ALJDEC decisions subject to certification as final

2022A-01208-NPC-ROC · Registrar of Contractors · 2022-06-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Empire Construction, LLC,

COMPLAINANT.

Method Construction, LLC

License No. ROC 323400,

RESPONDENT.

No. 2022A-01208-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 27, 2022

APPEARANCES: Tim Lucas appeared on behalf of Complainant Empire Construction, LLC. Adrian Wilson appeared on behalf of Method Construction, LLC.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

1. On or about August 26, 2020, Complainant Empire Construction, LLC (Empire) entered into an agreement with Respondent Method Construction, LLC (Method), wherein Empire agreed to provide and install doors, frames, and hardware to Method in connection with Method’s operations as a contractor.

2. Tim Lucas is the qualifying party for Empire.

3. Adrian Wilson is the qualifying party for Method.

4. Empire provided labor and materials as promised under the contract.

5. On December 15, 2020, Empire issued invoices to Method for the following amounts:

$16,429.67

$8,304.62

6. Method failed to pay the invoices.

7. On or about February 11, 2022, Empire filed a complaint with the Arizona Registrar of Contractors (ROC) alleging that Method failed to pay for labor and services provided by Empire pursuant to the August 26, 2020 contract.

8. On March 24, 2020, the ROC issued a Citation against Method’s license. Through the Citation, the ROC alleged that Method may have violated Arizona Revised Statutes (A.R.S.) 32-1154(A)(10).

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

10. A hearing was held on May 27, 2022.

11. At hearing, Mr. Lucas testified on behalf of Empire. Mr. Wilson testified on behalf of Method.

12. At hearing, Mr. Lucas explained that Method failed to pay a total of $24,734.29 when the amount became due under the contract.

13. Mr. Wilson did not dispute that Empire provided the labor and material promised under the contract. Mr. Wilson explained that Method was experiencing a financial difficulty. Mr. Wilson expressed that Method desires to make Empire whole.

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. A.A.C. R2-19-119.

“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.” A.R.S.. § 1-211(B).

The purpose of the ROC’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.

8. 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.”

9. 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.

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

11. Based upon Respondent’s violation of the provisions of A.R.S. § 32-1154(A)(10), grounds exist to impose discipline against Method’s license.

12. Because A.R.S. § 32-1154(A)(10) only includes a licensee’s failure to pay for materials or services rendered in connection with the licensee’s operations as a contractor, not late fees, interest, or other consequential or contractual damages, the Administrative Law Judge does not recommend that Respondent be required to pay late fees as a condition of keeping its contractor’s license in good standing.

RECOMMENDed order

Based on the foregoing, it is recommended that the ROC suspend license number 323400 held by Method Construction, LLC until it has provided to the ROC, and the ROC has accepted, documents that establish that it has paid Complainant $24,734.29 in certified funds.

It is further recommended that when and if the ROC receives and accepts Respondent’s evidence that it has paid Complainant in certified funds, the ROC may close the Complaint in Case No. 2022A-01208.

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 40 days from the date of the certification.

-54864001

001

-137160-45720000Done this day, June 8, 2022.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

By Miranda Alvarez

Legal Secretary