ALJDEC - Licensing

2024A-12071-NPC-ROC · Registrar of Contractors · 2025-01-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Copperstate Cabinets LLC,

DBA: Copperstate Cabinet Company

COMPLAINANT,

v.

CSE and Associates Inc

DBA: C.S. Edmunds Homes

License No. ROC 116885,

RESPONDENT.

No. 2024A-12071-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 6, 2025

APPEARANCES: Matt Coffey appeared on behalf of Copperstate Cabinets LLC, DBA: Copperstate Cabinet Company. Scott Edmunds appeared on behalf of CSE and Associates Inc DBA: C.S. Edmunds Homes.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

Copperstate Cabinets LLC, DBA: Copperstate Cabinet Company

(Complainant) and CSE and Associates Inc DBA: C.S. Edmunds Homes (Respondent), entered into a contract wherein Complainant would manufacture and install cabinets for Respondent at the Nadasky, Wickenburg Ranch Lot 349 (Nadasky project), in connection with Respondent’s operations as a contractor.

Respondent performed the work pursuant to the contract.

On October 29, 2023, Complainant issued an invoice to Respondent for the

work in the amount of $30,912.25, (hereinafter “Invoice 1097”), for the work that Complainant performed.

Respondent did not pay the invoice.

Complainant subsequently filed a Complaint with the Arizona Registrar of

Contractors (Registrar or ROC), on October 28, 2024. Through the Complaint, Complainant alleged that Respondent failed to pay for services and materials rendered to Respondent, in connection with Respondent’s operations as a contractor.

On November 8, 2024, the Registrar issued a Citation to Respondent

alleging that Respondent had violated Ariz. Rev. Stat. section 32-1154(A)(10).

Respondent filed a timely answer to the Citation.

The matter was referred to the Office of Administrative Hearings for an

evidentiary hearing.

A hearing was held on January 6, 2025.

At hearing, Matt Coffey, Complainant’s owner, testified on behalf of

Complainant. Scott Edmunds, Respondent’s qualifying party, testified on behalf of Respondent.

Testimony of Matt Coffey

The owner of Nadasky project paid Respondent for the cabinetry work.

After the project began, the owner wanted to continue working with Complainant. However, the owner no longer wanted to work with Respondent. After Respondent failed to make the final payment, Complainant and Respondent agreed to resolve their dispute through a separate construction contract wherein Complainant would perform cabinetry work for Respondent on a second project (hereinafter “project 2”). Respondent paid Complainant a down payment in the amount of $9,000 dollars for project 2. Mr. Coffey contended that the start date for construction was delayed because changes were requested by Respondent. Respondent demanded that Complainant return the $9,000 payment. However, Complainant informed Respondent that he could not return the money because he had already used the money purchase the materials for project 2.

Testimony of Scott Edmunds

Scott Edmunds did not dispute the accuracy of Invoice 1097. Mr. Edmunds

alleged that Respondent was never paid by the owner of the Nadasky project.

Mr. Edmunds did not dispute that Respondent was paid for the cabinetry portion of construction. Mr. Edmunds stated that Respondent was never paid for the total construction of the home, and that Respondent did not have the funds to pay Complainant. At hearing, Mr. Edmunds submitted bank statements from an account owned by Respondent. Mr. Edmunds explained that the bank statements in exhibits CSE000003-CSE000006 were designated for the Nadasky project. The bank statements reflect ending balances at the end of each month beginning May 2024 to July 2024. The account balance did not exceed $129.07 in any given month. However, Respondent did not provide statements for Respondent’s other bank accounts.

Mr. Edmunds agreed that the parties decided to resolve the amount owed on

the Nadasky project through project #2. However, Mr. Edmunds alleged that he lost the job because Nadasky project Complainant never started work. Mr. Edmunds admitted that he delayed in obtaining the measurements for the wall where the cabinetry would be installed. However, Mr. Edmunds did not agree that it was his responsibility to measure the wall. Mr. Edmunds alleged that his contract with the owner of the Nadasky project was a contract where payments were made based upon on stage of the project and not specifically when cabinetry was finished. Mr. Edmunds also admitted on cross-examination that he did not make clear to the owner the parts of construction that the owner was paying for when he made payments to Respondent. Mr. Edmunds did not clarify whether the money he received from the owner was for the cabinetry.

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.” A.R.S. § 1-211(B).

The purpose of the ROC’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).

A.R.S. § 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. 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 . . . 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 Administrative Law Judge concludes that Respondent has failed to

meet his burden of establishing the affirmative defense that he was not paid by the owner and that he lacked the capacity to pay. The preponderance of the evidence shows that Respondent failed to pay Complainant $30,912.25 for services and materials rendered to Respondent for the Nadasky project, when payment became due.

11. Based on the foregoing, the Administrative Law Judge concludes that Respondent violated A.R.S. § 32-1154(A)(10) as alleged.

12. Based upon Respondent’s violation of the provisions of A.R.S. § 32-1154(A)(10), grounds exist to impose discipline against Respondent’s license.

13. 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 ROC suspend license number 116885 held by CSE and Associates Inc DBA: C.S. Edmunds Homes, until it has provided to the ROC, and the ROC has accepted, documents that establish that it has paid Complainant $30, 912.25 in certified funds.

It is further recommended that when and if the ROC receives and accepts Respondent’s evidence that it has paid Complainant $30,912.25 in certified funds, the ROC may close the Complaint in Case No. 2024A-12071.

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, January 27, 2025.

/s/ Velva Moses-Thompson

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Copperstate Cabinets LLC

DBA: Copperstate Cabinet Company

[email redacted]

CSE and Associates Inc.

DBA: C.S. Edmunds Homes

[email redacted]

By: OAH Staff