VACATE/ Order entered prospectively on 8/17/99, allowing objection

99F-2712-ROC · Registrar of Contractors · 1999-09-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

The hearing of this matter is scheduled for September 3, 1999. The alleged violations of the Citation and Complaint concern A.R.S. §32- 1154(A)(1), (7) and (11), refusal to perform, wrongful or fraudulent act and failure to pay. Based on the complaint, the Respondent and Complainant entered a contract whereby the Complainant paid Respondent a deposit toward performance on a contract between the Complainant and a homeowner. Prior to performance, the Respondent evidently experienced an accident (a fire), and was unable to perform and did not refund the deposit. On March 23, 1999, the Complainant filed its complaint with the Registrar of Contractors (Registrar). On May 28, 1999, the Registrar filed the Citation and Complaint in the instant case. On June 17, 1999, the Respondent filed a Chapter 7 Voluntary Petition in Bankruptcy, in the United States Bankruptcy Court, District of Arizona, Case No. 99-07185 PHX GBN. A copy of the petition was received by Office of Administrative Hearings on August 16, 1999. The automatic stay provisions of the United States Bankruptcy Code, USC § 362(a)(1) provide that the stay applies to the commencement or continuation of a proceeding against the debtor that was or could have been commenced prior to the filing of the petition. The stay also applies to administrative proceedings. The stay does not apply to an agency’s enforcement of its regulatory or police power relating to issues of public health, safety and welfare. The facts asserted in the instant Citation and Complaint indicate a pecuniary issue which at best is only remotely related to public health and safety concerns. The matter is therefore one which would utilize the Office of Administrative Hearings, the Office of the Registrar and the Registrar’s sanctioning power for the presumed purpose of the Complainant attempting to obtain a financial preference over creditors in the Bankruptcy Court. Absent an order from the Bankruptcy Court, the Bankruptcy Code and the automatic stay provisions do not allow such a preference or allow the Respondent to make any such preferential payment. RECOMMENDED ORDER In view of the foregoing, it is recommended that the instant case be closed on the effective date of the Order entered in this matter, until such time as appropriate relief has been obtained from the automatic stay provisions of the Bankruptcy Code. ORDER PROSPECTIVELY VACATING THE HEARING IT IS HEREBY ORDERED that the hearing of this matter shall be vacated from the docket of the Office of Administrative Hearings effective September 2, 1999, unless an objection to this Order is received by the Office of Administrative Hearings by September 1, 1999, and said objection is fully supported by a legal memorandum concisely stating why the automatic stay provisions of the Bankruptcy Code do not apply to this case. Done this day, August 18, 1999.

_________________________________ ALLEN REED Administrative Law Judge

Copies mailed this ____ day of August, 1999, to:

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

Bruce A. Wiegard Suncraft Quality Builders 8687 E. Via De Ventura Scottsdale, AZ 85258

Dick North, Inspector Registrar of Contractors 800 West Washington, 6th Floor Phoenix, AZ 85007

Design Line Woodworks, Inc. 5413 W. Tierra Buena Lane Glendale, AZ 85306

By _______________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826