ALJDEC decisions subject to certification as final (use this one)

19A-AL19-004-BTR · Board of Technical Registration · 2019-08-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 21, 2019, at 1:00 p.m. APPEARANCES: Victor Johnson, Jr. (“Respondent”) appeared on his own behalf; the Arizona State Board of Technical Registration (“the Board”) was represented by Scott Donald, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On April 5, 2019, Respondent filed a completed Alarm Agent Application Form with the Board. The telephone number on the application was 602-430-8020. Respondent marked, “no” to the question, “Have you ever been the subject of professional disciplinary action, including license denial, or do you now have such action pending against you in any state or jurisdiction (including in Arizona)?”[1] 2. On April 5, 2019, Respondent filed a completed Controlling Person Application Form on his own behalf as controlling person of Justice Security. The telephone number on the application was 602-430-8020. Respondent marked, “no” to the question, “Have you ever been the subject of professional disciplinary action, including license denial, or do you now have such action pending against you in any state or jurisdiction (including in Arizona)?”[2] 3. On May 29, 2019, the Board’s Executive Director sent a letter to Respondent, informing him that at the Board’s May 28, 2019 meeting, the Board had denied his applications for certification as both an Alarm Agent and as a Controlling Person. The reasons for the denials were that Respondent had failed to demonstrate to the Board that he possessed the good moral character and reputation, pursuant to A.R.S. § 32-122-05 and A.A.C. R4-30- 101(12)(e), to practice capably and safely in the alarm industry in Arizona.[3] 4. On June 19, 2019, Respondent requested rehearing on and appealed the Board’s denials.[4] 5. The Board referred the appeal to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. On July 17, 2019, the Board issued a Notice setting the matter for hearing on August 21, 2019. 6. According to the OAH docket, on July 25, 2019, the Board issued an order, stating that it had considered Respondent’s request for rehearing at its July 23, 2019 board meeting and that it had voted to deny the request. 7. A hearing was held before OAH on August 21, 2019. Respondent submitted eleven exhibits and testified on his own behalf. The Board submitted six exhibits and presented the testimony of three witnesses: (1) William Will, the Board’s Investigator who had investigated a previous complaint about Respondent’s unlicensed activities; (2) Robert Stam, the Board’s Licensing Manager, who worked with Mr. Will and reviewed Respondent’s applications; and, on rebuttal, (3) Patrice Pritzl, the Board’s Deputy Director. Additional Hearing Evidence 8. Mr. Will testified that in October 2018, the Phoenix Police Department complained to the Board about Respondent’s conduct of unregistered alarm business through the unlicensed firm Justice Satellite and Security. The Board submitted the Complaint and Notice of Hearing in Case No. THE UNLICENSED ACTIVITIES COMPLAINT that was based on its investigation of the complaint.[5] The Complaint and Notice of Hearing included the following Findings of Fact: 1. Board staff had contacted Board Registrant Robert Hight and Mr. Hight provided texts from Respondent regarding alarm service calls that Respondent had received from seven alarm customers on dates between July 2018, and December 2018.[6] All of the customers had asked Respondent and Justice Satellite and Security to change or repair their alarm systems. Mr. Will testified that Respondent and Justice Satellite Security were not registered by the Board. 2. Mr. Hight provided evidence of Respondent’s payment to him for “service calls.”[7] Mr. Will testified that Lydia a.k.a. COPS Monitoring (“Lydia”) was a third party biller that took in fees and sent the surplus to alarm companies. According to the Complaint, pursuant to the Board’s subpoena, Lydia provided six checks that were made payable to Respondent.[8] 3. The Phoenix Police Department provided the address of P.O. Box 598, Tolleson, Arizona 85353, and the telephone number of 602-430-8020 for Respondent. Respondent confirmed to Board staff that the P.O. Box and telephone number belonged to him and that his son did not have access to either one.[9] 9. Based on the facts, the Complaint and Notice of Hearing in Case No. THE UNLICENSED ACTIVITIES COMPLAINT charged Respondent and Justice Satellite and Security with fifteen counts operating an unregistered alarm business in violation of A.R.S. § 32-121.[10]

10. On May 28, 2019, the Board considered the unlicensed activities complaint against Respondent at its regularly scheduled meeting. Respondent was present and addressed the Board. 11. The Board adopted the factual allegations and charged violations in the Complaint and Notice of Hearing in Case No. THE UNLICENSED ACTIVITIES COMPLAINT.[11] As a result of the fifteen statutory violations found, the Board imposed a $5,000.00 civil penalty, $960.00 for costs of the investigatory, and $390.45 in attorney’s fees against Respondent and Justice Satellite and Security.[12] 12. Respondent did not request rehearing on or appeal the Board’s final order in Case No. THE UNLICENSED ACTIVITIES COMPLAINT. As noted above, on April 5, 2019, while the Board’s investigation was pending, Respondent filed an Alarm Agent Application Form and Controlling Person Application with the Board. 13. The Board considered Respondent’s applications for registration at the May 28, 2019 meeting after it considered the complaint for unlicensed activities in Case No. THE UNLICENSED ACTIVITIES COMPLAINT and voted to deny the applications. 14. Mr. Will testified that Respondent was dishonest and untruthful during the course of the investigation into the complaint in Case No. THE UNLICENSED ACTIVITIES COMPLAINT. The first time Mr. Will called Respondent, Respondent stated that his name was not Victor Johnson, but that he knew Victor Johnson. 15. Respondent testified that whenever he receives a call from someone he does not know, he does not talk to the person. Respondent testified that he answered Mr. Will’s second telephone call because he recognized his name. 16. Mr. Will testified that Respondent acknowledged that he had been running an unregistered alarm business for at least six months and that Respondent also told him that he does not install alarms, but only provides service. 17. Respondent denied that he ever told Mr. Will or other Board staff that he had been operating an unregistered firm for six months, contrary to the Board’s allegations in the Complaint and Notice of Hearing,[13] which the Board later adopted. Respondent denied that he had ever operated Justice Satellite and Security. 18. Mr. Will testified that Respondent told him that his son owned and ran Justice Satellite and Security and Respondent only made referrals, but did not accept payment. Respondent also said that he was not in business, but only worked for friends. At another time, Mr. Will stated that Respondent said he had owned the business for 15 years. 19. Mr. Will stated that he notified the responsible person at Lydia about the Board’s investigation and was told that Lydia had not stopped doing business with Respondent based on its contract with Respondent. On July 5, 2019, Mr. Will received Lydia’s notice of termination of its business relationship with Respondent. 20. Respondent denied that he ever told anyone he was Lydia’s “dealer rep.”[14] Respondent testified that his son was Lydia’s dealer rep, though he had applied to transfer that designation to him and his company. Respondent explained that since he had not been able to obtain a license, Lydia had denied the requested transfer. 21. As a former police officer with 20 years’ experience, Mr. Will testified that he has had to deal with people for decades. Mr. Will testified that, in his opinion, Respondent had no integrity. Respondent’s story kept changing and the only thing that was consistent about the story was its inconsistency. In Mr. Will’s opinion, Respondent is not qualified to be registered as an alarm agent or controlling person. 22. Mr. Stam testified that Mr. Will shared the results of the investigation with him. After the Board started its investigation in into the unlicensed activities complaint, Respondent hand-delivered the Alarm Agent Application Form and Controlling Person Application Form to Mr. Stam. Usually if an applicant does not check “yes” to any questions on the forms, the Board’s front desk refers applications to the Licensing Department to process the application. 23. Mr. Stam testified that because he was aware of the Board’s investigation, he referred the applications directly to the Board. Mr. Stam noted that whenever an applicant checks the box “no” about prior investigations when the Board has a history of an investigation, Mr. Stam refers the application to the Board because the answer indicates a lack of honesty. 24. Mr. Stam testified that the Board’s initial vote on the applications was 6-2 in favor of denial. Mr. Stam explained that two Board members who voted for licensure thought they should grant Respondent’s applications to be better able to control him. After additional discussion, the Board voted 7-1 to deny the applications. Mr. Stam testified that the seven Board members who voted against registration of Respondent felt that he could not be regulated. 25. Mr. Stam testified that he interacted with Respondent on a number of occasions. Although Respondent was polite, the interactions were awkward because Respondent did not seem to understand what the Board does or what he needed to do to be registered. Mr. Stam testified that after eight or nine months, he believes that Respondent may be starting to understand the reason for registration. 26. Mr. Stam testified that he does not believe that Respondent possesses the requisite good character to be capable of safely practicing as an alarm agent or controlling person. 27. Respondent testified that Mr. Will, Mr. Stam, and the Board are mistaken in their belief that he has been operating Justice Satellite and Security all these years. Respondent testified that everything he told Mr. Will was true. 28. Respondent testified that, in fact, his son, Victor Johnson, Jr. has been running the company Justice Satellite and Security. When his son dropped out of sight and moved to California, his son asked him to answer the phones and, if customers have problems, to refer them to Mr. Hight. Respondent submitted a signed letter dated June 24, 2019, from Mr. Hight, which stated that Victor Deshone Johnson was Respondent’s (Victor Johnson Jr.’s) son and the owner of Justice Satellite and Security, but that Respondent was answering the phone and contacting Mr. Hight about service calls while Victor Deshone Johnson was absent.[15] 29. Respondent submitted a typewritten General Power of Attorney signed on June 19, 2019, by Victor Johnson but with the typed name Victor Johnson III, giving power of attorney to Victor Johnson, Jr., who Respondent testified was him.[16] Respondent also submitted a handwritten note signed by Victor Johnson, but stating that Victor Johnson III owns “Justice Sattlight [sic] Security” and does not live with his father, Victor Johnson Jr.[17] Respondent testified that his son’s name was not Victor Johnson III. 30. Respondent submitted his son’s birth certificate from Los Angeles County in 1969 showing the name, “Victor Deshone Johnson.”[18] Respondent submitted a California Driver’s License for Victor Johnson Jr., which Respondent testified was his son’s, at an address in California.[19] Respondent also submitted a T-Mobile phone bill due by August 23, 2019, to Victor Johnson at the California address, which Respondent stated was his son’s.[20] The bill did not show a telephone number, but Respondent acknowledged that the number on the bill was 602-430-8020, the number that the Board found to be Respondent’s in the unlicensed activities complaint. 31. Respondent submitted Articles of Incorporation for Justice Satellite dated March 29, 2002, signed by Victor Johnson, Jr.[21] Respondent testified the articles were signed and filed by his son, not him. Respondent testified that he was trying to “squash” his son’s business by opening new bank accounts, getting a new name, and obtaining new licenses. Respondent submitted a Trade Name Certification dated January 8, 2019, from the Arizona Secretary of State for the trade name, “Justice Satellite Auto & Security.”[22] Respondent also submitted an email dated July 31, 2019, from COPS monitoring stating in relevant part as follows: For reference, below is the responsible party for each company:

Justice Satellite & Security (original alarm dealer on file) Contract Signed by: Victor Johnson

Justice Security (dealer that purchased accounts in May 2019 from Justice Satellite & Security) Contract Signed by: Victor Johnson Jr.[23]

Respondent argued he would not have taken those steps if he already owned the business. 32. Respondent testified that around the time Justice Satellite was incorporated, he was working two jobs and did not have time to run an alarm business. Respondent submitted a paystub from Staples dated April 11, 2003, in the amount of $239.53 and a paystub from America West Airlines dated December 6, 2003, in the amount of $520.26.[24] 33. Respondent testified that after Mr. Stam said that he did not have all the qualifications to be licensed as an alarm agent and controlling person, on July 26, 2019, he took the Arizona Registrar of Contractors’ examination on General Low Voltage Electrical, Digital Communications Systems, Fire and Security Detection, PA Systems, Fire and Security Detection and Alarms, PA Systems, Grounding and Bonding, and Conductors required for a CR-67 Low Voltage Communications Systems license and passed.[25] 34. Respondent testified that he understands what the Board regulates. He also acknowledged that when he submitted the controlling person application on April 5, 2019, he did not control Justice Security. He acknowledged that the Board regulates but does not give ownership of security companies. Respondent explained that the Justice Security on the application was a different company than the one his son owned. 35. Ms. Pritzl testified that she oversees discipline and licensing of alarm agents and controlling persons at the Board. Ms. Pritzl testified that the Board’s primary purpose is to protect the public through licensing and regulation. In the alarm business, alarm agents and controlling persons have access to people’s alarm codes, homes, social security numbers, and other sensitive information, as well as their possessions. 36. Ms. Pritzl testified that she has had several conversations with Respondent because he asked her about operating an alarm company pending his appeal. Ms. Pritzl testified that Respondent told her that he had not terminated his customers and asked her for a letter that he could give Lydia so it would not terminate its relationship with him. Ms. Pritzl testified that she told Respondent that Justice Security was unregistered and that he could not legally operate the business without a registration. Ms. Pritzl testified that Respondent does not understand what being regulated means and does not understand what a controlling person does. CONCLUSIONS OF LAW 1. The Board has jurisdiction to consider Respondent’s appeal.[26] 2. Respondent bears the burden of proof to establish that he meets statutory and regulatory qualifications for an alarm agent and a controlling person registrations by a preponderance of the evidence.[27] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[28] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[29] 4. Since May 1, 2013, alarm agents and alarm businesses cannot operate in Arizona unless they have received certificates from the Board. See A.R.S. § 32-122.05(A). A.R.S. § 32-122.07(A) allows the Board to “deny an application for certification as an alarm business or alarm agent if a controlling person of an alarm business or an alarm agent lacks good moral character . . . .” A.A.C. R4-30-101(12)(e) provides that “‘[g]ood moral character and repute’ means that the registration or certification applicant/registrant . . . [h]as not engaged in fraud or misrepresentation in connection with the application for registration, certification, or related examination.” 5. The Board’s final decision on the complaint that Respondent through Justice Satellite and Security operated an unregistered alarm business establishes that Respondent in the very recent past violated the Board’s statutes. Respondent did not appeal that decision and he cannot challenge the Board’s final factual findings or legal conclusions in his appeal of the Board’s denials of the alarm agent application and the controlling person application.[30] Although the Board’s investigation was ongoing when Respondent filed the applications with the Board, he still marked “no” in response to the question on both applications about pending investigations. Respondent’s answers on both applications were not honest. 6. Respondent’s testimony and evidence about his role in the unlicensed activities of Justice Satellite and Security were confusing, inconsistent, and contradictory. His son did not testify. The similar entity names and the fact that Respondent and his son allegedly frequently used the same name make Respondent’s account extremely confusing and incredible. 7. It does not appear on this record that Respondent understands the concept of regulation or that he is capable of being regulated. It appears that Respondent will say anything to get what he wants and avoid consequences. Consequently, Respondent’s appeal should be denied and the Board’s decision to deny his applications should be affirmed. ORDER IT IS ORDERED that Victor Johnson Jr.’s appeal is denied; IT IS FURTHER ORDERED that the Board’s decisions denying Respondent’s application Alarm Agent Application and denying Respondent’s Controlling Person Application are affirmed. 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 is five days after the date of that certification. Done this day, August 27, 2019.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Melissa Cornelius, Executive Director Board of Technical Registration ----------------------- [1] The Board’s Exhibit 1. [2] The Board’s Exhibit 2. [3] See the Board’s Exhibit 5. [4] See the Board’s Exhibit 6. [5] See the Board’s Exhibit 3. [6] See the Board’s Exhibit 3 at 5-6, ¶¶ 10(a) through 10(g). [7] See the Board’s Exhibit 3 at ¶¶ 6 and 11. [8] See the Board’s Exhibit 3 at 6-7, ¶ 14. [9] See the Board’s Exhibit 3 at 3, ¶ 3, and 7, ¶ 10. [10] See the Board’s Exhibit 3 at 8-9, ¶¶ 23-37. [11] See the Board’s Exhibit 4 at 1. [12] See the Board’s Exhibit 4 at 2. [13] See the Board’s Exhibit 3 at 4 ¶ 5. [14] Cf. the Board’s Exhibit 3 at 7 ¶ 15. [15] See Respondent’s Exhibit D. [16] See Respondent’s Exhibit A. [17] See Respondent’s Exhibit B. [18] See Respondent’s Exhibit C. [19] See Respondent’s Exhibit J. [20] See Respondent’s Exhibit E. [21] See Respondent’s Exhibit F. [22] See Respondent’s Exhibit H. [23] See Respondent’s Exhibit K. [24] See Respondent’s Exhibit G. [25] See Respondent’s Exhibit I. [26] See A.R.S. §§ 32-106(A)(3). [27] See A.R.S. § 41-1092.07(G)(1); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [28] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [29] Black’s Law Dictionary at page 1220 (8th ed. 1999). [30] “‘Under the doctrine of res judicata, a judgment on the merits in a prior suit involving the same parties or their privies bars a second suit based on the same cause of action.’” Hawkins v. State of Arizona, Department of Economic Security, 183 Ariz. 100, 103, 900 P.2d 1236, 1239 (App. 1995) (quoting Gilbert v. Board of Medical Examiners, 155 Ariz. 169, 174, 745 P.2d 617, 622 (App. 1987); emphasis added).

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826