ALJDEC - Licensing
2023A-00760-NPC-ROC · Registrar of Contractors · 2023-05-05
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
R&H Reliable Painting LLC,
COMPLAINANT,
v.
Julius Painters LLC
ROC License No. 339281,
RESPONDENT.
No. 2023A-00759-NPC-ROC (ROOT)
No. 2023A-00760-NPC-ROC
No. 2023A-00761-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: April 27, 2023 at 9:00 AM
APPEARANCES: Steve Ramos appeared on behalf of R&H Reliable Painting LLC (“Complainant”). Kyle O’Dwyer, Esq. appeared on behalf of Julius Painters LLC (“Respondent”) with Max Julius LeSeuer 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 Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website. On July 08, 2022, the Registrar issued License No. 339281 Specialty Dual CR-34 Painting and Wall Covering contracting license to Respondent. The license is currently active and renewed through July 31, 2024. Max Julius Lesueur is the Qualifying Party and Manager on the license. Respondent’s address of record for the license is 3707 E. Southern Ave. #1047 Mesa, AZ 85206. There is an active $6,750.00 bond issued by RLI Insurance Company for the license, effective June 20, 2022. There is no prior disciplinary history for the license, save one three (3) open complaints; one of which is presumably related to this matter.
On or about January 11, 2023, the Registrar received a complaint from Complainant alleging nonpayment of services and materials against Respondent. Specifically, Complainant alleged that Respondent had failed to remit timely payments for five (5) projects based on work performed at four (4) project sites, and that Respondent had not paid Complainant fully and still owed an outstanding balance of $1,510.00 as a result. Although only one (1) complaint was filed by Complainant, the matter was designated Complaint Nos. 2022-07206 2023A-00759-NPC-ROC, 2023A-00760-NPC-ROC, and 2023A-00761-NPC-ROC by the Registrar and assigned to Eric Ulinger for investigation.
On January 24, 2023, 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 February 06, 2023.
Respondent did not provide a response to the Registrar.
On February 13, 2023, Complainant submitted an email to the Registrar which contained the following information, in pertinent parts:
On December 27, 2022, Mr. LeSeuer asked Mr. Ramos to paint cabinets at 2909 E. Glenhaven Dr. Phoenix, AZ 85048 on December 28, 2022. The parties agreed that Respondent would pay Complainant $85.00 per door, and $85.00 for every two drawers. On December 30, 2022, work was completed.
On December 28, 2022, Mr. LeSeuer asked Mr. Ramos to repair the patio ceiling at the Glenhaven project. The parties agreed that Respondent would pay Complainant $300 for the project. On December 30, 2022, work was completed.
On January 01, 2023, Mr. LeSeuer asked Mr. Ramos to paint a two-car garage at 7909 E. Broadway Rd. #14 Mesa, AZ 85208. The parties agreed that Respondent would pay Complainant $550.00 for the project. On January 02, 2023, work was completed.
On or about January 02, 2023, Mr. LeSeuer asked Mr. Ramos to paint the interior of a residence located at 2564 Leisure World Mesa, AZ 85206. The parties agreed that Respondent would pay Complainant $1,750.00 for the project. On January 06, 2023, work was completed.
On January 03, 2023, Mr. LeSeuer asked Mr. Ramos to power-wash a fence and trim located at 624 W. Aviary Way Gilbert, AZ 85233. The parties agreed that Respondent would pay Complainant $250.00 for the project. Work was completed the same day.
On January 04, 2023, Respondent paid Complainant $550.00 via Zelle.
On January 05, 2023, Respondent paid Complainant $2,200.00 in cash.
On January 06, 2023, Mr. Ramos advised Mr. LeSeuer that he was stilled owed $4,065.00 for his work. Mr. LeSeuer instructed Mr. Ramos to pick up the outstanding monies from his office on January 09, 2023.
On January 09, 2023, Mr. Ramos went to Respondent’s office to pick up payment, but a check had not been left for him and Mr. LeSeuer was not present. Shortly thereafter, Complainant filed a complaint with the Registrar.
On February 17, 2023, the Registrar issued a Citation to Respondent for an alleged violation of Ariz. Rev. Stat § 32-1154(A)(10). Respondent was notified that a failure to provide an Answer by March 07, 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.
Respondent’s Answer is presumed to be timely received by the Registrar.
On March 03, 2023, this matter was referred to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 27, 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
Steve Ramos testified on behalf of Complainant. Max Julius LeSeuer testified on behalf of Respondent. The Registrar’s agency file, including the Notice of Hearing and supplemental agency file, was also admitted into the record as its own exhibit. The substantive facts of record are as follows:
Mr. Ramos testified that although Complainant charged Respondent $3,910.00 for the Glenhaven project, an invoice was never issued to Respondent. Per Mr. Ramos, Complainant did not issue Respondent any invoices for any projects related to this matter.
Mr. LeSeuer testified that Complainant timely completed the Glenhaven, Broadway, Leisure World, and Aviary projects to Respondent’s satisfaction. Mr. LeSeuer also testified that he was in agreement with what Complainant charged for each project, save the cabinet portion of the Glenhaven project; which he believed Complainant was to be paid $2,500.00 for. Mr. LeSeuer was uncertain due to the parties’ lack of written agreement.
Both parties agree that Complainant charged Respondent a total of $6,760.00 for all projects related to this matter, and that Complainant was paid $2,700.00 on his verbal contracts with Respondent.
Between January 09, 2023, and January 11, 2023, Mr. Ramos called and texted Mr. LeSeuer multiple times regarding the whereabouts of his final payment, to no avail.
Closing Arguments
In closing, Respondent conceded that the ceiling portion of the Glenhaven, project, and Broadway, Leisure World, and Aviary projects were billed correctly by Complainant, but argued that it would not have agreed to pay Complainant $3,910.00 on a $2,900.00 cabinet project, as Respondent would have lost money. Respondent opined that any contradictory testimony should be viewed favorably in light of Mr. LeSeuer because he was a more credible witness. Respondent further argued that the Registrar’s issuance of three (3) complaints was in error, as only one (1) complaint was filed against Respondent by Complainant, and that if the Tribunal found a violation of Ariz. Rev. Stat. § 32-1154(A)(10) existed, Respondent should only be found in violation once. To that end, Respondent argued that discipline should be the minimum civil penalty as Respondent has no prior disciplinary history with the Registrar.
In closing, Complainant argued that Respondent only paid $2,700.00 for all 5 projects, and still owed Complainant monies for the balance owed for work performed.
CONCLUSIONS OF LAW
The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.
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.
Statutes should be interpreted to provide a fair and sensible result. “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”
The Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.
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.”
Ariz. Rev. Stat. § 32-1156.01 states, in pertinent part, that after a hearing an Administrative Law Judge may provide restitution to any person who is injured by an action of a licensee.
The material facts in the case at bar are clear.
The substantive facts of record establish that the parties had 5 subcontracting agreements, and that 4 of those agreements, totaling $2,850.00, for the ceiling portion of the Glenhaven, project, and Broadway, Leisure World, and Aviary projects were satisfactorily completed and billed correctly by Complainant. The record also reflects that Complainant satisfactorily completed the cabinet project at Glenhaven. The record also establishes that Respondent only paid Respondent $2,700.00 for all projects. Thus, the record establishes that Respondent failed to pay Complainant for the cabinet portion of the Glenhaven project, and shorted Complainant another $150.00 for work on the remaining projects.
In order to determine how much Respondent owes for Complainant’s cabinet work, in the absence of any corroborating documents, the parties’ testimony must be strictly scrutinized. Mr. LeSeuer testified that the cabinet project was $2,900.00 and that he recalled agreeing to pay Mr. Ramos $2,500.00 as a “backup” painter. Mr. Ramos testified that he only agreed to perform work if paid $85.00 per door and $85.00 for every two drawers, but could not identify how many doors or drawers were painted. The Tribunal accepts Mr. LeSeuer’s admission the he believed Mr. Ramos was supposed to be paid $2,500.00 for this scope of work. The record reflects that Mr. LeSeuer never declined to pay Mr. Ramos what he asked to be paid for his work, and that. Mr. LeSeuer agreed to do so on January 09, 2023. Therefore, the record establishes that Respondent owes Complainant a remaining balance of $2,650.00 for work performed.
The question remains whether Respondent raised a sufficient justification or excuse for failing to issue payment to Complainant on the underlying projects. This is an affirmative defense that Respondent bears the burden to establish. The Tribunal is not at liberty to make presumptions in favor of Respondent or accept facts in mitigation on behalf of Respondent that are not supported by the evidence. Here, Mr. LeSeuer did not provide any proof that he paid Mr. Ramos more than $2,700.00 for the work at issue. Because the credible evidence of record reflects that Respondent owes Complainant payment(s) for the work performed in this matter, and that Respondent had no affirmative defense(s) for failing to timely remit payment(s), Respondent has failed to sustain its burden of proof.
Therefore, as Complainant has established by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that on the effective date of the Final Order in this matter, Respondent Julius Painters LLC, ROC License No. 339281, shall be suspended until Respondent provides the Registrar with sufficient proof that $2,650.00 in certified funds has been tendered to Complainant for completed work as restitution in this matter.
IT IS FURTHER RECOMMENDED that after the Registrar has received Respondent’s proof of payment(s) to Complainant, Complaint Nos. 2023-00759, 2023-00760, and 2023-00761 may be closed.
NOTICE
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 Final Order is forty (40) days after the date of that certification.
Done this day, May 05, 2023.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted electronically to May 05, 2023:
Martín Quezada, Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
Julius Painters LLC, Respondent
c/o Kyle O’Dwyer, Esq.
Fortify Legal Services, Counsel for Respondent
3707 E. Southern Ave.
Mesa, AZ 85206
[email redacted]
R&H Reliable Painting LLC, Complainant
8809 W. Osborn Rd.
Phoenix, AZ 85037
[email redacted]
By: OAH Staff