ALJDEC decisions subject to certification as final

2012A-4588-R0C-rhg · Registrar of Contractors · 2013-11-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

REHEARING: November 12, 2013, at 8:00 a.m. APPEARANCES: Complainant Consolidated Electrical Distributors, Inc. appeared through Jeff Huppler, Division Credit Manager; Respondents Lifetime Development LLC and Lifetime Electrical Contractors Inc. failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On or about February 23, 2004, the Arizona Registrar of Contractors (“the Registrar”) issued License No. C-11.193030-R for residential electrical contracting to Lifetime Electrical Contractors Inc. (“Lifetime Electric” or “Respondent”). The persons listed on Lifetime Electric’s license are Justin Jeremy McDaniel, Qualifying Party and Officer, and Marisa Kay McDaniel, Officer. On or about July 10, 2012, Lifetime Electric voluntarily cancelled License No. C-11.193030-R. On or about July 10, 2012, the Registrar issued License No. K-11.279838-D for dual electrical contracting to Lifetime Development LLC (“Lifetime Development” or “Respondent”). Lifetime Development’s address of record is 1210 West Alameda Drive, Suite 111, Tempe, Arizona 85282-3340. The only person listed on Lifetime Development’s license is Justin Jeremy McDaniel, Qualifying Party and Member. On or about April 11, 2013, Lifetime Development cancelled License No. K- 11.279838-D. Consolidated Electrical Distributors Inc. (“Complainant”) is a supplier of electrical building materials to contractors like Lifetime Electric and Lifetime Development. On or about September 18, 2012, Complainant filed Complaints against Lifetime Electric and Lifetime Development with the Registrar alleging that, collectively, they owed a total of $48,459.90 for materials that Complainant had supplied on credit to Lifetime Electric and Lifetime Development for use in their contracting businesses. After Lifetime Electric and Lifetime Development failed to make any payments on their credit account with Complainant, it requested that the Registrar issue Citations against Lifetime Electric and Lifetime Development. The Registrar issued Citations and Complaints against Lifetime Electric and Lifetime Development, charging both with a possible violation of A.R.S. § 32-1154(A)(11). The Registrar mailed copies of the Citations and Complaints to Lifetime Electric and to Lifetime Development at their respective addresses of record. Lifetime Electric and Lifetime Development both filed written answers to the Citations and Complaints, generally denying any statutory violations. The Registrar consolidated the two Complaints and referred them to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. Neither Lifetime Electric, Lifetime Development, nor Complainant appeared at the initial hearing. The Registrar issued a final order dismissing the two Complaints based on Complainant’s failure to present any evidence to establish its claims. Complainant filed a petition for rehearing and Lifetime Electric and Lifetime Development failed to file responses to the petition. The Registrar granted Complainant’s petition for rehearing. On September 6, 2013, the Registrar sent a Notice of Rehearing on the consolidated cases to Lifetime Development at its address of record and to Lifetime Electric at the return address on its most recent correspondence, setting a rehearing on November 12, 2013, at 8:00 a.m. before the OAH. A rehearing was held on November 12, 2013, at 8:00 a.m. Jeff Huppler, Complainant’s Division Credit Manager, testified on its behalf and submitted seven exhibits. Lifetime Electric and Lifetime Development did not request to appear telephonically at the rehearing or request that the rehearing be continued. Although the rehearing did not conclude for approximately 35 minutes, Lifetime Electric and Lifetime Development did not appear, through an authorized officer, member, employee, or attorney, and did not contact the OAH to request that the start of the rehearing be further delayed. Consequently, Lifetime Electric and Lifetime Development did not present any evidence to defend their licenses. Mr. Huppler testified that Complainant had a long-standing relationship with Mr. and Mrs. McDaniel. In June 2012, Mr. McDaniel informed Complainant that the couple was going through an amicable divorce and that as part of the division of property, he would obtain a new contractor’s license. Mr. McDaniel informed Complainant that he would pay Complaint in full the approximately $45,000.00 that Lifetime Electric owed on its account at the time. Mr. Huppler testified that in June 2012, Mr. McDaniel made a substantial payment on Lifetime Electric’s account. Mr. Huppler testified that after Lifetime Electric cancelled its contractor’s license, Complainant continued to provide electrical supplies worth $5,172.81 to Mr. McDaniel and his new company, Lifetime Development. Mr. Huppler testified that Mr. McDaniel agreed to pay $18,000.00 on Lifetime Electric/Lifetime Development’s account in July 2012. Mr. Huppler testified that Complainant never received any more payments from Mr. McDaniel, Mrs. McDaniel, Lifetime Electric, or Lifetime Development. Mr. Huppler testified that he later learned that in June 2012, Mr. and Mrs. McDaniel had filed for protection of their personal assets under Chapter 7 of the United States Bankruptcy Code. Mr. Huppler testified that in his conversations with Mr. and Mrs. McDaniel, they never mentioned the bankruptcy. Mr. Huppler submitted invoices, purchase orders, and statements to establish that Lifetime Electric and Lifetime Development owe a total of $48,459.90 to Complainant. Mr. Huppler testified that this amount does not include interest, attorney’s fees, penalties, or collection costs. CONCLUSIONS OF LAW 1. The cancelled status of Lifetime Electric’s and Lifetime Development’s licenses does not deprive Complainant of its right to prosecute its Complaint or prevent the Registrar from determining the merits of Complainant’s Complaint.[1] This matter lies within the Registrar’s jurisdiction.[2] 2. The Notices of Rehearing that the Registrar mailed to Lifetime Development at its address of record and to Lifetime Electric at the return address on its most recent correspondence were reasonable and they are deemed to have received notice of the hearing.[3] 3. Complainant bears the burden of proof to establish statutory violations by a preponderance of the evidence.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] 4. Because the same persons as defined in A.R.S. § 32- 1101(A)(5) are listed on Lifetime Electric’s License No. C-11.193030-R and Lifetime Development’s License No. K- 11.279838-D, under A.R.S. § 32-1154(A)(21),[6] discipline against either license will result in discipline against the other license, as well as any other license on which any of those persons are listed.[7] 5. Complainant also established that the credit that it extended to Lifetime Development was due to Complainant’s prior relationship with Mr. and Mrs. McDaniel and Lifetime Electric and that Lifetime Development was intended to continue Lifetime Electric’s business after Mr. and Mrs. McDaniel’s divorce. Even without A.R.S. § 32-1154(A)(21), Complainant established that both Lifetime Electric and Lifetime Development are responsible for the past due account with Complainant. 6. Complainant established that Lifetime Electric and Lifetime Development violated A.R.S. § 32-1154(A)(11)[8] by failing to pay Complainant $48,459.90 for materials that Respondents used in their contracting businesses. RECOMMENDED ORDERS Case No. 2012A-4588-ROC Based on the foregoing, it is recommended that on the effective date of the final Order, Respondent Lifetime Development LLC’s License No. K- 11.279838-D shall be revoked unless Lifetime Development and/or Lifetime Electric pay a total of $48,459.90 to Complainant Consolidated Electrical Distributors Inc. It is further recommended that if on or before the effective date of the Order, the Registrar receives satisfactory written proof from Lifetime Development that $48,459.90 has been paid to Complainant by cashier’s or certified check, then Lifetime Development’s license shall not be revoked but, instead, the Complaint in Case No. 2012-4588 shall be closed. 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. Case No. 2012A-4593-ROC Based on the foregoing, it is recommended that on the effective date of the final Order, Respondent Lifetime Electrical Contractors Inc.’s License No. C-11.193030-R shall be revoked unless Lifetime Electric and/or Lifetime Development pay a total of $48,459.90 to Complainant Consolidated Electrical Distributors Inc. It is further recommended that if on or before the effective date of the Order, the Registrar receives satisfactory written proof from Lifetime Electric that $48,459.90 has been paid to Complainant by cashier’s or certified check, then Lifetime Electric’s license shall not be revoked but, instead, the Complaint in Case No. 2012-4593 shall be closed. 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, November 26, 2013.

/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 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; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

[6] A.R.S. § 32-1154(A)(21) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[h]aving a person named on the license who is named on any other license in this state or in another state which is under suspension or revocation unless the prior revocation was based solely on a violation of this paragraph.” [7] According to the Registrar’s public website, Justin Jeremy McDaniel and Marisa Kay McDaniel are also listed on License No. L-11.236739-C issued to Lifetime Electrical Contractors Inc. and License No. K-67.250482-D issued to Lifetime Technologies LLC. Both of those licenses were cancelled on July 10, 2012. [8] This statutory subsection 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.”

-----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826