ALJDEC decisions subject to certification as final

2015A-801-ROC · Registrar of Contractors · 2016-01-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 19, 2016, at 3:00 p.m. APPEARANCES: Premier Waste Services Inc. (“Complainant”) appeared through Michael O’Connor, its manager; Parker Design and Construction Inc. (“Respondent”) was represented by J. Murray Zeigler, Esq., Zeigler Law Group, PLC. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure The Arizona Registrar of Contractors (“the Registrar”) issued License Nos. KB-1.188861-D for dual building contracting, A.217901-C for general engineering, CR39.280153-D for air conditioning and refrigeration, and CR67.280762-C for dual low voltage communications systems to Respondent. Complainant provides dumpsters to construction jobsites around the Phoenix metropolitan area. On or about February 23, 2015, Complainant filed a complaint against Respondent with the Registrar for non-payment on three jobs, including the Saddle Mountain Brewery, the Danf Shaved Ice, and the Yoga on Indian School Rd. in Goodyear jobs. Complainant alleged that of an aggregate contract principal amount of $4,254.83, Respondent had paid only $3,764.70. According to the itemized accounting that Complainant provided on the second page of the complaint, Respondent owed $2,623.66 for the Saddle Mountain Brewery job at 15651 W. Roosevelt St. in Goodyear, $496.69 for the Danf Shaved Ice job, and $494.70 for the Yoga on Indian School in Goodyear job. After Respondent did not resolve the complaint, Complainant requested a hearing. The Registrar issued a Citation for an alleged violation of A.R.S. § 32- 1154(A)(10). Respondent filed a timely written answer to the Citation, denying that it had failed to pay more than $750.00 that was owed to Complainant and affirmatively alleging that it lacked the capacity to pay and that it had not received sufficient monies from the jobs to pay Complainant. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, to schedule an evidentiary hearing. A hearing was held on January 19, 2016. Complainant submitted five exhibits and presented the testimony of Cheryl Caponigro (“Ms. Caponigro”) and Michael O’Connor (“Mr. O’Connor”). Respondent presented the testimony of Kenneth Lamar Parker (“Mr. Parker”), its qualifying party and officer. Hearing Evidence Ms. Caponigro and Mr. O’Connor testified that Respondent has used Complainant’s services and agreed to Complainant’s charges on past jobs, including the fuel surcharge and finance charges, as well as the charge for the roll-off dumpster. Complainant submitted its printouts for its charges and Respondent’s payments for the Coca Cola Plant on 1850 W. Elliott in Tempe between March 8, 2011, and July 28, 2011,[1] and for the building at 6712 E. Hummingbird Lane in Paradise Valley between March 4, 2014, and April 2, 2014.[2] Ms. Caponigro testified that the fuel surcharge is based on a number that the United States Department of Energy provides weekly. Ms. Caponigro testified that Complainant issues bills twice a month and takes the number provided most recently by the Department of Energy to calculate fuel surcharges in its invoices. Ms. Caponigro testified that Respondent agreed to the charges when it requested Complainant’s services. Complainant submitted three printouts for the jobs that Respondent allegedly still owed money on, in relevant part as follows: 1. [account number redacted] at 15651 W. Roosevelt St. for services provided between June 2, 2014, and January 2, 2015, which showed only one payment of $490.13 on June 23, 2014, admin/reporting charges totaling $361.67 to file a lien on December 18, 2014, finance charges, fuel surcharges, and a total amount owed of $2,749.12;[3] 2. [account number redacted] at 15661 W. Roosevelt St. for services provided between August 11, 2014, and December 24, 2014, which did not show any payments, but showed finance charges, fuel charges, and a total amount owed of $508.81;[4] and 3. [account number redacted] at 14130 W. Indian School Rd. for services provided between August 15, 2014, and December 11, 2014, which did not show any payments, but showed finance charges, fuel charges, and a total amount owed of $506.77.[5] Complainant also submitted printouts of screenshots for each job that showed who had requested the services from Respondent’s telephone number. Mr. O’Connor acknowledged that the charges were based on the parties’ past course of conduct and that Complainant did not have a written contract or credit agreement that set forth the terms of the parties’ understanding. Mr. O’Connor testified that if the finance charges were deducted, Respondent owed $2,525.61 in principal for the Saddle Mountain Brewery job on 155651 W. Roosevelt St. Ms. Caponigro acknowledged that she signed the complaint that Complainant had filed with the Registrar under penalty of perjury and that the difference between the amount of the contract and amount paid on the first page of the complaint form was $490.13. According to Complainant’s exhibits, on December 18, 2014, when Mr. O’Connor attempted to contact Respondent’s attorney, Respondent owed $2,623.66 on account #32937 for the property at 15651 W. Roosevelt St., $496.69 on [account number redacted] for the property at 15661 W. Roosevelt St., and $494.70 for [account number redacted] at 14130 W. Indian School Rd. These amounts match the amounts on the second page of the complaint that Complainant filed with the Registrar. Mr. Parker testified that Respondent went into business thirteen years ago and did well for a while. Mr. Parker testified that in 2014 and 2015, Respondent entered into business arrangements with Mingus Construction to rehabilitate financially distressed properties and that Respondent was not paid for the jobs. Mr. Parker testified that Respondent went out of business on October 15, 2014, and that it is not presently earning any money. Mr. Parker testified that Respondent does not have the ability to pay any amounts that may be owed to Complainant. Mr. Parker testified that Mingus Construction did not pay Respondent anything for the Saddle Mountain Brewery job and that Respondent is currently owed $15,958.28 for the job. Administrative notice was taken of the Registrar’s public website on January 15, 2016. On October 1, and 15, 2015, Respondent’s License No. KB- 1.188861-D was administratively suspended for lack of bond and non-renewal; on November 1, 2015, Respondent’s License No. CR39.280153-D had expired; and on November 1, 2015, License No. CR67.280762-D had expired. Respondent’s License No. A.217901 was current. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[6] Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s licenses by a preponderance of the evidence.[7] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[8] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[9] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[10] 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 . . . 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.” Payment for “[s]ervices rendered in connection with the licensee’s operations as a contractor” does not include interest, finance charges, lien charges, or other charges that are based solely on contract terms.[11] Complainant established that it has some kind of a business arrangement with Respondent and that pursuant to this arrangement, Complainant provided services to Respondent’s jobs at 15651 W. Roosevelt St., 15661 W. Roosevelt St., and 14130 W. Indian School Road. On this record, however, Complainant did not establish the terms of the parties’ agreement(s) or provide sufficient information to allow the Administrative Law Judge liquidate any debt that Respondent may owe. A contractor’s inability to pay a supplier and nonpayment by the general contractor on a project are affirmative defenses that the contractor bears the burden to prove in a supplier’s administrative complaint for nonpayment under A.R.S. § 32-1154(A)(10). Mr. Parker’s testimony that Respondent is no longer in business was corroborated by information found at the Registrar’s public website. Therefore, Respondent established that it lacks the capacity to pay Complainant. Respondent also established that it did not receive sufficient monies on the Saddle Mountain Brewery job to pay Complainant for its services on the job. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Complainant Premier Waste Services Inc.’s complaint in Case No. 2015-801 against Respondent Parker Design and Construction Inc.’s License Nos. KB-1.188861-D, A.217901-C, CR39.280153-D, and CR67.280762-D shall be dismissed. 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 five days from the date of that certification. Done this day, January 27, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See Complainant’s Exhibit 1. [2] See Complainant’s Exhibit 2. [3] See Complainant’s Exhibit 3. [4] See Complainant’s Exhibit 4. [5] See Complainant’s Exhibit 5. [6] See 32-1101 et seq. [7] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [8] See A.A.C. R2-19-119(B)(2). [9] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [10] Black’s Law Dictionary at page 1220 (8th ed. 1999). [11] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (Ct. App. 1984).

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