ALJDEC decisions subject to certification as final

2019A-00505-ROC · Registrar of Contractors · 2019-06-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 3, 2019 APPEARANCES: Carl Wilkens, Complainant, Edward Marko, Esq., attorney for the Complainant. ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

FINDINGS OF FACT On, September 11, 2017, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC 315229, Class B-1 for residential general contracting to Respondent MIO Specialty Contractors LLC [hereinafter, “MIO”][1] MIO’s current address of record with the Registrar is 3217 East Shea Blvd., Suite 211, Phoenix, Arizona 85028.[2] On November 2, 1972, the Registrar issued License Number ROC 036936, a General Residential B General Residential class license to Complainant Ralph Wilkens Company Inc. [hereinafter, “Wilkens”].[3] On January 31, 2019, Wilkens filed a Written Complaint with the Arizona Registrar of Contractors.[4] The Written Complaint charges MIO with the commission of an act or acts that would, if proven, be cause for the suspension or revocation of MIO’s license under A.R.S.§1154(A)(10).[5] Wilkens’ Complaint alleges that MIO owes Wilkens $5,900.00 for its performance of a subcontract to “furnish and install (1) series 511 sectional door (1) series 592” garage doors[6] at Tint World of Chandler, in Chandler, Arizona.[7] The amount is past due and owing. The Registrar referred the Complaint to MIO for its immediate attention. On February 11, 2019, the Registrar issued a Citation against MIO’s license charging a violation of A.R.S. § 32-1154(A)(10). The Registrar mailed a copy of the Citation and Complaint to MIO at its address of record provided by MIO to the Registrar of 3217 East Shea Blvd., Suite 211, Phoenix, Arizona 85028. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, to schedule and to conduct a fair hearing. On February 19, 2019, the Registrar issued a Notice of Hearing on Wilkens’ Complaint. Hearing was continued on Motion of MIO until June 3, 2019 by Order of the undersigned ALJ. The Order setting the June 3, 2019 hearing was mailed MIO at its address of record with the Registrar of 3217 East Shea Blvd., Suite 211, Phoenix, Arizona 85028. A hearing was held on June 3, 2019 at 1:00 p.m. Although the beginning of the duly noticed hearing was delayed twenty- five minutes to allow MIO reasonable additional travel time as might be necessary, MIO did not appear through an authorized member, employee, or attorney and did not contact the Office of Administrative Hearings to request a continuance or that the time for the hearing be further delayed. MIO presented no evidence at the hearing to defend its license. Wilkens presented the testimony of its Qualifying Party, Carl Wilkens, and submitted the exhibits that were attached to its Complaint.[8] Wilkens submitted its unpaid Invoice for the MIO project for the work done.[9] Mr. Wilkens testified that Wilkens is a licensed Arizona contractor. He stated that his company completed the MIO work for which it was contracted. When the work was completed, Wilkens provided MIO with an Invoice to MIO for the contracted amount of $5,900.00. Mr. Wilkins testified that upon his information and belief, Tint World of Chandler paid MIO for Wilkens’ work but MIO kept the money Mr. Wilkens’ testified that, although the amounts had been long overdue for payment pursuant to the terms of the parties’ contract, MIO has failed and refused payment of balance due and owing. A review of MIO’s disciplinary record of the Registrar discloses that MIO’s contractors license was previously administratively suspended and that MIO has been disciplined once before arising out of a Complaint. MIO’s license is currently under disciplinary suspension for another failure to pay Citation and Complaint. Five Complaints are pending currently. That MIO failed to appear at hearing in this matter along with the disciplinary record of MIO are aggravating circumstances. There are no mitigating circumstances presented.

CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[10] The notice of the hearing that the Registrar mailed to MIO at its address of record was reasonable and MIO is deemed to have received the Notice of Hearing.[11] Wilkens bears the burden of proof and must establish MIO’s contracting law violations by a preponderance of the evidence.[12] MIO bears the burden to establish affirmative defenses by the same evidentiary standard.[13] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[14] 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.”[15] A.R.S. § 32-1154(A)(11) 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.” A general contractor’s inability to pay and nonpayment by the owner on a project are affirmative defenses that the general contractor bears the burden to prove in a subcontractor’s administrative complaint under A.R.S. § 32-1154(A)(11). MIO has never disputed that it owes Wilkens for its work pursuant to the parties’ subcontracts. MIO did not present any evidence to establish the affirmative defenses of its inability to pay or of the owner’s failure to pay. 8. Wilkens therefore has borne its burden to establish that MIO violated A.R.S. § 32-1154(A) (11)[16] by failing to pay Wilkens $5,900.00, the total of the invoice set forth above. The suspended status of MIO’s license does not preclude Wilkens from pursuing its administrative remedy nor does it preclude the Registrar from conducting these disciplinary proceedings.[17] If MIO fails to comply with any condition that the Registrar sees fit to include in his final Decision and Order in this matter, its suspended license will be revoked. If the Registrar accepts this recommendation and, as a result of MIO’s failure to comply with the Registrar’s final decision in this matter, the Registrar revokes MIO’s license, in due course the revocation will lead to revocation of any other license on which MIO or and any person or entity that are listed of record with the Registrar on the license[18] and will prevent any new license from being issued to them or to any entity for which they are members, officers, or qualifying parties.[19]

RECOMMENDED ORDER Based on the contracting law violation proven in this matter, IT IS RECOMMENDED that, on the effective date of the final order in this matter, the Registrar of Contractors suspend MIO Specialty Contractors LLC, License Number ROC 315229 previously issued to MIO. IT IS FURTHER RECOMMENDED that, if on or before the effective date of the order, the Registrar receives proof from MIO that it has paid $5,900.00 to Complainant Ralph Wilkens Company Inc., by cashier’s or certified check, the Registrar should not suspend MIO’s license but, instead, should close the complaint in Case No. 2019A-00505-ROC. FURTHER IT IS RECOMMENDED that if MIO fails on or before the effective date of the order to provide sufficient proof to the Registrar that MIO has paid $5,900.00 to Ralph Wilkens Company Inc., by cashier’s or certified check, then MIO Specialty Contractors LLC, License Number ROC 315229 shall, without further order or action by the Registrar, be revoked. If the Director of the Office of Administrative Hearings certifies this Administrative Law Judge Decision, the effective date of the order will be forty days from the date of certification. Done this day, June 4, 2019. /s/ Randolph D. Wolfson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Administrative Judicial Notice is taken of the entirety of the Registrar’s physical and electronic records in this matter, including, but not limited to information displayed on the Registrar’s Public Access Website [2] See, ROC Public Access Website for MIO’s license number ROC 315229. [3] See, ROC Public Access Website for MIO’s license number ROC 227712. [4] Agency Record, pages 19 and 20. [5] A.R.S.1154(A)(10): “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 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.” [6] Complainant Exhibit B, “Contract P041801.” [7] See, “Complaint,” Agency Record, pages 19-26. [8] See, Agency Record, pages 19-31. [9] See, Agency Record, page 21. [10] See 32-1101 et seq. [11] See A.R.S. §§ 41-1092.04; 41-1092.05(D). It is noted that there isn’t any doubt that MIO received its Notice of Hearing at its address of record since MIO moved for and was granted a continuance of the initially set hearing date. The initial Notice of Hearing was Notice was sent to MIO’s address of record as was this ALJ’s Minute Entry continuing the initially set hearing [12] 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). [13] See A.A.C. R2-19-119(B)(2). [14] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [15] Black’s Law Dictionary at page 1220 (8th ed. 1999). [16] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” [17] See A.R.S. § 32-1154(C). [18] See A.R.S. § 32-1154(A)(21). [19] See A.R.S. § 32-1122(E).

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