ALJDEC decisions subject to certification as final

2010A-308475659-ROC · Registrar of Contractors · 2012-09-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 23, 2012, at 8:00 a.m. APPEARANCES: Complainant Caliente Construction, Inc. was represented by Julianne C. Wheeler, Esq., Sacks Tierney, P.A.; Respondent Built Rite Masonry LLC appeared through Richard Alati, its qualifying party and member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. The Arizona Registrar of Contractors (“the Registrar”) issued License No. K-31.170742-D for dual masonry to Built Rite Masonry LLC (“Respondent”). Richard Alati is the qualifying party and only person listed on Respondent’s license. 2. The Registrar issued License No. B-1.091625-C for commercial general contracting to Caliente Construction, Inc. (“Complainant”). 3. On September 7, 2010, Complainant filed a Complaint with the Registrar alleging that Respondent cashed a check for $16,200.00 that Complainant had issued to Respondent in error and refused to reimburse the funds. 4. On September 8, 2010, the Registrar sent a letter to Respondent enclosing a copy of the Complaint and informing Respondent that “[i]f you do not resolve this complaint within ten (10) calendar days from the date of this letter, a formal citation may be issued against your license.” 5. On October 4, 2010, and November 29, 2010, the Registrar sent letters to Respondent informing it that the Registrar had received a request for a formal citation against its license and that “[t]his is your final opportunity to resolve this complaint before it is sent to the ROC Legal Department for a formal citation.” 6. On April 5, 2012, the Registrar issued a Citation and Complaint against Respondent charging a possible violation of A.R.S. § 32- 1154(A)(7). 7. Mr. Alati, on Respondent’s behalf, filed a timely written answer to the Citation and Complaint, denying any statutory violation and affirmatively alleging that he had not done anything to cause Complainant to issue the check to Respondent. 8. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. Motions to Dismiss and for Attorney’s Fees 9. A hearing was held on August 23, 2012. At the beginning of the hearing, Mr. Alati moved to dismiss the Complaint under A.R.S. § 32- 1166.02. Mr. Alati pointed out that the Registrar closed the Complaint on January 19, 2011,[1] and that the Citation and Complaint was not issued until nearly two years after the Complaint was filed. 10. Complainant’s attorney, Julianne C. Wheeler, opposed Respondent’s motion to dismiss because the delay in the matter proceeding to hearing was not due to any failure by Complainant to prosecute its Complaint. Ms. Wheeler explained that the delay was occasioned by the Registrar’s adjustment to the legislature’s 2009 amendment of A.R.S. § 32-1154(A)(7) that eliminated a wrongful act as grounds to discipline a contractor’s license and, instead, required a fraudulent act.[2] Ms. Wheeler stated that she made many telephone calls to the Registrar’s Legal Department to request that the Complaint be scheduled for hearing because Complainant alleged a fraudulent act, not merely a wrongful act. 11. At the end of the hearing, Ms. Wheeler requested that the Registrar require Respondent to pay Complainant’s attorney’s fees. Hearing Evidence 12. Complainant submitted thirteen exhibits and presented the testimony of three witnesses: (1) Mary Staeuble, Complainant’s Executive Assistant, who issued the check to Respondent in error; (2) Danielle Painter, Complainant’s Project Manager on the job for which the erroneous payment was made; and (3) Lorraine Bergman, Complainant’s President. Respondent submitted one exhibit that consisted on four subparts and presented Mr. Alati’s testimony. 13. Complainant is a large commercial general contractor that enters into contracts for construction projects with private and public property owners. Complainant then enters into subcontracts with subcontractors. Complainant uses a software program called American Contractor to keep track of every project’s cost. 14. Ms. Staeuble testified that the American Contractor software program keeps track of job-specific costs and expenditures. Ms. Staeuble testified that Complainant enters its subcontractors’ payment applications into the American Contractor software to generate billings to the property owner. 15. On or about January 28, 2004, shortly after Respondent started on a subcontract with Complainant on its Bank One Guadalupe project, Mr. Alati on Respondent’s behalf signed a Master Subcontract with Complainant. The intent of the Master Subcontract was “to eliminate the need to execute a separate subcontract containing all the terms and conditions applicable to the work on each project for which [Respondent] agrees to perform work required in the Contract between the Owner and [Complainant].”[3] 16. As a result of the January 28, 2004 Master Subcontract, Respondent’s name, address, telephone number, and facsimile number were entered into the contractor database in Complainant’s American Contractor software program. 17. Respondent performed two masonry subcontracts with Complainant: (1) The Bank One Guadalupe project; and (2) The Village @ Pinnacle Peak project. Complainant paid Respondent in full for both subcontracts. Neither of the projects involved a school. 18. Respondent’s last contact with Complainant involving a subcontract between the parties was on February 5, 2007, when Complainant paid Respondent the final payment of $763.90 on the Village at Pinnacle Peak project.[4] 19. On or about February 7, 2007, Mr. Alati signed an Unconditional Waiver and Release on Final Payment that identified Complainant as the general contractor and the name and address of the Village @ Pinnacle Peak project, to warrant that Respondent had paid or would use Complainant’s final payment to pay laborers, subcontractors, materialmen, and suppliers that Respondent had used on the project.[5]

20. Ms. Staeuble testified that after the project manager approves the work included on a subcontractor’s payment application, she cuts a check to the subcontractor and sends by facsimile a notice to the subcontractor that the check is ready with a copy of a job-specific Unconditional Waiver and Release. Ms. Staeuble testified that Complainant requires subcontractors to execute a job-specific unconditional waiver and release as a condition of receiving a progress or final payment. 21. During the summer of 2010, Complainant was the general contractor on a landscaping project for Maricopa County Community College District (“MCCCD”) at Scottsdale Community College (“SCC”). The project did not include any masonry work and Respondent did not perform any work on Complainant’s MCCCD SCC project. 22. Complainant subcontracted to Biltrite, Inc. dba Biltrite Gates, License No. L-24.171945-C for ornamental metals (“Biltrite”) metal work on the MCCCD job. Because Biltrite was a new subcontractor and had not yet executed a Master Subcontract with Complainant, in July 2010, Biltrite was not yet in Complainant’s database in the American Contractor software program. 23. Ms. Staeuble testified that Biltrite submitted a handwritten payment application for metal work on the MCCCD SCC job to Complainant that was not very legible. Ms. Staeuble testified that she looked into the database in the American Contractor software program and located Respondent’s contact information to match with Biltrite’s payment application. 24. On July 8, 2010, Ms. Staeuble sent a facsimile to Respondent regarding a payment in the amount of $16,200.00. The facsimile cover page requested that Respondent “read this entire fax” and notified Respondent that it must provide a Workers’ Compensation Insurance Certificate and Liability Insurance Certificate before Complainant would release the check.[6] Ms. Staeuble attached two documents to her facsimile: (1) An Unconditional Waiver and Release on Progress Payment (“Unconditional Waiver”) that identified Complainant as the general contractor and provided the name and address of the MCCCD SCC job; and (2) A copy of Complainant’s check for $16,200.00 made payable to Respondent.[7] 25. Mr. Alati testified that he was on vacation on July 8, 2010, and that his daughter was at his home at 6150 East Greenway, which was Respondent’s office at the time. Mr. Alati testified that when his daughter called him about Ms. Staeuble’s facsimile, he told her to put the facsimile on his desk and he would take care of it when he returned home. 26. Mr. Alati testified that the check came “out of the blue.” Mr. Alati testified that he assumed that the check was for a job that Respondent had done two or three years before 2010, for which it had not been paid. 27. On July 12, 2010, Mr. Alati called Ms. Staeuble to inquire about Complainant’s insurance requirements. Mr. Alati did not tell Ms. Staeuble that he thought the payment was for a job that Respondent had performed two or three years earlier and did not ask why Respondent was finally getting paid for the job. 28. In response to Mr. Alati’s inquiry, Ms. Staeuble sent a document entitled “Attachment A” to Respondent that set forth Complainant’s insurance requirements and the following job-specific requirements: PLEASE PROVIDE INSURANCE CERTIFICATE(S), PER THE ABOVE REQUIREMENTS, FOR THE FOLLOWING PROJECT:

• #10-2008 SCC LB SIDEWALK LANDSCAPING • Caliente Construction and MCCCD as Additional Insured.[8]

29. Mr. Alati testified that he did not read Exhibit A but, instead, sent it to Respondent’s liability insurer, The Houston-Taylor Group, LLC (“HTG”), and to its Workers’ Compensation insurer, Sunwest Employer Services, Inc., with his request that they provide the required insurance certificates.[9] 30. Mr. Alati testified that he believed that Complainant was requesting an insurance update for work that Respondent had completed two or three years earlier. Mr. Alati testified that he did not see anything unusual in a general contractor’s request for a subcontractor’s current insurance information for a job that the subcontractor had completed years before. 31. On July 13, 2010, Mr. Alati appeared at Complainant’s office and presented HTG’s Certificate of Insurance for a policy that had an effective date of January 28, 2010, and a termination date of January 28, 2011. The certificate identified Respondent as the insured, “10- 2008 SCC LB Sidewalk Landscaping” as the project, and Complainant and MCCCD as additional insureds.[10] 32. On July 13, 2010, Mr. Alati also presented to Complainant a fully executed Unconditional Waiver that identified the project as the “MCCCD Library Sidewalk Landscp,” provided the address of the project as 9000 East Chaparral Road in Scottsdale, and identified Complainant as general contractor. The Unconditional Waiver included the following two paragraphs above the signature line: This release covers a progress payment for all labor, services, equipment or materials furnished to the job site or to Caliente Construction, Inc. through 06/30/10 only and does not cover any retention, pending modifications and changes or items furnished after that date.

The undersigned warrants that he either has already paid or will use the monies he receives from this progress payment to promptly pay in full all of his laborers, subcontractors, materialmen and suppliers for all work, materials, equipment or services provided for or to the above-referenced project up to the date of this waiver.[11]

Mr. Alati testified that he did not read the Unconditional Waiver because it was a form document that contractors routinely sign to receive payment. 33. Ms. Staeuble testified that when Mr. Alati signed the Unconditional Waiver, she understood that he was representing that Respondent had performed work on the MCCCD SCC project and that Respondent was the subcontractor that had submitted the payment application. 34. Based on the insurance certificate and Unconditional Waiver that Mr. Alati had signed, on July 13, 2010, Ms. Staeuble released Complainant’s $16,200.00 check to Mr. Alati. On that same date, Mr. Alati endorsed the check and deposited it into Respondent’s business account. The check cleared two days later.[12] 35. Several weeks after Respondent cashed Complainant’s $16,200.00 check for the progress payment on the MCCCD SCC project, Biltrite contacted Ms. Staeuble about the status of its pay application. At that time, Ms. Staeuble realized that she had paid the wrong subcontractor. 36. Ms. Staeuble immediately called Mr. Alati and told him that she had issued the check in error and that she needed to get Complainant’s money back. 37. Ms. Staeuble testified that Mr. Alati said that he did not know what she was talking about and that he would have to talk to his daughter, who had picked up the check, and that he would call Ms. Staeuble back in the afternoon. Ms. Staeuble testified that Mr. Alati did not call her back and when she called him again the next day, he did not answer her calls. Ms. Staeuble testified that she went to Ms. Painter in tears and asked for help. 38. Mr. Alati testified that he never told Ms. Staeuble that his daughter had picked up the check. Mr. Alati testified that, instead, he told Ms. Staeuble that he needed to research the check because Respondent keeps its records in storage for previous years and that he needed to go to the storage facility to find records of the project for which he thought Complainant’s check was paying. 39. Mr. Alati testified that he researched the unpaid project that Respondent had performed two or three years earlier and that he located the file for the unpaid project. Mr. Alati testified that the project was for MCCCD or another school, that the general contractor on the job was Chaparral Construction, and that he did not try to collect the debt because the project manager had told him that the owner had gone bankrupt. Mr. Alati testified that in July 2010, he thought that Complainant might have been the general contractor on the project. 40. Mr. Alati did not submit any records regarding the unpaid project that Respondent had allegedly performed for Chaparral Construction. On cross-examination, Mr. Alati testified that could not remember the name of the project, the nature of the project, the name of the project manager, or the amount that was due to Respondent for the project, except that it was “thousands.” Mr. Alati acknowledged that he did not think that MCCCD had gone bankrupt and that he did not file a complaint with the Registrar or file a civil action against the general contractor for nonpayment. 41. Ms. Painter was Complainant’s project manager on the MCCCD SCC landscaping project. Ms. Painter knows Mr. Alati because she also had been Complainant’s project manager on the Village @ Pinnacle Peak project and had supervised Respondent’s performance of its subcontract on that project. After Ms. Staeuble informed Ms. Painter of the erroneous payment to Respondent and Mr. Alati’s refusal to discuss the matter, Ms. Painter called Respondent’s telephone numbers three times and left messages. Mr. Alati did not return Ms. Painter’s telephone calls. 42. On or about August 8, 2010, Ms. Painter decided to go by the business address listed on Complainant’s database in the American Contractor software. Ms. Painter saw that the building listed as Respondent’s business address on the database was vacant. Ms. Painter consulted the Registrar’s public website and found Respondent’s current address of record with the Registrar, which was approximately a mile away from Respondent’s former business address. 43. Ms. Painter drove to Respondent’s current address of record with the Registrar and found it to be Mr. Alati’s residence. When she knocked on the door, Mr. Alati answered. After Ms. Painter explained why she was there, Mr. Alati suggested that they go to a nearby McDonald’s restaurant to discuss Complainant’s concerns. 44. Ms. Painter and Mr. Alati subsequently met at the McDonald’s restaurant. Ms. Painter explained that Complainant had mistakenly paid Respondent for a project that it did not work on, that Respondent had accepted funds that should have been paid to another subcontractor, and that she needed to reach a proposed resolution of the matter before she discussed it with Ms. Bergman. Ms. Painter testified that she was hoping that Respondent had not spent the money and that Mr. Alati would agree to repay it. 45. Mr. Alati informed Ms. Painter that he no longer had the $16,200.00 from the check that Complainant had mistakenly issued to Respondent. Mr. Alati stated that Respondent’s business was not doing well and that it had lost its office. Ms. Painter told Mr. Alati that she would have to report the matter to Ms. Bergman. 46. Mr. Alati proposed that Complainant award subcontracts to Respondent to allow it to work off the debt. Ms. Painter testified that she told Mr. Alati that she would convey his proposal to Ms. Bergman, but that she was not authorized to resolve Complainant’s disputes with subcontractors. Ms. Painter testified that she suggested that Mr. Alati write a check made payable to Complainant in the amount of the mistaken payment as an admission of his wrongdoing. 47. Mr. Alati testified that he gave Ms. Painter Respondent’s check to secure its agreement to perform future work for Complainant and that he told Ms. Painter that Respondent did not have funds in the bank to cover the check. 48. Mr. Alati never contacted Complainant or went to its office to check on pending projects on which Respondent might work to pay off its debt. Mr. Alati testified that he was waiting for Complainant to contact him. 49. Ms. Painter testified that she expressed to Mr. Alati several concerns about his proposal that Complainant allow Respondent to work off its debt, as follows: 1. Respondent had lost its office due to lack of resources. Complainant was selective about its subcontractors and performed extensive prequalification of the subcontractors that it chose to perform its projects due to the nature of the property owners with whom Complainant contracted. If Respondent did not even have an office, it also might not have the employees or tools that it would need to work off its debt. 2. Mr. Alati and taken and cashed a check for work that Respondent did not perform. Ms. Painter testified that most people would not have taken or cashed the check unless they were in serious trouble. 3. Ms. Painter testified that she did not know at the time that Mr. Alati had signed an Unconditional Waiver and had provided a certificate of insurance to obtain the check. If she had known of the measures that Mr. Alati took to obtain the check, his dishonesty would have disqualified Respondent from being Complainant’s subcontractor. 50. Complainant subsequently attempted to cash Respondent’s check. Respondent’s bank returned the check for insufficient funds. 51. On August 17, 2010, Complainant issued a check in the amount of $16,200.00 to Biltrite to replace the progress payment check that Complainant had mistakenly issued to Respondent.[13] 52. Ms. Bergman testified that she has worked in construction management for 21 years and has been Complainant’s president for 12 years. Ms. Bergman testified that she has never before known of a subcontractor signing a lien waiver and submitting a certificate of insurance to obtain payment for a job that it did not perform. 53. On September 13, 2010, after Respondent’s check had been returned for insufficient funds and Complainant had filed the Complaint with the Registrar against Respondent, Mr. Alati went to Complainant’s office to meet with Ms. Bergman. Mr. Alati proposed that Respondent make payments in the amount of $500.00 per month, in combination with performing work to pay its debt quicker. Mr. Alati insisted as a condition of Respondent agreeing to make any payments that Complainant withdraw its Complaint with the Registrar and agree that it would not involve the Registrar in enforcing the settlement agreement.[14] 54. Ms. Bergman testified that Complainant was unwilling to allow Respondent to work off the debt or to agree not to involve the Registrar in Complainant’s efforts to collect the debt. Ms. Bergman explained that Complainant’s contracts with property owners require it to accept the lowest responsible bid. Ms. Bergman testified that because Complainant was only as good as its subcontractors, it needed to use only subcontractors that it could trust. 55. Ms. Bergman testified that she considered a subcontractor’s signature on an Unconditional Waiver to be a promise from the subcontractor that it had performed work on the project that was identified. Ms. Bergman testified that she considered the Unconditional Waiver that Mr. Alati signed to contain a false representation because Respondent had not performed any work on the MCCCD SCC project. 56. Ms. Bergman testified that at the time Mr. Alati submitted the signed Unconditional Waiver to Complainant, it had no way of knowing that Respondent’s representation on the Unconditional Waiver was false. Ms. Bergman testified that Complainant relied upon Mr. Alati’s representation in the Unconditional Waiver to release the check to Respondent. 57. As of the date of the hearing, Respondent had not paid any monies to Complainant. 58. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on September 11, 2012. Such prior License record reflects that Respondent’s license K- 31.170742-D was current and that one complaint was pending against the license. CONCLUSIONS OF LAW 1. The proponent of a motion bears the burden to establish grounds to support the motion.[15] 2. A.R.S. § 32-1166.02 provides that “[a] citation under section 32-1166 shall be issued by the registrar within ninety days after actual discovery of the offense by this state or the political subdivision having jurisdiction.” A.R.S. § 32-1166 authorizes the Registrar to issue a cease-and-desist order and to assess civil penalties against a person who engages in unlicensed contracting activities, in violation of contracting statutes.[16] The Registrar has not issued a cease-and- desist order or assessed any civil penalty against Respondent. Because Respondent is licensed, A.R.S. § 32-1166 does not apply to Complainant’s Complaint. Therefore, Respondent’s motion to dismiss should be denied. 3. The legislature has not authorized the Registrar to award attorney’s fees that a complainant incurs in prosecuting its administrative complaint with the Registrar against a licensed contractor for a violation of A.R.S. § 32-1154(A).[17] Therefore, Complainant’s request for an award of attorney’s fees should be denied. Charged Violation of A.R.S. § 32-1154(A)(7) 4. The Registrar has jurisdiction to determine whether Respondent violated A.R.S. § 32-1154(A)(7).[18] 5. Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[19] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[20] 6. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[21] 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.”[22] 7. A.R.S. § 32-1154(A)(7) 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: . . . .

7. The doing of a fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

A.R.S. § 32-1154(A)(7) does not define what constitutes actionable fraud. The nine elements of common-law fraud are as follows: "'(1) A representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; (9) his consequent and proximate injury.'"[23]

8. Complainant acknowledged that it made a mistake when it issued the check to Respondent based on information in the database in the American Contractor software. Complainant’s mistake does not end the inquiry into whether Mr. Alati committed fraud when he induced Complainant to release the check and cashed the check. 9. Mr. Alati’s testimony that he thought that the check was for a project that Respondent had completed years before was not credible. 10. If Mr. Alati failed to read the Unconditional Waiver, his failure was calculated to avoid notice that Complainant’s payment was made in error and his signature renders him responsible for the representations contained in the Unconditional Waiver.[24] Therefore, Complainant established that when Mr. Alati signed Unconditional Waiver that stated that Respondent had performed work on the MCCCD SCC project, he knowingly made a false and material representation. 11. Mr. Alati knew that he needed to sign the Unconditional Waiver and provide an insurance certificate for Ms. Staeuble to release the check. Therefore, Complainant established that Mr. Alati intended Complainant to act on his false representation by releasing the check to him. 12. When Ms. Staeuble released the check to Mr. Alati, she did not know that Respondent had not worked on the MCCCD SCC project and relied upon Mr. Alati’s signature on the Unconditional Waiver to release the check to Respondent. Complainant’s practice of requiring job-specific lien waivers as a condition of paying subcontractors is common in the construction industry. Complainant had a right to rely on Mr. Alati’s signature on the Unconditional Waiver to show that Respondent had performed work at the MCCCD SCC project. 13. Because Complainant had to pay twice for Biltrite’s ornamental iron work on the MCCCD SCC project, Mr. Alati’s false representation on the Unconditional Waiver proximately and substantially injured Complainant. Mr. Alati is Respondent’s principal and the only person listed on its license. Therefore, Complainant established that Mr. Alati committed fraud, thereby establishing cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(7). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, Respondent Built Rite Masonry LLC’s License No. K- 31.170742-D be suspended until Respondent pays $16,200.00 to Complainant Caliente Construction, Inc. It is further recommended that if on or before the effective date of the Order, the Registrar receives written proof that is acceptable to the Registrar that Respondent has paid Complainant $16,200.00 in certified funds, Respondent’s license not be suspended but, instead, Complainant’s complaint in Case No. 2010-[number redacted] be closed. 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, September 11, 2012. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: William A. Mundell, Director Registrar of Contractors ----------------------- [1] The electronic record that the Registrar forwarded to the Office of Administrative Hearings does not include a letter closing the Complaint. [2] See Laws 2009, Ch. 99, § 3 (effective September 30, 2009). [3] Complainant’s Exhibit 1. [4] See Complainant’s Exhibits 2 and 8. [5] See Complainant’s Exhibit 3. [6] See Complainant’s Exhibit 3. [7] See id. [8] Respondent’s Exhibit A at 3. [9] See Respondent’s Exhibit A at 1 and 2. [10] See Complainant’s Exhibit 7. [11] Complainant’s Exhibit 5. [12] See Complainant’s Exhibit 6. [13] See Complainant’s Exhibit 9. [14] See Complainant’s Exhibit 10. [15] See A.A.C. R2-19-119(B)(3). [16] A.R.S. § 32-1166 provides as follows: A. In addition to all other remedies, when it appears to the registrar, either upon complaint or otherwise, that any person, firm, partnership, corporation, association or other organization, or a combination of any of them, has engaged in or is engaging in any act of contracting, practice or transaction which constitutes a violation of this chapter, or any rule or order of the registrar, the registrar may serve upon such person, firm, partnership, corporation, association or other organization not currently licensed under this chapter, by certified mail or by personal service, a cease and desist order requiring the person, firm, partnership, corporation, association or other organization to cease and desist immediately, upon receipt of the notice, from engaging in such act, practice or transaction. In conjunction with the cease and desist order, the registrar may issue a citation for a violation. Each citation shall be in writing and shall clearly describe the violation for which the citation was issued. Each citation shall contain an order to cease and desist and an assessment of a civil penalty in an amount of at least two hundred dollars for each violation but not more than two thousand five hundred dollars for the multiple violations committed on the same day. If after the issuance of a citation by the registrar, the person or organization receiving the citation fails to cease and desist in the violation or violations described in the citation, the registrar may assess an additional civil penalty of up to two thousand five hundred dollars for each day the violation or violations continue. The registrar shall adopt rules covering the assessment of a civil penalty that give due consideration to the gravity of the violation and any history of previous violations. The penalties authorized under this section are separate from, and in addition to, all other remedies either civil or criminal. B. Each violation of this chapter or a rule or order of the registrar by a person who is required to be licensed by this chapter and who does not possess the required license shall constitute a separate offense, and the registrar may impose a civil penalty of not to exceed two thousand five hundred dollars for each violation . . . . C. The registrar of contractors may issue citations containing orders to cease and desist and of civil penalties against persons who have never been licensed under this chapter who are acting in the capacity of or engaging in the business of a contractor in this state. [17] See Semple v. Tri-City Drywall, Inc., 172 Ariz. 608, 611-612, 838 P.2d 1369, 1372-73 (App. 1992) (Prevailing party in administrative complaint to the Registrar is not entitled to an award of attorney’s fees under A.R.S. § 12-341.01). [18] See A.R.S. §§ 32-1151 to 32-1169. [19] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [20] See A.A.C. R2-19-119(B)(2). [21] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [22] Black’s Law Dictionary at page 1220 (8th ed. 1999). [23] Staheli v. Kauffman, 122 Ariz. 380, 383, 595 P.2d 172, 175 (1979) (quoting Carrel v. Lux, 101 Ariz. 430, 434, 420 P.2d 564, 568 (1966); Nielson v. Flashberg, 101 Ariz. 335, 338-39, 419 P.2d 514, 517-18 (1966) (footnote added)). [24] See In re McDonnell’s Estate, 65 Ariz. 248, 253, 179 P.2d 238, 242 (1947).

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