ALJDEC - Licensing
2024A-04222-NPC-ROC · Registrar of Contractors · 2024-08-08
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
PRESTIGE PLUMBING COMPANY LLC,
COMPLAINANT
v.
SE Construction, LLC
License No. ROC 296493,
RESPONDENT.
No. 2024A-04222-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: July 19, 2024
APPEARANCES: Raul Leyva represented PRESTIGE PLUMBING COMPANY LLC (Complainant.) Elizabeth Adams represented SE Construction, LLC (Respondent.)
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
_____________________________________________________________________
FINDINGS OF FACT
1. Respondent hired Complainant to perform plumbing work for Shimogamo Restaurant, in connection with Respondent’s work as a general contractor.
2. Complainant’s qualifying party is Jesus Leyva.
3. Raul Leyva is Complainant’s employee.
4. Respondent’s qualifying party is Elizabeth Adams.
5. Complainant performed the plumbing work as required under the contract and issued an invoice to Respondent for labor and materials, in the amount of $66,660.02, in or around February of 2004.
6. Respondent did not pay the invoice.
7. On or about April 9, 2024, Complainant filed a complaint with the Registrar of Contractors (Registrar) alleging that Respondent failed to pay for labor and materials provided by Complainant when payment became due.
8. On May 17, 2024, the Registrar issued a Citation against Respondent license alleging that Respondent violated Arizona Revised Statutes (A.R.S.) 32-1154(A)(10).
9. Respondent filed a timely answer to the Citation.
10. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.
11. A hearing was held on July 19, 2024. At hearing, Raul Leyva testified on behalf of Complainant.
12. Raul Leyva explained that Respondent failed to pay Complainant after Complainant performed plumbing work for Respondent as agreed under the contract. Raul Leyva also stated that change orders were issued to Respondent.
Raul Leyva explained that Respondent never set official deadlines. Raul Leyva aul stated that there was delay in the project because the owner took time to decide on the size of water heater he desired. Raul Leyva stated that Respondent did not notify Complainant of work that needed to be repaired.
13. Ms. Adams stated that Complainant did not complete the work under the contract or change orders. Ms. Adams alleged that Complainant owes Respondent $33,450.78. Ms. Adams stated that although Complainant was provided with a work schedule, Complainant could not complete work by the dates listed in the schedule.
Ms. Adams stated that the project started two weeks later than originally expected.
Ms. Adams stated that there was a charge for the glass washer that Complainant should be responsible for paying. Ms. Adams stated that Complainant made unsatisfactory job progress, there were defective materials not remedied by the contractor, and that Complainant failed to comply with other material provisions of the construction contract. Ms. Adams admitted that Complainant’s work passed required inspections after prior failed inspections.
CONCLUSIONS OF 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. Ariz. Admin. Code 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.” Ariz. Rev. Stat. § 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.” Ariz. Rev. Stat. § 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).
Ariz. Rev. Stat § 32-1154(A) provides that:
The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: .... 10. Failure by a licensee or agent or official of a 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.
8. Ariz. Rev. Stat § 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 . . . 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.”
9. Payment for “[s]ervices rendered in connection with the licensee’s operations as a contractor” does not include interest, finance charges, lien charges, or other charges that are based solely on contract terms.
10. The preponderance of the evidence shows that Complainant performed work consistent with the contract. Respondent failed to provide sufficient evidence to establish that it was entitled to any offset of the amounts owed to Complainant. Therefore, the Administrative Law Judge concludes that Complainant violated Ariz. Rev. Stat § 32-1154(A)(10) as alleged.
11. Based upon Respondent’s violation of the provisions of Ariz. Rev. Stat § 32-1154(A)(10), grounds exist to impose discipline against Respondent’s license.
12. Because A.R.S. § 32-1154(A)(10) only includes a licensee’s failure to pay for
materials or services rendered in connection with the licensee’s operations as a contractor, not late fees, interest, or other consequential or contractual damages, the Administrative Law Judge does not recommend that Respondent be required to pay late fees as a condition of keeping its contractor’s license in good standing.
RECOMMENDed order
Based on the foregoing, it is recommended that the Registrar suspend SE Construction, LLC License No. ROC 296493 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $66,660.92 in certified funds.
It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $66,660.92 in certified funds, the Registrar may close the Complaint in Case No. 2024A-04222.
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, August 8, 2024.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
SE Construction, LLC
[email redacted]
PRESTIGE PLUMBING COMPANY LLC
[email redacted]
By: OAH Staff