ALJDEC - Licensing
2023A-13693-NPC-ROC · Registrar of Contractors · 2024-04-05
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Van Marcke Trade Supply,
COMPLAINANT,
v.
Sun City Mechanical LLC
ROC License No. 249350,
RESPONDENT.
No. 2023A-13693-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: April 05, 2024 at 9:00 AM.
APPEARANCES: Daphne Betone appeared on behalf of Van Marcke Trade Supply (“Complainant”). No appearance(s) by or on behalf of Sun City Mechanical LLC (“Respondent”).
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the Arizona Registrar of Contractor’s (“Registrar’s”) agency file, was admitted into the evidentiary record.
_____________________________________________________________________
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 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 history as shown on the Registrar’s public website. On October 03, 2008, the Registrar issued ROC License No. 249350 for Specialty Commercial C-77 Plumbing including Solar contracting to Respondent. The license is active and renewed through October 31, 2024. Gary William Ferguson is listed on the license as the Qualifying Party and Member. The address of record for the license is 25607 W. Pioneer St. Buckeye, Arizona 85326. Respondent has an active $17,500.00 surety bond for the license issued through Merchants Bonding Company, effective October 31, 2014. The license has not been previously disciplined and no prior complaints have been resolved or otherwise settled on the license.
On or about November 21, 2023, the Registrar received a complaint from Complainant alleging nonpayment of materials against Respondent. Specifically, Complainant alleged that Respondent had failed to remit timely payment(s) on thirty-four (34) invoices issued between June 26, 2023, and October 20, 2023, and owed Complainant an outstanding balance of $11,280.34 as a result. The Registrar designated it Complaint No. 2023-13693 and assigned the case to Mary Coyne in their legal department for investigation.
On December 06, 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. Respondent did not provide a response.
On December 06, 2023, the Registrar issued a Notice of Insufficiency letter to the parties to advise Complainant that it needed a copy of the parties’ contract or statement regarding the scope of work and start date of the underlying project.
On December 14, 2023, Complainant replied to advise that it is “a wholesale vendor who sold product” to Respondent under a line of credit that had been issued, and that there was “no contract involved.”
On December 26, 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 January 07, 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 issued a Final Administrative Decision and Order (Default) in Case No. 2023-13693 due to Respondent’s failure to file a timely Answer. As a result, ROC License No. 249350 was suspended effective January 24, 2024, until the Registrar received “written proof that Respondent has paid Complainant.”
On January 17, 2024, Respondent’s President, Jenni Drew, emailed the following to the Registrar:
I am writing to you to figure out what solutions we might have. I have been out of the office for over a month because my son has been in the hospital. So unfortunately this is the first time I am hearing of this. Is there anything that I can do at this point?
Attached, Respondent provided an Addendum to Payment Arrangement agreement executed between the parties January 19, 2024, which noted Respondent owed Complainant $11,280.34 and would make ten (10) payments between January 22, 2024, and March 25, 2024, to pay off the debt.
On February 09, 2024, the Registrar issued an Order Setting Aside Final Administrative Decision and Order (Default). The Order notes the following, in pertinent part:
The Registrar favors resolving complaints on their merits rather than procedural technicalities. The Registrar reviewed the record to determine whether there is sufficient evidence to set aside the default in this case. Here, good cause exists to set this matter for a hearing before the Office of Administrative Hearings. Once Respondent was aware of the Registrar’s issuance of a default he promptly sought relief. Respondent further articulated reasons for failing to file a timely answer. Therefore, the Registrar determines that good cause exists to set aside the default.
On February 14, 2024, this matter was referred to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 05, 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
Complainant called Daphne Betone, Accounts Receivable Credit Manager, to testify. Although afforded a 5-minute grace period, there was no appearance by or on behalf of Respondent. The substantive facts of record are as follows:
On November 22, 2022, Respondent applied for a commercial line of credit from Complainant for the purchase of construction materials.
Although Complainant had a “high risk” credit score, on December 16, 2022, the application was nonetheless approved for a $20,000.00 limit, at 2% interest, on net 25 payment terms.
Between June 26 2023, and October 20, 2023, the following invoices were issued by Complainant to Respondent for payment of materials purchased with Complainant’s line of credit:
On June 26, 2023, Invoice #91976681 was issued to Respondent for $55.27. The invoice was due on August 25, 2023.
On June 26, 2023, Invoice #91976684 was issued to Respondent for $66.08. The invoice was due on August 25, 2023.
On June 27, 2023, Invoice #91978455 was issued to Respondent for $232.66. The invoice was due on August 25, 2023.
On June 29, 2023, Invoice #91981697 was issued to Respondent for $15.38. The invoice was due on August 25, 2023.
On June 30, 2023, Invoice #91982569 was issued to Respondent for $785.86. The invoice was due on August 25, 2023.
On July 05, 2023, Invoice #91987446 was issued to Respondent for $102.62. The invoice was due on August 25, 2023.
On July 07, 2023, Invoice #91990374 was issued to Respondent for $245.13. The invoice was due on August 25, 2023.
On July 11, 2023, Invoice #91984760 was issued to Respondent for $680.81. The invoice was due on August 25, 2023.
On July 27, 2023, Invoice #92016778 was issued to Respondent for $207.32. The invoice was due on September 25, 2023.
On July 31, 2023, Invoice #92020724 was issued to Respondent for $14.15. The invoice was due on September 25, 2023.
On July 31, 2023, Invoice #92020778 was issued to Respondent for $637.60. The invoice was due on September 25, 2023.
On August 03, 2023, Invoice #92025878 was issued to Respondent for $564.46. The invoice was due on September 25, 2023.
On August 03, 2023, Invoice #92025890 was issued to Respondent for $42.75. The invoice was due on September 25, 2023.
On August 08, 2023, Invoice #92031987 was issued to Respondent for $305.54. The invoice was due on September 25, 2023.
On August 11, 2023, Invoice #92036746 was issued to Respondent for $307.64. The invoice was due on September 25, 2023.
On August 15, 2023, Invoice #92041095 was issued to Respondent for $508.07. The invoice was due on September 25, 2023.
On August 21, 2023, Invoice #92049266 was issued to Respondent for $637.60. The invoice was due on September 25, 2023.
On August 22, 2023, Invoice #92050748 was issued to Respondent for $33.60. The invoice was due on September 25, 2023.
On August 23, 2023, Invoice #92053171 was issued to Respondent for $890.37. The invoice was due on September 25, 2023.
On August 26, 2023, Invoice #92057084 was issued to Respondent for $54.28. The invoice was due on October 25, 2023.
On September 06, 2023, Invoice #92069575 was issued to Respondent for $339.71. The invoice was due on October 25, 2023.
On September 08, 2023, Invoice #92072762 was issued to Respondent for $649.22. The invoice was due on October 25, 2023.
On September 12, 2023, Invoice #92078277 was issued to Respondent for $302.48. The invoice was due on October 25, 2023.
On September 13, 2023, Invoice #92079824 was issued to Respondent for $256.98. The invoice was due on October 25, 2023.
On September 14, 2023, Invoice #92080436 was issued to Respondent for $86.14. The invoice was due on October 25, 2023.
On September 15, 2023, Invoice #92082049 was issued to Respondent for $773.46. The invoice was due on October 25, 2023.
On September 18, 2023, Invoice #92084867 was issued to Respondent for $26.86. The invoice was due on October 25, 2023.
On September 28, 2023, Invoice #92098821 was issued to Respondent for $347.24. The invoice was due on November 25, 2023.
On September 29, 2023, Invoice #92100925 was issued to Respondent for $273.52. The invoice was due on November 25, 2023.
On October 05, 2023, Invoice #92108492 was issued to Respondent for $557.40. The invoice was due on November 25, 2023.
On October 16, 2023, Invoice #92122663 was issued to Respondent for $120.54. The invoice was due on November 25, 2023.
On October 16, 2023, Invoice #92123080 was issued to Respondent for $79.67. The invoice was due on November 25, 2023.
On October 17, 2023, Invoice #92124313 was issued to Respondent for $585.84. The invoice was due on November 25, 2023.
On October 20, 2023, Invoice #92129501 was issued to Respondent for $494.09. The invoice was due on November 25, 2023.
As of the date of the hearing Respondent tendered a total of $4,500.00 to Complainant, leaving an outstanding balance of $6,780.34 for 14 aforementioned invoices.
Additional Evidence
On March 28, 2024, Ms. Drew asked Ms. Betone if Complainant would “work” with Respondent regarding the outstanding balance it owed, to which Ms. Batone relied affirmatively. Ms. Drew informed Ms. Betone that Respondent would make a good-faith payment on April 01, 2024, but failed to do so.
Closing Argument
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; including to Respondent’s counsel per its Notice of Appearance, 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 are clear.
It is clear from the record that Respondent applied and received a line of credit from Complainant, which Respondent used to purchase construction materials. It is also clear from the record that Respondent had 25 days from the date of purchase to pay its debt(s) to Complainant, and on no less than fourteen (14) occasions Respondent failed to tender payments to Complainant on invoices issued for purchases it made with the line of credit authorized by Complainant. It is further clear that Respondent owes Complainant $6,780.34.
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 invoices. This is an affirmative defense that Respondent bears the burden to establish. Because Respondent failed to appear and provide testimony, there is no exigent or otherwise mitigating evidence in the record in favor of Respondent. In fact, Respondent’s absence from these proceedings is a factor in aggravation and evinces Respondent’s unwillingness to be regulated by the Registrar.
Here, the credible evidence of record establishes that Respondent failed to completely pay Complainant for materials purchased with a line of credit from Complainant, and had no affirmative defense(s) for doing so.
Because Complainant established Respondent’s violation(s) of Ariz. Rev. Stat. § 32-1154(A)(10) by a preponderance of the evidence, Complainant also established cause for the Registrar to discipline ROC License No. 268707.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that on the effective date of the Final Order in this matter, Respondent Sun City Mechanical LLC, ROC License No. 249350, shall be suspended until Respondent provides the Registrar with proof that $6,780.34 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 2023-13693 may be closed.
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 is forty days after the date of that certification.
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, April 08, 2024.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
Van Marcke Trade Supply, Complainant
c/o Janet Glover, Agent
813 E. University Dr.
Phoenix, AZ 85034
[email redacted]
Sun City Mechanical LLC, Respondent
c/o Jenni Drew, Agent
25607 W. Pioneer St.
Buckeye, AZ 85326
[email redacted]
By: OAH Staff