ALJDEC decisions subject to certification as final

2017A-1375-NPC-ROC · Registrar of Contractors · 2017-07-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Universal Wallboard Corporation,

COMPLAINANT,

v.

Ventura Pacific Development, Inc. ,

License No: 259314

RESPONDENT.

No. 2017A-1375-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 12, 2017

APPEARANCES: Joe Wittmann, Universal Wallboard Corporation and Qualifying Party, Charles Stinton, Esq., attorney for Universal Wallboard Corporation.

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

_____________________________________________________________________

A Hearing was convened to determine whether Respondent Ventura Pacific Development, Inc. violated state law as has been alleged by Universal Wallboard Corporation and as cited by the Arizona Registrar of Contractors (hereinafter also, “the ROC”).

At Hearing, the Ventura Pacific Development, Inc. failed to appear. Evidence and testimony were presented to establish a factual basis for this decision.

Based upon an examination of the entire record, the following Findings of Fact are made, Conclusions of Law rendered, and DECISION AND RECOMMENDED ORDER issued:

FINDINGS OF FACT

Respondent Ventura Pacific Development, Inc. holds a KB-1 | Dual | Corporation license Number 259314 first issued by the ROC on October 27, 2009 [hereinafter referred to as “Ventura”]. Administrative Judicial Notice is taken that the Ventura’s license was suspended by the ROC on July 14, 2017. As of the date of this decision, Ventura’s license remains suspended.

Universal Wallboard Corporation [herein after “Universal”] holds a CR10 and CR40| Dual | Corporation license numbers 072845 and 099139, respectively. The licenses are in good standing at all times material to this case.

Universal alleges that Ventura has refused to pay Universal the sum of $10,042.40, when due, for materials or services rendered in connection with Ventura’s operations as a contractor.

Douglas Edward Peery is a member the Ventura LLC and the Qualifying Party for Ventura.

Joe Wittmann, is an officer of Universal and is Universal’s Qualifying Party.

Old Vail Station is the owner of that certain real property known as 13200 East Colossal Cave Road, Vail, Arizona [the “Property”] Old Vail Station contracted with Ventura Pacific Development Group a division of Ventura Pacific Development Inc. [Respondent herein] for the construction of a project know as Old Vail Station Storage Building Phase· II on the Property [hereinafter the “Prime Contract]. [Exhibit C-13].

Including all change orders, Old Vail Station agreed to pay Ventura the sum of Five Hundred Twenty-Three Thousand Four Hundred Forty-One Dollars ($523,441.00) upon satisfactory completion of the Prime Contract. [Ibid].

As part of the performance of Ventura’s Prime Contract with Old Val Station, on January 20, 2016, Ventura contracted with Universal to build a storage building referred to as Old Vail Station Storage Bldg. Phase II - Project 15-035. The building contract calls for the construction of 120' x 120', free standing self-storage building to be, constructed with steel studs and joists, a metal roof and wall paneling. [Exhibit C-2].

The total contract amount between Ventura and Universal, with a change order, was for $100,424.00. [Ibid and Exhibit C-3]. The Ventura–Universal agreement called for a retainage amount of $10,042.40 [Exhibit C-2].

A Certificate of Occupancy was issued by Pinal County for the building constructed by Universal on August 5, 2016. [Exhibit C-12]. Universal, having completed its contracted work, sought final payment from Ventura.

Ventura did not pay Universal for Universal’s completed work. Universal claims Ventura, without penalty or fees being added, owes Universal $10,042.40.

On March 13, 2017, Universal Wallboard Corporation filed a written Complaint against Ventura with the Arizona Registrar of Contractors.

On April 27, 2017, the ROC issued a Citation to Ventura charging a violation of A.R.S. § 32-1154(A)(10). The Citation and Complaint charged Respondent with the commission of an act or acts that would, if proved, be cause for the suspension or revocation of Respondent’s license.

Ventura filed a timely written Answer to the Citation.

On May 23, 2017, the ROC issued a Notice of Hearing setting the above-captioned matter for hearing on July 12, 2017, at the Office of Administrative Hearings in Phoenix, Arizona.

In its Answer, Ventura’s asserts the right under its contract with Universal to withhold the retainage amount of $10,042.40 because

The complainant's work having not been complete per plans on Old Vail Station has caused harm to Ventura and as a result monies owed to us have been withheld by the owner causing us to not be able to pay the subcontractors on those projects. While the dispute with the owner is ongoing and remains unresolved the monies due the complainant have been withheld from us. Per the contract used as evidence for the complaint, the complainant has not met the requirements of the contract for substantial completion and until such time as the issue can be resolved with the owner, the balance is being withheld by the owner and not by Ventura.

[Respondent’s Answer].

Ventura cites the Universal Agreement at §11. 9 .1 as the basis for its right to withhold payment to Universal:

Retainage of amounts otherwise payable to the Subcontractor shall be withheld and released to the extent the Owner withholds and releases retainage to the Contractor with respect to the work as provided in the Prime Contract. The Owner Old Vail Station has withheld retainage owed to Ventura Pacific. We have legally under the te1ms of the contract withheld retainage due complainant.

[Ibid].

Old Vail Station authorized and paid or caused Ventura to be paid the entire amount due on the Prime Contract except the sum of Fifteen Thousand One Hundred Dollars ($15,100.00). [Id.]

Old Vail Station withheld the sum of Fifteen Thousand One Hundred Dollars ($15,100.00) of the contract sum otherwise due Ventura with respect to item identified in a Transmittal Letter dated August 24, 2016 to Bank of Tucson from Kathleen M. Dehn on behalf of Old Vail Station. [Exhibit C-11].

Thomas M. Parsons is the manager of Old Val Station. By his June 23, 2017 Affidavit [Exhibit C-13], Mr. Parsons relates that all work to be performed by Universal on the Storage Building was approved and certified as l 00% complete prior to August 24, 2016 and “None of the sum withheld by Old Vail Station from the contract amount ... related to in any manner to the labor or materials to be provided to the Storage Building by Universal.” [Id]. [emphasis added].

Mr. Parson relates that he has been contacted by other sub-contractors having agreements with Ventura on the Old Val Station project who assert they too have not been paid approximately $40,000.00 for work performed.

That Ventura asserts the amount owed Universal is not yet due because Ventura has not been paid by Old Val Station is not persuasive.

CONCLUSIONS OF LAW

A party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

Ariz. Rev. Stat section 32-1154(A) provides that

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

....

10. Failure 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.

“A construction contract shall not alter the rights of any contractor, subcontractor or material supplier to receive prompt and timely payments as provided under [Title 32, Chap. 10, Art. 2.].” Ariz. Rev. Stat. § 32-1129.01(P).

The preponderance of the evidence demonstrates Ventura has been paid under the Prime Contract in full for the services provided by Universal.

The preponderance of the evidence shows that although retainage was withheld Ventura under the Prime Contract, the sums withheld are related to work on the Prime Contract that in no way relates to the performance of Universal under its contract with Ventura.

The preponderance evidence shows Ventura has been paid under the Prime Contract for services it contracted with Universal. Thus, Ventura has the capacity to pay Universal or has received sufficient monies as payment on the Prime Contract for the particular construction work project for which Universal provided under its contract.

In violation of the provisions of Ariz. Rev. Stat section 32-1154(A)(10), payment the sum of $10,042.40 has been and continues to be wrongfully withheld from Universal by Ventura.

In the evidence presented, it appears more likely than not that Ventura has failed to pay other of its contractors for work performed on the Prime Contract. Such conduct is an aggravating circumstance.

Ventura’s current license status is suspended.

The preponderance of the evidence shows that Ventura failed or neglected to apply funds as payment to Universal which were received from Old Val Station under the Prime Contract for the purpose of obtaining or paying for services from Universal provided by Universal.

Pursuant to A.R.S. § 32-1166(A), a civil penalty of $500.00 is appropriate.

RECOMMENDED ORDER

IT IS ORDERED that on the effective date of the final Order in this matter Ventura Pacific Development, Inc,, License No: 259314, is revoked unless ROC receives and accepts written verification that Ventura Pacific Development, Inc. has paid to Universal Wallboard Corporation the sum of $10,042.40 in certified funds.

FURTHER IS IS ORDERED that on or before the effective date of the final Order in this matter, Ventura Pacific Development, Inc, must pay to the Registrar of Contractors in certified funds a civil penalty of $500.00.

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 is forty days after the date of that certification.

Done this day, July 20, 2017

/s/ Randolph D. Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors