ALJDEC

02F-UF0019-ROC · Registrar of Contractors · 2002-01-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 2, 2002. APPEARANCES: John Lawrence Schmitt, Appellant, Dawn Walton Lee, Assistant Attorney General representing the Registrar of Contractors, Dan Fishel, Registrar of Contractors Inspector, and Ted Thomas, observer. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ By building a home without a contractor’s license with the intent to sell it, John Lawrence Schmitt violated A.R.S. § 32-1166. Despite his protestation that he did not have the intent to sell when he undertook to build it, the reasons for the alleged change of heart were not sufficiently convincing to carry the weight of the evidence. Therefore, the Civil Citation and $1000 civil penalty imposed by the Registrar should be sustained, and this appeal should be denied. FINDINGS OF FACT 1. On August 29, 2001, Dan Fishel, a Registrar of Contractors Investigator, received an anonymous report that an owner/builder of a home in Flagstaff, Arizona was selling his home less than a year after it was built. Since this was a potential violation of Arizona law governing the right of owners to build their own home without having a contractor's license, Mr. Fishel was required to investigate. 2. During the course of his investigation, Mr. Fishel discovered that John Lawrence Schmitt had applied for a building permit in his own name in March 2000, that he did not have a contractor's license in Arizona, and that a Certificate of Occupancy was issued on the home on July 18, 2001. He also verified that Mr. Schmitt listed the property for sale on or about August 13, 2001. Having determined in his mind that this was a violation of the applicable statute, Mr. Fishel issued a Cease and Desist Order to Mr. Schmitt on September 4, 2001. When the home continued to be listed for sale, as evidenced by the sale sign on the property, he issued a Civil Citation on November 6, 2001 with a $1000 penalty for contracting without a license. 3. Mr. Schmitt appealed the Citation and penalty. At hearing he testified that his wife has had several miscarriages and when she had her last, they decided to build a home in Payson so they could be nearer to the Mayo Clinic where she goes for medical examinations and treatment about 7 or 8 times per year. He stated that they live in Alaska in the summer and in Payson in the winter and his business address is in Snowflake, Arizona, though he rarely needs to go there. He denied having the intent to sell the home while building it. He stated that it took many years to get the proper permits and other groundwork laid to build the home. He also stated that he could have used his partner's contractor's license on the permit but was told that an owner could build one home every two years without a license and that an owner could sell a home within a year if he or she had health problems. CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§ 32-1156, 32-1166 and 41-1092 et seq. 2. Arizona law at A.R.S. § 32-1151 prohibits contracting without a license. Pursuant to A.R.S. § 32-1166, the Registrar may order someone in violation of this statute to cease and desist their unlawful activities and may issue a Civil Citation with penalties up to $2,500 per violation. Homeowners may build their own home without a license if they intend to live in the home when it is finished. The sale or rent of the home or the offering of it for sale or rent within one year of completion or Certificate of Occupancy is to be considered, by law, to be prima facie evidence that the owner built it with the intent to sell or rent. A.R.S. § 32-1121(A)(5). The issue before the Registrar is whether Mr. Schmitt had the intent to sell the home when he undertook to build it. The effect of prima facie evidence is to shift the burden of proof to the other party. Graham County v. Graham County Elec. Co-op, Inc., 109 Ariz. 468, 512 P.2d 11(1973). Thus, Mr. Schmitt must establish that he did not intend to sell the home when he built it. 3. The weight of the evidence adduced at hearing makes it appear more likely that Mr. Schmitt did intend to sell the property when he undertook to build it and did not intend to live there. His wife's health does not appear to require that she live close to any particular facility. Rather, her health and her desire to have a baby causes her to visit the Mayo Clinic, on a non-emergency basis, 7 or 8 times per year, an average of less than once per month. Because of this, Mr. Schmitt argues, they wish to continue living in the area they have been living in all along. It will save her driving time in the amount of a maximum of 3 or 4 hours per trip. Nothing about her health would actually be affected by living in the different location. Rather, it will be more convenient for her to attend her appointments. This is not even a health reason, per se. Further, the medical condition prompting their alleged change of mind existed for years prior to this, even if another miscarriage had taken place more recently. 4. Mr. Schmitt's personal thoughts at the time he applied for the permit cannot be unquestionably determined through objective proof at hearing; therefore, the Registrar's Decision must be based upon the weight of the evidence. The Schmitts’ circumstances lacked any substantial change at the time when the home was completed. Therefore, Mr. Schmitt’s testimony denying his original intent to sell did not overcome the presumption created by his offering it for sale within one year of completion. The totality of the evidence has established that it is most likely that Mr. Schmitt violated A.R.S. § 32-1155 by building a home without a contractor’s license and that the civil penalty of $1000 was properly imposed. RECOMMENDED DECISION Based upon the foregoing considerations, the undersigned Administrative Law Judge hereby recommends that the Civil Citation issued to John Lawrence Schmitt on November 6, 2001, along with the $1000 penalty accompanying it, be sustained and that this appeal be denied. Done this day, January 14, 2002. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2002 to:

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

By ___________________________

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