ALJDEC - Licensing
2023A-14565-NPC-ROC · Registrar of Contractors · 2024-04-18
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Phoenix Scaffolding and Equipment Inc,
COMPLAINANT
v.
Legacy Contracting LLC
License No. ROC 333553,
RESPONDENT
No. 2023A-14565-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: March 29, 2024, 9:00 A.M.
APPEARANCES: Melinda Yarbro, Controller, appeared on behalf of Complainant; Daylyn Eagleshield, CEO, appeared on behalf of Respondent
ADMINISTRATIVE LAW JUDGE: Roger Geddes
EXHIBITS ADMITTED INTO EVIDENCE: Complainant’s Exhibit Nos. 1-14
_____________________________________________________________________
FINDINGS OF FACT
Background and Procedure
1. Legacy Contracting, LLC (“Respondent”), is the holder of License Number 333553 issued by the Registrar of Contractors (“Registrar”).
2. On or about December 26, 2023, Phoenix Scaffolding and Equipment, Inc. (“Complainant”), filed a Complaint against Respondent with the Registrar alleging the principal amount due of $8,120.23 from Respondent for scaffolding planks rented by Respondent from Complainant.
3. On January 18, 2024, the Registrar then issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) for the alleged failure by Respondent to pay monies in excess of $750.00 when due for materials or services rendered in connection with Respondent’s operations as a contractor. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.
4. The Registrar issued a Notice of Hearing that set a hearing for March 29, 2024, at 9:00 A.M. At the hearing, Complainant presented the testimony of Melinda Yarbro, Pebbles Moreno, and Tony Sucato; Respondent presented the testimony of Daylyn Eagleshield, CEO. The Tribunal received and admitted Complainant’s Exhibit Nos. 1-14; Respondent did not submit any exhibits.
5. Pebbles Moreno testified on behalf of Complainant, as herein relevant to the Citation, that Jerry Vaughn signed an agreement to rent scaffolding planks (Complainant’s Exhibit No. 1) and left a personal credit card with Respondent’s company information, but that it was declined. She stated Daylyn Eagleshield from Respondent then gave her another credit card to charge and that he told her that he was going to try to bring the planks back but that he never did, but he did promise to make full payment. (Complainant’s Exhibit No. 12). She testified he then promised to make a partial payment but then began to question the invoice and how many planks he had. (Complainant’s Exhibit No. 13). She stated the unpaid amount represents $2,970.24 for the rental charges (4 months at $742.56 per month) and $5,149.99 for not returning the planks. (Complainant’s Exhibit No. 11). She testified that invoices had been provided to Respondent during the months the planks were rented.
6 Melinda Yarbro testified on behalf of Complainant, as herein relevant to the Citation, that when she indicated her intention to Respondent to file a complaint with the Registrar regarding the unpaid amount, Mr. Eagleshield only then claimed that Mr. Vaughn did not have the authority to rent the planks. She stated Respondent did make payments on the account in May, October, and November 2023. (Complainant’s Exhibit No. 11).
7. Dewal Tuilefano testified on behalf of Complainant, as herein relevant to the Citation, that he processed the original contract for the rental with Mr. Vaughn on March 10, 2023, who represented that he was renting on behalf of Respondent.
8. Daylyn Eagleshield testified on behalf of Respondent, as herein relevant to the Citation, that he was unclear about the planks because Respondent had a sufficient amount of planks, and might have only needed a few more planks at most. He stated the amount of planks Complainant is invoicing did not line up with what Respondent would have needed. He testified that Mr. Vaughn did not have the authority to rent planks and that he was suspended in early 2023 and fired in April or May 2023. He stated he believed Mr. Vaughn took the planks, and he did not believe Respondent had the planks. He further stated he did not receive invoices from Complainant during the months the planks were supposedly rented.
9. Pursuant to Arizona Administrative Code Rule 4-9-117, administrative notice is taken of the Registrar’s public website which reflects Respondent was first issued the subject license on June 6, 2021, and is presently in suspended status due to lack of a Qualifying Party. The site also reflects five Open Cases, no Disciplined Cases, and four Resolved/Settled cases.
CONCLUSIONS OF LAW
1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154.
2. 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 preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119.
3. To warrant such sanctions by the Registrar, a Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” BLACK’S LAW DICTIONARY 1182 (Rev. 6th ed. 1990).
4. The suspended status of Respondent’s license does not deprive Complainant of the right to prosecute a complaint against Respondent or prevent the Registrar from determining the merits of Complainant’s complaint. See A.R.S. § 32-1154(D) (“The expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . .”).
5. A.R.S. § 32-1154(A)(10) included 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.
6. A.R.S. § 32-1154(A)(10). Complainant has satisfied its burden to demonstrate that Respondent has failed to pay Complainant monies that had become due for materials or services rendered in connection with Respondent’s operations as a contractor. However, even though Complainant has claimed the total amount of $8,120.23 is due, the Tribunal finds only the rental charges for the planks in the amount of $2,970.24 are monies due under A.R.S. § 32-1154(A)(10), but that the non-return of the planks charge of $5,149.99 is not money due under A.R.S. § 32-1154(A)(10).
The Tribunal finds that monies in the amount of $2,970.24 (monthly rate of $742.56 for 4 months) are due Complainant for the rental of the planks. Respondent denied it ever received or rented the planks and in essence claimed that a rogue employee (or former employee) must have fraudulently rented them for his own use and not for the benefit of Respondent. However, such a claim is inconsistent with the communications of the parties and actions of Respondent. The planks were rented in March 2023 and the evidence presented reflected that Respondent gave Complainant a credit card for rental charges which Complainant in fact charged for rentals for May, October, and November 2023. (Complainant’s Exhibit No. 11). The written evidence presented showed that Respondent did not question the propriety of the charges until December 2023, just before this subject Complaint was filed. Further, even if this employee truly did not have the authority to rent the planks and bind Respondent to the contract with Complainant, the evidence suggests to the Tribunal that Respondent later ratified that agreement.
The Tribunal does not consider the non-return charge of $5,149.99 assessed by Complainant to constitute money due under A.R.S. § 32-1154(A)(10). The contract was for the rental of planks at a specific rate. There was no evidence that retention or purchase of the planks was contemplated. This non-return charge was more in the nature of contractual damages suffered by Complainant due to the unauthorized retention of the planks. Indeed, Section 2 of the contract between the parties states that “if Lessee does [retain the Equipment], Lessor in addition to its other remedies herein [such as repossession] shall be entitled to damages during such period after the Termination Date as Lessee retains the Equipment, such damages to be in the amount of 150% of the rent.” (Complainant’s Exhibit No. 1). Thus, while Complainant may very well be entitled to contractual damages for the unauthorized retention of the planks, such damages do not constitute money due under A.R.S. § 32-1154(A)(10).
Further, even if the unauthorized retention of the planks is considered to create an amount due for materials rendered in connection with Respondent’s contractor operations, there was no evidence presented to support the specific amount of $5,149.99 invoiced for the non-return of the planks. There was nothing in the contract to explain how this amount was calculated, whether it was calculated as 150% of the rent (a term not clearly defined in the contract), or whether it was some other valuation method such as cost, market value, or the depreciated value or cost of the planks. Accordingly, Complainant has failed to meet its burden to show that the amount invoiced for the retention of the planks was money due under A.R.S. § 32-1154(A)(10).
7. There was no claim made or evidence presented to show that Respondent lacked the capacity to pay or that Respondent had not received sufficient monies as payment for the particular construction work project or operation for which Complainant’s services or materials were rendered.
8. In this matter, Complainant has established by a preponderance of the evidence that Respondent’s license should be disciplined for a violation of A.R.S. § 32-1154(A)(10).
RECOMMENDED ORDER
Based on the foregoing, it is recommended that within seven (7) days of the effective date of this order, Respondent’s License Number 333553 is suspended (or shall remained suspended) until the Registrar receives and accepts written verification that Respondent has paid $2,970.24 to Complainant in certified funds.
It is further recommended that if and when the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $2,970.24 in certified funds, the Registrar may close this Complaint.
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, April 18, 2024.
/s/ Roger Geddes
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]
Phoenix Scaffolding and Equipment Inc
[email redacted]
Legacy Contracting LLC
[email redacted]
By: OAH Staff