ALJDEC

97F-2762-ROC · Registrar of Contractors · 1997-11-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 13, 1997; 9:30 A.M.; Phoenix, Arizona APPEARANCES: Complainant: Jose Luis Guzman Diaz Respondent: No Appearance ADMINISTRATIVE LAW JUDGE: George A. Schade, Jr.

Based upon the evidence presented at the hearing, Administrative Law Judge George A. Schade, Jr. submits this Recommended Decision and Order to the Director of the Arizona Registrar of Contractors (“Registrar”). FINDINGS OF FACT 1. Respondent Gold Creek, Inc. (“Gold Creek”) holds License No. 111662, Class B, issued by the Registrar on March 4, 1996. Mr. John David Addison is the qualifying party. 2. Complainant Jose Diaz Tile Contractor, Inc. holds License No. 067706, Class C-48, issued by the Registrar on May 13, 1987. Mr. Jose Luis Guzman Diaz is the qualifying party. 3. On October 9, 1996, Complainant and Gold Creek entered into a contract whereby Complainant would install ceramic tile and Respondent would pay $14,920.65 for this work. 4. From October to December, 1996, Complainant installed ceramic tile throughout a private residence (Mileff residence) in Fountain Hills, Arizona, including two bathrooms and showers but excepting the bedrooms. 5. On May 14, 1997, Mr. Jose Luis G. Diaz, on behalf of Complainant, filed a complaint alleging that Gold Creek owed it $2,920.65 under the terms of the contract. 6. On June 10, 1997, and on July 15, 1997, Mr. Diaz requested an administrative hearing, as Complainant had not been paid in full. Complainant had, however, during that month period been paid $1,500.00. 7. On August 1, 1997, the Registrar issued to Gold Creek Citation and Complaint No. 97-2762 alleging violations of Arizona Revised Statutes (“A.R.S.”) §§ 32-1154(A)(7), 32-1154(A)(11), and 32-1154(A)(23). 8. On August 7, 1997, Gold Creek answered the citation indicating that the complaint was “substantially accurate,” Gold Creek was “having financial difficulties which are causing the delay in payment, and “we will pay in full at the earliest possible date.” No disagreement with the claimed balance of $1,420.65 was expressed. 9. On September 3, 1997, the Registrar issued a Notice of Hearing. Under the authority of A.R.S. § 41-1092.02, the hearing was assigned to the Office of Administrative Hearings. 10. On November 13, 1997, a hearing was held. The start of the hearing was delayed for thirty minutes. Mr. Addison did not appear, and no other representative of Gold Creek appeared. Following the conclusion of the hearing, the Office of Administrative Hearings was informed Mr. Addison was not able to appear at the hearing because he had been involved in a car accident that morning.[1] 11. Gold Creek has paid Complainant pursuant to their contract, but a balance of $1,420.65 is due the Complainant. 12. On November 4, 1997, Mr. Addison informed the Office of Administrative Hearings “that this matter will be settled prior to the hearing, and he will advise the office as soon as the matter is finalized.” He was responding to a telephone call from the Office of Administrative Hearings regarding the status of this matter. 13. The Registrar did not issue a formal Corrective Work Order. GOLD CREEK’S PRIOR DISCIPLINARY RECORD 14. The Registrar’s public records show that during the past two years one confirmed complaint (Berlin, No. M97-1443) has been filed against Gold Creek, and a total of 17 complaints have been filed with allegations of nonpayment of monies for contractor’s services rendered. Fifteen of these complaints for nonpayment have been resolved, and two, including this complaint, remain pending. CONCLUSIONS OF LAW The issues are did Gold Creek violate any of the following disciplinary provisions? APPLICABLE STATUTES AND RULES A.R.S. § 32-1154(A) provides in the pertinent subsections: “A. 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: *** 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. *** 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 operation 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. *** 23. Failure to take appropriate 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 a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held pursuant to the provisions of this article.” CONCLUSIONS OF LAW 1. The evidence establishes that Gold Creek violated A.R.S. §§ 32- 1154(A)(7) and 32-1154(A)(11). Complainant, a licensed contractor, performed services for the benefit of Gold Creek’s “operation as a contractor,” and has not been paid in full. Not paying a licensed contractor for services and materials rendered constitutes a “wrongful” act which, in this case, has resulted in Complainant being “substantially injured.” Black’s Law Dictionary defines “substantial” as meaning “Of real worth and importance; of considerable value; valuable.” BLACK’S LAW DICTIONARY 1428 (6th ed., 1990). The amount of $1,420.65 is of “real worth and importance” to the Complainant. 2. Gold Creek did not violate A.R.S. § 32-1154(A)(23) as a formal Corrective Work Order was not issued. 3. The Registrar “may temporarily suspend, with or without imposition of specific conditions,” a residential contractor’s license for violations of any of the provisions of A.R.S. § 32-1154(A). A.R.S. § 32-1154(B). 4. Gold Creek’s prior disciplinary record may be considered “in mitigation or aggravation when formulating and submitting an appropriate recommended disposition of this matter.” Notice of Hearing issued on September 3, 1997 (Prior Record section). RECOMMENDED ORDER It is recommended that the Registrar suspend Gold Creek’s License No. 111662, Class B, unless and until the Registrar receives, prior to the effective date of its order of suspension, written notification that Gold Creek has paid Complainant the amount of $1,420.65. If this payment is timely made, the Registrar should close Citation and Complaint No. 97-2762. SUBMITTED this 13th day of November, 1997.

George A. Schade, Jr. Administrative Law Judge

The original Recommended Decision and Order was mailed on November 13, 1997 to Michael Goldwater, Director, Arizona Registrar of Contractors

George A. Schade, Jr. ----------------------- [1] The Administrative Law Judge wishes Mr. Addison a speedy recovery.

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