ALJDEC decisions subject to certification as final

2011A-7093-ROC · Registrar of Contractors · 2012-08-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 15, 2012, at 8:00 a.m. APPEARANCES: Baseline Crossing LLC (hereinafter “Complainant”) appeared through its authorized representative, David Moradzadeh. Ashco General LLC (hereinafter “Ashco”) failed to appear. 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. Ashco is the holder of License No. B-2.258511-C issued by the Registrar of Contractors. 2. Ashco performed remodeling work on a commercial building owned by Complainant. Complainant paid Ashco in full for Ashco’s completed construction work and Ashco provided Complainant with an unconditional lien release. 3. Several of Ashco’s subcontractors then approached Complainant for payment for their completed construction work on the commercial building. Complainant explained that it had fully paid Ashco for the entire construction project and that Ashco was supposed to pay its own subcontractors. The subcontractors then tried again to collect their money from Ashco. When the subcontractors’ collection attempts were unsuccessful, several of the subcontractors filed liens against Complainant’s commercial building. 4. Complainant then repeatedly demanded that Ashco properly pay its subcontractors. When Ashco failed to pay its subcontractors despite Complainant’s repeated demands, Complainant filed a formal Complaint against Respondent with the Registrar of Contractors. 5. Pursuant to the filing of the formal Complaint, the Registrar of Contractors issued a Citation and Complaint against Ashco alleging potential violations of A.R.S. § 32-1154(A)(11) and A.R.S. § 32- 1154(A)(17). 6. On or about February 23, 2012, Complainant filed a Request to Amend the original Complaint Form to include an alleged violation of A.R.S. § 32- 1154(A)(10). The Registrar of Contractors accepted the Amendment and the contents of Complainant’s Request to Amend were incorporated into the Complaint Form and the Citation and Complaint. 7. David Moradzadeh (hereinafter “Mr. Moradzadeh”) testified that Complainant agreed to pay Ashco the total sum of $425,000.00 for the agreed upon remodeling work on Complainant’s property. Mr. Moradzadeh stated that the construction project was completed in October, 2011, and that Complainant paid Ashco the final payment of $125,000.00 pursuant to the terms of the parties’ written construction agreement. Complainant paid Ashco the total sum of $425,000.00 for the completed construction project.[1] 8. On November 17, 2011, Ashco provided Complainant with an Arizona Unconditional Waiver and Release on Final Payment for the construction project. Mr. Moradzadeh testified that shortly thereafter, Complainant began receiving telephone calls from Ashco’s subcontractors requesting payment. Complainant provided the subcontractors with copies of the Arizona Unconditional Waiver and Release on Final Payment. Several of the subcontractors then recorded liens against Complainant’s property. Complainant then was forced to reach settlement agreements with the subcontractors to pay twice for the same construction work to remove the subcontractors’ liens against Complainant’s property.[2] 9. Joelyn Frawley (hereinafter “Ms. Frawley”) testified that her construction company was the flooring subcontractor for the construction project. Ms. Frawley stated that Ashco acknowledged that it had been paid in full by Complainant and promised to pay Ms. Frawley’s construction company “within a few days.” Ms. Frawley testified that Ashco failed to pay her construction company any money and that Ashco owed her company the approximate sum of $23,000.00 for the completed flooring work performed on Complainant’s property.[3] 10. Mr. Moradzadeh stated that the alleged violation of A.R.S. § 32- 1154(A)(10) added as a result of the amendment to the complaint could be removed from the Citation and Complaint because he was not sure what his attorney was thinking about when the amendment to the complaint was filed.[4] 11. There was no dispute that Complainant paid Ashco the total sum of $425,000.00 for the construction project at issue. The scope of Ashco’s License No. B-2.258511-C is limited to the performance of construction projects for which the price of materials and labor does not exceed $250,000.00.[5] 12. Administrative notice is taken of Ashco’s prior license record as reflected on the Registrar of Contractors’ public website on August 23, 2012. Such prior license record reflects that License No. B-2.258511-C of Ashco was revoked by the Registrar of Contractors on June 5, 2012. 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. Ashco failed to pay its subcontractors monies in excess of seven hundred fifty dollars when due for materials and services rendered in connection with Ashco’s operations as a licensed contractor. This Tribunal concludes that Ashco violated the charged provision of A.R.S. § 32- 1154(A)(11).[6] 4. Ashco knowingly entered into a construction agreement for a $425,000.00 construction project and was fully paid the sum of $425,000.00 for its completed construction work. Ashco’s License No. B-2.258511-C is limited in scope to the performance of construction projects that do not exceed $250,000.00 for material and labor. This Tribunal concludes that Ashco violated the charged provision of A.R.S. § 32-1154(A)(17).[7] 5. There was no credible evidence that Ashco violated the charged provision of A.R.S. § 32-1154(A)(10).[8] RECOMMENDed order In view of the foregoing, it is recommended that Ashco’s License No. B- 2.258511-C shall be revoked on the effective date of this Order. 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, August 27, 2012.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] 8/15/12 Hearing Record (hereinafter “H.R.”) at 4:55-5:40. [2] H.R. at 6:34-7:35. [3] H.R. at 9:32-11:12. [4] H.R. at 14:00-14:15. [5] See A.A.C. R4-9-101(C); see also A.A.C. R4-9-102 (Scope of B-2 license incorporates by reference definitions set forth in A.A.C. R4-9-101).

[6] A.R.S. § 32-1154(A)(11) includes among the grounds for disciplinary action against a contractor’s license, 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. [7] A.R.S. § 32-1154(A)(17) includes among the grounds for disciplinary action against a contractor’s license, knowingly contracting beyond the scope of the license or licenses of the licensee. [8] A.R.S. § 32-1154(A)(10) includes among the grounds for disciplinary action against a contractor’s license, aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one's license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.

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