ALJDEC decisions subject to certification as final

2018A-139-NPC-ROC · Registrar of Contractors · 2018-04-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Border Construction Specialties LLC,

COMPLAINANT,

v.

Integrated Land Solutions LLC dba,

ILS Contracting,

License No: 306043

RESPONDENT.

No. 2018A-139-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 4, 2018

APPEARANCES: Yashica Dettmen, Complainant; Armondo Perez, Respondent member.

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

On or about June 23, 2016, the Arizona Registrar of Contractors (“the Registrar”) issued License No. 306043 for B-2 General Small Commercial Contractor to Respondent.

Complainant is a distributor of masonry materials, supplies and equipment. On or about January 11, 2018, Complainant filed a complaint with the Registrar alleging that Respondent owed Complainant $2,779.12 on invoices for masonry products delivered to the Respondent’s job site dating back to June 2017.

On January 26, 2018, the Registrar issued a citation for Alleged Violation of A.R.S. § 32-1154(A)(10).

Respondent timely answered the citation and complaint, admitting that it owed Complainant $2,779.12, but denying any statutory violation. Respondent affirmatively alleged that Respondent was unable to pay immediately because of a downturn in business.

The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, to schedule and to conduct an evidentiary hearing.

A hearing was held on April 4, 2018. Complainant submitted one exhibit along with the exhibits attached to its compliant and presented the testimony of Mrs. Yashica Dettman, Complainant. Respondent submitted two exhibits and presented the testimony of Mr. Perez, a 75% owner of the Respondent’s LLC..

Hearing Evidence

Mrs. Dettman testified that the Complainant’s credit policy’s terms and conditions provide that payment is due from customers who purchase product within 30 days from the date of Complainant’s invoice.

Mrs. Dettman testified that on the same date of the complaint, January 11, 2018, the Respondent paid the sum of $1,200.00, in cash, against its outstanding invoice balance. Moreover, another payment in the amount of $300.00 was thereafter paid by the Respondent by check. However, that check’s payment was dishonored as NSF by the drawer’s bank on February 14, 2018. A $10.00 NSF charge was assessed the Complainant by its bank [Exhibit C-1]. Mrs. Dettman indicated on the record that the Complainant waives reimbursement for the bank’s $10.00 NSF fee.

Thus, Mrs. Dettman, by her testimony, amended the total claim against Respondent in her complaint to $2,779.12.

Mr. Perez testified that the customer for whom masonry product was ordered from the Complainant [which order is the subject of the Complainant’s complaint] paid Mr. Perez the sum of $5,000.00 in advance for the cost of materials. Mr. Perez testified that much of those advanced cost of materials were spent for other than paying the Complainant.

Complainant’s answer and in Mr. Perez’s testimony it is admitted that the Complainant’s charges are owed and mostly unpaid. Mr. Perez admits at hearing that the Respondent owes Complainant the sum of $2,779.12.

The Respondent testified and in his final argument indicated that the business has slowed from a 2017 gross revenue of approximately $700,000.00 down to only $10,000.00 for the first quarter of 2018. Mr. Perez has taken on a second job and also expects Respondent’s business to pick up in the next 30 days. He has asked for the benefit of having three more weeks to allow him to pay Complainant in full.

Mr. Perez provided no explanation or excuse for why Complainant was not paid in 2017 from the advance given him from his customer for materials and supplies or during 2017 when the Respondent was enjoying a prosperous season.

The Respondent’s license is currently suspended and has been suspended since Top of Form

December 5, 2017 for Lack of Bond on file with the Registrar.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s licenses by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A 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.”

A supplier may pursue an administrative claim for nonpayment against a contractor’s license as well as a civil action for breach of contract or unjust enrichment in a judicial forum. The different remedies are not exclusive.

Respondent did not dispute that Complainant was owed $2,779.12 for the material and supplies that it provided for Respondent customer’s project.

A contractor’s inability to pay a supplier and nonpayment by the general contractor on a project are affirmative defenses that the contractor bears the burden to prove in a supplier’s administrative complaint for nonpayment under A.R.S. § 32-1154(A)(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.” [Emphasis added.]

Respondent did not bear its burden to establish that that it did not receive sufficient money from its customer to pay the money that Respondent acknowledged it owes Complainant.

Complainant established that Respondent violated

A.R.S. § 32-154(A)(10).

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that on the effective date of the final order in this matter, Integrated Land Solutions LLC dba, ILS Contracting, License number 306043 shall be suspended until Respondent pays Complainant Continental Lighting and Contracting Inc. the sum of $2,779.12.

IT IS FURTHER RECOMMENDED that if, prior to the effective date of the final order, the Registrar receives written proof satisfactory to the Registrar that Respondent has paid Complainant $2,779.12, in certified funds, the Registrar shall not suspend Respondent’s license for violation of A.R.S. § 32-154(A)(10). but, instead, shall close Case No. 2017A-139-NPC-ROC.

IT IS FURTHER RECOMMENDED that unless and until the Respondent causes to be filed with the Registrar evidence of a sufficient contractor’s bond, Respondent’s license shall remain suspended.

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, April 4, 2018.

/s/ Randolph D. Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

Done this day, April 4, 2018

/s/ Randy Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

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