ALJDEC decisions subject to certification as final

2011A-3625-ROC · Registrar of Contractors · 2011-11-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 3, 2011, at 1:00 p.m. APPEARANCES: Complainant Alfred Z. Campoy appeared on his own behalf; Respondent Terryl Curtis Gibson dba Gibson and Gibson Development appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In September 1999, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC148753, Class B for residential general contracting to Terryl Curtis Gibson doing business as (“dba”) Gibson and Gibson Development (“Respondent”). On June 23, 2011, the Registrar received a complaint from Alfred Z. Campoy (“Complainant”) against Respondent regarding his failure to perform his contract to replace the roof on Complainant’s residence at 2418 East Billings Street in Mesa, Arizona, after Complainant paid Respondent $4,000.00. Complainant requested that the Registrar issue a citation against Respondent. On August 9, 2011, the Registrar issued a Citation and Complaint, charging Respondent with violations of A.R.S. § 32-1154(A)(1) and (10). Respondent filed a timely written answer to the Citation and Complaint, affirmatively alleging that Global Construction hired him to oversee its roofing projects and to use his residential license, that he knew nothing about its contract with Complainant, and that he did not receive any of the $4,000.00 that Complainant had paid. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A hearing was held on November 3, 2011. Complainant submitted three exhibits and presented the testimony of two witnesses: (1) Himself; and (2) His wife, Mary Campoy. Respondent submitted five exhibits and testified on his own behalf. Hearing Evidence On October 5, 2010, a severe hail storm hit the Phoenix area, damaging many roofs. The aftermath of the storm offered contractors an opportunity for substantial work, especially since many of the residences were insured against storm damage, and after a work slow down due to the economic recession. Respondent testified that he was looking for work on Craigslist when he found that Global Construction was looking for a contractor with a license that it could use to undertake roof repairs in the Phoenix area. Respondent testified that he looked into Global Construction, and learned that it was based in Ohio and appeared to be “on the up-and-up.” Respondent testified that he met with Global Construction’s managers in Arizona, Don Johnson and Eric Hoffman, and that the three agreed that Global Construction could enter into contracts using Respondent’s license to repair or replace roofs in Arizona, and that Respondent would inspect Global Construction’s work. Respondent testified that he believed that he could allow Global Construction to use his license because he has a business performing millwork, and that when he is too busy, he sometimes hires installers who have their own licenses.[1] On or about January 26, 2011, Jack Perry submitted a proposal to Complainant to replace the roof on his house. Mr. Perry’s business card showed that he worked in “Principal Lead Sales Accounts” for “Gibson and Gibson Development.” The proposal showed Respondent’s residential license number. Respondent testified that he did not meet or hear of Mr. Perry until after Complainant filed the complaint. Respondent testified that “things went fine” with Global Construction until the end of February 2011. At that point, Mr. Hoffman informed Respondent that Global Construction would not need to use Respondent’s license any longer because it had obtained its own license. Respondent submitted the license screen printout for License No. ROC271049, Class K-42 for dual roofing that the Registrar issued on February 23, 2011, to Professional Home Improvements, Inc., with Eric Mitchell Hoffman and Donald Allen Johnson listed as officers.[2] Respondent testified that Mr. Hoffman or Mr. Johnson asked him if he were willing to sell the company name so that they could use it in marketing. Although Respondent made suggestions regarding sale price, no agreement was ever reached. In the meantime, Complainant was attempting to make a claim to his homeowner’s insurance carrier for the replacement of the roof. Although the first adjuster who inspected the roof opined that the hail storm had not damaged it, in April 2011, a second inspector opined that the hail storm had caused damages to the roof that were within the scope of coverage. Complainant testified that before he signed the proposal, he called the Registrar to confirm that Gibson and Gibson Development had a current license in good standing and a bond. Complainant testified that his homeowner’s insurance carrier subsequently issued a check to him in the amount of $4,900.00. On or about April 26, 2011, Complainant’s wife, Mrs. Campoy, wrote a personal check to “Gibson and Gibson” in the amount of $4,000.00 to begin replacement of the roof, and Mr. Perry gave Complainant and his wife a receipt for $4,000.00 with the name, “Gibson and Gibson,” and Respondent’s residential license number. Mrs. Campoy’s personal check was endorsed “Gibson & Gibson” and deposited in an account at Chase Bank. Respondent testified that he did not give Global Construction, Mr. Hoffman, or Mr. Johnson permission to open a bank account in Respondent’s business name, and that he did not think that anyone could open such a bank account because he was a sole proprietor. Respondent testified that he did not receive any portion of the proceeds of Mrs. Campoy’s personal check. Respondent testified that he learned about money that Global Construction or Mr. Hoffman had received from homeowner Ryan Smith for work that it did not perform. Respondent testified that he contacted Mr. Hoffman about the matter and that on or about May 20, 2011, Mr. Hoffman caused a cashier’s check for $5,193.33 to be issued to Ryan Smith, with “Gibson and Gibson Development” as the remitter. Respondent testified that after he asked Mr. Hoffman to return Complainant’s money, Mr. Hoffman and Mr. Johnson stopped returning his e- mails and telephone calls. Respondent testified that he contacted the Arizona Attorney General’s Office about possible violations of the Consumer Fraud Act, but that the Attorney General’s Office referred him to the Registrar. According to the Registrar’s electronic record, on October 1, 2011, Respondent’s License No. ROC148753 was suspended for non-renewal, and the license remained suspended on the date of the hearing. CONCLUSIONS OF LAW The administratively suspended status of Respondent’s license does not deprive Complainant of his right to prosecute his complaint against Respondent or prevent the Registrar from determining the merits of Complainant’s complaint.[3] This matter lies within the Registrar’s jurisdiction.[4] Complainant bears the burden of proof and must establish Respondent’s statutory violations by a preponderance of the evidence.[5] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[6] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[7] Applicable statute required Respondent’s qualifying party to be actively involved in supervising the performance of any contracting activity that Mr. Perry, Mr. Hoffman, or Mr. Johnson undertook after Respondent allowed Global Construction to use Respondent’s license.[8] Because Respondent’s qualifying party did not supervise Global Construction’s principals or employees, Mr. Perry, under the authority of Respondent’s license, contracted to perform work, accepted Complainant’s wife’s check, and failed to perform any work. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(1) by abandoning the contract that Mr. Perry made under Respondent’s license.[9] Because Mr. Perry, Mr. Hoffman, and Mr. Johnson could not have abandoned the contract in violation of A.R.S. § 32-1154(A)(1) after taking Complainant’s money if Respondent had not allowed Global Construction to use his license, Complainant also established that Respondent violated A.R.S. § 32-1154(A)(10).[10] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, the Registrar revoke Respondent Terryl Curtis Gibson dba Gibson and Gibson Development’s License No. ROC148753. It is further recommended that the Registrar not revoke Respondent’s license but, instead, close Case No. 2011-3625 if on or before the effective date of the Registrar’s order, Respondent provides written proof that is satisfactory to the Registrar that it has remedied its violations of A.R.S. § 32-1154(A)(1) and (10) by paying Complainant Alfred Z. Campoy $4,000.00 by certified or cashier’s check. It is further recommended that in addition to any license suspension that may result from this matter, Respondent’s Class B license be placed on disciplinary probation for a period of 180 days, commencing on the effective date of the Registrar’s order or the date on which Respondent files notice of compliance, whichever is later. 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, November 16, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] According to the Registrar’s electronic record, Respondent also holds License No. ROC150016, Class B-2 for small commercial general contracting. [2] The licensee’s name was later changed to Wakina Contracting, Inc. Wakina Contracting, Inc. also holds License No. ROC271051, Class KB-2 for dual residential and small commercial contracting, and Mr. Hoffman and Johnson are also listed on that license. According to the Registrar’s electronic record, on October 6, 2011, License Nos. ROC271049 and ROC271051 were suspended for lack of bond. [3] See A.R.S. § 32-1154(C). That statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [4] See 32-1101 et seq. [5] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [6] See A.A.C. R2-19-119(B)(2). [7] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [8] See A.R.S. § 32-1127. This statute defines “responsible managing employee” and “qualifying party” in relevant part as follows:

The terms "responsible managing employee" and "qualifying party" shall, for the purpose of administering this chapter, be synonymous, and shall mean an employee who is regularly employed by the licensee and is actively engaged in the classification of work for which such responsible managing employee qualifies in behalf of the licensee. While engaged as a qualifying party for a licensee, the qualifying party shall not take other employment that would conflict with his duties as qualifying party or conflict with his ability to adequately supervise the work performed by the licensee.

[9] A.R.S. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” [10] A.R.S. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]iding or abetting a licensed or unlicensed person to evade this chapter, knowingly combining or conspiring with a licensed or unlicensed person, allowing one’s license to be used by a licensed or unlicensed person with intent to evade this chapter.”

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