ALJDEC - Licensing
2023A-01017-NPC-ROC · Registrar of Contractors · 2023-07-10
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
S A K Electric and Plumbing, Inc.
COMPLAINANT,
v.
REIcon, LLC
License No. ROC 340420,
RESPONDENT.
No. 2023A-01017-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: June 19, 2023
APPEARANCES: Joseph Hammer represented Complainant S A K Electric and Plumbing, Inc. Todd A. Baxter, Esq. represented Respondent REIcon, LLC.
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
_____________________________________________________________________
FINDINGS OF FACT
1. Respondent REIcon, LLC holds license number 34020 issued by the Arizona Registrar of Contractors (Registrar).
2. Joseph Hammer is the qualifying party for Complainant S A K Electric and Plumbing, Inc.
3. In or around October of 2021, Complainant agreed to provide concrete and plumbing work for Respondent in connection with its work as a contractor.
4. In May of 2022, Complainant and Respondent entered into a written contract regarding the project. See the Registrar’s Administrative Record (AR), pgs. 71-77.
5. Complainant performed work under the contract and issued the following invoices to Respondent:
Invoice #1366 dated 10/2/2022 with Pay Application #3 for $74,481.90
Invoice #1452 dated 11/18/2022 with Pay Application #4 for $16,492.00
Invoice #1639 dated 1/16/2023 with Pay Application #5 for $1,817.35
Invoice #1640 dated 1/16/2023 with Pay Application #6 for $10,085.75.
6. On or about January 26, 2023, Complainant filed a complaint with the Registrar alleging that Respondent failed to pay for work performed in connection with the concrete and plumbing project. See AR, pg. 106.
7. Respondent filed a timely answer to the Citation.
8. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.
9. A hearing was held on June 19, 2023.
10. At hearing, Mr. Hammons testified on behalf of Complainant. Respondent presented the testimony of its qualifying party, Christopher Riegel.
11. At hearing, Mr. Hammons explained that Respondent failed to pay a total of $102,876 for work performed in invoices 1640, 1366, 1452, and 1639. Mr. Hammons stated that Respondent delayed the completion of the project because Respondent failed to communicate with Complainant. Mr. Hammons stated that Respondent delayed in providing city stamped plans needed to begin construction. Additionally,
Mr. Hammons explained that the project was delayed due to thunderstorms that flooded the job-site.
12. Mr. Riegel asserted that Respondent delayed in competing a substantial amount of the project without excuse. Respondent stated that the delays caused Respondent to incur additional fees. Respondent also alleged that Complainant’s subcontractor damaged Respondent’s stalking.
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 failed to pay Complainant $102,876.00 for the work performed on the concrete and plumbing project. Respondent did not meet its burden to establish the affirmative defense that that any monies that it otherwise might have owed Complainant for the three jobs are more than offset by the costs incurred by Respondent as the result of Complainant’s alleged delays. Respondent did not meet its burden to establish the affirmative defense that Complainant caused delays that resulted in additional costs to Respondent.
11. The preponderance of the evidence shows that Respondent violated A.R.S. § 32-1154(A)(10) as alleged.
12. 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.
13. 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 does not recommend that Respondent be required to pay 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 Registrar suspend license number 340420 held by REIcon, LLC until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $102,876.00 in certified funds.
It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant in certified funds, the Registrar may close the Complaint in Case No. 2023A-01017.
In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of the certification.
/s/ Velva Moses-Thompson
Administrative Law Judge
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, July 10, 2023.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
S A K Electric and Plumbing, Inc.
[email redacted]
Todd A. Baxter, Esq.
[email redacted]
REIcon, LLC
[email redacted]
Martín Quezada
Registrar of Contractors
[email redacted]
By: OAH Staff