ALJDEC

97F-2708-ROC · Registrar of Contractors · 1998-01-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 22, 1997 in Phoenix, Arizona.

APPEARANCES: Mr. Mark Wogernese, Qualifying Party, for Complainant; and Mr. Julian Sanders, Owner, for Creative Builders.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn _____________________________________________________________________

The hearing in this matter was held for the purpose of determining whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (“Registrar”). Testimony and evidence was taken into the record. The matter was taken under advisement and the hearing was concluded at the time. Based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made: FINDINGS OF FACT 1. This matters arises out of Complainant’s claim against Respondent that Respondent has failed to pay Complainant a sum due for materials which were provided through Respondent’s account. 2. Complainant is in the business of selling roofing materials. As a normal part of its business, Complainant allows persons and businesses to set up business credit via a business account. Respondent has such an account for its business with Complainant. 3. In order to help out an acquaintance, Mark O’Classen with Personalized Roofing, Inc. (PRI), Respondent agreed to allow PRI to charge materials on its account to use on PRI jobs. There was also some information regarding a company referred to as On-Top Roofing, having used the account, but no other specific person was

indicated as being owner of On-Top Roofing. There were no written agreements executed for this credit-use arrangement. Respondent testified that he had verbally worked out an arrangement with Brian Bailey, a manager of Complainant, to allow PRI to do so, but on the condition that there were joint payment checks [payable to PRI and to Complainant] from the general contractors and that there be twenty-day notices on the projects. Respondent testified that Complainant had a legitimate complaint, but that it was directed against the wrong person, and should be addressed against PRI because Respondent personally had not purchased or used these materials. 4. Complainant filed its complaint with Registrar on May 7, 1997 alleging nonpayment after purchases over $750.00. 5. Registrar issued its Notice of Hearing on August 29, 1997 alleging violations by Respondent of Arizona Revised Statutes (A.R.S.) §32- 1154.A.7, A.11 and A.23. 6. At the hearing, Complainant presented evidence of the overdue balance on Respondent’s account of $5,559.04. The account and payment records of Complainant show running amounts of purchases and billings and payments made on the account. While there had been some PRI payments on the materials purchased, there had also been some returned (for insufficient funds) checks from PRI. Complainant testified that one job was a residential project which could not be liened, and the other was a commercial project which could have been liened. 7. Respondent testified that the materials were purchased by PRI, and used at PRI job(s) and at one job by On-Top Roofing. Respondent argued that it was useless to have a hearing on this matter without including his filed complaint against PRI; however there was no consolidation of these cases for hearing. Respondent’s September 1997 Answer to the Citation and Complaint does mention “inclusion of my complaint”, but does not ask that the matters be consolidated. This matter was Noticed since October 1997, and no amendment of the Citation and Complaint was indicated by Registrar.

8. The evidence presented demonstrates that Respondent agreed to being responsible for payment for materials from Complainant for purchases made by PRI on several projects, and that some amounts on Respondent’s account remain owing to Complainant. It is determined that Respondent has had no just reason for failing or refusing to pay the sum Complainant claims are due on Respondent’s account.

APPLICABLE LAW A.R.S. §32-1154.A. provides, in the following relevant portions, that a holder of a license or a person listed on a license shall not commit the following: 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. xxx 11. 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. xxx 23. Failure to take corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving written directive from the Registrar... .

CONCLUSIONS OF LAW 1. To warrant action by the Registrar pursuant to the statutes above, Complainant must demonstrate by a preponderance of the evidence that Respondent violated any one of the statutes. 2. There was no testimony or evidence with regard to failure to comply with Registrar directives or unworkmanlike efforts on the part of Respondent. Therefore, there is no finding of any violation of A.R.S. §32- 1154.A.23. 3. With respect to Respondent’s alleged wrongful conduct, Complainant sustains its burden of demonstrating a violation. Complainant has demonstrated sufficient evidence that Respondent violated §32-1154(A)(7), a wrongful act in failing to make the payment of monies due. 4. With respect to Respondent’s alleged failure to pay monies in excess of $750.00 due and owing to Complainant, Complainant again sustains its burden of demonstrating a violation. Complainant has demonstrated sufficient evidence that Respondent violated §32-1154(A)(11). RECOMMENDED DECISION 1. In view of the foregoing, it is recommended commencing on the effective date of the final order of the Registrar in this matter, that Respondent ’s Class B-01 license, number 069851, be suspended.

2. It is further recommended that Respondent have an opportunity to avoid suspension of its license. Therefore, if, by the final order’s effective date, Respondent tenders to Complainant the sum of $5,559.04, then the above-provided license suspension shall not take place and Citation No. 97-2708 shall be closed.

ORDERED and DATED this day: January 14, 1998.

______________________________________ Kay A. Abramsohn Administrative Law Judge

Foregoing mailed this ____ day of January, 1998, to:

Mr. Michael P. Goldwater, Director Registrar of Contractors ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

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Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 PH (602) 542-9826 / FAX 542-9827