ALJDEC decisions subject to certification as final

2011A-6959-ROC · Registrar of Contractors · 2012-06-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 18, 2012, at 8:00 a.m. APPEARANCES: Complainant Onsite Design, L.L.C. appeared through Joelyn Frawley, its Office Manager; Respondent Ashco General, L.L.C. did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT The Arizona Registrar of Contractors (“the Registrar”) issued License No. K- 8.165318-D to Onsite Design, L.L.C. (“Complainant”). The Registrar issued License No. B-2.258511-C to Ashco General, L.L.C. (“Respondent”). Respondent’s current address of record is 1826 West Broadway Road, Suite 3, Mesa, Arizona 85202-1131. The Registrar received a complaint from Complainant against Respondent alleging that it owed monies to Complainant for tenant improvements at the Medical Annex Building on West Baseline Road in Phoenix, Arizona (“the project”). Complainant attached to its complaint a copy of Respondent’s work authorization for Complainant to construct the flooring at the project. Respondent’s address on the work authorization was P.O. Box 864, Higley, Arizona 85236. The Registrar issued a Citation and Complaint against Respondent, charging a violation of A.R.S. § 32-1154(A)(11). Respondent’s attorney filed a timely written answer to the Citation and Complaint, denying any statutory violation. Respondent’s attorney affirmatively alleged that it had not received full payment for the project. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. On March 23, 2012, the Registrar issued a Notice of Hearing setting a hearing on May 18, 2012, at 8:00 a.m. at the OAH. The Registrar mailed copies of the Notice of Hearing to Respondent at its current address of record and at the address in Higley, as well as to its attorney. The Registrar’s Notice of Hearing advised the parties that failure to attend the hearing was likely to result in an adverse ruling against them. A hearing was held on May 18, 2012. Complainant presented the testimony of its office manager, Joelyn Frawley, and submitted seven exhibits. Respondent did not request to appear telephonically at the hearing or to continue the hearing. 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. Ms. Frawley submitted Respondent’s work authorization. Ms. Frawley credibly testified that Complainant completed its work on the project. Ms. Frawley submitted Complainant’s invoices for the project showing a balance due of $21,526.56 for the project. Ms. Frawley testified that Respondent had not paid Complainant any of the balance due. Ms. Frawley also submitted the following documents to establish that Respondent had been paid in full for the project: (1) An e-mail from Respondent’s superintendent on the project, stating that it had received full payment; (2) A letter from the attorney for the owner of the project, stating that Respondent had been paid in full and demanding that it satisfy the liens that its subcontractors and suppliers had filed; and (3) A copy of an unconditional waiver and release on final payment, signed by Respondent’s representative, stating that it had been paid in full for the project. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website. Such prior license record shows that as of June 6, 2012, Respondent’s license was revoked. Three complaints were pending against the license and one complaint had resulted in discipline. CONCLUSIONS OF LAW The revoked status of Respondent’s license does not deprive Complainant of its right to prosecute its complaint against Respondent or prevent the Registrar from determining the merits of Complainant’s complaint.[1] This matter lies within the Registrar’s jurisdiction.[2] The Notices of Hearing that the Registrar mailed to Respondent at its address of record and at its alternate address, and to its attorney were reasonable. Respondent is deemed to have received notice of the hearing.[3] Complainant bears the burden of proof to 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] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[6] 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.” A licensee’s lack of capacity to pay and nonpayment by the owner or tenant on a project are affirmative defenses that the licensee bears the burden to establish. Respondent did not present any evidence to establish the affirmative defense asserted in its attorney’s written answer to the Citation and Complaint. Complainant established that Respondent subcontracted a portion of the project to Complainant, that Complainant fully performed the subcontract, and that Respondent failed to pay Complainant $21,526.56 for its work on the project. Complainant further established that Respondent was paid in full for the project, even though it was not Complainant’s burden to do so. Therefore, Complainant established that Respondent violated A.R.S. § 32- 1154(A)(11) by failing to pay Complainant $21,526.56 for work it performed 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 revoke Respondent Ashco General, L.L.C.’s License No. B-2.258511-C. It is further recommended that if on or before the effective date of the order, the Registrar receives from Respondent written proof that is satisfactory to the Registrar that Respondent has paid $21,526.56 to Complainant Onsite Design, L.L.C. in certified funds, the Registrar not revoke Respondent’s license but, instead, close the complaint in Case No. 2011-6959. 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, June 6, 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). That statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [2] See A.R.S. § 32-1101 et seq. [3] See A.R.S. § 41-1092.04 and A.R.S. § 41-1092.05(D). [4] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19- 119(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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