ALJDEC

99F-F0235-ROC · Registrar of Contractors · 1999-08-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 25, 1999 at 1:30 p.m. APPEARANCES: Complainant appeared through its qualifying party, Larry Pritchard; Respondent did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

Complainant presented evidence and testimony regarding Respondent’s failure to pay it for services rendered in connection with Respondent’s operations as a contractor. Based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT The Registrar of Contractors issued License No. 097545, Class B, to Respondent, an individual, on May 26, 1993. The Registrar’s records reveal that the license currently is expired because Respondent’s check for the renewal fee was returned by Respondent’s bank for insufficient funds. Pursuant to a contract the parties entered on or about December 21, 1997, Complainant performed specified drywall work on a residential project located at 205 Pebble Drive in the Village of Oak Creek for which Respondent was acting as general contractor. Although Complainant completed all of the specified work by March 17, 1998, Respondent has not paid Complainant the $6,800.00 promised in the contract. On or about July 24, 1998, Respondent signed a promissory note, again promising to pay Complainant $6,800.00 with interest in monthly payments of $1,533.00, beginning on November 15, 1998. Respondent made no payments pursuant to the promissory note and, on January 19, 1999, Complainant made a complaint to the Registrar. The Registrar issued a Citation and Complaint in this matter on March 31, 1999, charging Respondent with violations of A.R.S. § 32-1154(A)(7) and (11). On or about April 14, 1999, the Registrar received Respondent’s written answer, which admitted that he owed Complainant $6,800.00 for construction-related work and that the balance was past due, but that he was going through “very difficult financial problems” and could not pay the amount due unless he completed and sold a “spec house” he was building and, presumably, financing. The Registrar issued a Notice of Hearing on June 7, 1999, which was sent to Respondent at his last address of record, P.O. Box 10297, Sedona, AZ 86339, which was the same address to which the Citation and Complaint had been sent. Although the beginning of the hearing was delayed fifteen minutes to allow Respondent additional travel time, he neither appeared, personally or through an authorized representative, nor contacted the Office of Administrative Hearings or the Registrar to request that the beginning of the hearing be further delayed or that the hearing be continued to a later date. Complainant testified at the hearing that Respondent has not paid any portion of the $6,800.00 that became due on March 17, 1998 and that the project for which Complainant’s services were rendered was for a homeowner, not the house Respondent was building on speculation. Complainant further testified that to his knowledge, the homeowner paid Respondent for the project on which Complainant worked. The expired status of Respondent’s license must be considered in imposing disciplinary sanctions, since little or no motivation otherwise would exist for any contractor to avoid suspension of an expired license. The expired license status of Respondent does not preclude Complainant from pursuing its administrative remedy nor preclude the Registrar of Contractors from conducting these disciplinary proceedings, which are authorized by A.R.S. § 32-1154(C). Respondent’s non-compliance with any condition deemed proper for inclusion in any Order entered in this proceeding should result in revocation of Respondent’s expired license, which, in turn and in due course, will lead to the initiation of appropriate disciplinary action pursuant to A.R.S. § 32-1154(A)(21) against any newly issued separate license on which Respondent may be listed as a “person” as defined in A.R.S. § 32-1101(A)(5). CONCLUSIONS OF LAW The record demonstrates that the owner of the project has accepted Complainant’s work on said projects and moreover, has paid Respondent for his role in the construction work at issue. Respondent ‘s failure to pay Complainant $6,800.00 is unjustified and, accordingly, under all of the facts and circumstances, Respondent’s failure to pay constitutes a violation of A.R.S. § 32-1154(A)(7)[1] and (11).[2] RECOMMENDED ORDER In view of the foregoing, it is recommended commencing on the effective date of the Registrar of Contractors’ Order that Respondent’s License No. 097545, Class B, be revoked until the Registrar of Contractors receives written proof that Respondent has paid or tendered the sum of $6,800.00 to Complainant. It is further recommended that, if Respondent pays or tenders $6,800.00 to Complainant on or before the effective date of the Registrar’s Order, then the aforementioned license revocation shall not take place. It is further recommended, in addition to the foregoing indefinite license suspension, if any, that Respondent’s Class B license be placed on a period of l80 days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Registrar’s Order or the date on which notice of Respondent’s compliance with the terms of this Order is filed with the Registrar, whichever is later. It is further recommended, in addition to the above provided penalties, if any, that restoration of Respondent’s rights to resume contracting, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twenty-four (24) months, including future renewal periods, in the amount of $1,500.00, such bond or deposit to be for the sole benefit of persons injured as defined in A.R.S. § 32- 1131(3) and to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32-1152(D). Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above- provided twenty-four (24) month period and only if no claims are then pending. Done this day, August 30, 1999.

______________________________________ Diane Mihalsky Administrative Law Judge

Original transmitted by mail this ____ day of August, 1999, to:

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

By ___________________________

----------------------- [1] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.”

[2] This statutory subsection 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 . . . .”

-----------------------

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