ALJDEC decisions subject to certification as final

2018A-321-NPC-ROC · Registrar of Contractors · 2018-06-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

JP Window and Door LLC,

COMPLAINANT,

v.

Frameless Glass LLC,

License No: 283819

RESPONDENT.

No. 2018A-321-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 04, 2018 at 10:00 AM.

APPEARANCES: Jason Plegar appeared on behalf of JP Window and Door LLC (“Complainant”). Ronald Vucson appeared on behalf of Frameless Glass LLC (“Respondent”). No appearance(s) on behalf of the Registrar of Contractors (“the ROC”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the ROC.

FINDINGS OF FACT

Background and Procedure

According to the ROC’s public website, on or about March 29, 2013, the ROC issued License No. 283819, dual CR65 Glazing, to Respondent. Mr. Ronald Joseph Vucson (“Mr. Vucson”) is the qualifying party on this license. Respondent’s address of record on the license is 2218 E Magnolia St., Phoenix, AZ 85034-6817.

According to both parties, Complainant entered into an agreement with Respondent whereby Complainant would supply Respondent with custom cut manufactured glass, and in turn Respondent would pay half of the total amount owed upon ordering, and render the remaining half owed upon receipt of the product from Complainant.

Both parties agree that they had a preexisting business relationship spanning a number of years, and because of that, Complainant was relaxed when it came to collecting invoiced debts when they were due.

Both parties further agree that in October of 2017 Respondent ceased remitting payment for balances owed to Respondent, but that both parties continued placing and accepting product orders through December of 2017.

By January of 2018, Respondent had eighteen outstanding invoices due totaling $25,639.94.

At that time, Complainant stopped accepting orders from Respondent and required a good faith payment to prevent Complainant from filing a complaint with the ROC. Respondent did not remit any monies to Complainant.

On January 19, 2018, Complainant filed a complaint with the ROC alleging that Respondent owed him an outstanding balance of $25,639.94 for product and services rendered October 18, 2017, through the date of filing. Complainant attached eighteen invoices to his complaint, along with several emails to support his allegations.

The ROC received Complainant’s complaint on January 23, 2018.

On January 24, 2018, the ROC issued a letter to both parties advising receipt of Complainant’s complaint. Respondent was advised that it had until January 30, 2018, to submit any affirmative defenses and/or file a response.

Respondent did not file a response or affirmative defenses.

On February 09, 2018, the ROC issued a Citation For Alleged Violation of A.R.S. § 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 February 26, 2018.

On February 23, 2018, Respondent, through its attorney, filed its Answer with the ROC. Respondent argued that the monies owed to Complainant were not yet “due,” and that even if they were, Respondent was insolvent and lacked the “capacity to pay.” Respondent reasoned that it had not “received sufficient monies as payments for the particular construction work project or operation for which the services or materials were rendered or purchased.” Respondent did not provide any further documentation or evidence to substantiate its position.

Because Respondent contested the charged complaint, the ROC referred this matter to the Office of Administrative Hearings on March 12, 2018, an independent state agency, and issued a Notice of Hearing for an evidentiary hearing on June 04, 2018, to determine the validity of the contested charge.

The ROC affirmed in the Notice of Hearing that it declined to send a witness from the agency to testify.

Neither party requested an informal Settlement Conference in this matter.

Additional Evidence

Sometime in February 2018, Respondent informed Complainant that it did not have the ability to pay its debt in full because it was waiting on payment from customers to bring their legers current and pay them.

Complainant contacted several of Respondent’s customers to inquire about the validity of Respondent’s allegation. Complainant was able to reach a few of them and in each instance was informed that the customer had paid Respondent.

Shortly thereafter, Complainant received a Cease and Desist letter from Respondent’s attorney, demanding that Complainant cease contact with any and all of Respondent’s customers.

In March of 2018, Respondent, through its attorney, offered Complainant a Settlement Agreement, whereby it would repay its debt in installments over the course of approximately twelve months. Respondent declined.

In April of 2018, Respondent, through its attorney, again offered Complainant a Settlement Agreement, whereby it would repay its debt in installments. Again, Respondent declined.

Complainant testified that he declined Respondent’s installment payments offers because he believed that the offers to pay came after he had filed his ROC complaint, and that if he accepted anything less than the full amount owed from Respondent and Respondent failed to pay, that he would have to file a new complaint with the ROC, effectively starting the process over.

Complainant further testified that on May 31, 2018, he learned that Respondent was sold. Respondent advised Complainant that its debt was included in the Bill of Sale to the new owners of the company.

Per Respondent’s Bill of Sale, escrow closed on April 25, 2018. Lee Freeman and Kim Eaton are listed as purchasing members. Per the purchase agreement, from the close of escrow onward, the company will operate under the name Vision Glass, LLC. Mr. Vucson will not be involved with Vision Glass, LLC in any capacity.

Complainant testified that on June 01, 2018, he received conflicting information from Vision Glass, LLC regarding the $25,639.94 debt owed by Respondent. First, Lee Freeman told Complainant that Vision Glass, LLC was aware of the debt and would remit payment, but was unaware when remittance would occur. That same day, Complainant was informed by Kim Eaton that Vision Glass, LLC had no intention of ever paying Respondent’s debt to Complainant.

Respondent testified that it was indebted to Complainant and had owed $25,639.94, but that it was no longer liable because the debt was included in the company’s sale to Vision Glass, LLC on April 25, 2018.

Respondent did not present any evidence to substantiate the arguments from its Answer that payments were not due when the invoices were issued, or that the business was financially insolvent when it received each of the invoices at issue or Complainant’s demand letter for payment in full.

Respondent further testified that he cancelled License No 283819 with the ROC on June 01, 2018.

The Tribunal was notified on June 01, 2018, that Respondent’s attorney terminated representation on May 24, 2018.

Upon review, the available credible evidence establishes that Complainant is owed the sum total of $25,639.94 for services and/or materials provided to Respondent under License No 283819. However, Respondent’s affirmative defense of assumed liability has merit, as the record reflects that Vision Glass, LLC is liable for the debt owed to Complainant.

Regardless of whether Respondent is the current owner of Frameless Glass, LLC or the current holder of License No 283819 the record reflects that, Mr. Vucson committed a violation of Ariz. Rev. Stat. § 32-1154(A)(10) from October 18, 2017, through January 02, 2018, when he failed to pay for services and/or products rendered by Complainant, per their agreement.

Administrative notice is taken of Respondent’s license record as reflected on the ROC’s public website as of June 04, 2018. The record reflects that Respondent’s License No. 283819 has not previously been issued formal discipline by the ROC, but it does show that there is one open complaint against Respondent’s license, presumably by Complainant.

CONCLUSIONS OF LAW

The ROC has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A).

The ROC bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

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.

In the present case, Respondent has conceded that Complainant is owed $25,639.94 for services and/or materials provided to Respondent, while respondent was operating under License No 283819 as Frameless Glass, LLC.

Therefore, Complainant established cause for the ROC to suspend or revoke Respondent’s contractor’s license under Ariz. Rev. Stat. §§ 32-1154(A)(10), 32-1154(A)(12), and Ariz. Admin. Code R4-9-131(5) and R4-9-131(9).

However, because Respondent established that his business was sold on April 25, 2018, and that it is more likely than not that the $25,639.94 owed to Complainant is a part of the $85,000.00 listed in the Bill of Sale as an assumption of accounts payable, Respondent has established an affirmative defense that bars this Tribunal from requiring Respondent to remit the debt owed to Complainant.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that on the effective date of the final order in this matter, Respondent Frameless Glass LLC, License No: 283819 shall be revoked pursuant to Ariz. Rev. Stat. § 32-1154(A)(10).

IT IS FURTHER RECOMMENDED that Ronald Vucson be prohibited from joining license numbers 181559 or 218610 as a Qualified Party/Member under E Built Contracting, LLC or Vision Glass, LLC.

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, June 08, 2018

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors