ALJDEC decisions subject to certification as final

2016A-816-ROC · Registrar of Contractors · 2016-07-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 15, 2016 APPEARANCES: Julie Slesarik, Director of Finance and Operations, and Matt Personne appeared on behalf of Complainant Arcadia Townhomes LLC; no appearance by Respondent ADMINISTRATIVE LAW JUDGE: Roger A. Geddes _____________________________________________________________________ FINDINGS OF FACT 1. Interstate Construction Services, LLC (Respondent), is the holder of License Numbers KB-1.276608-D and KA.276609-D issued by the Registrar of Contractors (Registrar). 2. On or about March 10, 2016, Arcadia Townhomes, LLC (Complainant), filed a Complaint against Respondent with the Registrar alleging that Respondent owed Complainant the sum of $6,399.84, representing part of the sum Complainant paid to Respondent’s supplier, Red Mountain Rentals LLC, which Respondent had failed to pay. Complainant also seeks interest and attorney’s fees. Complainant is the owner of the property for which work was provided and Respondent is the general contractor. 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). The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 4. The Registrar issued a Notice of Hearing setting a hearing for June 15, 2016, at 10:00 A.M. The Registrar mailed a copy of the Notice of Hearing to Respondent on or about April 29, 2016, at its address of record. 5. The Notice of Hearing informed the parties that “[f]ailure to attend the scheduled hearing is likely to result in an adverse ruling against you.” 6. A hearing was held on June 15, 2016, at 10:00 a.m. Complainant presented the testimony of Julie Slesarik, Director of Finance and Operations, and Matt Personne. 7. Although the commencement of the hearing was delayed approximately 15 minutes, Respondent did not appear at any time during the hearing through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license. Respondent further did not request to appear telephonically and did not request that the hearing be continued. 8. Ms. Slesarik testified that Red Mountain Rentals, LLC, a supplier of heavy equipment to Respondent, had not been paid the amount of $6,399.84 due from Respondent and that Red Mountain Rentals, LLC, was filing a lien in the amount of $6,399.84 plus interest and attorney’s fees against the property of Complainant. 9. Ms. Slesarik also testified that Complainant paid Red Mountain Rentals, LLC, $7,015.22 to release the lien and Complainant also incurred attorney’s fees in the amount of $2,305.00 in connection with the lien release for a total amount of $9,320.22 in connection with this matter. 10. Ms. Slesarik further testified that Complainant was able to recover $5,000.00 on Respondent’s surety bond. Ms. Slesarik testified that she believed Complainant was still owed the amount of $4,320.22 regarding this matter. 11. Pursuant to A.A.C. R4-9-117, administrative notice is taken of the Registrar’s public website. On May 11, 2016, Respondent’s License Numbers KB-1.276608-D and KA.276609-D were suspended for lack of a qualifying party. The administratively suspended status of Respondent’s license and Respondent’s failure to appear at the hearing are considered as factors in aggravation of any determination of discipline. CONCLUSIONS OF LAW 1. The copies of 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 hearing. A.R.S. §§ 41-1092.4 and 41- 1092.05(D). 2. The administratively suspended status of Respondent’s license does not deprive Complainant of its right to prosecute its complaint against Respondent or prevent the Registrar from determining the merits of Complainant’s complaint. See A.R.S. § 32-1154(C) (“The expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . .”). 3. 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 preponderance of the evidence. See A.A.C. R2-19-119. 4. 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). 5. 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. Emphasis added. 6. In this matter, Respondent failed to pay the amount of $6,399.84 to its supplier, Red Mountain Rentals, LLC, for materials or services rendered in connection with Respondent’s operations as a contractor. 7. Complainant in essence paid said unpaid amount of $6,399.84 as part of Complainant’s payment to Red Mountain Rentals, LLC, to release the lien of Red Mountain Rentals, LLC. 8. Complainant recovered $5,000.00 on Respondent’s surety bond relating to this matter. Therefore, Complainant has recovered all but the amount of $1,399.84 it paid for the unpaid materials or services rendered by Red Mountain Rentals, LLC, to Respondent. 9. The value of the materials or services rendered by Red Mountain Rentals, LLC, was $6,399.84. The additional amount Complainant paid to Red Mountain Rentals, LLC, over and above the $6,399.84 to release the lien, the interest accrued on the amount of $6,399.84, and attorney’s fees incurred by Complainant in connection with the release of the lien do not constitute materials or services rendered and are more properly categorized as damages to Complainant. 10. Complainant has established that Respondent’s license should be disciplined for a violation of A.R.S. § 32-1154(A)(10). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of this Order, Interstate Construction Services, LLC’s, License Numbers KB- 1.276608-D and KA.276609-D are revoked until the Registrar receives and accepts written verification that Interstate Construction Services, LLC, has paid $1,399.84 to Arcadia Townhomes, LLC, in certified funds. 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 five days from the date of the certification. Done this day, July 5, 2016.

/s/ Roger Geddes 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