ALJDEC - Licensing

2024A-08673-NPC-ROC · Registrar of Contractors · 2026-07-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Electric Supply Inc.,

COMPLAINANT

v.

Keough Electric Company

License No. ROC 335221,

RESPONDENT

No. 2024A-08673-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 22, 2026

APPEARANCES: Victoria Mitchel on behalf of Complainant. Dough Keough, Qualifying Party, on behalf of Respondent with James Keough as observer.

ADMINISTRATIVE LAW JUDGE: Fahd Nazir

EXHIBITS ADMITTED INTO EVIDENCE: Administrative notice was taken of the hearing packet submitted by the Registrar of Contractors. After the hearing, administrative notice was taken of documentation submitted by Complainant for prior hearings. After the hearing, administrative notice was taken of documentation submitted by Respondent for prior hearings.

FINDINGS OF FACT

Keough Electric Company (Respondent) is the holder of License No. 335221 issued by the Registrar of Contractors (Registrar).

On or about March 13, 2023, Electric Supply Inc., (Complainant) subcontracted with Respondent for, among other things, construction supplies.

On July 31, 2026, Complainant filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $60,486.89.

The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a Citation alleging a possible violation of Ariz. Rev. Stat. § 32-1154(A)(10).

The matter was referred to Office of Administrative Hearings (OAH), an independent state agency, for an evidentiary hearing. The matter was scheduled for a hearing on October 22, 2024, at 10:00 AM.

The parties filed a joint motion to change hearing date to allow additional time to parties to reach settlement. The matter was further continued for a total of three times. Upon Complainant’s request, the matter was put back on calendar. A hearing a convened and concluded on June 22, 2026.

Ms. Mitchel testified on behalf of Complainant that the total outstanding amount due to Complainant initially was $60,486.89. The witness stated that all product was supplied and that Respondent had not paid, despite multiple attempts to collect payment. She added that Respondent agreed to start making regular payments and did make such payments for about a year, however, the payments stopped earlier this year, just short of the total alleged amount as per the original Complaint. Accordingly, the outstanding balance due to Complainant was $9,531.00.

Mr. Keough testified on behalf of Respondent and contended that the amount owed was still disputed. He added that Respondent voluntarily paid Complainant anywhere between $51,000 and $54,000 despite not being paid on the project by client. Due to out-of-pocket project costs exceeding $150,000, Mr. Keough asserted that Respondent lacked the ability to pay Complainant beyond the actual amount it owed Complainant. Notwithstanding, Respondent was willing to pay additional $200.00 to settle all claims.

Mr. Keough added that if the amount being alleged by Complainant was true, and did not contain penalties or attorneys’ fees, then it would be around $7,100 at most. In addition, he argued that Complainant’s legal representative never drafted a settlement agreement and therefore the amount was still disputed.

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.

A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.”

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 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.

The credible evidence demonstrated that Respondent assumed a substantial debt to Complainant by voluntarily rendering payments exceeding $50,000. Consequently, Complainant's recollection and accounting records establishing a total obligation of $60,486.00 are accepted as factually dispositive, leaving a total outstanding balance of $9,531.00. Also, the credible evidence presented at the hearing established that Complainant supplied all items it was contracted to supply.

Although Respondent was experiencing financial strain, it failed to establish by a preponderance of the evidence that it lacked the ability to pay, as required under Arizona law. Therefore, Complainant established that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10) by failing to pay Complainant $9,531.00 for services or materials rendered in connection with Respondent’s contracting business.

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.

RECOMMENDed order

Based on the foregoing, it is recommended that the Registrar suspend Respondent’s License No: 335221 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted documents that establish that it has paid Complainant $9,531.00 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $9,531.00 in certified funds, the Registrar may close the Complaint in Case No. 2024-08673.

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, July 13, 2026.

/s/ Fahd Nazir

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

Registrar of Contractors

Keough Electric Company

[email redacted]

Electric Supply Inc.

[email redacted]

By: OAH Staff