ALJDEC - Licensing
2023A-01934-NPC-ROC · Registrar of Contractors · 2023-05-23
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
ThermAir Systems LLC,
COMPLAINANT
v.
Desert Sun Heating Cooling and
Refrigeration Inc
License No. ROC 243161,
RESPONDENT
No. 2023A-01934-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: May 8, 2023
APPEARANCES: Austin Phillippe appeared via Google Meet on behalf of Complainant ThermAir Systems LLC. Jonathan Martinez appeared via Google Meet on behalf of Respondent Desert Sun Heating Cooling and Refrigeration Inc.
ADMINISTRATIVE LAW JUDGE: Adam D. Stone
_____________________________________________________________________
FINDINGS OF FACT
On March 31, 2023, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on May 8, 2023 at the Office of Administrative Hearings.
The Notice of Hearing shows that the hearing was being conducted on the charges made in the complaint and citation that were served on Respondent Desert Sun Heating Cooling and Refrigeration Inc. on March 2, 2023.
Through the citation and Notice of Hearing, ROC alleges that Respondent may have violated Ariz. Rev. Stat. section 32-1154(A)(10).
Respondent holds License No. 243161 issued by ROC. Jose (Jonathan) Venegas Martinez is Respondent’s qualifying party and an officer in the corporation.
Complainant is ThermAir Systems LLC.
Complainant sold to Respondent material used by Respondent in connection with its license.
Respondent was a subcontractor on a project with Carlson Brothers to build several homes in the Gila River area.
February 2023, Complainant filed with ROC a complaint against Respondent alleging that Respondent owed Complainant $120,134.20.
At hearing, Austin Phillippe and Kathy Hettinger testified on behalf of Complainant.
Mr. Phillippe testified that Respondent ordered a significant amount of equipment in the initial order, and then placed subsequent purchase orders. Further, Mr. Phillippe testified that he allowed Respondent to pay in cash for some orders, but in May 2021, informed Respondent that he could no longer accept the cash payments. Finally, Mr. Phillippe testified that the total balance currently owed was $120,134.20.
Ms. Hettinger testified that she had made several attempts to collect the balance to the try to work with Respondent but to no avail.
Mr. Martinez testified that he acknowledged the amount owed, and this was a mess of a project, as the general contractor pulled out of the project after only 70 homes were built.
Mr. Martinez also testified that he has only received payment for about 50% of the work he performed, and he was owed $340,550.00. In addition, Mr. Martinez testified that the last payment from Gila River was in December 2022, and that payment went to another supplier, Hercules, as it had the biggest balance.
Further, Mr. Martinez read an email from his contact with Gila River stating that it was going to enter into a mediation conference with the general contractor to try to resolve the matter, but that it was Gila River’s intent to pay all of the subcontractors. While Mr. Martinez was not given a timeframe for when the payment would occur, he testified that it was his intent to pay Complainant as soon as it got paid.
CONCLUSIONS OF LAW
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. Ariz. Admin. Code § 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.” Ariz. Rev. Stat. § 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.” Ariz. Rev. Stat. § 1-211(B).
The purpose of the Registrar’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).
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 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.” Ariz. Rev. Stat. § 32-1154(A)(10).
The preponderance of the evidence shows that Respondent owes Complainant more than $750 for materials purchased in connection with Respondent’s operations as a contractor.
Therefore, the only issue remaining is whether Respondent raised a sufficient justification or excuse for failing to pay Complainant on the invoices in question. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent testified credibly as to the project’s problems and the inability to receive payment from the general contractor and Gila River. Respondent testified and supplied an answer to the Complaint that Gila River made payment to him and Hercules and all of the money went to Hercules. Further, based upon Respondent’s testimony it appears that Gila River’s intent is to ensure payment to all of the subcontractors.
Therefore, the preponderance of the evidence shows that Respondent has not violated section 32-1154(A)(10), and no discipline should come to Respondent’s license. However, this does not necessarily alleviate Respondent’s responsibility to pay Complainant, and Complainant still may have other legal avenues to pursue the balance owed.
RECOMMENDED ORDER
IT IS RECOMMENDED that the Complaint against Desert Sun Heating Cooling and Refrigeration, Inc.’s 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, May 23, 2023.
/s/ Adam D. Stone
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Martín Quezada, Director
Registrar of Contractors
ThermAir Systems LLC
2521 E. Birchwood Ave.
Mesa, AZ 85202
[email redacted]
Desert Sun Heating Cooling and Refrigeration Inc.
PO Box 12400
Casa Grande, AZ 85130
[email redacted]
By: OAH Staff