ALJDEC decisions subject to certification as final

2018A-1359-NPC-ROC · Registrar of Contractors · 2018-06-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

H K B Inc,

COMPLAINANT,

v.

Interwest Specialties, Inc ,

License No: 312754

RESPONDENT.

No. 2018A-1359-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 7, 2018, 1:00 P.M.

APPEARANCES: Robert Moore, Esq., appeared on behalf of Complainant; Jeff Larson, President of Respondent, appeared on behalf of Respondent

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

1. Interwest Specialties, Inc. (Respondent), is the holder of License Number 312754 issued by the Registrar of Contractors (Registrar).

2. On or about March 26, 2018, H K B, Inc. (Complainant), filed a Complaint against Respondent with the Registrar alleging that Respondent owed Complainant the sum of $122,013.15. This amount represented a series of unpaid invoices on and relating to equipment provided by Complainant in connection Respondent’s highway construction projects.

3. On April 10, 2018, the Registrar then issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) for the alleged failure by Respondent to pay monies in excess of $750.00 when due for materials or services rendered in connection with Respondent’s operations as a contractor. 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 that set a hearing for June 7, 2018, at 1:00 P.M. At the hearing, Complainant presented the testimony of Jim Wilson, CFO of Complainant; Respondent presented the testimony of Jeff Larson, President of Respondent. The Tribunal took administrative notice of the Registrar’s file.

5. Complainant presented invoices (attached to its Complaint) reflecting a balance due of $122,013.15. Complainant also contended Respondent owed Complainant an additional amount of $13,000.00 for attorney’s fees incurred by Complainant in connection with collection of this amount.

6. Jeff Larson, President of Respondent, testified on behalf of Respondent that he did not dispute the existence or the extent of the past due amounts. He testified that Respondent has been fully paid for the work by the state of Arizona but that the company has encountered financial difficulties and needed time to get back on its feet to make payments on open invoices.

7. Respondent did not present evidence to show that it lacked the capacity to pay the amount Complainant contended was due.

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154.

2. 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 Arizona Administrative Code Rule 2-19-119.

3. To warrant such sanctions by the Registrar, a Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” BLACK’S LAW DICTIONARY 1182 (Rev. 6th ed. 1990).

4. 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.

5. The evidence established that Respondent failed to pay the amount of $122,013.15 to Complainant for materials rendered in connection with Respondent’s operations as a contractor. There was no evidence presented to rebut the existence or extent of nonpayment nor was there evidence presented that Respondent lacked the capacity to pay.

6. Complainant’s request regarding its attorney’s fees it seeks from Respondent is not the subject of this hearing. A violation of A.R.S. § 32-1154(A)(10) relates only to “monies...due for materials or services.” While an award of attorney’s fees in connection with collection of unpaid monies may be awardable in a civil action, there is no support for the notion that such fees constitute monies due for materials and services that would form the basis of a statutory violation.

7. In this matter, 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, Interwest Specialties, Inc.’s, License Number 312754 is suspended until the Registrar receives and accepts written verification that Interwest Specialties, Inc., has paid $122,013.15 to H K B, Inc. in certified funds.

It is further recommended that if and when the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $122,013.15 in certified funds, the Registrar may close the Complaint in Case No. 2018A-1359-NPC-ROC.

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, June 27, 2018.

/s/ Roger Geddes

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors