ALJDEC - Licensing
2023A-02476-NPC-ROC · Registrar of Contractors · 2023-11-29
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
3rd Generation Electric LLC,
COMPLAINANT,
v.
McCurdy Construction LLC
ROC License No. 322920,
RESPONDENT.
No. 2023A-02476-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: November 29, 2023 at 1:30 PM.
APPEARANCES: Seth Storer appeared on behalf of 3rd General Electric LLC (“Complainant”). No appearance(s) by or on behalf of McCurdy Construction LLC (“Respondent”). Lisbeth Storer and Evelyn Hargis observed.
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. On December 12, 2018, the Registrar issued ROC License No. 322920 for General Commercial B contracting to Respondent. Respondent’s license is active and renewed through December 31, 2024. Michael S. McCurdy is listed as the Qualifying Party and Member on the license. The address of record for the license is 2090 E. University Dr., Ste. 105. Tempe, Arizona 85281. Respondent has an active $9,000.00 surety bond for the license issued through RLI Insurance Company, effective December 06, 2018. The license has been disciplined on 2 prior occasions, and has had 1 complaint resolved or otherwise settled against it. The record reflects that there are four (4) open complaints against the license, one of which is presumed to be related to this matter.
On February 27, 2023, the Registrar received a complaint from Complainant alleging nonpayment of services against Respondent. Specifically, Complainant alleged that Respondent had failed to remit timely payment(s) on multiple projects and owed Complainant an outstanding balance of $12,241.00 as a result. The Registrar designated it Complaint No. 2023-02476 and assigned the case to Tedi Quezada in their legal department for investigation.
On March 03, 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 March 10, 2023.
Respondent did not provide a response.
On March 20, 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 April 04, 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 April 05, 2023, the Registrar received Respondent’s untimely Answer. Mr. McCurdy offered that he was “[n]ot disputing the claim by [Complainant]” and acknowledged that Respondent owed “an outstanding balance of $12,241.00 for projects listed on their complaint.” Mr. McCurdy explained, in pertinent part, that Respondent was in “financial distress for Q3 and Q4 of 2022 and all of 2023” due to “an ongoing cash deficiency for the last year.” Mr. McCurdy argued that “license suspension or revocation will only make it more difficult for [Respondent] to get our account paid, and our outstanding projects completed.”
On April 10, 2023, this matter was referred to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on June 05, 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
Complainant called Seth Storer to testify and submitted Exhibits 1-60 into the record. The Notice of Hearing and Registrar’s agency file were also admitted into the record. Although afforded a 10-minute grace period, there was no appearance by or on behalf of Respondent. The substantive facts of record are as follows:
Mr. Storer and Mr. McCurdy have had a professional working relationship since 2015.
On an unknown date, the parties entered into a net-7 subcontracting agreement whereby Complainant agreed to provide labor and materials for various projects in exchange for Respondent’s payment of invoices within seven (7) days.
On September 30, 2022, Complainant issued the Glowacka project invoice to Respondent for $1,200.00.
On October 19, 2022, Complainant issued the Giamarrino project invoice to Respondent for $2,616.00.
On October 30, 2022, Complainant issued the Innes project invoice to Respondent for $945.00.
On October 30, 2022, Complainant issued the Lindner project invoice to Respondent for $2,210.00.
On November 14, 2022, Complainant issued the Cournoyer project invoice to Respondent for $320.00.
On November 14, 2022, Complainant issued another invoice for the Innes project to Respondent for $570.00.
On November 14, 2022, Complainant issued the Uhaul project invoice to Respondent for $820.00.
On November 14, 2022, Complainant issued the Kolsrud project invoice to Respondent for $3,560.00.
As of the date of the continued hearing, Respondent had paid half of the outstanding invoices at issue; only the Giamarinno, Linden, Uhaul, and Kolsrud invoices remained payable, totaling $9,206.00 due.
Additional Evidence
On or about June 05, 2023, the parties executed an Arizona Standard Promissory Note which noted the following, in pertinent part:
McCurdy Construction LLC of 2090 E. University Dr. #105 Tempe, AZ 85281 has received and promises to payback 3rd Generation Electric LLC of 1449 N. Maria Lane, Casa Grande, AZ 85122 the principal sum of $12,241.00 US Dollars.
1. PAYMENTS. The full balance of this Note, including all accrued interest and late fees, is due and payable on 08/04/2023, hereinafter known as the “Due Date.” The Loan shall be due and payable in one (1) of the following ways: (check one)
- LUMP SUM. The Borrower shall pay a lump sum to be made in full of Twelve Thousand Two Hundred Forty One Dollars and Zero Cents. ($12,241.00) by the Due Date. Good faith progress payments are to be made as the borrower is able until the full amount is paid by the due date above.
(Emphasis in original.)
Closing Arguments
Complainant declined to provide a closing argument.
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.
The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received Notice of Hearing in this matter. Because OAH issued all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from OAH as well.
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.”
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 this case establish that the parties had agreements for eight (8) projects totaling $12,241.00, Complainant performed its obligations under their terms, and Respondent failed to timely remit the full amount owed to Complainant. The record reflects that there is an outstanding balance of $9,206.00 owed by Respondent.
Therefore, the only issue remaining is whether Respondent raised a sufficient justification or excuse for failing to tender payment in full to Complainant on the underlying projects. This is an affirmative defense that Respondent bears the burden to establish. Because Respondent failed to appear and provide testimony, this burden has not been sustained. The credible evidence of record shows that Respondent failed to completely pay Complainant for labor and/or materials on this project, and had no affirmative defense(s) for doing so.
Because Complainant established by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10), Complainant 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’s McCurdy Construction LLC, ROC License No. 322920, shall be suspended until Respondent provides the Registrar with proof that $12,241.00 has been tendered to Complainant in certified funds as restitution.
IT IS FURTHER RECOMMENDED that after the Registrar has received Respondent’s proof of payment to Complainant, Complaint 2023-02476 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 Order will be forty (40) days from the date of that certification.
Done this day, December 01, 2023.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
c/o Legal Department
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
McCurdy Construction LLC, Respondent
c/o Michael S. McCurdy, Agent
2090 E. University Dr., Ste. 105
Tempe, AZ 85281
[email redacted]
3rd Generation Electric LLC, Complainant
c/o Seth Storer & Lizbeth Storer, Agents
1449 N. Maria Ln.
Casa Grande, AZ 85122
[email redacted]
By: OAH Staff