ALJDEC - Licensing

2023A-11710-NPC-ROC · Registrar of Contractors · 2024-02-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Dynamic Fencing and Fabrication LLC,

COMPLAINANT,

v.

DirtWorks Contracting Inc,

License No. ROC 318883,

RESPONDENT.

No. 2023A-11710-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 9, 2024

APPEARANCES: Attorney James St. Clair represented Dynamic Fencing and Fabrication LLC and its owner Denise Anderton; Attorney Karen Palacek represented DirtWorks Contracting Inc. and its “Director” Edward Britt.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: Notice of Hearing (Registrar record); Complainant’s Exhibits 1 through 9; and, Respondent’s Exhibits1 and 2.

_____________________________________________________________________

FINDINGS OF FACT

DirtWorks Contracting Inc. (Respondent) is the holder of License No. ROC 318883 issued by the Registrar of Contractors (Registrar) on April 6, 2018.

Dynamic Fencing and Fabrication LLC (Complainant) provided materials and installation to Respondent for a project which Complainant referred to as the Silverbell guardrail project. The residential development was being built by D.R. Horton. Respondent was contracted with D.R. Horton for construction of infrastructure such as underground utilities, excavation, curbing and sidewalks; Respondent’s work was to include the subject guardrail installation.

After some corrections/changes were made to the particular guardrail area, apparently by the general contractor, Respondent requested that Complainant provide a new estimate in March 2023.

On March 9, 2023, Respondent requested whether Complainant had had a chance to work up an updated quote regarding the new requirements. The parties’ emails indicate there were possibly some supply and shipping issues, which were still not resolved by April of 2023.

On March 21, 2023, Contractor gave Respondent the estimate of $10,866.21.

On March 22, 2023, Respondent gave approval, stating: “[L]ooks good, please get material ordered and or confirm if you had this in your yard and what would be your potential install date.”

After completing the installation on April 25, 2023, Complainant invoiced Respondent for the amount of $10,866.21 on Net-30 terms.

On July 11, 2023, Respondent’s Kerry Lanoue advised Complainant that it hoped to have the invoice paid “this week.” After four additional requests from Complainant regarding payment, on August 21, 2023, Ms. Lanoue replied to Complainant that all the payment requests had been forwarded to the [Respondent’s] owner. On August 21, 2023, Complainant then asked Ms. Lanoue whether Respondent had been paid by the owner.

On September 8, 2023, Complainant continued to inquire of Respondent regarding payment on the invoice.

At no time did any of the parties’ emails that were provided to the hearing record indicate that Respondent had not been paid by D.R. Horton for that particular portion of the Silverbell crossing project.

On September 12, 2023, Ms. Lanoue responded to Complainant as follows:

Hi Denise I apologes [sic] for the delay. I am no longer with the company. I did forward your email to the owner. Thank you.

On October 9, 2023, Complainant filed a Non-Payment Complaint with the Registrar alleging that Respondent had failed to pay Complainant the sum of $10,866.21.

On October 23, 2023, Respondent filed a response with the Registrar to the Complaint, indicating that it lacked the capacity to pay as it had not been paid for the particular project.

On October 23, 2023, Registrar inquired of Respondent whether it had any documentation “that shows DirtWorks Contracting Inc lacks the capacity to pay because it has not received payment for the Silverbell Crossing - Guard Rail project?”

On October 23, 2023, the Registrar received a copy of Respondent’s Balance Sheet dated as of September 30, 2023. Respondent stated:

Attached is the company balance sheet as of 9/30/30. As you can see there is very little cash and even less now. The accounts receivable show invoicing has been sent out but not paid. If the company receivables are paid there would be money to pay this subcontractor, but there is no money to pay them at this time.

On October 26, 2023, the parties engaged in multiple email communications. In one, the Registrar requested documentation to be provided as soon as possible for the reason that the matter was “under review with one of our attorneys for consideration of issuing a Citation.” In one, Mr. Britt replied to the Registrar as follows: “Yes, we do. I will send that documentation. Thank you. Edward Britt.” Registrar had also inquired of Respondent as follows: “[I]s the project not finished yet, were you terminated from the project, or is the owner or the jobsite refusing to pay?

On November 1, 2023, the Registrar issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10).

Respondent’s Answer to the Citation was filed on November 15, 2023. Respondent denied the allegations.

On November 30, 2023, the Registrar issued a Notice of Hearing setting this matter for virtual administrative hearing on January 9, 2024 at the Office of Administrative Hearings (OAH). Within the Notice of Hearing, as it had in the Citation, Registrar alleges that Respondent may have violated A.R.S. § 32-1154(A)(10)

At hearing, Complainant argued that Respondent had not paid on the April 25, 2023 invoice.

At the time of the hearing, Respondent did not deny any of the facts regarding the parties’ contract, the project changes, and the unpaid invoice. Respondent argued that its October 31, 2023 Balance Sheet and its December 1, 2023 Aging Summary demonstrate that Respondent had not been paid and did not have the money to pay the invoice. The Respondent’s Aging Summary states that, post-90 days, D.R. Horton Silverbell Crossing showed a balance due of $138,078.01. Respondent indicated that it had filed liens on the 90-day past due accounts.

The Registrar’s public records show that Respondent’s ROC License 318883 is inactive effective November 24, 2023, and that the instant case is one of two open cases with the Registrar.

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. Arizona Administrative Code (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 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.” A.R.S. § 32-1154(A)(10).

The evidence of record demonstrates that Respondent owes Complainant more than $750.00 for services rendered in connection with Respondent’s operations as a contractor.

At hearing, Respondent showed that, on its books, the D.R. Horton Silverbell Crossing account showed a balance due of $138,078.01, which was 90 days past due. However, such does not document that Respondent had not been paid sufficient monies from D.R. Horton as payment for the particular construction work for which Complainant’s services were rendered or purchased. Complainant completed its portion of the Silverbell Crossing project in April 2023 and neither the October 31, 2023 Balance Sheet nor the December 1, 2023 Aging Summary demonstrate that Respondent had not been paid sufficient monies by D.R. Horton within 30, 60, or even 90 days of the April 25, 2023 invoice which was a Net-30 invoice. Neither document demonstrates that any payment claim made to Respondent at or about the time of the April 25, 2023 invoice was unpaid by Respondent.

Respondent failed to present or establish by any preponderance of evidence that it had lacked the ability to pay Complainant for the services or that it had not been paid sufficient funds when the funds were due on that portion of the Silverbell Crossing project for which Complainant’s services were performed.

Complainant established at hearing that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $10,866.21 for services and materials rendered in connection with Respondent’s contracting business. The evidence demonstrates that, at the time of the January 9, 2024 administrative hearing, Respondent still owes Complainant the amount of $10,866.21. Therefore, the evidence of record demonstrates that Respondent has violated A.R.S. § 32-1154(A)(10) and that grounds exist for the Registrar to impose discipline against Respondent’s license.

Based on the foregoing, Respondent’s license should be suspended until it pays to Complainant the amount of $10,866.21.

RECOMMENDED ORDER

IT IS RECOMMENDED that DirtWorks Contracting Inc. License No. ROC 318883 be suspended until the Registrar receives proof that it has paid to Dynamic Fencing and Fabrication LLC, the amount of $10,866.21.

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 date February 2, 2024.

/s/ Kay Abramsohn

Administrative Law Judge

Transmitted electronically to:

Tom Cole

Registrar of Contractors

Legal Department

[email redacted]

JAMES A ST. CLAIR

[email redacted]

Attorney for Complainant

Karen A. Palecek

Attorney for Respondent

[email redacted]

[email redacted]

By: OAH Staff