ALJDEC

00F-2045-ROC · Registrar of Contractors · 2000-10-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On September 21, 2000, a hearing was held to determine if AAA Sam Dursey and Company, Inc. (“AAA”) had violated provisions of A.R.S. §32- 1154(A). Sun Belt Solar Systems, Inc. dba AAA Sun Belt Contractors, Inc. (“Sun Belt”) was represented by counsel, Stephen I. Dokken. AAA was represented by counsel, John A. Propstra. Based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made to the Director of the Arizona Registrar of Contractors. FINDINGS OF FACT Sam Dursey (“Sam”) and Carmen Dursey (“Carmen”) are husband and wife currently in the throes of a bitter divorce. Prior to the deterioration of the marriage, Carmen and Sam were owners of Sun Belt, with Carmen owning 51% of the corporation and serving as its President, and Sam owning 49% of the corporation and serving as Vice-president and Secretary. Sun Belt was formed in 1980. Three licenses were issued to Sun Belt by the Registrar of Contractors (“ROC”). Sun Belt’s B-03 License No. 093185 was issued on April 3, 1992. Sun Belt’s C-37 License No. 095387 was issued on November 12, 1992. Sun Belt’s L-61 License No. 105358 was issued on December 20, 1994. All three licenses were applied for by and issued to Sun Belt Solar Systems, Inc., dba AAA Sun Belt Contractors, Inc. Sam signed each application as both an officer and as qualifying party. Sun Belt purchased yellow page advertisements for the 1999 Phoenix Metro area directory and the 1998-1999 Scottsdale/Paradise Valley directory, listing the name “AAA Sun Belt Contractors, Inc.” The advertisement lists the phone number as 951-8800. Sun Belt’s proposals, invoices, letterhead, and business cards identify the corporation as “AAA Sun Belt Contractors, Inc.” On August 3, 1999, Sam incorporated a new corporation, “AAA Sun Belt Contractors, Inc.” with the Arizona Corporation Commission. Since early August 1999, calls to (602) 951-8800, Sun Belt’s telephone number, have been forwarded to Sam’s personal cellular telephone, at Sam’s instruction to U.S. West, without the knowledge or consent of Carmen. The phone number at Sun Belt’s place of business is no longer in service because Sam removed Carmen from the account and instructed U.S. West to disconnect the telephone number. Additionally, when Sun Belt’s telephone number is called, a recording is heard indicating that the number has been changed to Sam’s cellular phone number (602) 525-1340. The weight of the credible evidence established that on or about August 26, 1999, Sam removed most of the equipment and supplies located in and belonging to Sun Belt’s corporate office, including, but not limited to all business records, file cabinets, furniture, statements, and check book. This effectively precluded Carmen from paying any outstanding bills. Sam forwarded Sun Belt’s mail to Sam’s new residential address without the knowledge or consent of Carmen. On October 25, 1999, Sam amended the Articles of Incorporation filed on August 3, 1999, to change the name of his new corporation from “AAA Sun Belt Contractors, Inc.” to “AAA Sam Dursey and Company, Inc.” On November 2, 1999, Sam resigned as an officer of Sun Belt. The letter of resignation reads in pertinent part, “I, Sam Dursey do hereby resign all my duties as Vice-president of Sun Belt Solar Systems effective this 2nd day of November in the year of our Lord 1999. I hereby relieve myself of all responsibilities associated with the above corporation and its DBA, AAA Sun Belt Contractors, Inc.” Therefore, as of November 2, 1999, Sam was not authorized to act on behalf of Sun Belt. On or about November 16, 1999, Sam and his girlfriend applied for three licenses for AAA. During the process of applying for these new licenses, Sam voluntarily canceled all three of Sun Belt’s existing licenses, signing the voluntary cancellation request as Secretary of Sun Belt, despite his resignation on November 2, 1999. Further exacerbating the situation, Sam misrepresented his business and residential addresses on the applications, utilizing Sun Belt’s business address as the address for AAA. The ROC canceled all three of Sun Belt’s licenses per Sam’s request effective November 26, 1999.[1] The evidence of record demonstrated that Sam requested that the ROC mail the notices of cancellation to an address other than Sun Belt’s, thereby precluding Sun Belt and Carmen from becoming aware of the canceled status of all three of Sun Belt’s licenses. The evidence of record further established that in October or November 1999, AAA entered into a contract, using the name, address, and license numbers of Sun Belt. Additionally, Sam instructed the other contracting party to make all checks payable to Sam Dursey, and instructed that all payments be mailed to Sam’s new mailing address. The undersigned Administrative Law Judge finds that Sam misappropriated the identity of Sun Belt by intercepting all incoming telephone calls intended for receipt by Sun Belt, and by using invoices, bid proposals, and the licenses belonging to Sun Belt. The evidence of record further demonstrated that Sam improperly utilized Sun Belt’s licenses, advertisements, phone number, and business cards to promote and do business as AAA, thereby diverting all of Sun Belt’s business and potentially causing confusion to the public. The undersigned Administrative Law Judge further finds that Sam wrongfully canceled all three of Sun Belt’s licenses without authority to act on behalf of Sun Belt, and deliberately concealed the cancellation of the licenses from Carmen by instructing the Registrar of Contractors to mail the notices of cancellation to an address different from Sun Belt’s. CONCLUSIONS OF LAW In this proceeding, Sun Belt bears the burden to prove by a preponderance of the evidence that AAA is subject to discipline for violations of A.R.S. §32-1154(A)(7), as charged by the ROC in its June 7, 2000 Citation and Complaint. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence §5 (1960). Under A.R.S. §32-1154(A)(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act … as a contractor resulting in another person being substantially injured.” (Emphasis added.) The undersigned Administrative Law Judge concludes that while Sam acted wrongfully as delineated in the above Findings of Fact, he did not do so “as a contractor” within the meaning of A.R.S. §32-1154(A)(7). Therefore, Sam’s wrongful acts notwithstanding, it is not appropriate for the ROC to impose discipline against AAA’s licenses pursuant to the June 7, 2000 Citation and Complaint.[2] RECOMMENDED ORDER In view of the foregoing, it is hereby recommended that Citation Nos. 00-2045, 00-2045X, 00-2045Z, together with the Complaints upon which they are based, be dismissed.

Done this day, October 11, 2000.

______________________________________ Sondra J. Vanella Administrative Law Judge

Original transmitted by mail this ____ day of October, 2000, to:

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

By ___________________________

----------------------- [1] All three of Sun Belt’s licenses have subsequently been reinstated, however all three licenses were suspended on January 2, 2000 for lack of a qualifying party. [2] Although the undersigned Administrative Law Judge concludes that AAA is not subject to discipline under A.R.S. §32-1154(A)(7), she believes that the facts of this case warrant further investigation by the Registrar of Contractors and that discipline may be appropriate with regard to AAA’s activities in attaining licensure as well as its advertising practices.

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

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