 1:00 p.m. Complainant’s member and qualifying party, Timothy Scott Williams, appeared and 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. Respondent was the general contractor for the construction of a Menchies commercial yogurt shop at 15147 North Scottsdale Road, Suite H1-100 (“the project”). Respondent subcontracted to Complainant the HVAC and related work on the project. The original amount of the parties’ subcontract was $20,350.00. Respondent added $2,400.00 to the subcontract for certain extras, making the total contract price $22,750.00. Complainant fully performed the subcontract. Respondent paid Complainant only $10,000.00. According to the Registrar’s electronic record, Respondent’s license was voluntarily cancelled on June 23, 2011. Complainant’s complaint appears to be the only complaint pending against the license. CONCLUSIONS OF LAW 1. The cancelled status of Respondent’s license does not preclude Complainant from pursuing its administrative remedy nor preclude the Registrar from conducting this disciplinary proceeding.[1] This matter lies within the Registrar’s jurisdiction.[2] 2. The Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable and it is deemed to have received notice of the hearing.[3] 3. Complainant bears the burden of proof and must establish Respondent’s statutory violation by a preponderance of the evidence.[4] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[5] 4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[6] 5. A.R.S. § 32-1154(A) prohibits a contractor from performing certain acts that furnish grounds for the Registrar to suspend, revoke, or otherwise discipline the contractor’s license. A.R.S. § 32-1154(A)(11) includes among such acts: Failure 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. Complainant established that Respondent failed to pay Complainant $12,750.00 for work that Complainant performed pursuant to its subcontract with Respondent on the project. 7. A general contractor’s inability to pay and nonpayment by the owner on a project is an affirmative defense that the general contractor bears the burden to prove in a subcontractor’s complaint for nonpayment under A.R.S. § 32-1154(A)(11). Because Respondent did not present any evidence at the hearing, it has not borne its burden to establish this affirmative defense. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(11). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, the Registrar revoke Respondent Azra Home Services, L.L.C. dba Azra Commercial Development’s License No. B- 2.241854-C. 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 $12,750.00 to Complainant Williams Mechanical Services, L.L.C. by cashier’s or certified check, the Registrar not revoke Respondent’s license but, instead, close Case No. 2011-4074. 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, January 10, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1154(C). [2] See 32-1101 et seq. [3] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [4] 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). [5] See A.A.C. R2-19-119(B)(2). [6] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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