ALJDEC decisions subject to certification as final

2019A-06065-NPC-ROC · Registrar of Contractors · 2020-03-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

VW Dig LLC,

COMPLAINANT

Jarvis Development, LLC,

ROC License: ROC 321436,

RESPONDENT

No. 2019A-06065-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 5, 2020.

APPEARANCES: Jeremy Prahl and Cindy Degrado appeared on behalf of VW Dig LLC, Complainant. Ed Wehring appeared on behalf of Jarvis Development, LLC, Respondent.

ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera.

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

On or about August 27, 1986, the Arizona Registrar of Contractors (Registrar) issued License No. 321436 for General Dual KB-2 Dual Residential and Small Commercial contracting to Respondent. Edwin Walter Wehring is listed as the Qualifying Party and Troy Alan Jarvis is listed as Manager. The address of record for the license is 7704 East Doubletree Ranch Road, #155, Scottsdale, Arizona 85258.

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s license file as shown on the Registrar’s public website March 5, 2020.

Regarding ROC License No. 321436, such prior license record reflects that Respondent’s license is active and currently renewed through August 31, 2020. The license has been previously disciplined on one occasion. The record also reflects that there are two open complaints against the license, one which is presumed to be related to this matter. Respondent has an active $65,000.00 surety bond for the license issued through Western Surety Company, effective August 6, 2018.

On December 9, 2019, the Registrar received a complaint from Complainant alleging nonpayment of services against Respondent. The Registrar designated it Complaint No. 2019-06065 and assigned the case to Doug Ulmer in their legal department for investigation.

On December 27, 2019, the Registrar issued a Citation to Respondent for an alleged violation of Ariz. Rev. Stat § 32-1154(A)(10). Respondent was notified that a failure to provide an Answer by January 11, 2020, would be deemed as an admission of Respondent’s commission of the act(s) charged in the underlying complaint, pursuant to Ariz. Rev. Stat § 32-1155(B), and could result in discipline against Respondent’s license including suspension or revocation.

On January 13, 2020, the Registrar received Respondent’s Answer. In its Answer, Respondent alleged that the investors refused to further fund the project. Respondent made several attempts to agree on new terms but negotiations broke down. Respondent continued to seek funding from other investors to finish the project. Respondent intended to complete the project and bring all contractor’s payments current.

On January 22, 2020, this matter was referred to the Office of Administrative Hearings (OAH), an independent state agency, for an evidentiary hearing on March 5, 2020.

On or about February 3, 2020, the Registrar issued a Notice of Hearing. Per the Notice of Hearing, the issue to be determined is whether the Registrar has cause to discipline Respondent’s license based on the following charge(s) alleged in the Citation and Complaint:

Charge 1: A violation of A.R.S. § 32-1154(A)(10).

Hearing Evidence

Complainant was represented by Jeremy Prahl. He testified on his own behalf and presented the testimony of Cindy Degrado. Respondent was represented by Ed Wehring who testified on his own behalf.

Ms. Degrado testified that Complainant entered into a contract with Respondent on or about June 7, 2019, for the amount of $50,689.89. Complainant made the following payments to Respondent: $4,671.34 was sent on or about September 13, 2019; $43,217.98 was sent on or about October 15, 2019; $5,321.04 was sent on or about December 4, 2019; $8,407.15 was sent on or about April 26, 2019; and $12,370.59 was sent on or about April 26, 2019. Respondent has not received any payments to date. Complainant told Respondent that the investors stopped paying and that was why it could not pay Complainant.

Mr. Prahl testified that Complainant contracted with Respondent to do dry utilities work. Respondent owed Complainant $53,210.36 for services rendered and $5,179.00 for attorneys’ fees as a result of foreclosure.

Mr. Wehring testified that Respondent met with investors to resolve the issues however, the negotiation was unsuccessful. The private investor did not find the project lucrative and did not want to continue the project. The project entailed the development of a subdivision. The other subcontractors on the project were paid by other investors. Mr. Wehring did not know when the private investor stopped paying on the project. Mr. Wehring also did not know if Respondent was able to pay Complainant in full from its own funds. Respondent fully intended to pay all contractors.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction and has been properly brought before the Office of Administrative Hearings for adjudication.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of 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.” 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.”

Statutes should be interpreted to provide a fair and sensible result. Statutes shall be liberally construed to affect their objects and to promote justice.

Ariz. Rev. Stat. § 32-1154(A)(10) holds, in pertinent part, that among the grounds for suspension or revocation of a contractor’s license is a “[f]ailure by [the] 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, 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.”

Ariz. Rev. Stat. § 32-1156.01 states, in pertinent part, that after a hearing an Administrative Law Judge may provide restitution to any person who is injured by an action of a licensee.

The material facts in this case are not in dispute. Complainant and Respondent entered into contract whereby Complainant was to install dry utilities. Complainant presented evidence that Respondent owed Complainant $53,210.36. Complainant argued that while other subcontractors were paid, Complainant was not paid.

The evidence showed that Respondent tried to resolve issues with the private investor as well as attempt to obtain other investors to complete the project but have been unsuccessful. Additionally, Respondent failed to file its Answer prior to the deadline. This was deemed as an admission of Respondent’s commission of the act charged in the Complaint.

Therefore, the only issue remaining is whether Respondent raised a sufficient justification or excuse for failing to issue payment to Complainant on the underlying project. This is an affirmative defense that Respondent bears the burden to establish. Respondent did not provide a sufficient affirmative defense. Thus, Respondent’s burden of proof has not been sustained.

The credible evidence of record shows that Respondent failed to promptly and completely pay Complainant for services rendered and had no affirmative defense(s) for doing so.

Because Complainant established by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10), Complainant also established cause for the Registrar to discipline Respondent’s contractor’s license.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that on the effective date of the Final Order in this matter, Respondent’s, Jarvis Development, LLC, License No. 321436 shall be suspended until Respondent provides the Registrar with proof that $53,210.36 has been tendered to Complainant in certified funds as restitution.

After the Registrar has received Respondent’s proof of payment to Complainant, Complaint 2019-06065 may be closed.

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, March 25, 2020.

/s/ Antara Nath Rivera

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

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