ALJDEC decisions subject to certification as final

08F-R0018W-ROC · Registrar of Contractors · 2008-07-31

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 31, 2008 APPEARANCES: Complainant: Assistant Attorney General Mona Baskin appeared on behalf of the Registrar of Contractors. Respondent: Lester R. Otteman, corporate officer and qualifying party for Respondent Molk Enterprises, Inc. and member and qualifying party for Respondent Trinity Southwest Investments, LLC, appeared, pro per. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. These consolidated matters convened for hearing at the time, date and place set forth in the Registrar of Contractors’ Notice of Hearing dated June 23, 2008. 2. On December 4, 2007, Complainant Registrar of Contractors (“Complainant/ROC”) filed a Citation and Complaint against respondents Molk Enterprises, Inc. (“Molk”) and Trinity Southwest Investments, LLC (“Trinity”) alleging possible violations of A.R.S. §32-1154A (21) in that both Molk and Trinity had “persons listed on [their licenses] who are listed on a license that is revoked.” 3. At the hearing, Complainant submitted Exhibits 1A, 1B, 2A, 2B, 3A through 3I and 4A through 4D which were marked, admitted and considered. Complainant offered the testimony of no witnesses and rested on the substance of these exhibits. 4. Lester R. Otteman (“Otteman”), corporate officer and qualifying party for Molk and member and qualifying party for Trinity, testified on behalf of both respondents but submitted no exhibits. 5. Respondent Molk holds Arizona Contractor’s License No. 204835, Class B (General Residential) which the Registrar of Contractors issued on February 26, 2005. A review of the licensing database maintained by the Registrar of Contractors indicates that this license expired March 1, 2008. 6. Respondent Trinity holds Arizona Contractor’s License No. 219708, Class B (General Residential) which the Registrar of Contractors issued April 30, 2006. A review of the licensing database maintained by the Registrar of Contractors indicates that this license was suspended May 14, 2008 until compliance with a corrective work order in Case No. M08-0042, suspended July 17, 2008 until compliance with a corrective work order in Case No. 08-0312 and revoked July 16, 2008 in Case No. T07-1608. 7. The undisputed evidence demonstrated that as of February 19, 1998 Otteman was listed as the qualifying party for Arizona Contractor’s License No. 112502, Class B (General Residential) of Construction Alliance, LLC (“Construction Alliance”). 8. It is further undisputed that: a. On January 22, 2007, the Registrar of Contractors revoked Construction Alliance’s License No. 112502 pursuant to a default Decision and Order in Case No. T07-0075. b. Otteman was designated as the qualifying party for Molk on February 26, 2007. c. Otteman was designated as the qualifying party for Trinity on April 30, 2006. 9. Otteman offered no testimony at the hearing other than to relate that he did not contest these consolidated actions and, essentially, had moved on in his life with other pursuits.

CONCLUSIONS OF LAW 1. The Registrar of Contractors is empowered pursuant to the provisions of A.R.S. §32-1154A (21) to impose disciplinary penalties against a hold of a contracting license on which a person, as defined in A.R.S. §32-1101A (5), had also been listed as a person on another license that had been previously revoked by the agency. 2. The Registrar of Contractors has the burden of establishing a violation of A.R.S. §32-1154A (21). 3. The uncontroverted evidence of record established that Otteman, as corporate officer and qualifying party for Construction Alliance’s B license No. 112502, is a “person”) listed on such license as defined in A.R.S. §32-1101A (4). Thus, it is determined and concluded that the Registrar has met its burden of proof in this matter. 4. The type and extent of penalty to be imposed, if any at all, is a matter within the sound discretion of the Registrar of Contractors. However, it must be remembered that “[t]he purpose of licensing contractors is to ‘regulate the conduct of contracting and protect the public from unscrupulous acts.” Better Homes Construction, Inc. v. Goldwater, 203 Ariz. 295, 300, 53 P.3d 1139, 1140 (App. 2002), citing Beazer Homes Ariz., Inc. v. Goldwater, 196 Ariz. 98, 101, 993 P.2d 1062, 1065 (App. 1999). In addition, the manifest purpose of the above-described statutory provisions is to prevent individuals from hopping between different licenses particularly when damage to others is caused by one entity. Moreover, Molk and Trinity have the burden of establishing mitigating circumstances for the undersigned to consider in reaching his recommended decision. 5. In this case, it is clear that the prior revocation of Construction Alliance’s Class B license in Case No. T07-0075 was based on the failure to attend to corrective work. Moreover, in that case Construction Alliance failed to timely file an answer to the citation and complaint which resulted in a default decision being entered against Construction Alliance in that matter. At the hearing herein, Molk and Trinity presented no credible, probative or substantial evidence to explain Otteman/Construction Alliance’s failure to rectify its prior revocation by subsequent efforts to make that complainant whole. Based on the foregoing, the undersigned determines and concludes that Molk and Trinity failed to provide sufficient evidence of mitigating circumstances to warrant the closure of the issued citation without imposing a penalty.

RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that Respondent Molk’s Class B license No. 204835 and Respondent Trinity’s Class B license No. 219708 be revoked on the effective date of the Registrar’s Order herein.[1] Done this day, July 31, 2008.

_______________________ Brian E. Smith Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Registrar of Contractors Fidelis V. Garcia 3838 N. Central Ave., Ste. 400 Phoenix, AZ 85012-1906

By ___________________________ ----------------------- [1] In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order in this matter will be forty (40) days from the date of that certification.

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