ALJDEC decisions subject to certification as final

09F-R0023W-ROC · Registrar of Contractors · 2009-12-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 25, 2009 APPEARANCES: Assistant Attorney General Camila Alarcon represented Complainant Registrar of Contractors. Jim Csontos, Esq. represented Respondents Reyes Masonry, L.L.C. and Affordable Swimming Pool Services, L.L.C. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The question presented by this matter is whether Respondents Reyes Masonry, L.L.C. (“Reyes”) and/or Affordable Swimming Pool Services, L.L.C. (“Affordable”) violated A.R.S. § 32-1154(A)(21) as charged by the Arizona Registrar of Contractors in a March 3, 2009 Citation and Complaint. Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order. FINDINGS OF FACT 1. Reyes is the holder of a Class C-31 license (No. 183719) issued by the Registrar of Contractors (“ROC”) on April 4, 2003. Brian Frank Reyes appears as qualifying party and member, Daniel Edward Reyes appears as member, and Christopher Sylvester Hernandez appears as member on License No. 183719. 2. Affordable is the holder of a Class K-36 license (No. 183781) issued by the ROC on April 3, 2003. Brian Frank Reyes appears as qualifying party and member, Daniel Edward Reyes appears as member, and Christopher Sylvester Hernandez appears as member on License No. 183781. 3. On May 13, 1997, the ROC issued a Class A-09 license (No. 123104) to Excel Pools, Inc. (“Excel”). Daniel Ernest Reyes appears as qualifying party and President on license number 123104.[1] 4. The ROC revoked Excel’s license number 123104 on April 30, 2008, pursuant to a Decision and Order in ROC Case No. 07-2892W. 5. The ROC revoked Excel’s license number 123104 on July 17, 2008, pursuant to a Decision and Order in ROC Case No. 08-0379W. 6. The ROC revoked Excel’s license number 123104 on August 20, 2008, pursuant to a Decision and Order in ROC Case No. G08-0231W. 7. On May 2, 1996, the ROC issued a Class B-05 license (No. 113810) to Excel. Daniel Ernest Reyes appears as qualifying party and President on license number 113810. 8. Between April 29, 2008 and January 6, 2009, the ROC revoked Excel’s license number 113810 approximately 60 times, resulting from complaints filed in 2006 and 2007. Most of the complaints against Excel were adjudicated in 2008. 9. On March 3, 2009, the ROC issued a Citation and Complaint charging that Reyes and Affordable were in violation of A.R.S. § 32-1154(A)(21), which provides as follows: The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

21. Having a person named on the license who is named on any other license in this state or in another state which is under suspension or revocation unless the prior revocation was based solely on a violation of this paragraph.

10. Jim Csontos, Esq. represented Reyes and Affordable at the administrative hearing of this matter. Mr. Csontos did not dispute that Excel’s licenses have been revoked multiple times. Mr. Csontos did not call any witnesses to testify. Mr. Csontos argued that Daniel Reyes helped his son, Brian Reyes, obtain a contracting license, and that Daniel Reyes was only a minority owner and member of Brian Reyes’ company. Excel failed in 2008. However, Mr. Csontos argued that Brian Reyes removed Daniel Reyes from Reyes’ and Affordable’s licenses upon receipt of the March 3, 2009 Citation and Complaint. On March 17, 2009, Notices of Disassociation were filed with the ROC, whereby Daniel Reyes resigned as a member of both Reyes and Affordable and designated Brian Reyes and Christopher Hernandez as 50% owners of each company. Mr. Csontos asserted that “there is no reason to take away the son’s licenses based upon the father’s revocations”, and that there is no longer a statutory violation because it has “been cured”. 11. The ROC argued that the Notices of Disassociation were filed only after the Citation and Complaint was filed in the instant matter, and approximately one year after the first revocations occurred. CONCLUSIONS OF LAW 1. In this proceeding, the ROC bears the burden to prove, by a preponderance of the evidence, that Reyes and/or Affordable violated A.R.S. § 32-1154(A)(21) as charged by the ROC in its March 3, 2009 Citation and Complaint. See Arizona Administrative Code R2-19-119. 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). 2. Under A.R.S. § 32-1154(A)(21), a contractor is subject to discipline for “[h]aving a person named on the license who is named on any other license in this or another state that is under suspension or revocation . . . .” 3. A.R.S. § 32-1101(A)(5) defines “person” as “an applicant, an individual, a member of a limited liability company, a qualifying party, any partner of a partnership or limited liability partnership or any officer, director, qualifying party, trustee of a trust, beneficiary of a trust or owner of at least twenty-five percent of the stock or beneficial interest of a corporation.” 4. The evidence demonstrated that Daniel Reyes appeared as member on Reyes’ license number 183719 and Affordable’s license number 183781 until his resignation on March 17, 2009, and as qualifying party and President on Excel’s license numbers 123104 and 113810. By virtue of these positions, Daniel Reyes is a person named on Reyes’, Affordable’s, and Excel’s licenses. See A.R.S. § 32-1101(A)(5). Thus, Reyes and Affordable stand in violation of A.R.S. § 32- 1154(A)(21) because a person named on its license, i.e., Daniel Reyes, is a person named on a license from this State that has been revoked, i.e., Excel. 5. Having considered the evidence and argument presented, the Administrative Law Judge concludes that neither Reyes nor Affordable has presented a valid defense to the ROC’s charge in this matter. As the holders of contracting licenses issued by the ROC, each is presumed to have knowledge of the applicable statutes and rules including the requirement that neither have a person named on the license who is named on any other license in this state or in another state which is under suspension or revocation. The Notices of Disassociation do not alter this conclusion as they do not have any retroactive effect. The gravity of the matter is exacerbated by the fact that not only were Excel’s licenses revoked, they were revoked on multiple occasions, and there is no evidence to suggest that any of the cases that gave rise to those revocations have been resolved. 6. Given the nature and the circumstances of the established violations, the Administrative Law Judge concludes that the most appropriate disciplinary penalty for Reyes’ and Affordable’s violations of A.R.S. § 32-1154(A)(21) is that Reyes’ Class C-31 license (No. 183719) and Affordable’s Class K-36 license (No. 183781) be revoked. RECOMMENDED ORDER In view of the foregoing, it is recommended that Reyes’ Class C-31 license (No. 183719) and Affordable’s Class K-36 license (No. 183781) shall be revoked on the effective date of the Order entered in this matter. 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 will be 40 days from the date of that certification. Done this day, December 9, 2009.

/s/ Sondra J. Vanella Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The ROC confirmed that Daniel Edward Reyes and Daniel Ernest Reyes are the same individual with a birth date of May 7, 1958.

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