ALJDEC - Licensing

2022A-11265-NPC-ROC · Registrar of Contractors · 2023-03-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

RITE NOW CONSTRUCTION LLC,

COMPLAINANT,

M S Square Construction LLC

ROC License No. 139324,

RESPONDENT.

No. 2022A-11265-NPC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: March 10, 2023 at 1:00 PM.

APPEARANCES: Stephen Craig appeared on behalf of Rite Now Construction LLS (“Complainant”). Michael Smith appeared on behalf of M S Square Construction LLC (“Respondent”) with Christopher Smith as a witness.

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

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. 139324, such prior license record reflects that on October 06, 1998, the Registrar issued ROC License No. 139324 for General Commercial B-1 contracting to Respondent. Michael Herbert Smith is listed on the license as the Member. The address of record for the license is 4332 W. Greenway Rd. Glendale, Arizona 85306. Respondent’s license is active and renewed through October 31, 2024. 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; one of which is presumed to be related to this matter. Respondent has an active $40,000.00 surety bond for the license issued through Surety Bonding Company of America, effective March 01, 2009.

On an unknown date, the Registrar received a complaint from Complainant alleging nonpayment of wages against Respondent. Specifically, Complainant alleged that Respondent had failed to remit $8,000.00 in wages to Stephen Craig for work performed for Respondent in October 2022.

On December 22, 2022, 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 29, 2022.

On January 02, 2023, Respondent provided a response to the Registrar. Respondent alleged, in pertinent part, as follows:

MS Square Construction has never had a relationship with Rite Now Construction, LLC (Rite Now). Mr. Craig’s statements that he was employed by MS Square Construction are false. Mr. Craig has attempted to fraudulently file an Unemployment Claim against CMS Equity, Inc. among other nefarious actions to besmirch CMS Equity’s reputation.

On January 04, 2023, the Registrar issued a Citation to Respondent for an alleged violation of Arizona Revised Statute (“Ariz. Rev. Stat.”) § 32-1154(A)(10). Respondent was notified that a failure to provide an Answer by January 19, 2023, 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 17, 2023, the Registrar received Respondent’s timely Answer whereby Respondent resubmitted its aforementioned correspondence to the Registrar with a November 17, 2022, Compliance Notice from the City of Scottsdale and approved plans from August 08, 2022.

On January 20, 2023, this matter was referred by the Registrar to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 10, 2023. 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

At the onset of hearing in this matter it was immediately brought to the undersigned’s attention that the crux of the underlying dispute was between an individual and the responding party over an employment-related pay dispute, not between licensed parties disputing payment over contracted labor and/or materials under regulation by the Registrar.

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.

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.”

The material facts of record establish that there is no dispute between Complainant and Respondent, but rather a disagreement between Mr. Craig and Respondent regarding alleged nonpayment of wages.

Therefore, because neither the Registrar nor OAH has the jurisdictional authority to adjudicate employment or pay disputes under Ariz. Rev. Stat. §§ 32-1101 et seq., 32-1154(A)(10), or 41-1092 et seq.,

IT IS ORDERED that because no violation of Ariz. Rev. Stat. § 32-1154(A)(10) exists, Complaint No. 2022-11265 must be dismissed with prejudice per Ariz. Admin. Code R2-19-119(1).

IT IS FURTHER ORDERED that the matter be vacated from OAH’s calendar and remanded to the referring agency for further action, if any, pursuant to Ariz. Admin. Code R2-19-111(4).

Pursuant to Ariz. Rev. Stat. § 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.

-54864001

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-137160-45720000Done this day, March 14, 2023.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically or by mail to:

Martín Quezada, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

M S Square Construction LLC, Respondent

c/o Michael Smith

4332 W. Greenway Rd.

Glendale, AZ 85306

[email redacted]

Rite Now Construction LLC, Complainant

c/o Stephen Craig

10645 N. Tatum Blvd., Ste. C200-460

Phoenix, AZ 85028

[email redacted]

By: OAH Staff-54864001

001

-137160-45720000