ALJDEC decisions subject to certification as final

2015A-2374-ROC · Registrar of Contractors · 2016-01-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 4, 2016 APPEARANCES: Brian Baker appeared on behalf of Complainant Baker Enterprises, Inc. Keltek LLC was represented by Tom Hall, Attorney. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. Keltek LLC (Respondent) is the holder of License No. 280629 issued by the Registrar of Contractors (Registrar). 2. On or about June 1, 2015, Baker Enterprises Inc. (Complainant) filed a Complaint against Respondent with the Registrar alleging that Respondent had defaulted on a note, and $14,800.00 was due. 3. The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10). 4. Mr. Baker testified he provided a capital expenditure loan to Respondent in the amount of $19,500.00 and that a promissory note was signed by Kitrina Meyer and Michael Meyer, members of Respondent’s LLC at the time the promissory note was executed. Mr. Baker acknowledged that Jason Kelley, currently the sole member of Respondent’s LLC, did not sign the promissory note. Mr. Baker testified that for the first few months, timely payments were made on the note, but that in April 2015, the payments stopped. Mr. Baker stated that he had filed suit in the Justice Court and that the Meyers accepted full responsibility for the monies owing on the promissory note. Mr. Baker stated that he did not provide any materials or services to Respondent and provided only money in the form of a loan. 5. Mr. Kelley testified that when the Meyers were obtaining the loan from Mr. Baker, he confirmed with Mr. Baker that Respondent would not be liable and that the loan was being made to the Meyers in their personal capacity. Mr. Kelley stated that he did not sign any loan documents and that the loan proceeds were not used for any business purpose and were not related to any business project. Mr. Kelley acknowledged that he acted as a go-between for Mr. Baker to contact Ms. Meyer during his attempts to secure payment. 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)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, [f]ailure 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. Complainant acknowledged that Respondent did not owe Complainant for any “materials or services,” but only for a capital expenditure loan. Regardless of the legal consequences of a member of Respondent’s LLC accepting a loan and signing a promissory note, Complainant has not established that Respondent failed to pay monies in excess of $750.00 due for materials or services rendered in connection with the licensee’s operations as a contractor. 5. Therefore, Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(10). RECOMMENDed order Based on the foregoing, it is recommended that the Registrar close the Complaint in Case No. 2015-2374. 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, January 24, 2016.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors -----------------------

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