ALJDEC decisions subject to certification as final

07F-L0250-ROC · Registrar of Contractors · 2007-08-20

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 20, 2007 APPEARANCES: Complainant : Robert Blanker appeared pro se. Respondent : Frederick Lathrop, Partner and “Qualifying Party,” represented Lathrop Pool Service and Repair. ADMINISTRATIVE LAW JUDGE: Gary B. Strickland _____________________________________________________________________ A Hearing was convened to determine whether Respondent Lathrop Pool Service and Repair (hereinafter also, “Respondent” or “Lathrop Pool” or “the Contractor”) violated state law as has been alleged by Complainant Blanker and as has been cited by the Arizona Registrar of Contractors (also, the “ROC”). Evidence and testimony were presented. Respondent holds a C-05 (Residential Swimming Pool Repair) license issued by the Registrar of Contractors. Complainant alleges that Respondent violated statutory requirements by not carrying Workers’ Compensation insurance during a period while Complainant was employed by Respondent. . . . Based upon an examination of the entire record,[1] the following Findings of Fact are made, Conclusions of Law rendered, and DECISION AND RECOMMENDED ORDER issued: FINDINGS OF FACT 1. Respondent’s license (No. 161326) was initially issued on January 17, 2001, renewed on January 31, 2007 with viability through January 31, 2009. The license was in active status at all times herein relevant.[2] 2. Frederick Lathrop is the Qualifying Party identified on the Lathrop Pool license. 3. Respondent is a Contractor licensed by the Registrar of Contractors and the allegation made by Complainant goes to heart of contracting responsibilities vis-à-vis a licensed Contractor’s statutorily- imposed duties. As such, the acts and omissions alleged in the Complaint fall within the requirements of Title 32, Article 3. 4. Complainant Blanker was employed by Lathrop Pool during a period encompassing October 18, 2006 (beginning in August 2005). 5. Complainant alleges that he was injured on the job on October 18, 2006 when he stepped into (or slipped in) a negative-edge pool. Complainant alleges that he injured his left knee and leg in the process. 6. Complainant has received medical care for his injury.[3] 7. Although allegedly initially promising to assist Complainant with all of his medical expenses incurred as a result of the October 18, 2006 incident, Respondent has refused to assist Complainant with the payment of all of his medical expenses. 8. Complainant has filed a Workers’ Compensation claim before the ARIZONA INDUSTRIAL COMMISSION. 9. In a March 22, 2007[4] letter written to the ROC, Susanne Lathrop, Partner in the business, asserted (1) that Respondent had paid a significant amount of the medical expenses incurred by Complainant, as well as payment for time missed; and acknowledged (2) that Respondent was not carrying Workers’ Compensation insurance as of October 18, 2006. A compensation policy was purchased by Lathrop Pool effective November 30, 2006. 10. Disconcerted over the turn of events, Complainant Blanker filed a Complaint to the ROC on January 9, 2007.[5] 11. Thereafter, upon motion of Complainant, the ROC issued a CITATION AND COMPLAINT against the Lathrop Pool license on March 19, 2007, alleging therein violations of A.R.S. § 32-1154(A)(4) and (7). It is those allegations that are herein addressed. 12. Lathrop Pool filed an ANSWER to the CITATION AND COMPLAINT on March 22, 2007 wherein it admitted that it did not carry Workers’ Compensation insurance as of October 18, 2006, but denied validity of the injury claimed and any wrongdoing on its part.[6] 13. At the Hearing, Ms. Lathrop argued that the ROC lacked jurisdiction over the Complaint because the incident had occurred while Mr. Blanker was performing pool cleaning services, a task not requiring licensure. The argument lacks merit. The fact is that the entity was licensed by the ROC and was required to carry Workers’ Compensation insurance under applicable law. 14. Under A.R.S. § 23-902(A),[7] Lathrop Pool was required to carry Workers’ Compensation insurance. It is undisputed that on October 18, 2006, Lathrop Pool did not have a Workers’ Compensation insurance policy in effect to cover its employees. Mr. Blanker was an employee of Lathrop Pool on October 18, 2006 (this is undisputed). 15. Lathrop Pool’s failure to have a Workers’ Compensation insurance policy in effect on October 18, 2006 violated A.R.S. § 32- 1154(A)(4). 16. Lathrop Pool has challenged whether Mr. Blanker was injured (and the extent thereof) on October 18, 2006 while on the job. 17. Lathrop Pool’s failure to afford Mr. Blanker Workers’ Compensation coverage on October 18, 2006 was wrongful under A.R.S. § 32- 1154(A)(7). 18. No evidence of fraud was entered.[8] 19. Whether and the degree to which Complainant may have sustained an injury for Workers’ Compensation purposes is best left to the ARIZONA INDUSTRIAL COMMISSION. Whether Complainant sustained substantial[9] injury attributable to Respondent’s failure to satisfy the requisites of A.R.S. § 23-902 and A.R.S. § 32-1154(A)(4) cannot be answered on this record. While the medical record evinces occurrence of some “knee joint effusion consistent with a knee injury,”[10] Ms. Lathrop’s unrebutted assertion that Lathrop Pool paid for Complainant ‘s medical care up to and including an MRI dispels notion that Complainant has borne expense attributable to Respondent’s failure to satisfy the requisites of A.R.S. § 23-902 and A.R.S. § 32-1154(A)(4). . . . APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors charged Respondent with possible violations of A.R.S. § 32-1154(A)(4) and (7). Those statutory sections require that a holder of a license or a person listed on a license not commit the following:

4. Failure to comply with the statutes or rules governing social security, workers' compensation or unemployment insurance.

. . .

7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. . . .

CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over Complaint No. L07-0250 under A.R.S. § 32-1101, et seq., a section that authorizes the Registrar to impose disciplinary sanctions against licensees for violations identified at A.R.S. § 32-1154(A). Lathrop Pool was licensed at the time that the alleged incident occurred. 2. The burden of persuasion generally at an administrative hearing falls to the party asserting a claim, right or entitlement, or an Agency seeking to impose a penalty.[11] Further, the standard of proof is that of the “preponderance of the evidence”.[12] Proof by a preponderance means that the evidence is sufficient to persuade the finder of fact that the proposition is “. . . more likely true than not.”[13] The evidence taken as a whole must convince the decision maker that the party who bears the overall burden of persuasion, in this case Complainant Blanker, is more probably correct on the issue(s) in dispute. 3. Observing these standards, Complainant Blanker has satisfied his burden, by a preponderance of the evidence, that Respondent Lathrop Pool has violated (4) but not (7) of A.R.S. § 32-1154(A) as charged in the CITATION AND COMPLAINT. The Contractor failed to satisfy the requisites of A.R.S. § 23-902. The failure, in itself, manifested noncompliance under A.R.S. 32-1154(A)(4). 4. An examination of Lathrop Pool Service and Repair’s Complaint history[14] reveals that no (-0-) other Complaint has been filed against its license. License history presents no basis for aggravation in an assessment of a proper penalty for the violation herein found.[15] RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors place Lic. No. 161326 on probation for a period of thirty (30) days, commencing on the effective date of the Registrar’s Order. In the event of the certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will fall forty days from the date of that certification. Done this 20th day of August 2007.

______________________________________ Gary B. Strickland Administrative Law Judge

Original transmitted by mail this 21st day of August 2007 to:

Registrar of Contractors Fidelis V. Garcia, Director Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

----------------------- [1] The record consists of those documents found within the Agency’s case file, the contents of which the Administrative Law Judge has accorded Administrative notice, the exhibits offered by the Complainant and Respondent, and the digital record of the proceedings under A.A.C. R2-19- 121.

[2] See http://www.azroc.gov/clsc/AZROCLicenseQuery

[3] See Exhibit 1. [4] Respondent’s ANSWER.

[5] See COMPLAINT within the Agency Hearing file.

[6] See ANSWER within the Agency Hearing file.

[7] A.R.S. § 23-902. Employers subject to chapter; exceptions

A. Employers subject to the provisions of this chapter are the state, each county, city, town, municipal corporation and school district and every person who employs any workers or operatives regularly employed in the same business or establishment under contract of hire , including covered employees pursuant to a professional employer agreement, except domestic servants. Exempted employers of domestic servants may come under the provisions of this chapter by complying with its provisions and the rules of the commission. For the purposes of this subsection "regularly employed" includes all employments, whether continuous throughout the year, or for only a portion of the year, in the usual trade, business, profession or occupation of an employer.

[8] See Echols v. Beauty Built Homes, 132 Ariz. 498, 500; 647 P.2d 629, 631 (Ariz. 1982) (“A showing of fraud requires (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) the speaker's intent that it be acted upon by the recipient in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) the hearer's reliance on its truth; (8) the right to rely on it; (9) his consequent and proximate injury. (citation omitted). Each element must be supported by sufficient evidence. ‘Fraud may never be established by doubtful, vague, speculative, or inconclusive evidence.’ In re McDonnell's Estate, 65 Ariz. 248, 253, 179 P.2d 238, 241 (1947)”).

[9] Meaning, a material injury, one that is not illusory. See ”substantial”: WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 2280 (2002).

[10] See Exhibit 1, November 7, 2006 office note of Daniel Heiner, M.D.

[11] See Ariz. Admin. Code R2-19-119(B).

[12] Culpepper v. Arizona Board of Nursing, 187 Ariz. 431, 930 P.2d 508 (App. 1997); See also Ariz. Admin. Code R2-19-119(A).

[13] In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). See also J. LIVERMORE, R. BARTELS, & A. HAMEROFF, LAW OF EVIDENCE ( 301.1(4th ed. 2000) (One party bears the overall burden of persuasion on each fact material to the party’s claims and defenses. Further, the party with the burden of persuasion on a particular fact is required to satisfy the burden of production of enough qualitative evidence sufficient to support a finding of the existence of the fact, following a reasonable person standard.)

[14] See http://www.azroc.gov/clsc/AZROCLicenseQuery

[15] See A.A.C. R4-9-117. Prior Record

In any disciplinary proceeding conducted by the Registrar, the licensee's entire license file including the record of prior citations and decisions may be considered by the Registrar in making a decision and order in the case.

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

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