FINACT2019A-00142-ROC.pdf

2019A-00142-ROC · Registrar of Contractors · 2019-05-22

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Kerns Plumbing LLC, Case No. 2019-00142 COMPLAINANT, Docket No. 2019A-00142-ROC v. Alexon Design and Landscaping Inc., FINAL ADMINISTRATIVE DECISION DBA: Alexon Design Group, AND ORDER License No. ROC 289045, 289046, 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 July 1, 2019.

Dated May 22, 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 May 22, 2019 to: Respondent Alexon Design and Landscaping Inc DBA: Alexon Design Group 170 S William Dillard Dr Bldg 6 Suite 115 Gilbert, AZ 85233 Complainant Kerns Plumbing LLC King Underground 2630 N Ogden Rd Ste 108 Mesa, AZ 85215 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar

Office of Administrative Hearings Jenna Clark, Administrative Law Judge Case No. 2019-00142/tw

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 5.1.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Kerns Plumbing LLC, No. 2019A-00142-ROC DBA: King Underground COMPLAINANT, ADMINISTRATIVE LAW JUDGE DECISION vs.

Alexon Design and Landscaping Inc., DBA: Alexon Design Group ROC License: ROC 289045, 289046, RESPONDENT.

HEARING: April 16, 2019 at 1:00 PM. APPEARANCES: Jonathan Horowitz appeared on behalf of Kerns Plumbing LLC (“Complainant”) with Daniel Olivas as a witness. No appearance(s) on behalf of Alexon Design and Landscaping Inc. (“Respondent”). 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 Arizona Registrar of Contractors (“ROC”). FINDINGS OF FACT BACKGROUND AND PROCEDURE 1. On January 24, 2014, the ROC issued License No. 289045 for general residential B-5 swimming pool contracting to Respondent.1 On January 24, 2014, the ROC issued License No. 289046 for specialty dual CR-21 hardscaping and irrigation systems contracting to Respondent.2 Respondent’s address of record for the licenses is 170 S William Dillard Dr. Bldg. 6, Suite 115, Gilbert, AZ 85233-5509. Thomas James Wilcoxson is listed on the licenses as Qualifying Party and Owner.

1 See https://roc.az.gov/contractor-search?Id=a0Yt000000ACM52EAH. See https://roc.az.gov/contractor-search?Id=a0Yt000000ACMTyEAP. Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 5.1.2019 ROC LEGAL

2. Administrative Notice is taken of Respondent’s prior License record, for License No. 289045, as reflected on the ROC’s public website on April 16, 2019. Such prior License record reflects that Respondent’s license is currently suspended.3 The

license has was disciplined by the ROC on three prior occasion, and one settlement is

noted on the record as well.4 The record also reflects that there are three open

complaints against Respondent’s license, one of which is presumed to be related to

this matter.5 Respondent has an active $9,000.00 surety bond issued through RLI

Insurance Company effective November 18, 2013.6

3. Administrative Notice is taken of Respondent’s prior License record, for

License No. 289046, as reflected on the ROC’s public website on April 16, 2019. Such

prior License record reflects that Respondent’s license is currently suspended.7 The

license has been disciplined by the ROC on one prior occasion, and settlement is

noted on the record as well.8 The record also reflects that there are no open complaints

against Respondent’s license.9 Respondent has an active $6,750.00 surety bond

issued through RLI Insurance Company effective November 18, 2013.10

4. On or about August 01, 2016, Complainant and Respondent entered into

six different contract agreements, as subcontractor and contractor respectively, whereby Complainant agreed to perform plumbing work on Respondent’s various landscaping projects.11 Complainant issued Invoice 3517 to Respondent on March 03, 2017, for $2,121.80 (after applying a $575.20 credit).12 Complainant issued Invoice 3626 to Respondent on April 10, 2017, for $1,689.55.13 Complainant issued Invoice 3627 to Respondent on April 10, 2017, for $4,451.00.14 Complainant issued Invoice

See https://roc.az.gov/contractor-search?Id=a0Yt000000ACM52EAH. Id. 5 Id. Id. 7 See https://roc.az.gov/contractor-search?Id=a0Yt000000ACMTyEAP. Id. Id. Id. See Hearing File, pages 16-39. See Hearing File, page 17. See Hearing File, page 18. 14 See Hearing File, page 19. RECEIVED 5.1.2019 ROC LEGAL

3707 to Respondent on May 11, 2017, for $495.60 (after applying a $1,422.35).15 Complainant issued Invoice 3875 to Respondent on July 03, 2017, for $1,117.05.16 Complainant issued Invoice 4104 to Respondent on September 25, 2017, for

$125.00.17

5. On January 09, 2019, the ROC received a complaint from Complainant

alleging non-payment of services and/or materials.18 Complainant included a copies of

invoices issued to Respondent and email correspondence between the parties

regarding payment on the related invoices.19

6. On January 15, 2019, the ROC issued a non-payment complaint

notification letter to the parties, advising that Respondent could supply any affirmative

defenses or raise other issues to the ROC by January 23, 2019.20 Respondent did not

respond.

7. On January 24, 2019, the ROC issued a CITATION AND COMPLAINT to

Respondent for an alleged violation of ARIZ. REV. STAT. § 32-1154(A)(10).21

Respondent was given until February 08, 2019, to respond with its ANSWER or face

discipline pursuant to ARIZ. REV. STAT. §§ 32-1155(A) and 32-1155(B).22

8. On February 09, 2019, Respondent submitted an ANSWER to the ROC as follows: “My response is we do not have the money right now to pay the debt. I wish we could, but we do not. I would like a payment plan to be set if possible.”23 9. On February 15, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on April 16, 2019. Per the NOTICE OF HEARING the issue to be determined is whether the ROC has cause to discipline Respondent’s license based on the following charges:

See Hearing File, page 20. 16 See Hearing File, page 21. See Hearing File, page 22. See Hearing File, pages 16. See Hearing File, pages 16-39. See Hearing File, page 50. See Hearing File, pages 6-11. Id. 23 See Hearing File, page 75. RECEIVED 5.1.2019 ROC LEGAL

Charge 1: A violation of A.R.S. § 32-1154(A)(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.”).

HEARING EVIDENCE

10. Jonathan Horowitz and Daniel Olivas testified on behalf of Complainant.

No appearance(s) by or on behalf of Respondent. The ROC’s electronic hearing file

and NOTICE OF HEARING were also admitted into the record as their own exhibits.

11. Complainant and Respondent’s professional relationship spanned the last

ten years, and in that time Respondent had paid Complainant’s invoices within thirty

days of receipt.

12. After several months of nonpayment on issued invoices, Complainant

phoned Respondent to inquire about the delay. Complainant was advised that Respondent was in a “financial bind” due to having to redo work and pay other subcontractors, and could not pay Complainant because they were not on Respondent’s “radar.” At that time Respondent promised to pay Complainant upfront for any additional work.24 After a few months, however, Respondent had failed to keep its promise and Complainant stopped accepting jobs. 13. In total, Respondent owes Complainant $10,000.00 for six invoices issued between March 03, 2017, and September 25, 2017. Respondent was provided with a spreadsheet on November 06, 2018, which detailed its outstanding balanced owed to Complainant25, but no payment by Respondent was made. 14. Complainant completed all jobs related to the underlying invoices for Respondent, and Respondent did not file any complaints regarding Complainant’s work on any of the related projects. CONCLUSIONS OF LAW See Hearing File, pages 28-31. 25 See Hearing File, pages 34-36. RECEIVED 5.1.2019 ROC LEGAL

1. The ROC has jurisdiction over this matter pursuant to ARIZ. REV. STAT. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before the Office of Administrative Hearings pursuant to ARIZ. REV. STAT. §§ 41-1092 et seq.

2. The ROC may resolve contractual disputes if such resolution in ancillary

to its regulatory mission and may penalize a contractor’s license by ordering payment

of restitution if a proven statutory violation was not remedied by corrective action.26

3. The purpose of the ROC’s licensing statutes is to protect the public from

unscrupulous, unqualified, and financially irresponsible contractors.27

4. The NOTICE OF HEARING the ROC mailed to Respondent’s address of

record is sufficient, and Respondent is deemed to have received notice of the hearing

in this matter.28 Because the ROC mailed all correspondence to Respondent in the

same manner and failed to receive any mail returned as undeliverable, Respondent is

deemed to have received all correspondence regarding this matter from the ROC as

well.

5. Complainant bears the burden of proof to establish cause to discipline

Respondent’s license by a preponderance of the evidence.29 Respondent bears the

burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.30 6. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”31 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

26 See ARIZ. REV. STAT. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990). See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). See ARIZ. REV. STAT. §§ 41-1092.04, 41-1092.05(D), and 41-1061(A). ARIZ. REV. STAT. § 41-1092.07(G)(2); ARIZ. ADMIN. CODE R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). See ARIZ. ADMIN. CODE R2-19-119(B)(2). 31 MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). RECEIVED 5.1.2019 ROC LEGAL

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.”32 7. 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 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.”

8. Here, the material facts are not in dispute. The credible evidence of

record reflects that Respondent owes Complainant an outstanding balance of

$10,000.00 on valid subcontracting agreements executed between the parties in 2016

and 2017. Although afforded ample time and opportunity by Complainant, Respondent

failed to make a good-faith payment or set up a payment plan to pay off its debt to

Complainant.

9. Therefore, the only issue remaining is whether Respondent raised a sufficient justification or excuse for failing to timely and completely finish Complainant’s project per contract. This is an affirmative defense that Respondent bears the burden to establish. Because Respondent failed to appear and provide testimony, this burden has not been sustained. Respondent’s absence is a factor in aggravation. The record shows that Respondent failed to promptly and completely pay Complainant for labor and/or materials on six projects, and had no affirmative defense(s) for doing so. 10. Because Complainant established by a preponderance of the evidence that Respondent violated ARIZ. REV. STAT. § 32-1154(A)(10), Complainant has also established cause for the ROC to suspend or revoke Respondent’s contractor’s license. RECOMMENDED ORDER Based on the foregoing findings of fact and conclusions of law, BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). RECEIVED 5.1.2019 ROC LEGAL

IT IS RECOMMENDED that that on the effective date of the FINAL ORDER in this

matter, Respondent Alexon Design and Landscaping Inc., dba Alexon Design Group,

ROC License Nos. ROC 289045 and 289046 shall be revoked.

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

days from the date of that certification.

Done this day, April 29, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors