ALJDEC - Licensing

2023A-09265-NPC-ROC · Registrar of Contractors · 2023-12-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Creco Rental,

COMPLAINANT

v.

DirtWorks Contracting Inc.

License No. ROC 318883,

RESPONDENT

No. 2023A-09265-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 6, 2023

APPEARANCES: Steven Mahaffey appeared on behalf of Creco Rental. Edward Brit appeared on behalf of DirtWorks Contracting Inc.

ADMINISTRATIVE LAW JUDGE: Brian Del Vecchio

EXHIBITS ADMITTED INTO EVIDENCE: Hearing Packet submitted by the Registrar of Contractors.

FINDINGS OF FACT

DirtWorks Contracting Inc. (Respondent) is the holder of License No. 318883 issued by the Registrar of Contractors (Registrar).

On August 11, 2023, Steven Mahaffe, Managing Partner of Creco Rental (Complainant), filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $91,837.72 for heavy construction equipment rental services.

Between March 21, 2023 and July 24, 2023, Complainant rented to Respondent different heavy construction equipment for various projects Respondent had relating to its contracting business.

The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a Citation alleging a violation of Ariz. Rev. Stat. § 32-1154(A)(10).

At hearing, Mr. Mahaffey testified that the total amount due to Complainant was over $60,000.00. When Mr. Mahaffey filed the complaint with the Registrar, no payments had been made by Respondent. Sometime around March 16, 2023, ownership changed within Respondent. Sometime before Respondent changed ownership, payments totaling $22,654.98 were made. As of the date of the hearing, the outstanding balance was $69,182.74 in unpaid invoices for equipment rental services.

The majority of Complainant’s customers were contractors who rented equipment related to their construction projects. Mr. Mahaffey testified the invoices on the equipment rentals were due 28 days from submission of invoices. Mr. Mahaffey read the contract and invoice details into the record for each of the invoices which were due, but not paid by Respondent.

At hearing, Mr. Brit made an oral motion to dismiss because equipment rental was not defined as a service under the relevant statute. Mr. Brit’s motion was denied.

Mr. Brit testified Complainant failed to provide evidence that Respondent owed the money on the contracts. Mr. Brit testified he had no contracts with Complainant in his possession or in his system.

Respondent did not assert that it lacked the capacity to pay the amount Complainant asserted was due.

CONCLUSIONS OF LAW

The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by 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.”

Ariz. Rev. Stat. § 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 or agent or official of a licensee to pay monies in excess of $750 when due for materials or services rendered in connection with the licensee's operations as a contractor unless the licensee proves that the licensee lacks the capacity to pay and has not received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

Arizona statute defines equipment rentals as materials. Ariz. Rev. Stat. § 41-2503(27) states “‘[m]aterials’ [m]eans all property, including equipment, supplies, printing, insurance and leases of property, [d]oes not include land, a permanent interest in land or real property or leasing space.” Respondent leased Complainant’s property. Thus, Respondent was supplied materials. Respondent received the benefit of Complainant’s materials and Respondent failed to pay monies in excess of $750.00 when due. Therefore, the Registrar may discipline Respondent’s license for violations of Ariz. Rev. Stat. § 32-1154(A)(10).

The evidence established that, as of the date of the hearing, Respondent owed a total of $69,182.74 for equipment rentals. Respondent received the benefit of the use of Complainant’s equipment at Respondent’s construction jobsites, however, failed to pay the invoices when due.

Respondent failed to establish by a preponderance of the evidence that it lacked the ability to pay Complainant for the materials provided.

Therefore, Complainant established that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10) by failing to pay Complainant $69,182.74 for services or materials rendered in connection with Respondent’s contracting business.

Based upon Respondent’s violation of the provisions of Ariz. Rev. Stat. § 32-1154(A)(10), grounds exist to impose discipline against Respondent’s license.

RECOMMENDed order

Based on the foregoing, it is recommended that the Registrar suspend DirtWorks Contracting Inc.’s License No. 318883 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $69,182.74 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $69,182.74 in certified funds, the Registrar may close the Complaint in Case No. 2023-09265.

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, December 26, 2023.

/s/ Brian Del Vecchio

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 Street, Suite 105

Phoenix, AZ 85007

[email redacted]

Creco Rental

[email redacted]

DirtWorks Contracting Inc.

[email redacted]

By: OAH Staff