ALJDEC decisions subject to certification as final

2022A-07960-NPC-ROC · Registrar of Contractors · 2022-12-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

John and M J Masonry, LLC

COMPLAINANT,

KYBA Building Group, LLC

License No. ROC 298917,

RESPONDENT.

No. 2022A-07960-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: November 30, 2022

APPEARANCES: Oscar Galindo appeared on behalf of Complainant John and M J Masonry, LLC (Complainant). Juan Cholula appeared on behalf of Respondent KYBA Building Group, LLC (Respondent).

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

1. On October 28, 2022, the Arizona Registrar of Contractors (ROC or Registrar) issued a Notice of Hearing setting the above-captioned matter for hearing on November 30 2022, by the Office of Administrative Hearings.

2. The Notice of Hearing shows that the hearing was set to consider the charges made in the Citation and Complaint.

3. Through the Citation, the ROC alleges that Respondent may have violated Ariz. Rev. Stat. section 32-1154(A)(10). The Citation shows that if the Administrative Law Judge finds that any of the alleged charges are valid, the ROC may suspend or revoke Respondent’s license.

4. Respondent holds license 298917 issued by the ROC.

5. Juan Cholula owns Complainant.

6. Oscar Galindo owns Respondent.

7. Complainant and Respondent entered into a contract wherein Complainant would install a block fence with two gates for Respondent.

8. Complainant issued an invoice to Respondent for the construction work that included the following charges: $700 for a 4 x 6 metal gate, $1,700 for a 12 x 6 metal gate, $9,600 deposit for labor and material, including a $4,800 deposit.

9. On June 6, 2022, Complainant issued an invoice to Respondent that included the following charges: $1,500 for a 10 x 6 gate, 700 for a 4 x 6 gate, and $9,600 for labor and material, including a $4,800 deposit. See the Registrar’s administrative record, pg. 23.

10. On July 2, 2022, Mr. Galindo and Mr. Cholula signed a written document wherein Respondent agreed to pay Complainant $9,600 for the installation of a fence block and gates. See the Registrar’s Administrative Record, pg. 22. The agreement shows that Complainant paid Respondent a deposit of $4,800, and the remaining balance was due to Complainant upon completion of the fence block and gates. See id.

11. Mr. Galindo told Mr. Cholula that final payment would be subject to approval from a third party.

12. Complainant installed the fence block and gates.

13. After Complainant completed construction, and before the construction was approved by a third party, Mr. Galindo gave a check to Mr. Cholula for the amount of $6,800. Mr. Galindo told Mr. Cholula to wait 2-3 days before depositing the check and to call Mr. Galindo prior making the deposit.

14. Mr. Cholula waited two weeks to deposit the check. However, the funds were not available.

15. On or about September 12, 2022, the Arizona Registrar of Contractors (ROC or Registrar) received a complaint from Complainant alleging that Respondent failed to pay monies in excess of $750 when due for materials and services rendered in connection with Respondent’s work as a contractor.

16. On September 12, 2022, Mr. Cholula removed the gates from the construction site. See the ROC’s administrative record, pg. 18.

17. On September 27, 2022, the ROC issued a Citation against Respondent alleging that Respondent had violated Arizona Revised Statutes (A.R.S.) § 32-1154(A)(10).

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

19. A hearing was held on November 30, 2022.

20. At hearing, Mr. Cholula testified on behalf of Complainant. Mr. Galindo testified on behalf of Respondent.

21. At hearing, Mr. Cholula acknowledged that Mr. Galindo told him that

final payment was subject to approval and funding through a third party.

22. Respondent did not provide any written evidence that he lacked capacity to pay Complainant.

23. Based on the evidence presented at hearing, the Administrative Law Judge concludes that the preponderance of the evidence shows that Complainant was owed the remaining balance in the amount of at least $4,800 at the time that he completed construction of the block fence and gates. However, because Complainant has removed the gates, it is not appropriate to require Respondent to pay the remaining balance.

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).

The Administrative Law Judge may consider the ROC’s administrative

record. See A.A.C. R4-9-118.

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).

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. The preponderance of the evidence shows that at the time that

Complainant filed the complaint, Respondent had violated of A.R.S. § 32-1154(A)(10).

10. However, the balance of the contract is no longer due because the installation of gates was a condition precedent to payment under the contract and

Mr. Cholula has removed and is in possession of the gates.

11. Therefore, it is not appropriate to require Respondent to pay the remaining balance.

RECOMMENDed order

In view of the foregoing, it is recommended that this matter be dismissed.

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, December 19, 2022.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham

Registrar of Contractors

c/o Legal Department

1700 W. Washington Street, Suite 105

Phoenix, AZ 85007

[email redacted]

KYBA Building Group, LLC

727 E. Portland St. Apt. 22

Phoenix, AZ 85006

[email redacted]

John and M J Masonry, LLC

37251 N. 19th Ave.

Phoenix, AZ 85086

By Miranda Alvarez

Legal Secretary

-54864001

001

-137160-45720000