ALJDEC decisions subject to certification as final

2012A-520-ROC · Registrar of Contractors · 2012-05-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 11, 2012

APPEARANCES: Complainant appeared on his own behalf; Respondent was represented by its Managing Member and Qualifying Party Clint Hyman.

WITNESSES: Ed Davey Clint Hyman

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that Respondent Foresight Roofing LLC, without legal excuse, abandoned a project at Complainant’s home. Respondent denies the allegation, claiming that it is not responsible for the project. This tribunal entered the complaint file received from the Registrar of Contractors (“Registrar” or “ROC”) into the record, along with Complainant’s Exhibit A and Respondent’s Exhibits 1 and 2.[1] The parties presented evidence and testimony from the witnesses listed above. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding that Respondent is responsible for the abandonment of Complainant’s job. FINDINGS OF FACT 1. Respondent is the holder of License No: K-42.265407-D, a specialty dual residential and commercial contractor’s license issued by the Registrar. The license authorizes Respondent to perform roofing work for both residential and commercial projects. Clinton Shawn Hyman is the Qualifying Party. 2. Complainant testified that he entered into a contract in April 2011 with “Countrywide Shingle” to repair his roof after it was damaged by hail. That written contract is part of the complaint file and reflects a “Repair Work Order/Invoice” signed by Complainant, his wife, and “Paxton Moran” for the contractor. The Repair Work Order/Invoice is a form document with the details filled in by hand that show that the work included materials and installation for replacing the roof. The form is printed with a heading showing, “Countrywide Shingle,” and below that, “ROC: 265407,” which is Respondent’s license number. Based on other evidence (recited below in Finding of Fact 3) in the record, it is found that the entity that contracted with Complainant was Countrywide Shingle & Siding LLC, an entity that is not licensed by the Registrar. Complainant testified that he dealt only with a man named Paxton Moran and that he paid approximately 80% of the contract price as a down payment. The money paid was in the form of insurance proceeds checks endorsed over to “Countrywide Shingle.” 3. No work was done on Complainant’s roof. Complainant was in contact with “Countrywide Shingle” at the telephone number listed on the contract (602-484-9000), but there always appeared to be some problem that kept the work from commencing. In January 2012, Complainant received a letter from Countrywide Shingle & Siding LLC (“Countrywide LLC”) stating that they were out of business. The letter has no signature at the end, closing merely with “Sincerely, Countrywide Shingle.” It is apparent that the letter was issued to Complainant on the basis of the April 2011 contract with “Countrywide Shingle”. The letter states that Countrywide LLC entered into an agreement with “Foresight roofing [sic] to use there [sic] license to install roofs in the Arizona market.” The letter states that Countrywide Shingle has caused damage to “Foresight roofing [sic]” and that “Foresight roofing [sic]” did not “take” any of Complainant’s money. 4. Clint Hyman, Respondent’s Managing Member, testified that he was not aware of Complainant’s project until Complainant filed the ROC complaint in January 2012. Respondent introduced into evidence a written agreement between Respondent Foresight Roofing, LLC and Countrywide LLC, dated January 1, 2011.[2] The agreement is entitled “Fee Agreement” and called for Countrywide LLC to provide customer referrals to Respondent and for Respondent to enter into contracts with customers for roofing repair and replacement. Countrywide LLC was to provide materials and delivery of those materials, and Respondent was to provide labor and supervision for completion of the work. The Fee Agreement called for Respondent to do business as “Countrywide Shingle & Siding.” It also provided that Countrywide LLC would take all money received from homeowners and put it into a bank account opened and controlled by Countrywide LLC, who would then pay Respondent a fee according to a fee schedule in the Fee Agreement. 5. Respondent also introduced into evidence a License Agreement between Respondent and Countrywide LLC.[3] That agreement allows Respondent to use the trade name “Countrywide Shingle” for $100 per year. 6. Clint Hyman testified that at about the same time he entered the Fee Agreement and License Agreement, he requested and received from the Registrar the name, “Countrywide Shingle,” for use in conducting business. Clint Hyman also testified that he understood the arrangement was for Countrywide LLC to bring in customers and for Respondent to enter into contracts with the customers. Obviously, that did not happen in Complainant’s case. 6. The evidence shows that Complainant entered into agreements with an unlicensed entity using the same name, Countrywide Shingle, that Respondent then began using. Respondent knowingly and recklessly entered into the agreements with that unlicensed entity, Countrywide LLC, which aided and abetted Countrywide LLC’s unlicensed activity in such a way as to confuse the public. Respondent agreed to combine with Countrywide LLC for the purpose of contracting with homeowners for roof repair and agreed to let Countrywide LLC control the money. In addition, Respondent changed its name to that of the unlicensed entity. This arrangement further facilitated Countrywide LLC’s unlicensed conduct. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[4] Further, the standard of proof at hearing is by preponderance of the evidence.[5] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[6] Complainant has met that burden. 2. The Citation and Complaint alleges violations of A.R.S. § 32- 1154(A)(1) (prohibiting abandonment of a project) and A.R.S. § 32- 1154(A)(15) (prohibiting acting in a name other than that on the license). There is no question that the project was abandoned. The question to be determined is whether Respondent is to be held accountable for that abandonment, given the testimony that Clint Hyman was not aware of the project. 3. This tribunal finds that Respondent is accountable for the abandonment because Respondent set up a situation that was ripe for abuse in its arrangement with Countrywide LLC. The arrangement that Respondent apparently intended, as expressed in Clint Hyman’s testimony, was for Countrywide LLC to make customer referrals and sell Respondent materials for installation. Such an arrangement, however, did not require Respondent to change its name to “Countrywide Shingle,” which could only serve to confuse the public and blur the lines between the licensed and unlicensed entities. Respondent’s action of knowingly and recklessly combining with unlicensed Countrywide LLC in the above-described business venture is the basis for holding Respondent responsible for the abandonment of Complainant’s project. 4. Respondent is found to have violated A.R.S. § 32-1154(A)(1) (prohibiting abandonment of a project). With regard to A.R.S. § 32- 1154(A)(15) (prohibiting acting in a name other than that on the license), the evidence does not show a violation because the name “Countrywide Shingle” was an authorized business name for Respondent. 5. Administrative notice is hereby taken of Respondent’s prior license record as reflected on the Registrar’s public website on May 31, 2012. That record shows that Respondent’s license was revoked multiples times in February 2012 and May 2012. Pursuant to A.R.S. § 32-1154(C), the revocation of a license does not deprive the Registrar or this tribunal of jurisdiction and does not render the Registrar powerless to further discipline the license. 6. Respondent’s license should be revoked in this matter.[7] RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that License No: K- 42.265407-D held by Respondent Foresight Roofing, LLC dba Countrywide Shingle be revoked.

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, June 4, 2012.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] The audio record from the hearing reflects only admission of a document designated as Exhibit 1, which was handed to the Administrative Law Judge as a group of four pages stapled together and treated during the hearing as Exhibit 1. Upon closer inspection after the hearing, the Administrative Law Judge discovered that the four pages are actually two documents, one a Fee Agreement and one a separate License Agreement. These documents have been separated and now form two exhibits for purposes of clarity. Exhibit is the two-page Fee Agreement and Exhibit 2 is the two-page License Agreement. [2] Exhibit 1. [3] Exhibit 2. [4] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [5] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [6] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [7] It is recommended that the Registrar begin investigations for unlicensed contracting by Countrywide Shingle & Siding LLC and Paxton Moran.

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