ALJDEC decisions subject to certification as final

2010A-308472705-ROC · Registrar of Contractors · 2010-07-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 23, 2010 at 1:00 p.m. The matter was held open until July 1, 2010, to allow the parties sufficient time to submit post hearing memorandums. APPEARANCES: The Applicant appeared through its authorized representative, Catherine Dean. The Registrar of Contractors appeared by and through Assistant Attorney General, Keely Verstegen. ADMINISTRATIVE LAW JUDGE: M. Douglas

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. The Applicant, Eagle Masonry and Stone Inc., dba Eagle Fence and Gate, has filed an application for a Class K-14 License. 2. On April 8, 2010, the Registrar of Contractors issued a letter denying the Applicant’s license application. The letter denying the application provides, in relevant part, as follows: You are hereby notified pursuant to A.R.S. § 32-1124 that your License Application is denied. We find that the applicant does not qualify for the Class K-14 Dual Fencing License based on the following: 1. You have failed to demonstrate financial stability as is required by A.R.S. § 32-1122 (C). 2. You have failed to establish good character and reputation as required by A.R.S. § 32-1122(D). 3. There was no dispute that the Applicant’s Financial Statement submitted with its License Application provides that Eagle Fence and Gate has assets in the amount of $500.00. 4. Credible testimony and evidence established that the Applicant, if granted the license at issue, would normally be performing construction projects substantially in excess of the sum of $500.00. 5. Credible testimony and evidence established that the sum of $500.00 is inadequate and fails to meet the minimum level of financial ability required by applicable statute. 6. Credible testimony and evidence established that the Applicant has resolved the claims of deficient workmanship set forth in Case Nos. L09- 0187, L09-0188, L09-0189, L09-0191, L09-0192, L09-0194, L09-0196, L09- 0197. 7. There was no dispute that the Eagle Fence Co., Inc. is an Arizona Corporation and that Edward M. Dean is listed as president of the corporation and Catharine D. Dean is listed as the secretary for the corporation. 8. There was no dispute that Edward M. Dean is listed as the sole Director for Eagle Fence Co., Inc. 9. There was no dispute that the Eagle Fence Co., Inc. holds the following Arizona contracting licenses: License No. 107362, a Class C-14 License, License No. 107377, a Class C-31 License, License No. 146410, a Class L- License, and License No. 219487, A Class L-31 License. 10. There was no dispute that Eagle Fence Co., Inc. has filed for a Chapter bankruptcy in case number 09-bk-19386-RJH and that the voluntary bankruptcy petition for Eagle Fence Co., Inc. identifies the Arizona Department of Revenue, the Internal Revenue Service and SCF Arizona as creditors. 11. There was no dispute that the Applicant lists the same Edward M. Dean as its President and Qualifying Party and the same Catherine D. Dean as its Vice- President. 12. Credible testimony and evidence established that Eagle Fence Co., Inc. owes taxes to the Internal Revenue Service and the Arizona Department of Revenue and SCF Arizona. 13. Credible testimony and evidence established that such conduct by Eagle Fence Co., Inc., is in violation of A.R.S. § 1155(A) (5), which provides that it is a violation for a contractor or any person listed on a license to fail to pay income taxes, withholding taxes or any tax imposed by title 42, chapter 5, articles 1 and 4 and incurred in the operation of the licensed business, and further demonstrates a lack of good character and reputation as required by applicable statute. 14. Credible testimony and evidence established that that the Applicant has persons listed on its pending license, Edward M. Dean and Catherine Dean, who are also listed on a license that failed to pay federal and state taxes and that failed to comply with statutes and rules governing workers’ compensation insurance, social security or unemployment insurance. 15. Credible testimony and evidence established that the application for Eagle Masonry and Stone Inc., dba Eagle Fence and Gate, was not denied because Eagle Fence Co. Inc. filed bankruptcy. Rather, the license application was denied because the Applicant has persons listed on its license application who are also listed on a license that has failed to pay federal and state taxes and has failed to comply with applicable statues and rules governing workers’ compensation insurance, and social security or unemployment insurance. 16. Notwithstanding the foregoing conclusion that the Applicant’s license application was properly denied in this instance, such a conclusion should not be construed as a basis for continuing denials should a future application, as allowed by law, be filed by the Applicant. Provided that the Applicant is able to show that the persons listed on its license have properly resolved the delinquent state and federal taxes and the unpaid workers’ compensation insurance, social security or employment insurance that the listed persons are responsible for, and provided that the Applicant is able to provide proof of sufficient assets to establish financial stability, it is possible that the Applicant may establish the required good character and reputation and financial stability necessary to qualify for a contractor’s license.

CONCLUSIONS OF LAW 1. The Office of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to A.R.S. § 41-1092. 2. A.R.S. § 41-1092.07(G) provides, in relevant part, as follows: At a hearing on a denial of license or permit, the applicant has the burden of proof. 3. A.A.C. R2-19-119 entitled, “Proof” provides, in pertinent part, as follows: A Standard of Proof: Unless otherwise provided by law, the standard of proof is a preponderance of evidence. B. Burden of Proof: Unless otherwise provided by law; 1. the party asserting a claim, right, or entitlement has the burden of proof; 2. A party asserting an affirmative defense has the burden of establishing the affirmative defense * * * 4. The law in Arizona requires that an applicant for a contractor’s license demonstrate financial stability as is required by A.R.S. § 32-1122(C) and that an applicant for a contractor’s license demonstrate good character and reputation in addition to the requisite skills necessary in order to obtain such a license. 5. Credible testimony and evidence supported findings that establish that the Applicant has failed to demonstrate financial stability as required by applicable statute. 6. Credible testimony and evidence supported findings that establish that the Applicant has failed to establish good character and reputation as required by applicable statute.

RECOMMENDed order In view of the foregoing, it is recommended that the denial of the Applicant’s pending License No. K-14.263664-D be affirmed and that any license bond and/or recovery fee be returned to the Applicant in due course. In the event of certification of this 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 the certification.

Done this day, July 6, 2010.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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