ALJDEC decisions subject to certification as final

07F-UT0119-ROC · Registrar of Contractors · 2007-06-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 31st, 2007; 9:00 a.m. APPEARANCES: The Arizona Registrar of Contractors was represented by Ms. Kathryn J. Winters, Assistant Attorney General. The Defendant, Mr. Glen Ira Butler, represented himself. ADMINISTRATIVE LAW JUDGE: Grant Winston _____________________________________________________________________ The administrative hearing of this matter was held in the Office of Administrative Hearings, Tucson. Testimony was heard and other evidence admitted to the record, and, based on the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made.

FINDINGS OF FACT 1. Defendant, Mr. Glen Ira Butler, is not now, and at no time material hereto was, a contractor licensed by and doing business in the State of Arizona. These are facts which Mr. Butler does not dispute. 2. The issues presented here are to do with a commercial construction project in Tucson, Arizona, which occurred in the summer of 2006, and in which Mr. Butler was involved. Those issues are whether in his involvement with this project Mr. Butler was, one, acting as a licensed contractor and, two, advertising to contract without a license. 3. These allegations came to the Registrar’s attention through an administrative Complaint filed in the Registrar of Contractors’ Tucson office by a licensed contractor who also had been performing contracting work on the same project, a Mr. James Beard, owner of Family Air, LLC. This Complaint was filed by Mr. Beard on September 18th, 2006, and alleged that Mr. Butler, acting as an unlicensed entity named Penguin Mechanical, had been hired by the owner of the commercial job site, a business known as Poly Print, “to evaluate and oversee” Family Air’s work. The Complainant continued to state that Poly Print then back-charged Family Air for work performed by Penguin Mechanical (Mr. Butler) on the project. 4. Registrar of Contractors Investigator Tammi Jo Anders investigated the Complaint’s allegations. Two documents which were admitted into the record as ROC Exs. 1, and 2, were obtained by Ms. Anders and considered by her in her investigation. ROC Ex. 1 is the contract between Poly Print and Family Air for the commercial project in question, signed on June 14th, 2006. The contract price was $3,007.75. ROC Ex. 2 is a facsimile letter from Mr. Ron Genova of Poly Print to Mr. Beard, dated September 11th, 2006, explaining why Poly Print was back-charging Family Air for a portion of the contracted work which had been performed by Penguin Mechanical. Attached to ROC Ex. 2. is a copy of the itemized list of back- charges, printed on Penguin Mechanical Contracting letterhead, which was also supplied to Mr. Beard by Mr. Genova. The back- charges total $1,140.00. It was shortly after receiving this fax and the attachment when Mr. Beard filed the above-referenced Complaint with the Registrar’s office. 5. Ms. Anders, having the Complaint and these documents, then checked the Registrar’s computer database in order to determine whether any license was on file in the name of Mr. Butler or Penguin Mechanical. She discovered only that Penguin Mechanical had been licensed several years ago, but as of 2006, neither Mr. Butler nor Penguin Mechanical was licensed. Considering these facts, Ms. Anders issued two citations against Mr. Butler/Penguin Mechanical; one for contracting without a license in violation of A.R.S. 32- 1151, and a second for advertising without a license in violation of A.R.S. 32-1165. For each violation she assessed a civil penalty of $500.00, for a total of $1,000.00. 6. At the administrative hearing Mr. Butler, Mr. Beard and Ms. Anders testified. 7. ROC Ex. 2 is quite significant in making the case for the citation issued for contracting without a license. In that document Mr. Genova quite unequivocally explains to Mr. Beard that the back- charged items were performed by Penguin Mechanical (Mr. Butler). The items were part of the contract entered into by Family Air as a licensed contractor. Mr. Genova stated that Poly Print’s payment made to Penguin Mechanical was for “Penguin Mechanical to evaluate the work and oversee the completion.” The itemized list of back- charges indicates that 19 hours of work was performed by Penguin Mechanical. 8. At the hearing Mr. Butler admitted in testimony that he was hired by Mr. Genova, a friend of his, as a consultant to supervise Family Air’s work. He also admitted as much to Investigator Anders during her investigation. 9. Mr. Butler’s documentary evidence included Def.’s Ex. 2, which was a notarized letter from Mr. Genova, dated May 22nd, 2007. In that letter Mr. Genova backpedals from the statement he previously made to Mr. Beard in ROC Ex. 2. justifying the back-charges. In Def.’s Ex. 2 Mr. Genova revised his position by saying that he was mistaken to have earlier written that he had “hired Penguin mechanical to oversee [Family Air’s] work. . . . “ In the May 22nd statement Mr. Genova would have the reader believe that Mr. Butler was his “personal friend,” and acted only as a “personal assistant” or ”personal aide” on the project in question. 10. ROC. Ex. 2 carries substantially more weight than Def.’s Ex. 2. Def.’s Ex. 2, although notarized, is yet hearsay. But then ROC. Ex. 2 is also hearsay. Mr. Genova did not appear and subject himself to cross-examination by counsel for the Registrar or by Defendant, thus his statements were not able to be challenged. However, Mr. Genova himself is a personal friend of Mr. Butler, as written by Mr. Genova in Def. Ex. 2, and testified to by Mr. Butler. ROC. Ex. 2 was written contemporaneously with the events, and before there arose any controversy. On top of all this Mr. Butler himself did remark to Ms. Anders and testified in hearing that he had been acting as Mr. Genova’s consultant and overseer on the project, which would corroborate ROC Ex. 2, and contradict Def.’s Ex. 2. 11. Mr. Beard’s testimony gives credence to the position that Mr. Butler was working as a consultant, overseer or supervisor of the project. Mr. Beard was on the job site, and saw Mr. Butler perform work, and was informed by Mr. Genova of Mr. Butler’s status on the job. 12. Mr. Butler also testified that he and Mr. Genova were very careful to insure that Mr. Genova hired only licensed contractors and points to the contract between Poly Print and Family Air as circumstantial evidence that he was not performing contracting work requiring a license, or why would Mr. Genova have bothered to hire Family Air. But if this is a fact accented to bolster the argument that it was only Family Air which was contracting, it is a fact which incriminates Mr. Butler, for it was precisely for that licensed contracting work which Poly Print back-charged Family Air and paid Mr. Butler. 13. Ms. Anders testified that the amounts of the civil penalties she assessed were within Registrar of Contractors guidelines and Defendant had not subsequently become licensed, an act which sometimes is ground to reduce the amount of the civil penalty.

CONCLUSIONS OF LAW 1. This administrative hearing was held under authority of and pursuant to A.R.S. 32-1156, and A.R.S. 41-1092. 2. A.R.S. 32-1151 prohibits engaging in the business of, or acting as a contractor without having a contractor’s license in good standing, unless the engagement or action is exempted by A.R.S. Title 32. 3. “Contractor” is defined at A.R.S. 32-1101.A.3.a to include the supervision of others in their performance of construction work, such as that performed in this case. 4. The greater weight of evidence proved that Mr. Butler was acting as a contractor in this project, while having no license in good standing with the Arizona Registrar of Contractors. No finding was made that Mr. Butler did so intentionally, but intent is not an element of the offense. There is no evidence of any exemption to the license requirement which removes the onus from Mr. Butler’s activities in this case. 5. A.R.S. 32-1165 prohibits advertising the ability to perform services or contracts for compensation as a licensed contractor without obtaining a license from the Registrar beforehand. 6. “Advertisement” is defined at A.R.S. 32-1101.A.1 to include any written publication, dissemination or circulation which is “intended to directly or indirectly induce any person to enter into an agreement for contracting services. . . . “ 7. The evidence relied on to support the issuance of the civil penalty for advertising is ROC. Ex. 2, the list of back-charges on Penguin Mechanical letterhead. The evidence was that this document was published and disseminated by Mr. Genova of Poly Print, and not by Mr. Butler. Moreover, there is no evidence to suggest that it was given to Mr. Beard for any reason other than to justify back-charges. There is no evidence it was disseminated to induce anyone to enter into a contract with Penguin Mechanical or Mr. Butler. It, therefore, was not an advertisement. 8. The civil penalty and amount assessed for Defendant having violated A.R.S. 32-1151 should be affirmed, while the civil penalty for violating A.R.S. 32-1165 should be dismissed.

RECOMMENDED ORDER In view of the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the civil penalty in the amount of $500.00, assessed against Mr. Glen Ira Butler/Penguin Mechanical in this case for violation of A.R.S. 32-1151 be affirmed, and that for allegedly violating A.R.S. 32-1165 be dismissed, on the effective date of this Order (40 days after the date of service shown by the Registrar’s certification on the Order). In the event of certification of the Administrative Law Judge’s Decision and Order by the Director of the Office of Administrative Hearings, then the effective date of the Order shall be 40 days after the date of that certification. Done this day, June 4th, 2007.

______________________________________ Grant Winston Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

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

By ___________________________

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Office of Administrative Hearings 100 N. Stone Ave., Suite 704 Tucson, Arizona 85701 (520) 628-5488