ALJDEC decisions subject to certification as final

2012A-5651-ROC · Registrar of Contractors · 2013-08-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 6, 2013, at 8:00 a.m. APPEARANCES: Swaine Asphalt Corporation (hereinafter “Complainant”) appeared through its accountant, Glenda Marie Meyer. G N D Construction LLC (hereinafter “GND”) 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 GND is the holder of License No. A.268562-C issued by the Registrar of Contractors. This is a commercial matter where the parties entered into a written construction agreement for Complainant to furnish all labor and materials for paving approximately 15,948 sq. feet with new 19 mm asphalt to a depth of 2” at the Village at Oasis Park, 10617 Oasis Drive, Building #1, Mesa, Arizona (hereinafter “Oasis Village”), for the total sum of $24,591.40.[1] Complainant completed the agreed-upon paving work and provided GND with an invoice on August 24, 2012.[2] On October 12, 2012, GND provided Complainant with a check in the amount of $20,902.67. GND’s owner represented that the check was a “good” check and it was accepted by Complainant. GND’s check was returned marked “NSF” by its bank. Complainant then repeatedly demanded payment from GND. When GND failed to comply with Complainant’s repeated demands for payment, Complainant filed a formal Complaint against GND with the Registrar of Contractors. GND failed to make any payment to Complainant and Complainant requested an administrative hearing. On March 26, 2013, the Registrar of Contractors issued a Citation and Complaint against License No. A.268562-C of GND charging a possible violation of A.R.S. § 32-1154(A)(11).[3] Testimony of Glenda Marie Meyer Complainant’s accountant, Glenda Marie Meyer (hereinafter “Ms. Meyer”), testified that Complainant performed paving work for GND at Oasis Village in 2012. Ms. Meyer stated that Complainant repeatedly attempted to obtain payment from GND for Complainant’s completed construction work. Ms. Meyer testified that Complainant received no response from GND until Complainant expressed its intent to place a lien on the property. Ms. Meyer testified that GND then responded to Complainant’s demand for payment. Ms. Meyer stated that GND’s president, Joe Bustamante (hereinafter “Mr. Bustamante”), informed Complainant that GND could not pay Complainant until its material supplier was paid and an unconditional release from the material supplier was obtained. Ms. Meyer testified that Complainant paid GND’s material suppler, Cemex Construction Materials (hereinafter “Cemex”), the sum of $10,461.29 on October 12, 2012, and Cemex provided Complainant with an unconditional waiver and release so that Complainant could obtain payment from GND.[4] Ms. Meyer testified that GND then provided Complainant with a check for $20,937.67, and that Complainant gave GND a copy of the unconditional waiver and release from Cemex. Ms. Meyer stated that Complainant also provided GND with an unconditional waiver and release for the construction project at Oasis Village from Complainant. Ms. Meyer testified that GND’s check failed to clear the bank and was returned marked “NSF.” Ms. Meyer stated that Complainant received nothing for the paving work that it performed for GND, and that Complainant spent an additional $10,462.29, to obtain an unconditional waiver and release from Cemex. Ms. Meyer testified that Complainant lost a total of $31,398.96 on the Oasis Village construction project. Testimony of Jacqueline Marie Swaine Complainant’s owner, Jacqueline Marie Swaine (hereinafter “Ms. Swaine”), testified that Complainant gave GND repeated opportunities to pay Complainant. Ms. Swaine stated that GND’s president, Mr. Bustamante, acted as if business had improved for GND and that Mr. Bustamante spent “a lot of time” at Complainant’s office on the day he delivered the NSF check to Complainant. Ms. Swaine testified that Complainant released its lien rights on the property in good faith and that GND was unresponsive to Complainant’s communications after the waiver and release was signed.

Administrative notice is taken of GND’s prior license record as reflected on the Registrar of Contractors’ public website on August 8, 2013. Such prior license record reflects that License No. A.268562-C of GND was revoked four times on July 31, 2013, and that License No. A.268562-C of GND was suspended for lack of bond on July 1, 2013. 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. GND informed Complainant that GND could not pay Complainant until its material supplier was paid and an unconditional release from the material supplier was obtained. Complainant paid GND’s material suppler, Cemex the sum of $10,461.29 on October 12, 2012, in order to be paid by GND. Complainant then provided GND with signed waiver and releases. GND failed to pay Complainant any money for the paving work that Complainant completed at the Oasis Village project and Complainant lost a total of $31,398.96 as a result of GND’s failure to pay Complainant. This Tribunal concludes that GND violated the charged provision of A.R.S. § 32- 1154(A)(11). RECOMMENDed order In view of the foregoing, it is recommended that License No. A.268562- C of GND shall be revoked. 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 12, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit Nos. 1 and 2 (8/16/12 Proposal/Contract and 8/20/12 Proposal/Contract for change order). [2] See Exhibit No. 3 (8/24/12 Invoice). [3] 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. [4] See Exhibit No. 5 (Copy of check for $10, 461.29 to Cemex and 10/12/12 Waiver and Release from Cemex).

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