ALJDEC decisions subject to certification as final

2011A-6090-ROC · Registrar of Contractors · 2012-06-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 28, 2012, at 8:00 a.m. The matter was held open until May 28, 2012, to allow sufficient time to verify Respondent’s alleged bankruptcy. APPEARANCES: Complainant appeared through its attorney, Mark A. Kirkorsky Esq., Mark A. Kirkorsky P.C. Respondent appeared through its authorized representative, Thomas Allen Duncan. 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. Respondent is the holder of License No. K-39.233453-D issued by the Registrar of Contractors. 2. Casino Air LLC purchased materials and supplies from Complainant that Casino Air LLC then utilized for various construction projects pursuant to a written application for credit and credit agreement.[1] 3. Respondent was unable to fully pay Complainant for the construction materials at issue, and Respondent voluntarily entered into a Settlement Agreement with Complainant. In accordance with the terms of the parties’ Settlement Agreement, Respondent signed a negotiable promissory note on May 24, 2011, for the total sum of $20,958.99 and agreed to make five monthly payments of $500.00 and one final payment of $18,458.99 to Complainant.[2] 4. There was no dispute that Respondent failed to comply with the terms of the parties’ Settlement Agreement and that Respondent failed to make any of the agreed payments to Complainant.[3] 5. During the scheduled hearing, Respondent’s representative, Thomas Allen Duncan, stated that his attorney had filed bankruptcy proceedings on his behalf and that Complainant was listed as a creditor in the bankruptcy petition. The matter was held open to provide sufficient time to verify the alleged bankruptcy filings. 6. A search of the United States Bankruptcy Court PACER site verified that on March 28, 2012, a Chapter 7 bankruptcy had been filed for Thomas Allen Duncan, Respondent’s representative, on February 27, 2012, in bankruptcy case number 2:12-bk-03522-RTB. No bankruptcy filing for Casino Air LLC could be found.[4] 7. Respondent failed to provide any proof of a bankruptcy filing on behalf of Casino Air LLC, despite an extended opportunity to do so. 8. The signed promissory note shows a principal amount of $20,152.89 and a finance charge of $806.10, with a note total of $20,958.99. 9. Respondent’s written answer to citation and complaint provides, in pertinent part, as follows: I worked out a payment plan with Farnsworth Wholesale in hopes of a turnaround in the economy, as you know this did not happen. A former employee stole several thousand dollars of tools from me. Incompetent work by my employees resulted in redoing several jobs for no charge. These issues resulted in the disillusion of Casino Air in mid July 2011 even though I have been honoring warranty work and customer complaints on work by my employees at no cost to the customers.[5]

10. Respondent‘s failure to pay the aforementioned principal sum of $20,152.89 to Complainant for materials rendered in connection with Respondent’s operations as a licensed contractor is found to be a violation of the charged provisions of A.R.S. § 32-1154(A)(11). 11. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar of Contractors’ public website on June 12, 2012. Such prior License record reflects that License No. K-39.233453-D of Casino Air LLC (LLC) is current and in good standing. 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 grounds for suspension or revocation of a contractor’s license for, “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….” Here, Complainant has alleged an outstanding balance that includes a finance charge of $806.10. A.R.S. § 32-1154(A)(11) does not authorize the Registrar to award finance charges in an administrative proceeding against a contractor’s license. 4. Respondent violated the charged provisions of A.R.S. § 32-1154(A)(11) by failing to pay the principal sum of $20,152.89 when due for materials rendered in connection with the Respondent’s operations as a contractor. RECOMMENDED ORDER In view of the foregoing, it is recommended, commencing on the effective date of the Registrar of Contractors’ Order, that License No. K- 39.233453-D of Casino Air LLC (LLC) be suspended until the Registrar of Contractors receives and accepts written proof that Respondent has paid the sum of $20,152.89 to Complainant. It is further recommended that if Respondent pays the above described sum of money on or before the effective date of the Registrar’s Order then the aforementioned license suspension shall not take place and that this matter shall be closed. 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, June 18, 2012.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit C-1 (October 1, 2006 Application for Credit and Credit Agreement). [2] See Exhibit No. C-3 (May 24, 2011 Negotiable Promissory Note). [3] See December 20, 2011 Written Answer to Citation and Complaint. [4] See March 28, 2012 Bankruptcy Case Search (Copy in file). [5] See December 20, 2011 Written Answer to Citation and Complaint.

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