ALJDEC decisions subject to certification as final

2016A-2338-ROC · Registrar of Contractors · 2016-09-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 16, 2016, at 8:00 a.m. APPEARANCES: Ferguson Enterprises Inc. (“Complainant”) was represented by Tara K. Miller, Esq., Mark A. Kirkorsky, PC; Rose Refrigeration Inc. (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On or about April 1, 2008, the Arizona Registrar of Contractors (“the Registrar”) issued License No. CR39.243605-D for Air Conditioning and Refrigeration to Respondent. Respondent’s address of record is 3001 W. Julie Dr., Phoenix, Arizona 85027-4904. Complainant supplies Heating, Ventilation, and Air Conditioning (“HVAC”) supplies and plumbing supplies to contractors like Respondent. On July 1, 2016, the Registrar received a complaint from Complainant against Respondent alleging that Respondent owed $12,793.32 for materials that Complainant had supplied to Respondent for use in its contracting business. On July 19, 2016, the Registrar issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10). The Registrar mailed a copy of the Citation to Respondent at its address of record. Respondent filed a timely written answer to the Citation. Respondent’s written answer did not dispute that it had failed to pay Complainant for materials used in Respondent’s contracting business but stated that “[c]ompany has been dissolved.” Respondent attached to its written answer a letter from the Arizona Corporation Commission with an effective date of May 10, 2016, stating that “All Required documents for voluntary dissolution have been received, and the voluntary dissolution is approved.” The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent agency, for an evidentiary hearing. On August 8, 2016, the Registrar issued a Notice of Hearing setting a hearing on September 16, 2016, at 8:00 a.m. in OAH. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. A hearing was held on September 16, 2016, at 8:00 a.m. Complainant submitted three exhibits and presented the testimony of Roger Reed (“Mr. Reed”), its Credit Manager. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed twenty-two minutes to allow Respondent additional travel time, Respondent did not appear, through an authorized officer, employee, or attorney, and did not contact OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend its license. Mr. Reed testified that on or about May 14, 2015, Respondent submitted an executed Credit Application, Guaranty & Master Sales Agreement (“the agreement”). Paragraph 2 of the agreement provided that “Buyer must notify Seller of billing errors or adjustments in writing within ten (10) days from the invoice date. Claims not received in writing within the time specified are waived by the Buyer.”[1] Mr. Reed testified that Respondent purchased HVAC and plumbing supplies from Complainant and that Complainant properly invoiced Respondent’s purchases.[2] Mr. Reed testified that Respondent picked up all the invoiced materials at Complainant’s business and that Respondent never contested the charges on the invoices. Complainant submitted two statements for HVAC supplies and for plumbing supplies that set forth the unpaid amounts.[3] The total of the two statements was $12,793.32. Mr. Reed testified that the statements reflected all credits due to Respondent. Administrative notice is taken of the Registrar’s public website. According to the website, on this date, Respondent’s license is current and in good standing. This is the only complaint pending against the license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[4] 2. The Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable and Respondent is deemed to have received notice of the hearing.[5] 3. Complainant bears the burden of proof to establish statutory violations by a preponderance of the evidence.[6] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[7] 4. Because A.R.S. § 32-1154(A) prohibits “[t]he holder of a license or any person listed on a license pursuant to this chapter”[8] from committing any of the proscribed acts, a licensee’s dissolved corporate status is not a defense to a violation of the statute. If Respondent fails to pay Complainant what it established what was owed, Respondent’s license shall be suspended indefinitely and no future license shall be issued to any entity consisting of the persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), until Respondent tenders payment of all outstanding amounts due to Complainant.[9] 5. Complainant established that Respondent violated A.R.S. § 32-1154(A)(10)[10] by failing to pay Complainant more than $750.00 for materials that Respondent used in its contracting business. 6. With respect to the amount owed, the legislature has not empowered the Registrar to award service charges or interest in an administrative proceeding against a contractor’s license. Therefore, Respondent should be required to pay Complainant the $12,793.32 as a condition of keeping its license in good standing. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Respondent Rose Refrigeration Inc.’s License No. CR39.243605-D shall be suspended until Respondent pays $12,793.32 to Complainant Ferguson Enterprises Inc. It is further recommended that when the Registrar receives satisfactory written proof from Respondent that it has paid $12,793.32 to Complainant by cashier’s or certified check, the Registrar shall reinstate Respondent’s license and may close the complaint in Case No. 2016-2338 as resolved/settled/withdrawn. 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, September 16, 2016. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Complainant’s Exhibit 1 at 2. [2] See Complainant’s Exhibit 2 (invoices). [3] See Complainant’s Exhibit 3. [4] See 32-1101 et seq. [5] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [6] 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). [7] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [8] Emphasis added. [9] See also A.R.S. §§ 32-1122(E) and 32-1154(A)(20). [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.”

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