ALJDEC - Licensing

2023A-13564-NPC-ROC · Registrar of Contractors · 2024-03-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Wolverine Daylighting LLC,

COMPLAINANT,

v.

All State Specialist LLC

ROC License No. 285566,

RESPONDENT.

No. 2023A-13564-NPC-ROC

CORRECTED ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 18, 2024 at 9:00 AM.

APPEARANCES: Wade Wyman appeared on behalf of Wolverine Daylighting LLC (“Complainant”). No appearance(s) by or on behalf of All State Specialist LLC (“Respondent”). West Monnett observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the Arizona Registrar of Contractor’s administrative agency file, were admitted into the record along with the February 15, 2024, Hearing Order issued by the Tribunal.

_____________________________________________________________________

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 October 21, 2019, the Registrar issued ROC License No. 285566 for Commercial A General Engineering contracting to Respondent. Peter James Mizioch is listed on the license as the member. The license is active and in good standing, and has been renewed through July 31, 2025. The address of record for the license is P.O. Box 71835 Phoenix, Arizona 85050. Respondent has an active $50,000.00 surety bond on the license issued by RLI Insurance Company, effective July 27, 2023, and another $5,000.00 bond for the license also issued by RLI Insurance Company, effective July 27, 2015. The license has no prior disciplinary history, save one (1) prior complainant that was resolved or otherwise settled against it. Currently, there are two (2) open complaints against the license; one of which is presumed to be related to the matter at bar.

On November 28, 2023, the Registrar received a complaint from Complainant alleging nonpayment of services and/or materials against Respondent. Specifically, Complainant alleged that Respondent had failed to remit timely payments on seven (7) invoices based on work performed in scope of existing verbal contracts between the parties, and that Respondent owed Complainant an outstanding balance of $16,511.58 as a result. The matter was designated Complaint No. 2023-13564 by the Registrar and assigned to legal assistant Doug Ulmer for investigation.

On December 15, 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 December 22, 2023.

Respondent did not provide a response to the Registrar.

On January 03, 2024, the Registrar issued a Citation to Respondent for an alleged violation of Arizona Revised Statute Ariz. Rev. Stat. § 32-1154(A)(10). Respondent was notified that a failure to provide an Answer by January 18, 2024, 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 January 17, 2024, the Registrar received Respondent’s timely Answer. Respondent provided the following, in pertinent parts:

Complainant has not been paid in full for the services and materials rendered because All State Specialist, LLC has not yet received sufficient monies/payment for the particular construction project for which services and materials were rendered.

This project (known as the “BFL Construction” project) has a large retention fund, which All State Specialist, LLC is working to obtain. All State Specialist is doing everything in its power to complete the project so that the retention amount can be released, and All State Specialist can pay any/all outstanding bills. Until the funds are released by BFL Construction, All State Specialist simply lacks the capacity to pay.

All State Specialist has not acted in bad faith and is not intentionally failing to pay the outstanding invoice(s) for any reason other than a sheer lack of funds/capacity.

On January 19, 2024, this matter was referred to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 18, 2024. 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

Wade Wyman testified on behalf of Complainant. The substantive facts of record are as follows:

Sometime in 2022, the parties entered into a subcontract agreement for Complainant to perform CCTV and/or line cleaning at multiple project sites in Arizona.

Work on the project took place between February 10, 2023, and June 14, 2023.

On February 10, 2023, Complainant performed 4 hours of subcontract work for Respondent in Maricopa, per their agreement. The following day Complainant issued Invoice No. 5285C to Respondent for $880.00, due net 30.

On April 11, 2023, Complainant performed 11 hours of subcontract work for Respondent in Buckeye, per their agreement. The following day Complainant issued Invoice No. 8374 to Respondent for $2,843.50, due net 30.

On April 12, 2023, Complainant returned to the project in Buckeye and performed 11 additional hours of subcontract work for Respondent, per their agreement. The following day Complainant issued Invoice No. 8474 to Respondent for $2,843.50, due net 30.

On May 02, 2023, Complainant returned to the project in Buckeye and performed 15 additional hours of subcontract work for Respondent, per their agreement. The following day Complainant issued Invoice No. 8658 to Respondent for $2,151.60, due net 30.

On May 04, 2023, Complainant returned to the project in Buckeye and performed 4.5 additional hours of subcontract work for Respondent, per their agreement. The following day Complainant issued Invoice No. 8658 to Respondent for $1,453.04, due net 30.

On June 14, 2023, Complainant performed 14 hours of work at a different project in Buckeye for Respondent, per their agreement. The following day Complainant issued Invoice No. 9088 to Respondent for $2,694.23, due net 30.

On June 14, 2023, Complainant performed 12.33 hours of work at the secondary project in Buckeye for Respondent, per their agreement. The following day Complainant issued Invoice No. 9088 to Respondent for $3,645.71, due net 30.

None of the invoices Complainant issued to Respondent were returned as undeliverable.

Respondent never advised Complainant that it was unable to pay any of the outstanding invoices at issue.

Additional Evidence

Complainant was unaware Respondent was working for BFL Construction, as Complainant was also performing work for them. Per Complainant, the parties did not have a contingent payment agreement. Further, Complainant had contacted BFL Construction and learned that it had paid all outstanding monies owed to Respondent, including the projects Complainant had performed work on.

On or about November 16, 2023, Respondent offered to pay Complainant $8,255.79 and pay the remaining balance in installments, which Complainant accepted. However, when Complainant reported to Respondent’s office to pick up the check as directed by Respondent, Complainant was advised that payment was unavailable.

To date, Respondent has not paid Complainant for any of the outstanding invoices at issue.

Closing Argument

In closing, Complainant argued that Complainant had performed all work at issue in good faith and without complaint by Respondent. Complainant opined that Respondent should be required to pay what was owed on their agreement, particularly given the fact that Respondent never denied the monies were owed to Complainant.

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 the hearing in this matter. Because the Registrar mailed 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 the Registrar 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.

Ariz. Rev. Stat. § 32-1183, commonly referred to as the Prompt Pay Act, provided in relevant subsection (J) that in any action brought to collect payment(s) or interest, the successful party shall be awarded costs and attorney fees in a reasonable amount.

Here, the material facts of record are clear.

The record reflects that the parties had a verbal contract for Complainant to perform subcontracting for Respondent, and that in turn Respondent failed to remit payment for all seven (7) invoices totaling $16,511.58 that Complainant submitted. The record further reflects that Complainant completed all of the work at issue and that Respondent did not identify or inform Complainant of any issues regarding workmanship.

Therefore, the only issue remaining is whether Respondent raised a sufficient justification or excuse for failing to issue payment to Complainant on the underlying projects. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain its burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance/competence on this project. No mitigating evidence exists in the record in favor of Respondent. In fact, Respondent’s absence from the administrative hearing, as well as Respondent’s conduct during the entirety of the complaint process, are glaring facts in aggravation that evinces Respondent’s unwillingness to be regulated by the Registrar. The credible evidence of record shows that Respondent failed to promptly and completely pay Complainant for labor and/or materials on these projects, and had no affirmative defense(s) for doing so.

Because Complainant has established Respondent’s violation(s) Ariz. Rev. Stat. § 32-1154(A)(10) by a preponderance of the evidence, Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED, pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(10) and 1156.01, that on the effective date of the Final Order in this matter, Respondent All State Specialist LLC, ROC License No. 285566, shall be suspended until Respondent provides the Registrar with proof that $16,511.58 in certified funds has been tendered to Complainant for completed work on Invoice Nos. 5285C, 8374, 8474, 8658, 8658, 9088, and 9088 as restitution in this matter.

IT IS FURTHER RECOMMENDED that Complainant be statutorily barred from an award of any related or otherwise accrued interest in this matter.

IT IS FURTHER RECOMMENDED that after the Registrar has received Respondent’s proof of payment to Complainant, Complaint 2023-13564 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, March 19, 2024.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

Registrar of Contractors

[email redacted]

Wolverine Daylighting LLC

24029 N. 91st Ave.

Peoria, AZ 85383

[email redacted]

All State Specialist LLC, Respondent

P.O. Box 71835

Phoenix, AZ 85050-1043

[email redacted]

All State Specialist LLC, Respondent

14155 N 83rd Ave.

Peoria, AZ 85381

All State Specialist LLC, Respondent

23623 N 67th Ave.

Glendale, AZ 85310

Courtesy copy electronically transmitted to:

Veronica L. Manolio, Esq.

Ronan & Firestone PLC

8686 E. San Alberto Dr., Ste. 200

Scottsdale, AZ 85258

[email redacted]

By: OAH Staff