ALJDEC - Licensing
2022A-10302-NPC-ROC · Registrar of Contractors · 2023-02-15
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Sunstate Equipment Co., LLC,
COMPLAINANT
v.
Spear E Enterprises LLC
DBA: Spear E Contracting
License No. ROC 323271,
RESPONDENT
No. 2022A-10302-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: January 26, 2023, 9:00 A.M.
APPEARANCES: John D. Parker, II, Esq., appeared on behalf of Complainant; Misty Smart appeared on behalf of Respondent
ADMINISTRATIVE LAW JUDGE: Roger A. Geddes
_____________________________________________________________________
FINDINGS OF FACT
Background and Procedure
1. Spear E Enterprises, LLC (Respondent), is the holder of License Number 323271 issued by the Registrar of Contractors (Registrar).
2. On or about November 7, 2022, Sunstate Equipment Co., LLC (Complainant), filed a Complaint against Respondent with the Registrar alleging that Respondent owed Complainant the principal sum of $4,482.55 for the unpaid amount of rental of backhoe equipment from Complainant.
3. The Complaint stated that amount represented the unpaid sum on a Default Judgment rendered in connection Complainant’s renting of equipment to Respondent.
4. On November 23, 2022, the Registrar issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) for the alleged failure by Respondent to pay monies in excess of $750.00 when due for materials or services rendered in connection with Respondent’s operations as a contractor.
5. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing which was noticed to be held on January 26, 2023, at 9:00 A.M.
6. At the January 26, 2023, hearing, Complainant presented the testimony of John D. Parker, II, Esq.; Respondent presented the testimony of Missy Smart, Office Manager of Respondent. Tribunal received and admitted Complainant’s exhibit numbers 1 - 10. No exhibits were submitted on behalf of Respondent.
7. John D. Parker, II, Esq., testified on behalf of Complainant, as herein relevant to the Citation, that Complainant obtained a Default Judgment on August 24, 2021, against Respondent in the Superior Court of the State of Arizona, County of Maricopa, in the principal sum of $10,131.77, with interest accruing at a rate of 18%. (Complainant’s Exhibit No. 1). The Judgment also included an award of attorney’s fees in the amount of $1,332.50. He further testified that Complainant and Respondent entered into a payment plan for $1,500.00 per month beginning February 15, 2022, under a Covenant Not to Execute. (Complainant’s Exhibit No. 9). An accounting provided by Mr. Parker reflected an original principal balance in the amount of $10,131.77. After paying $9,000.00 in total installments, Respondent had not made any further payment since August 15, 2022. (Complainant’s Exhibit No. 10).
8. Misty Smart testified on behalf of Respondent, as herein relevant to the Citation, that she did not dispute that a sum is still due on the installment payment agreement reached between Complainant and Respondent under the Covenant Not to Compete. She further testified that Respondent (nor any of its employees) did not deliver, use, or operate the equipment; rather the equipment was rented by Respondent on behalf of a church for a community volunteer project to help clean up homes of widows and that it was other individuals that used the equipment. She indicated the church had agreed to reimburse Respondent, but had failed to do so.
9. Administrative notice is taken of the Registrar’s public website which reflects a “Suspended” status of Respondent’s license status as of February 1, 2023, due to non-renewal.
CONCLUSIONS OF LAW
1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154.
2. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119.
3. The suspension status of Respondent’s license does not deprive Complainant of its right to prosecute its complaint against Respondent or prevent the Registrar from determining the merits of Complainant’s complaint. See A.R.S. § 32-1154(C) (“The expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . .”).
4. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” BLACK’S LAW DICTIONARY 1182 (Rev. 6th ed. 1990).
5. A.R.S. § 32-1154(A)(10) included among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license:
[f]ailure by a licensee or agent or official of a licensee to pay monies in excess of $750 when due for materials or services rendered in connection with the licensee’s operations as a contractor unless the licensee proves that the licensee lacks the capacity to pay and has not received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.
6. A.R.S. § 32-1154(A)(10). Complainant has not satisfied its burden to demonstrate that Respondent has failed to pay Complainant any sum that had become due for materials or services rendered in connection with Respondent’s operations as a contractor. There is no dispute that Respondent owes the balance due under the Default Judgment or Covenant Not to Execute for material or services. However, the evidence reflects that the obligation owed by Respondent was not a failure to pay monies when due for material or services that were “rendered in connection with the licensee’s operation as a contractor....” Respondent rented the equipment but did not use the equipment in connection with its license. Indeed, the evidence reflected that Respondent or its employees did not even use the equipment at all, nor had they intended to, and there was no evidence presented to the contrary. Respondent’s role in this matter apparently was solely to use its credit account with Complainant to rent the equipment for church volunteers to clean homes and Respondent did not participate in the use of the equipment. Accordingly, Respondent’s obligation did not arise in connection with its operation as a contractor.
7. Respondent did not contend nor did it present any evidence that it lacked the capacity to pay Complainant or that it had not received sufficient monies as payment for the project for which Complainant’s services were rendered.
RECOMMENDED ORDER
Based on the foregoing, it is recommended that on the effective date of this Order, that the Citation and the Complaint in this matter be dismissed.
Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.
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 will be forty (40) days from the date of that certification.
Done this day, February 15, 2023.
/s/ Roger Geddes
Administrative Law Judge
Transmitted electronically to:
Martín Quezada, Director
Registrar of Contractors
Complainant’s Attorney
John D. Parker II, Esq.
11801 N. Tatum Blvd Ste. 229
Phoenix, AZ 85028
[email redacted]
Spear E Enterprises LLC
DBA: Spear E Contracting
5606 S. Stockton Rd.
Safford, AZ 85546
[email redacted]
By: OAH Staff