ALJDEC decisions subject to certification as final

2016A-1437-ROC · Registrar of Contractors · 2016-08-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 1, 2016 APPEARANCES: Brian Baker appeared on behalf of Complainant Baker Enterprises, Inc. Respondent Arthur King Roofing Company Inc. was represented by Mary Hone. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. Arthur King Roofing Company Inc. (Respondent) is the holder of License No. 103187 issued by the Registrar of Contractors (Registrar). 2. On or about May 2, 2016, Baker Enterprises Inc. (Complainant) filed a Complaint against Respondent with the Registrar alleging that Respondent had defaulted on three working capital loans, and $90,383.00 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 three working capital loans to Respondent in the amounts of $35,000.00, $15,000.00, and $15,000.00, and that Arthur S. King, President of Respondent, signed promissory notes. 5. Mr. Baker stated that he did not provide any services to Respondent, but asserted that the money he provided in the form of a loan was a “material.” 6. Mr. King testified that he did not have the capacity to repay Complainant the funds borrowed. 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 argued that the proceeds of the working capital loan made to Respondent constituted “materials” under A.R.S. § 32-1154(A)(10). Complainant offered no legal authority in support of its position that the proceeds of a working capital loan are “materials” as contemplated under the statute. Therefore, 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. 2016-1437. 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 18, 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