ALJDEC decisions subject to certification as final

2021A-03282-NPC-ROC · Registrar of Contractors · 2021-11-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Gonzalez Electric, Inc.,

COMPLAINANT,

v.

CIM CON LLC

License No. ROC 323600,

RESPONDENT.

No. 2021A-03282-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 8, 2021 with the record open until October 22, 2021.

APPEARANCES: Sergio Gonzalez appeared on behalf of Complainant Gonzalez Electric, Inc. Troy Scott appeared on behalf of Respondent CIM CON, LLC.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

1. Respondent CIM CON, LLC (CIM CON) holds a KA-Dual Engineering contractor’s license. Complainant Gonzalez Electric, Inc.(GE) holds a CR-11 Electrical contractor’s license.

2. Troy Scott is the qualifying party for CIM CON.

3. Sergio Gonzalez is the qualifying party for GE.

4. On July 15, 2021, the Arizona Registrar of Contractors (ROC) received a complaint from GE alleging that CIM CON failed to pay for materials and labor provided to GE at various construction projects. GE alleged that CIM CON did not pay the following invoices:

(1) Invoice #307 $4,725 12/12/2020

(2) Invoice #327 $2,200 2/7/2021

(3) Invoice #331 $1,185.30 3/26/2021

5. On July 29, 2021, the ROC notified CIM CON that it had received a complaint against CIM CON’s license for non-payment of materials or services rendered. The ROC notified CIM CON that it was “free to raise any issue or affirmative defense” to the complaint by “filing a response with the Registrar by August 5, 2021.”

6. On July 26, 2021, Mr. Scott filed a response to the complaint on behalf of CIM CON. Mr. Scott asserted that CIM CON did not have a contract with GE regarding the work performed under Invoices #331 and #327, but rather, GE had entered into its own contracts with the homeowners. Mr. Scott took full responsibility for Invoice #307. See the Registrar’s administrative record, pg. 15.

7. On August 11, 2021, the Registrar issued a Citation to CIM CON.

Through the Citation, the Registrar alleged that CIM CON may have violated Arizona Revised Statutes (A.R.S.) § 32-1154 (A)(10).

8. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.

9. A hearing was held on October 8, 2021.

10. At hearing, Mr. Gonzalez testified on behalf of GE. Mr. Scott testified on behalf of CIM CON.

Invoice #307

11. Mr. Gonzalez asserted that he sent a proposal for Invoice #307 to

Mr. Scott and that Mr. Scott agreed to and signed the proposal. Mr. Gonzalez asserted that Mr. Scott made additional requests after signing the proposal. The Administrative Law Judge afforded Mr. Gonzalez additional time to find the signed proposal. However, Mr. Gonzalez notified the tribunal that he was unable to find copies of the signed proposal.

12. Mr. Scott stated that CIN CON had a verbal agreement with GE. Mr. Scott stated that he asked Mr. Gonzalez if he could perform the work for $3,500 and

Mr. Gonzalez agreed. Mr. Scott stated that he was overbilled.

Invoice #327

13. Mr. Gonzalez testified to the effect that he installed a meter at a residence for CIN CON. The invoice shows that the residence was located in Salome, Arizona.

Mr. Gonzalez asserted that GE’s contract was with CIM CON, not with the homeowner.

14. Mr. Scott testified to the effect that he connected GE with the homeowners, however, GE was required to bill the homeowners directly. Mr. Scott stated that CIM CON provided the trench work, GE installed the meter, and CIM CON backfilled the area. Mr. Scott stated that GE was preparing to give a bid to the homeowner to perform additional work. Mr. Scott stated, “..in the back of my mind,

I thought well that’ll all be included in the rest of the work that he does for the homeowner.” See Mr. Scott’s testimony on the audio record at 11:42 – 12:26 minutes. The homeowner has since passed away.

Invoice #331

15. Mr. Gonzalez asserted that GE provided labor and materials for work that it performed at the home of James Rainhart at Ola Street. Mr. Gonzalez asserted that CIM CON was the general contractor for the project and that GE had a contract with CIM CON. Mr. Gonzalez stated that Mr. Scott told him that he would pay him but his customers were out of town. Mr. Scott dug the trenches, Mr. Gonzalez provided and installed the conduit, and Mr. Scott backfilled the trench.

16. Mr. Scott asserted that CIM CON did not hire GE to perform work at the Rainhart’s home. Mr. Scott stated that one of the homeowners contacted GE to perform the work. Mr. Scott asserted that CIM CON was performing work at the Rhinehart’s home and that CIM CON agreed to dig the trench for the installation of the conduits to help “move the project” along. Mr. Scott asserted that Mr. Gonzalez told him that he had made a payment arrangement with the homeowners. Mr. Scott also stated that the homeowners reported that GE placed the conduits in the wrong location.

17. Mr. Gonzalez denied that GE installed the conduits in the wrong location.

Mr. Gonzalez explained that CIM CON and the homeowner stated specified where they wanted the conduits placed.

18. I find Mr. Gonzalez’s testimony to be credible.

19. Administrative notice is taken of Respondent’s license history. According to the Registrar’s website on November 10, 2021, Respondent’s General Dual KA Dual Engineering was issued on February 15, 2019, and is active. Such prior License record history shows that there is one complaint open against Respondent’s license.

CONCLUSIONS OF 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. Ariz. Admin. Code section R2-19-119.

The Administrative Law Judge may consider ROC’s administrative

record. See A.R.S. § R4-9-118. “At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” A.R.S. § 41-1092.07(G)(2).

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. section 1-211(B).

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

A.R.S. § 32-1154(A) provides that:

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: .... 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.

The Administrative Law Judge may consider Registrar’s administrative record. See Ariz. Admin. Code § R4-9-118.

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.”

10. Payment for “[s]ervices rendered in connection with the licensee’s operations as a contractor” does not include interest, finance charges, lien charges, or other charges that are based solely on contract terms.

11. The preponderance of the evidence shows that CIM CON and GE agreed that GE would provide material and labor for CIM CON in connection with CIM CON’s operations as a contractor, for the total amount of $8,110.30.

12. The preponderance of the evidence shows that Respondent violated A.R.S. § 32-1154(A)(10) as alleged.

ORDER

IT IS ORDERED that on the effective date of the final Order in this matter, License No. ROC 323600 held by CIM CON, LLC is suspended unless the Registrar receives and accepts written verification that CIM CON, LLC has paid to Gonzalez Electric, Inc. $8,110.30 in certified funds.

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, November 10, 2021.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors