ALJDEC decisions subject to certification as final

2018A-04594-ROC · Registrar of Contractors · 2019-02-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 23, 2019 at 1:00 PM. APPEARANCES: Tabatha Ochoa appeared on behalf of Inca Roofing Inc. (“Complainant”) with Salvador Flores as a witness. No appearance(s) on behalf of Sharan Development Services Inc. (“Respondent”). Blanca Cortez and Chance Peterson from the Arizona Registrar of Contractors (“ROC”) observed. ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the ROC. FINDINGS OF FACT Background and Procedure 1. According to the ROC’s public website, on or about May 1, 2009, the ROC issued License No. 255437, KB-2 dual residential and small commercial contracting license, to Respondent.[1] Mr. Samuel Ashish Sharon (“Mr. Sharon”) is the Qualifying Party/Officer on this license. Respondent’s address of record on the license is 2802 E Greenway Rd., Ste. 9, Phoenix, AZ 85032-4444.[2] 2. Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on January 23, 2019. License No. 255437 is current and renewed through May 31, 2020.[3] There is one open complaint against the license, which is Complainant’s.[4] No prior discipline has been taken against the license. The license has an active $14,000.00 surety bond through Developers Surety and Indemnity Co. effective March 21, 2013.[5] 3. Complainant is a roofing subcontractor. 4. On or about June 20, 2017, the parties entered into a contractual agreement whereby Complainant would perform polyurethane foam and tile removal, and reinstallation services, for Respondent for $23,050.00.00.[6] Complainant agreed to bill Respondent throughout the project via invoice. Payment was due on receipt. 5. Complainant sent three invoices to Respondent for the underlying project. Invoice No. 9540 for $2,358.50 was sent to Respondent on July 11, 2017. Invoice No. 9652 for $11,063.25 was sent to Respondent on October 04, 2017. Invoice No. 9667 for $11,037.25 was sent to Respondent on October 27, 2017. 6. On September 28, 2018, Complainant filed a Non-Payment Complaint Form with the ROC.[7] 7. On October 01, 2018, the ROC notified Respondent of the filed complaint via email and postal mail.[8] 8. On October 15, 2018, the ROC issued Respondent a Citation for Alleged Violation of Ariz. Rev. Stat. § 32-1154(A)(10). The written 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 under Ariz. Rev. Stat. § 32-1154(A)(10), which states, in pertinent part: 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:

Failure by 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.

Respondent was required to provide a written Answer per Ariz. Rev. Stat. § 32-1155(A) by October 30, 2018. 9. On November 07, 2018, the ROC received a letter titled Written Answer to Citation and Complaint from Respondent.[9] In its Answer, Respondent agreed that it hired Complainant as a roofing subcontractor on the underlying project. Respondent explained that it failed to pay for services rendered by Complainant because the project’s Homeowner failed to pay Respondent. Respondent argued that it made payments in excess of $2,000.00 to Complainant. Per Respondent, it was diligently attempting to secure funds to pay the remaining balance owed to Complainant and save their well-established professional relationship.

10. On December 03, 2018, the ROC issued a Notice of Hearing to the parties which set the above-captioned matter for hearing at 1:00 p.m. on January 23, 2019, at the Office of Administrative Hearings. 11. The Notice of Hearing shows that the hearing was being conducted on the charges made in the Citation and Complaint.[10] Hearing Evidence 12. Tabatha Ochoa testified on behalf of Complainant and submitted four exhibits. The ROC’s electronic file and Notice of Hearing were also admitted into the evidentiary record. No appearance(s) on behalf of Respondent. Ms. Ochoa’s testimony 13. Ms. Ochoa testified that she is employed by Complainant as its Office Manager. 14. Ms. Ochoa testified that the contract between the parties was for $23,050.00 plus tax, which brought the total to $24,433.00. 15. Per Ms. Ochoa, Respondent paid Invoice No. 9540 for $2,358.50 on July 25, 2017, via check.[11] Respondent made a partial payments for $1,026.00 on Invoice No. 9652 on January 05, 2018, via credit card, and for $1,000.00 on January 10, 2018, via check.[12] Per their contract, Respondent was assessed a 2.6% fee, or $26.00, for making a payment with a credit card.[13] 16. Ms. Ochoa testified that the total outstanding amount Respondent owes on the project, including tax and fees, is $20,074.50. 17. Ms. Ochoa testified that she was informed by Mr. Sharon that Respondent was unable to pay Complainant on the contract because Homeowner had not paid Respondent. 18. Ms. Ochoa testified that she contacted the Homeowner to verify that she had not paid Respondent for the project. Instead, Ms. Ochoa was provided with emails and copies of Homeowner’s checking account transfers which irrefutably established that Homeowner had timely paid Respondent in full for the project.[14] CONCLUSIONS OF LAW 1. The Notice of Hearing sent to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. 2. The ROC has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The purpose of the ROC’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.[15] 3. Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[16] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[17] 4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[18] 5. Ariz. Rev. Stat. § 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.

6. “Statutes should be interpreted to provide a fair and sensible result.”[19] 7. “Statutes shall be liberally construed to affect their objects and to promote justice.”[20] 8. In the present case, the preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10) by failing to pay Complainant monies owed for services performed and materials supplied, when due, sans sufficient justification or excuse as allowed by statute. To date, Respondent owes Complainant $20,074.50. 9. Based on the relevant and credible evidence in the record, it is appropriate for the ROC to discipline Respondent’s license, including suspension or revocation, pursuant to Ariz. Rev. Stat. § 32-1154(B) unless Respondent remits monies owed to Complainant. RECOMMENDED ORDER Based on the foregoing findings of fact and conclusions of law, IT IS RECOMMENDED that on the effective date of the Final Order in this matter, Sharan Development Services Inc., License No. ROC 255437 shall be suspended for five (5) business days. IT IS FURTHER RECOMMENDED that thirty calendar days after the effective date of the Final Order in this matter, Respondent’s contractor’s license shall be revoked unless Respondent has provided satisfactory written evidence to the ROC that it has paid Complainant Inca Roofing Inc., twenty thousand seventy-four dollars and fifty cents ($20,074.50) in certified funds.[21] Upon timely receipt of such satisfactory written proof, no such revocation shall take place and the ROC shall close Case No. 2018-04594. 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, February 06, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See https://roc.az.gov/contractor-search?Id=a0Yt000000ACMwLEAX. [2] Id. [3] Id. [4] Id. [5] Id. [6] See the Registrar’s electronic file at pages 30-35. [7] See the Registrar’s electronic file at page 29. [8] See the Registrar’s electronic file at page 15. [9] See the Registrar’s electronic file at page 41. [10] The Notice of Hearing does not provide the date the Citation was issued or when the complaint was filed. There appears to be no dispute, however, that the ROC issued the Citation For Alleged Violation of Ariz. Rev. Stat. § 32-1154(A)(10) on October 15, 2018, or that Complainant filed with ROC a complaint against Respondent on September 28, 2018. [11] See the Registrar’s electronic file at page 36. [12] See the Registrar’s electronic file at page 38. [13] Id. [14] See Complainant Exhibits 1-4. [15] See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). [16] See Ariz. Rev. Stat. § 41-1092.07(G)(2); Ariz. Admin. Code R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [17] See Ariz. Admin. Code R2-19-119(B)(2). [18] Morris K. Udall, Arizona Law of Evidence § 5 (1960). See also Black’s Law Dictionary 1373 (10th ed. 2014) which states that 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.” [19] See 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.”). [20] See Ariz. Rev. Stat. § 1-211(B). [21] The total amount owed will be seven thousand seven hundred sixty-seven dollars and twenty-seven cents ($7,767.27) if the ROC concludes Respondent owes interest on the outstanding balance, per the parties signed contract.

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826