ALJDEC - Licensing

2024A-05637-NPC-ROC · Registrar of Contractors · 2024-09-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

US LBM OPERATING CO. 3009, LLC,

DBA: R&K Building Supplies,

COMPLAINANT,

LANDO DEVELOPMENT LLC,

License No. ROC 339047,

RESPONDENT.

No. 2024A-05637-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 27, 2024

APPEARANCES: Nadine Stamper appeared on behalf of US LBM Operating Co. 3009 LLC dba R&K Building supplies. Orlando Ramirez, Qualifying Party, appeared representing Lando Developments LLC.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: Registrar Notice of Hearing Packet (Administrative Record or AR)

_____________________________________________________________________

FINDINGS OF FACT

Lando Developments LLC (Respondent) is the holder of License No. 339047, KB-2 Dual Residential and Small Commercial, issued by the Arizona Registrar of Contractors (Registrar) in June of 2022.

US LBM Operating Co. 3009 LLC dba R&K Building Supplies (Complainant) supplied materials for Respondent on at least two projects.

Under the parties’ credit agreement, payments were due from Respondent on a Net 30-day basis.

On or about May 17, 2024, the Registrar received a Non-Payment Complaint against Respondent from Complainant alleging nonpayment in the amount of $37,607.89. The at-issue invoices spanned from December 14, 2023 to January 10, 2024.

On June 11, 2024, the Registrar issued a Citation against Respondent, charging the possible violation of A.R.S. § 32-1154(A)(10), failure to pay monies in excess of $750 when due for materials or services rendered in connections with a licensee’s operations as a contractor.

Respondent filed its Answer on or about June 27, 2024. Additionally, Respondent had reached out to Complainant regarding the financial difficulties it was experiencing, including trying to avoid bankruptcy, and proposing a payment plan.

The matter was not resolved informally between the parties and the Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

On July 19, 2024, the Registrar issued its Notice of Hearing. The Office of Administrative Hearings then issued an order by email advising the parties the hearing would be conducted virtually by videoconference or telephone via Google Meet and providing the instructions to connect to the hearing.

At the hearing, Ms. Stamper reviewed for the hearing record regarding the five invoices for this project that remained unpaid; she indicated the materials supplied were trusses and lumber for a fast-food restaurant. Ms. Stamper also noted that, on two other projects, Respondent had paid on Complainant’s invoices. Ms. Stamper indicated that she was aware that Respondent is expecting payment from the general contractor on this project and that he then intends to make payment to Complainant from that payment.

At the hearing, Mr. Ramirez indicated that he had previously been operating the company as labor only and that he had difficulty balancing the administrative needs, and the supply and labor costs under the Net 30-day situations. Respondent had used monies received from its work on projects to continue to work on all its projects. In Respondent’s Answer, Mr. Ramirez had noted that he now understood he had not had enough capital to take on Net 30-day situations.

Regarding this specific project, Respondent stated that its efforts to get the payment from the general contractor were thus far to no avail, in that the general contractor was not responding. Respondent requested of Complainant the possibility of a payment plan again suggesting a payment plan as had been suggested in his June 2024 emails.

Complainant’s position is that they are both on the same page in just trying to get these invoices paid.

Since the day of the hearing, Complainant has not notified the Tribunal that Respondent has made any payment, either in full or in part.

Since the day of the hearing, Respondent has not notified the Tribunal that it has received payment from the general contractor on the fast-food project.

Administrative notice is taken of Respondent’s License record as of September 16, 2024. The ROC License record also reflects that there are two open complaints against Respondent’s license, one of which is the instant case.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazzano v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “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.

Emphasis added here.

The evidence of record established that Complainant provided materials to Respondent for a project on which Respondent was working and, further, that Respondent at this time has not yet made payment on the referenced Complainant’s invoices for the materials supplied.

Mr. Ramirez credibly testified that he had not been fully paid by the general contractor on the project for which these materials had been supplied by Complainant. However, Mr. Ramirez did not proffer evidence that Respondent had not already been paid sufficient monies on that project with which it could have paid Complainant’s invoices.

Therefore, the evidence of record established that Respondent is in violation of A.R.S. § 32-1154(A)(10).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, in the absence of evidentiary proof from Complainant that Respondent has paid the remaining unpaid balance to Complainant in full, the Registrar shall suspend Respondent’s License No. 339047, effective on such deadline date.

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.

-54864001

001

-137160-45720000Done this day, September 17, 2024.

/s/ Kay A. Abramsohn

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

US LBM OPERATING CO. 3009, LLC

DBA: R&K Building Supplies

[email redacted]

nadines@r&k.com

LANDO DEVELOPMENT LLC

[email redacted]

By: OAH Staff