ALJDEC - Licensing

2024A-01013-NPC-ROC · Registrar of Contractors · 2024-05-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HRL Construction LLC,

COMPLAINANT,

v.

Sigma Contracting Inc,

License No. ROC 070784,

RESPONDENT.

No. 2024A-01013-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 6, 2024 (Virtual).

APPEARANCES: Dan Hinkson, President, appeared on behalf of Sigma Contracting Inc. No person appeared on behalf of Complainant.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: Registrar Notice of Hearing Packet.

FINDINGS OF FACT

Public records indicate that HRL LLC (Complainant) holds License No. 319560, KB-1 Dual Building Contractor, which was issued by the Registrar of Contractors (Registrar) in May of 2018; the public records name qualifying party for Complainant as Wilbert Hernandez Bustamonte. Public records indicate that this license was voluntarily cancelled effective February 21, 2023.

Sigma Contracting Inc. (Respondent) holds License No. 070784, B-1 General Commercial Contractor, which was issued by the Registrar in November of 1987.

On or about February 9, 2024, John F. Russell of Complainant filed a Non-Payment Complaint Form (Complaint) against Respondent with the Registrar alleging that Respondent had failed to pay Complainant on multiple change orders.

Respondent filed a February 13, 2024 response to the Complaint noting that Mr. Russell had been employed by Respondent as the project manager on a particular project, the Tempe dance Studio. Therein, Respondent noted that Mr. Russell held an ownership interest in HRL Construction along with his wife Kim Russell; further:

John hired HRL Construction, originally a licensed Arizona contractor, KB-1 Dual Building Contractor, to do small “handyman” type of work. On February 21, 2023, he/they “voluntarily canceled” their license with the State of Arizona but never notified anyone at Sigma of this cancelation. So, for seven (7) months John continued to operate HRL as a licensed contractor knowing he had cancelled HRL’s license. Once John had issued the initial purchase order to HRL he then issued multiple change orders to HRL Construction on the project. John was managing the budget, issuing himself (HRL) purchases orders, then subsequent change orders then approving payments from Sigma to HRL.

On the Tempe Dance Studio project John initially wrote himself (HRL) purchase order 2311 for $506.00 to do provide SWPP services then subsequently issued twelve (12) additional change orders to HRL on this project for a total value of $48,132.14 ... One of the change orders that John issued to himself was to paint the building, CE #44 for Painting for $26,500.00.

Please note that the paperwork for all this work scope was created by John, distributed by John, and approved for payment by John. None of this documentation has a signature on it from me or my partner Jerry Patterson.

On February 21, 2024, the Registrar issued a Citation to Respondent for the alleged violation of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(10).

Respondent filed an Answer on March 7, 2024, indicating that HRL had not performed any of the punch list items on the project, that HRL had elected to suspend its license in February 2023, and that Mr. Russell had left the employment of Sigma in September of 2023. In its Answer, Respondent also stated that Respondent is still owed $50,000.00 from the Owner of the project.

The matter was not resolved informally between the parties.

On March 19, 2024, the Registrar issued its Notice of Hearing setting the virtual hearing for May 6, 2024. The Notice was sent to the parties’ addresses of record with the Registrar.

On April 30, 2024, the Tribunal issued its ORDER providing the virtual link and phone number for the parties to appear at the virtual hearing. The ORDER was issued electronically to the parties’ electronic addresses as reflected in the Registrar’s Notice of Hearing.

At the time of the hearing, and for fifteen minutes thereafter, Complainant did not appear. As a result of Complainant’s failure to appear, Complainant presented no evidence in regard to the Complaint.

According to the Registrar’s public record, Respondent has 2 open cases, one of which is this case.

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. See Arizona Administrative Code (A.A.C.) R2-19-119.

A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

A.R.S. § 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.

Complainant failed to appear to proceed with its Complaint or to present any evidence with regard to the matter. Therefore, Complainant failed to establish that it was owed any money by Respondent in connection with Respondent’s contracting business. Complainant failed to establish that any grounds exist to impose discipline on Respondent’s license. Finally, based on Complainant’s failure to appear and proceed with the matter, Complainant’s Complaint should be dismissed.

RECOMMENDed order

IT IS ORDERED Complainant’s Complaint is dismissed.

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 Administrative Law 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, May 27, 2024.

/s/ Kay A. Abramsohn

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

Sigma Contracting Inc

[email redacted]

[email redacted]

[email redacted]

HRL Construction LLC

[email redacted]

By: OAH Staff