FINACT2018A-3012-ROC.pdf

2018A-3012-ROC · Registrar of Contractors · 2019-01-22

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Revive Construction And Cleaning, LLC, Case No. 2018-3012 COMPLAINANT, Docket No. 2018A-3012-ROC v. FINAL ADMINISTRATIVE DECISION Shea Connelly Development, LLC, AND ORDER License No. ROC 270463, RESPONDENT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an

administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the

Registrar must provide written justification setting forth the reasons for the modification or rejection.

REGISTRAR’S ACCEPTANCE

In this case, a hearing was held, and the administrative law judge issued a written decision. See

Administrative Law Judge Decision, attached. The Registrar reviewed that decision and hereby accepts

it.

CONCLUSION

Because the Registrar has accepted the administrative law judge’s decision, that decision is the

final administrative decision in this case and becomes effective on February 27, 2019.

Dated January 18, 2019.

Registrar of Contractors /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Copy mailed via USPS First Class mail January 18, 2019 to: Respondent Shea Connelly Development LLC 2055 S Cottonwood Dr Tempe, AZ 85282 David W. Lunn, Esq. 14555 N Scottsdale Rd Ste 240 Scottsdale, AZ 85254 Complainant Revive Construction And Cleaning LLC 17028 N 14th St Phoenix, AZ 85022 Fidelis V. Garcia, Esq. PO Box 2230 Chandler, AZ 85244 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Respondent’s Attorney at email address of record with Registrar Complainant at email address on record with the Registrar Complainant’s Attorney at email address of record with Registrar Office of Administrative Hearings Velva Moses-Thompson, Administrative Law Judge

Case No. 2018-3012 / AN

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 1.7.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Revive Construction And Cleaning, LLC No. 2018A-3012-ROC

Complainant, ADMINISTRATIVE LAW JUDGE DECISION v.

Shea Connelly Development, LLC

Respondent.

HEARING: December 18, 2018 APPEARANCES: Fidelis V. Garcia, Esq. appeared on behalf of Complainant Revive Construction And Cleaning, LLC. David W. Lunn, Esq. appeared on behalf of Respondent Shea Connelly Development, LLC. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson _____________________________________________________________________

FINDINGS OF FACT

1. Complainant Revive Construction And Cleaning, LLC, (“Revive”), and

Respondent Shea Connelly Development, LLC (“Shea”), entered into an agreement

wherein Shea agreed to pay Revive to perform demolition and repair work at the Park

Place Phase 1 project (“Park Place project”).

2. Shea’s qualifying party is Bart Shea.

3. Rogelio Vasquez is the owner of Revive.

4. On or about January 15, 2018, Revive issued invoice # 97 to Shea, in the

total amount of $2,503.25, for materials purchased and rented for the Park Place

project. See Exhibit A.

5. On or about January 29, 2018, Revive issued invoice #100 to Shea, in the total amount of $33,390, for worked performed at the Park Place project. See Exhibit B. 6. On or about February 5, 2018, Revive issued invoice #101 to Shea, in the total amount of $29,880, for work performed at the Park Place project. See Exhibit C.

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 1.7.2019 ROC LEGAL

7. On or about February 5, 2018, Revive issued invoice #102 to Shea, in the total amount of $3,010 for work performed at the Park Place project. See Exhibit D. 1 8. Shea did not pay invoice #97, #100, #101, and #102.

9. On or about June 29, 2018, Revive filed a complaint against

Shea with the Arizona Registrar of Contractors, (“Registrar”), for non-payment in

connection with the Park Place project.

10. On September 28, 2018, the Registrar, issued a CITATION for an alleged

violation of A.R.S. § 32-1154(A)(10) and A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-

1129.02.

11. Shea filed a timely response to the CITATION.

12. The Registrar referred the matter to the Office of Administrative Hearings,

(“OAH”) an independent agency, to schedule an evidentiary hearing.

13. On October 31, 2018, the Registrar issued a NOTICE OF HEARING setting

the above-captioned matter for hearing at 1:30 p.m. on December 18, 2018, at the OAH

in Phoenix, Arizona.

14. A hearing was held on December 18, 2018.

15. At hearing, Revive presented the testimony of Mr. Vasquez, and submitted exhibits A thorugh D. Shea presented the testimony of Mr. Shea, and submitted exhibits 2, 3, and 4. 16. Mr. Vasquez testified that Revive performed work and provided materials as described in invoice #97, #100, #101, and #102. Mr. Vasquez testified that after about 95% of the work was completed, Revive began to experience problems receiving payment from Shea. 17. Mr. Shea initially testified that the contract with Revive for the Park Place project was for time and materials. Later in the hearing, Mr. Shea testified that the contract with Revive for the Park Place project was a time contract for labor. Mr. Shea testified that Shea has fully paid Revive over $800,000. Mr. Shea testified that Shea paid Revive $58,641.17 in the form of a down payment to start work on the Morningstar At hearing, Mr. Vasquez testified that the $3,010 amount represented an unpaid balance for invoice #99 which was for work performed at the Park Place Phase 1 project. RECEIVED 1.7.2019 ROC LEGAL

of Glendale project. Mr. Shea contended that Shea was not obligated to pay the invoices for the Park Place project because it had already paid Revive $58, 641.17 for the Morningstar of Glendale project, which was never completed. Mr. Shea testified

that Shea paid another contractor close to $300,000 to complete the Park Place and

Morningstar of Glendale projects.

18. Revive contended that contractors are obligated to pay their

subcontractors under Arizona law. Revive argued that Shea did not provide a written

statement within fourteen days to Revive under A.R.S. § 32-1129.02 (E), before it

withheld payment for any of the grounds listed A.R.S. § 32-1129.02 (C). Revive

contended that Shea failed to pay invoice #97, #100, #101, and #102 when they

became due.

19. Shea contended that the prompt payment statute does not apply because

Revive performed poor work. Shea argued that the Registrar considers offsets when

considering whether a contractor has violated A.R.S. § 32-1154 (A)(10) and A.R.S. §

32-1129.02. However, Shea provided no written evidence to show that it paid invoice

#97, #100, #101, and #102. Shea provided no authority to establish that the Registrar

considers offsets when assessing whether a contractor has violated A.R.S. § 32-1154 (A)(10) and A.R.S. § 32-1129.02. 20. Administrative notice is taken of Respondent’s prior License record on January 3, 2019. Such prior License record reflects that Respondent’s License No. 270463 was first issued on January 28, 2011, and is active. Such prior License record also reflects that is one open complaint against Respondent, and one complaint that was resolved or settled. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.2 2. 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. RECEIVED 1.7.2019 ROC LEGAL

3. 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). 4. 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.") 5. “Statutes shall be liberally construed to effect their objects and to promote justice.” A.R.S. § 1-211(B). 6. 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). 7. A.R.S. § 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….. 12. Failure in any material respect to comply with this chapter. 8. A.R.S. § 32-1129.02(A) provides that performance by a subcontractor in

2 See A.R.S. §§ 32-1151 to 32-1169. RECEIVED 1.7.2019 ROC LEGAL

accordance with the provisions of a construction contract entitles the subcontractor or material supplier to payment from the party with whom the contractor, subcontractor or material supplier contracts.

9. A.R.S. § 32-1129.02(B) provides that a subcontractor who has performed

in accordance with a construction contract is entitled to payment within seven days of

receipt of payment by the general contractor.

10. A.R.S. § 32-1129.02(C) provides that a general contractor may withhold

funds from a subcontractor for any of the following reasons:

1. Unsatisfactory job progress. 2. Defective construction work or materials not remedied. 3. Disputed work or materials. 4. Failure to comply with other material provisions of the construction contract. 5. Third party claims filed or reasonable evidence that a claim will be filed. 6. Failure of the subcontractor to make timely payments for labor, equipment and materials. 7. Damage to a contractor or another subcontractor or material supplier. 8. Reasonable evidence that the subcontract cannot be completed for the unpaid balance of the subcontract sum. 9. The owner has withheld retention from the contractor, in which case the amount of the retention withholding by the contractor shall not exceed the actual amount of the retention retained by the owner pertaining to the subcontractor's work.

11. A.R.S. § 32-1129.02(E) provides:

If the contractor or subcontractor chooses to withhold the application or certification for all or a portion of a subcontractor's or material supplier's billing or estimates as permitted by subsection C of this section, the contractor or subcontractor must prepare and issue a written statement within fourteen days to the applicable subcontractors or material suppliers stating in reasonable detail the contractor's or subcontractor's reasons for withholding the application or certification from the owner or contractor.

12. The preponderance of the evidence shows that Shea

violated A.R.S. § 32-1154(A)(10) as alleged. RECEIVED 1.7.2019 ROC LEGAL

13. The preponderance of the evidence established Shea violated A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1129.02 (A). 14. The preponderance of the evidence shows that Shea violated A.R.S. §§

32-1154(A)(10) and (A)(12) by failing to pay Revive $68,783.25 for services rendered

in connection with Shea’s contracting business.

15. Based upon Respondent’s violation of the provisions of A.R.S. § 32-

1154(A)(10) and (12), grounds exist to impose discipline against Shea’s license.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the Registrar suspend

Respondent’s License No: 270463 issued by the Registrar unless Respondent has

provided to the Registrar, and the Registrar has accepted, documents that establish

that Respondent paid Complainant $68,783.25 in certified funds.

It is further recommended that if the Registrar receives and accepts

Respondent’s evidence that it has paid Complainant $68,783.25 in certified funds before the effective date of the Registrar’s Order, the Registrar may close the Complaint in this matter. 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, January 3, 2018. /s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors