ALJDEC - Licensing

2023A-00453-NPC-ROC · Registrar of Contractors · 2023-05-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

The Sherwin Williams Company,

COMPLAINANT,

Millan's Painting LLC,

License No. ROC 331403,

RESPONDENT.

No. 2023A-00453-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 20, 2023, with record held open until May 1, 2023.

APPEARANCES: Attorney James B. Reed for The Sherwin Williams Company (Complainant). Jose Millan for Millan’s Painting LLC (Respondent).

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

_____________________________________________________________________

FINDINGS OF FACT

1. On or about January 11, 2021, Complainant entered into a credit agreement with Respondent regarding payment for supplies purchased.

2. Over time, Respondent purchased supplies for the various projects on which it was performing its contracting services and was paying on invoices up until August of 2022 for invoices dated in June of 2022. Financial difficulties have arisen and Respondent has not been paying multiple invoices since that time period.

3. Complainant documents $111,720.03 in invoices that are unpaid.

4. On or about January 9, 2023, Complainant filed a complaint with the Arizona Registrar of Contractors (ROC) alleging that Respondent has failed to pay for materials provided by Complainant.

5. On January 30, 2023, the ROC issued a Citation against Respondent’s license. Through the Citation, the ROC alleged that Method may have violated Arizona Revised Statutes (A.R.S.) § 32-1154(A)(10).

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

7. At hearing, Complainant’s Financial Analyst testified regarding the unpaid invoices, verifying the account balance.

8. At hearing, Respondent acknowledged the unpaid balances but also provided specific details regarding the invoices for Mandalay Homes (direct and on the shop account) and for Mountain Gate (a Mandalay project) for which Respondent had not been paid by that General contractor. Those amounts total $69,152.79.

9. Respondent is still a working entity and would like to be able to make payments to Complainant on the unpaid invoices.

10. Complainant did not dispute that the $69,152.79 yet owed to Respondent by the general contractor could not be the basis for a license suspension under A.R.S. § 32-1154(A)(10). Complainant demonstrated that $42,567.24 in unpaid invoices by Respondent can appropriately be the basis for a license suspension under A.R.S. § 32-1154(A)(10).

11. On review of the ROC license records, Respondent’s license is currently active and the instant case is the only open case for Respondent.

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 is in violation of 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 Respondent’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 cannot recommend that Respondent be required to pay any 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 ROC License 331403 held by Millan's Painting LLC until it has provided to the ROC, and the ROC has accepted, documents that establish that Respondent has paid Complainant $42,567.24 in certified funds.

It is further recommended that when and if the ROC receives and accepts Respondent’s evidence that it has paid Complainant $42,567.24 in certified funds, the ROC may close the Complaint in ROC Case No. 2023-000453.

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.

-54864001

001

-137160-45720000Done this day, May 21, 2023.

/s/ Kay Abramsohn

Administrative Law Judge

Transmitted electronically this day May 22, 2023 to:

Martín Quezada, Registrar

Registrar of Contractors

c/o Legal Department

[email redacted]

James B. Reed, Esq.

Udall Shumway PLC

[email redacted]

Millan's Painting LLC

[email redacted]

By: OAH Staff