ALJDEC decisions subject to certification as final

2018A-3724-NPC-ROC · Registrar of Contractors · 2018-11-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 27, 2018, at 1:00 p.m. APPEARANCES: ABC Supply Co. Inc. was represented by Timothy D. Ducar, Esq., Law Offices of Timothy D. Ducar, PLC; Robinson Roofing & Sheet Metal Inc. (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website, on July 7, 2016, the Registrar issued License No. ROC306437, Class CR-42 for dual roofing, to Respondent. Respondent’s current address of record is 1802 W. Grant Rd., Ste. 107, Tucson, AZ 85745-1232. Respondent’s qualifying party/director is Lewie Eugene Robinson, Jr. Complainant is in the business of supplying roof materials to contractors. On August 13, 2018, Complainant filed a complaint with the Registrar against Respondent’s license, alleging that Respondent owed Complainant $589,252.51 for roofing supplies that Complainant provided to Respondent for use in its contracting business pursuant to Respondent’s executed credit agreements. On September 14, 2018, the Registrar issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) against Respondent’s license. The Registrar mailed a copy of the Citation to Respondent at its address of record. Respondent filed a timely written answer to the Citation, denying any violation. The letterhead on Respondent’s answer showed Respondent’s address of record. Mr. Robinson signed the written answer. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent agency, for an evidentiary hearing. On October 26, 2018, the Registrar issued a Notice of Hearing on Complainant’s complaint, setting a hearing on November 27, 2018, at 1:00 p.m. The Registrar sent a copy of the Notice of Hearing via USPS first class mail to Respondent at its address of record. A hearing was held before OAH on November 27, 2018. Respondent did not request to appear telephonically at the duly noticed hearing. Although the beginning of the hearing was delayed 37 minutes, Respondent did not appear through an authorized officer, employee, or attorney and did not contact OAH to request a continuance or that the time for the hearing be further delayed. Consequently, Respondent presented no evidence to defend its license. Complainant called the Administrative Law Judge’s attention to the exhibits attached to its complaint and presented the testimony of Chris Mares, the Branch Manager for its store #124 in Tucson. On March 1, 2007, and June 2, 2014, Mr. Robinson signed Complainant’s credit applications on Respondent’s behalf.[1] Complainant filed a civil complaint against Respondent in Maricopa County Superior Court Case No. CV2017-055378 on or about August 18, 2017, for breach of contract and Mr. Robinson’s personal guarantee of Respondent’s debt to Complainant.[2] On September 15, 2017, Mr. Robinson on behalf of Respondent signed a Covenant Not to Execute upon Judgment and Commercial Security Agreement, acknowledging that he and Respondent owed Complainant $589,252.51.[3] On May 15, 2018, Complainant’s attorney filed an Amended Stipulated Judgment in Maricopa County Superior Court Case No. CV2017-055378, in the principal amount of $589,252.51, signed by Mr. Robinson on behalf of Respondent and Complainant’s attorney on its behalf.[4] Mr. Mares testified Complainant only sells roofing materials to contractors like Respondent to use in their businesses. Complainant does not install roofing materials. Mr. Mares testified that a homeowner who was one of Respondent’s customers paid Complainant directly $15,650.00 for materials, bring the total that Respondent owed to Complainant to $573,602.51. Mr. Mares testified that this amount is principal and does not include interest, fees, or attorney’s fees and that Respondent had not made any other payments. Pursuant to A.A.C. R4-9-117, administrative notice is taken of Respondent’s license history on the Registrar’s public website on this date. Respondent’s contractor’s License No. ROC306437 is active and in good standing, but has been disciplined once. Complainant’s complaint is apparently the only complaint pending against the license. Although Respondent’s license history does not include repeated or egregious past violations, Respondent’s failure to appear at the hearing and the large amount of the debt are considered as factors in aggravation of the penalty. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[5] 2. The notice of the hearing that the Registrar mailed to Respondent at its address of record and the address provided on its written answer to the Citation was reasonable and Respondent is deemed to have received notice of the hearing.[6] 3. Complainant bears the burden of proof to establish Respondent’s contracting law violations by a preponderance of the evidence.[7] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[8] 4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[9] 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.”[10] 5. A.R.S. § 32-1154(A)(10) specifically 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 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. A contractor’s inability to pay and nonpayment by the general contractor or owner on a project are affirmative defenses that the contractor bears the burden to prove in a material supplier’s administrative complaint under A.R.S. § 32-1154(A)(10). Respondent did not present any evidence to establish that it lacks the capacity to pay Complainant and that it has not received payment from the owners or general contractors on all the jobs on which it used roofing materials supplied by Complainant. 7. Complainant therefore has borne its burden to establish that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $573,602.51. 8. If the Respondent’s license is revoked as a result of its proven violation of A.R.S. § 32-1154(A)(10), in due course the revocation will lead to revocation of any other license on which Mr. Robinson may be listed[11] and will prevent any new license from being issued to him or to any entity for which he is a member, director, officer, or qualifying party.[12] RECOMMENDED ORDER Based on the contracting law violation that was proven in this matter, Respondent Robinson Roofing & Sheet Metal Inc.’s License No. ROC306437 shall be revoked thirty days after the effective date of the final order in this matter. If on or before thirty days after the effective date of the order, the Registrar receives documentary proof from Respondent that it has paid $573,602.51 to Complainant ABC Supply Co. Inc. by cashier’s or certified check or otherwise resolved Complainant’s complaint to its satisfaction, the Registrar shall not revoke Respondent’s license but, instead, should close the complaint in Case No. 2018-3724. If the Director of the Office of Administrative Hearings certifies this Administrative Law Judge Decision, the effective date of the order will be five days from the date of certification. Done this day, November 28, 2018.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See the Registrar’s electronic record at Complaint Intake.pdf at 11 and 12. [2] See id. at 7-10. [3] See id. at 17-31. [4] See id. at 3-6. [5] See 32-1101 et seq. [6] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [7] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [8] See A.A.C. R2-19-119(B)(2). [9] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [10] Black’s Law Dictionary at page 1220 (8th ed. 1999). [11] See A.R.S. § 32-1154(A)(21). [12] See A.R.S. § 32-1122(E).

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