ALJDEC decisions subject to certification as final

2021A-06613-NPC-ROC · Registrar of Contractors · 2022-03-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Creative Concepts Remodeling &

Restoration LLC,

COMPLAINANT,

v.

Henry Zipf Realty Co. LLC

ROC License No. 328494,

RESPONDENT.

No. 2021A-06613-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 04, 2022 at 9:00 AM.

APPEARANCES: Gaciel Cruz Martinez appeared on behalf of Creative Concepts Remodeling & Restoration LLC (“Complainant”). Henry Zipf appeared on behalf of Henry Zipf Realty Co LLC (“Respondent”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Arizona Registrar of Contractors (“Registrar”).

FINDINGS OF FACT

Background and Procedure

On April 15, 2020, the Registrar issued ROC License No. 328494 for General Small Commercial B-2 contracting to Respondent. Henry King Zipf is listed on the license as the Qualifying Party/Manager. The address of record for the license is 6354 N. Vuelta Tajo Tucson, AZ 85718.

Pursuant to Arizona Administrative Code (“Ariz. Admin. Code”) R4-9-117, Administrative Notice is taken of Respondent’s license files as shown on the Registrar’s public website. Regarding ROC License No. 328494, such prior license record reflects that Respondent’s license is active and renewed through April 30, 2022. The license has not been previously disciplined and no prior complaints have been resolved or otherwise settled on the license. However, the record reflects that there is one open complaint against the license, which is presumed to be related to this matter. Respondent has an active $5,000.00 surety bond for the license issued through RLI Insurance Company, effective April 13, 2020.

On December 10, 2021, the Registrar received a complaint from Complainant alleging nonpayment of services against Respondent. Specifically, Complainant alleged that Respondent had failed to remit timely payments on two (2) invoices and owed Complainant an outstanding balance of $1,800.00 as a result. The Registrar designated it Complaint No. 2021-06613 and assigned the case to Kyle Nelson in its legal department for investigation.

On December 17, 2021, the Registrar issued a Notice of No Pay Complaint letter to Respondent providing notice of Complainant’s complaint, and informed Respondent that it was free to raise any affirmative defense(s) or provide additional information by December 24, 2021.

Respondent did not provide a response to the Registrar.

On December 28, 2021, the Registrar issued a Citation to Respondent for an alleged violation of Arizona Revised Statutes (“Ariz. Rev. Stat.”) § 32-1154(A)(10). Respondent was notified that a failure to provide an Answer by January 12, 2022, 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 11, 2022, the Registrar received Respondent’s timely Answer. In its Answer Respondent alleged, in pertinent parts, that Complainant owed Mr. Zipf “reimbursement monies for work that had been done over again by a licensed plumber,” for the reinstallation of a shower stall and plumbing fixtures. Respondent also accused Complainant’s license of becoming inactive during the underlying project. Respondent opined that because Complainant owed Mr. Zipf “several thousand dollars” and knew “it would be impossible to collect [the money]” owed, and because Complainant had been allegedly overpaid on another project, that Respondent was within its rights to withhold funds as a chargeback.

On January 21, 2022, this matter was referred to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 04, 2022. 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:

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

Hearing Evidence

Complainant called Gaciel Cruz Martinez, Owner, to testify. Respondent called Henry Zipf, Owner, to testify. The Notice of Hearing and Registrar’s agency file were also admitted into the record as their own exhibits. The substantive facts of record are as follows:

Complainant performed subcontracting work for Respondent on two (2) projects in 2021. The parties did not have written agreements for either project, or memorialize the terms in writing after entering into the agreements. The parties stipulate to the following:

In or around early-July 2021, Respondent was the general contractor on a residential project located at 2341 E. 5th St. Tucson, AZ 85719. Respondent hired Complainant to perform unspecified work on the project.

On an unknown date Complainant advised Respondent that Mr. Zipf owed Mr. Martinez $650.00 for Complainant’s work at the 2341 E. 5th St. Tucson, AZ 85719 project.

In or around mid-November 2021, Respondent was the general contractor on a residential project located at 2445 N. Tucson Blvd. Tucson, AZ 85716. Respondent hired Complainant to perform drywall and durock work on the project.

On November 19, 2021, Respondent approved Complainant’s work.

On November 21, 2021, Complainant issued Invoice INV-26 for $1,150.00 to Respondent for Mr. Martinez’s completed portion of the work.

On July 28, 2021, MacInnis Plumbing LLC (ROC License No. 306539), issued Respondent Invoice 7766 for $859.50 for work performed at 2341 E. 5th St. Tucson, AZ 85719 to allegedly correct work performed by Mr. Martinez and/or repair damage caused by Mr. Martinez’s workmanship.

Mr. Zipf did not keep any accounting records for his professional agreements with Mr. Martinez, and admitted that he could owe outstanding monies based on his inability to reconcile payable.

Both parties declined to provide closing arguments.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction and has been properly brought before OAH for adjudication.

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

The Registrar 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.

The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar 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 Registrar as well.

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.

Here, the relevant and credible evidence of record establishes by a preponderance of the evidence that Respondent owes Complainant $1,150.00 for work completed at the 2445 N. Tucson Blvd. Tucson, AZ 85716 project that Respondent approved in November 2021. The record clearly reflects that there was a thoughtful exchange regarding the terms of the agreement, that Complainant completed the work, and that Complainant supplied Respondent with an invoice for payment upon completion of said work. There is not sufficient evidence in the record, however, to conclude that Respondent owes Complainant an additional $650.00 for work allegedly completed at the 2341 E. 5th St. Tucson, AZ 85719 project. Complainant failed to provide an indicia of evidence to support the specific scope and terms of the contract, completion of work, or proof that Respondent was ever provided an invoice or advised that payment was due.

Therefore, the only issue remaining is whether Respondent raised a sufficient justification or excuse for failing to issue payment to Complainant on the November 2021 project. This is an affirmative defense that Respondent bears the burden to establish. During his testimony, Mr. Zipf only addressed Mr. Martinez’s alleged subpar work in July 2021, and made no mention of the work Complainant completed in November 2021. Moreover, Mr. Zipf admitted that he could owe Complainant outstanding monies, as he did not possess an accounting of his agreements with Mr. Martinez. Thus, it cannot be held that Respondent sustained its burden of persuasion. Specifically regarding the November 2021 project, Respondent failed to promptly and completely pay Complainant for labor and/or materials on this project, and had no affirmative defense(s) for doing so.

An outstanding amount of $1,150.00 is owed.

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 Henry Zipf Realty Co. LLC, ROC License No. 328494, shall be suspended until Respondent provides the Registrar with proof that $1,150.00 has been tendered to Complainant in certified funds as restitution.

IT IS FURTHER RECOMMENDED that after the Registrar has received Respondent’s proof of payment to Complainant, Complaint 2021-06613 shall 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 23, 2022.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors