ALJDEC - Licensing
2024A-05312-NPC-ROC · Registrar of Contractors · 2024-08-23
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
R W C Building Products,
COMPLAINANT,
v.
Spartan Roofing LLC
ROC License No. 333086,
RESPONDENT.
No. 2024A-05312-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: August 23, 2024 at 9:00 AM.
APPEARANCES: Mark Wogernese appeared on behalfof R W C Building Products (“Complainant”). No appearance(s) by or on behalf of Spartan Roofing LLC (“Respondent”).
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the attached agency file, was admitted into the evidentiary record with a Hearing Order dated July 24, 2024.
_____________________________________________________________________
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 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 April 20, 2021, the Registrar issued ROC License No. 333086 for Specialty Dual CR-42 Roofing contracting to Respondent. Such prior license record reflects that Respondent’s license is active, in good standing, and renewed through April 30, 2025. Alexander Simpson Jr. is listed on the license as the Qualifying Party and Manager. The address of record for the license is 2040 S. Alma School Rd., #461 Chandler, Arizona 85286. Respondent has a $6,750.00 surety bond for the license issued through RLI Insurance Company, effective March 31, 2021. The license has no prior disciplinary record. Currently, the record reflects that there are two (2) open complaint against the license, one of which is presumed to be related to this matter.
On May 07, 2024, 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 payment(s) on a $9,395.51 outstanding line of credit Complainant opened with Respondent. The Registrar designated it Complaint No. 2024-05312 and assigned the case to Meridith Bell in their legal department for investigation.
On May 15, 2024, 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 May 22, 2024.
Respondent did not provide a response.
On June 05, 2024, 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 June 20, 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 June 19, 2024, the Registrar received Respondent’s timely Answer whereby Mr. Simpson generally admitted the alleged violation(s) of Ariz. Rev. Stat § 32-1154(A)(10) with the following statement:
We plan on setting up and paying whatever we owe. I told them originally I would start paying it down o guess they was not satisfied with that but the turned it into a agency so I will start dealing with them to get this resolved.
(All errors in original.)
On or about July 01, 2024, this matter was referred to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 23, 2024. Per the Notice of Hearing on Contested Case (“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
Mark Wogernese testified on behalf of Complainant. Although afforded a brief 5-minute grace period, there was no appearance by or on behalf of Respondent.. The substantive facts of record are as follows:
On December 20, 2023, Respondent submitted a commercial credit application to Complainant. The application included the following Terms of Sale, in pertinent parts:
PAYMENT: In consideration of Roofing Wholesale, Co., D.B.A. RWC Building Products (“RWC”) extending credit to Applicant, Applicant agrees to pay for all items and services picked and delivered to, or at the request of, Applicant. Applicant acknowledges that a service charge computed on the basis of 1 and 1⁄2 percent per month (or such higher rate as allowed by law) of all sums due to RWC which have not been received by the end of the month, will be charged to Applicant by RWC and Applicant agrees to promptly pay said service charge. Waiver of any one or more service charges shall not be deemed to be a waiver of further service charges. Applicant understands and agrees to a minimum return charge of 20% on acceptable goods returned. Applicant agrees to pay by cash, check, or ACH.
* * *
CONTINUING GUARANTEE: For valuable consideration, receipt of which is hereby acknowledged, the undersigned Guarantor(s) jointly and severally, absolutely and unconditionally guarantee to RWC the prompt payment up to the amount of $1,500,00 per guarantor when due from time to time, of the unpaid balance owed to RWC for all goods and services sold and to be sold to Applicant by RWC together with all service charges, attorney’s fees, costs and expenses. This Agreement is continuing guaranty and is to be in full force and effect until revoked by us as to future sales by written notice delivered to RWC.
(Emphasis in original.)
The application was signed by Alexander Simpson Jr. on behalf of Respondent.
Respondent’s credit application was approved by Complainant for a $10,000.00 limit.
Between January 08, 2024, and March 07, 2024, Complainant issued Respondent eleven (11) invoices for charges totaling $8,335.71. Each invoice included a 1% discount on the balance due if paid on the 10th of the following month, with a total balance due sans discount by the end of that next month.
In March 2024, Mr. Simpson avowed to Mr. Wogernese that Respondent would “clear the balance in a few days.” Respondent never paid any of the invoices, in whole or in part.
Additional Evidence
In addition to the outstanding invoices owed by Respondent, Complainant also provided the Registrar with Finance Charge statements issued to Respondent March 01, 2024, and April 01, 2024, each for $122.70, and an invoice for $227.52 that Respondent had allegedly charged to another client’s line of credit.
On May 14, 2024, the Registrar advised Complainant that the $245.40 in finance charges and $227.52 invoice could not be included in its nonpayment claim against Respondent. As a result, Complainant submitted an amended nonpayment complaint form to the Registrar for $8,335.71.
Closing Arguments
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(es) of record are sufficient, and Respondent is deemed to have received the 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.
The relevant and credible facts clearly establish that Respondent applied for a line of credit with Complainant, which was approved. The record also clearly establishes that Respondent racked-up $8,136.22 in charges in January 2024, and another $199.49 in March 24, of which it never tendered a single payment to Complainant for the outstanding balance. The record further reflects that despite multiple attempts to contact Respondent, Complainant was only successful on one occasion whereby Respondent asserted it would commence making payments, but never did. It is uncontroverted that Respondent still owes Complainant $8,335.71 for the charges it placed on its defaulted line of credit.
Therefore, the only issue remaining is whether Respondent raised a sufficient justification or excuse for failing to tender payment in full to Complainant on its commercial line of credit. This is an affirmative defense that Respondent bears the burden to establish. The Tribunal is not at liberty to make presumptions in favor of Respondent or accept facts in mitigation on behalf of Respondent that are not supported by the evidence. Here, the record shows that Respondent never made a payment to Complainant towards the balance on its line of credit, and had no affirmative defense(s) for doing so. Because Respondent failed to appear and provide testimony, this burden has not been sustained. Notably, Respondent’s absence from this administrative proceeding is also a factor in aggravation, as it evinces the licensee’s unwillingness to be regulated by the Registrar.
Because Complainant established by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10), Complainant also established cause for the Registrar to discipline Respondent’s contractor’s license.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that on the effective date of the Final Order in this matter, Respondent Spartan Roofing LLC, ROC License No. 333086, shall be suspended for violation(s) of Ariz. Rev. Stat. § 32-1154(A)(10).
IT IS FURTHER RECOMMENDED that ROC License No. 333086 shall remain in a suspended and inactive status until Respondent provides the Registrar with sufficient proof that $8,335.71 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 2024-05312 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, August 26, 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]
R W C Building Products, Complainant
c/o Mark Wogernese, Agent
1918 W Grant St
Phoenix, AZ 85009
[email redacted]
Spartan Roofing LLC, Respondent
c/o Alexander Simpson Jr., Agent
2040 S Alma School Rd #461
Chandler, AZ 85286
[email redacted]
By: OAH Staff