ALJDEC decisions subject to certification as final

2019A-02729-NPC-ROC · Registrar of Contractors · 2019-10-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 20, 2019 APPEARANCES: Chad Wold for Complainant Copper Creek Mechanical LLC. William A. Clark for Respondent WM A Clark Construction, Inc. ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn _____________________________________________________________________ FINDINGS OF FACT 1. On May 7, 2019, Complainant filed a Non-Payment Complainant Form against Respondent with the Arizona Registrar of Contractors (“Registrar”) alleging that Respondent had failed to pay Complainant on three invoices: #1330 for $1,753.00, #1507 for $739.50, and #1516 for $9,307.50, resulting in a total amount due of $11,800.00. Complainant attached the subject invoices. 2. On June 4, 2019, Complainant alerted the Registrar to a revised complaint form, alleging a new “Principal Amount Due” of $3,442.50 on Invoice #1330 for $803.00, #1507 for $739.50, and #1516 for $1,900.00. On the attached invoice #1330, Complainant noted that $950.00 payment had been applied, and on attached invoice #1516, Complainant noted that $7,407.50 payment had been applied. 3. Respondent filed its response, indicating that it had cancelled checks demonstrating payments, even overpayments, in regard to the alleged nonpayment of the invoices. 4. There was some confusion as to the invoices, and on June 11, 2019, the Registrar closed the complaint. 5. On July 2, 2019, Complainant apparently renewed the complaint by again supplying the three subject invoices to the Registrar. 6. Respondent sent two responses to the Registrar, one on July 9, 2019 (copied/resent on July 12, 2019) and one on July 15, 2019. Respondent indicated that the “revisions” on the invoices continued to be wrong and unsupported, as Respondent had cancelled checks to demonstrate payment in full. Respondent asked that a hearing date be set. In its email dated July 15, 2019, Respondent detailed its accounts as to the payments on the invoices. 7. On July 17, 2019, the Registrar issued a formal Citation charging Respondent with a possible violation of A.R.S. § 32-1154(A)(10) for the alleged failure by Respondent to pay monies in excess of $750.00 when due for materials or services rendered in connection with Respondent’s operations as a contractor. 8. Respondent filed its answer on August 1, 2019. 9. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing. 10. The parties contracted with each other in connection with several projects, having an ongoing relationship. There is no dispute that Respondent performed construction work for Complainant. 11. At hearing, Complainant’s position was that there were invoice balances going back farther than the complained-of invoices, but also acknowledged that they had only listed three “unpaid” invoices on the complaint and that the others, older invoices, were beyond the two- year limitation period.[1] According to Complainant, it had applied the current payments it had received on these at-issue invoices to older invoices (i.e., invoices not set forth on the complaint). 12. Respondent argued that it was not responsible for the manner in which Complainant applied the current payments to invoices in Complainant’s accounting system and argued, with documentary support, payment had been made to more than cover the invoices for the work performed. 13. Respondent’s documentation of cancelled checks and itemization of payments demonstrated that it has paid the amounts due on the at-issue invoices. CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over this matter pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. Therefore, to warrant such sanctions by the Registrar, a complainant must demonstrate by a preponderance of the evidence that a respondent violated any one of the statutory sections cited by the Registrar. Therefore, Complainant has the burden to demonstrate a violation by Respondent of the contracting laws. 3. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 4. A.R.S. § 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.

Emphasis added here.[2]

5. The evidence established that Complainant was paid on the at-issue invoices. Therefore, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(10) regarding the three at-issue invoices and, further, grounds do not exist to impose discipline against Respondent’s license. RECOMMENDed order Based on the foregoing, it is recommended that the Registrar dismiss Complainant’s Complaint and close Case No. 2019-02729. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five (5) days from the date of the certification. Done this day, October 10, 2019.

/s/ Kay A. Abramsohn Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1154(A), which provides for a two-year limitation period. [2] A.R.S. § 32-1154(A)(10) has recently been amended; the quoted language herein is the statute in effect at the time of the alleged violation.

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