ALJDEC decisions subject to certification as final

2013A-2459-ROC · Registrar of Contractors · 2013-07-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 12, 2013, at 1:00 p.m. APPEARANCES: Applicant 3FC LLC was represented by Paul G. Forshey, Jr., Esq.; the Arizona Registrar of Contractors was represented by John R. Tellier, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. In approximately January 2013, 3FC LLC filed an application for a KB-1 contractor’s license for dual building contracting with the Arizona Registrar of Contractors (“the Registrar”).[1] Three persons were listed on the application: (1) John Steven O’Connor as qualifying party, vice president, and 24.5% owner; (2) Steven James Ross as principal and 24.5% owner; and (3) Robert Michael White as president/CEO and 51% owner. 2. Mr. O’Connor disclosed on 3FC LLC’s application that he had been listed on a Class C-2 license that previously had been issued to Chuckwalla Excavating (“Chuckwalla”) and that the license had been cancelled. Mr. O’Connor did not disclose that he had been listed on any other contractor’s licenses. 3. Mr. O’Connor answered “No” to the question on 3FC LLC’s application about whether any license that he had been listed on had been suspended, revoked, or otherwise disciplined. 4. On or about May 6, 2013, the Registrar’s Assistant Chief of Licensing, Paul Terek, sent a letter to 3FC LLC notifying it that the Registrar had determined to deny its license application under A.R.S. §§ 32-1122(D), 32-1154(A)(6), and 32-1154(A)(21) because (1) Mr. O’Connor had been listed on a license issued to C W Excavating, Inc. (“C W Inc.”), but did not disclose the license on 3FC LLC’s application; and (2) C W Inc. had failed to remedy a Complaint against it for nonpayment, in violation of A.R.S. § 32-1154(A)(11) and former A.R.S. § 32-1154(A)(7).[2] 5. 3FC LLC requested a hearing on the Registrar’s denial. 6. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 7. An evidentiary hearing was held on July 12, 2013. 3FC LLC appeared through its attorney, submitted two exhibits, and presented the testimony of Mr. O’Connor, Mr. Ross, and Mr. White. The Registrar appeared through its attorney, submitted thirteen exhibits, and presented the testimony of Mr. Terek. Hearing Evidence Chuckwalla’s and C W Inc.’s Licenses 8. On or about June 11, 1998, Mr. O’Connor as a sole proprietor doing business as Chuckwalla filed an application for a C-2 contractor’s license for residential excavating, grading, and oil surfacing with the Registrar.[3] 9. The Registrar subsequently issued License No. C-2.136398-R to Chuckwalla. 10. On or about June 7, 2000, Mr. O’Connor as the qualifying party and president of C W Inc. filed an application for a C-2 license with the Registrar.[4] C W Inc.’s application provided its mailing address as 9393 North 90th Street, Bldg. 102, Suite 239, Scottsdale, Arizona 85258. 11. With C W Inc.’s license application, Mr. O’Connor filed a written request that the Registrar cancel Chuckwalla’s License No. C- 2.136398-R at the time that it issued the new license to C W Inc.[5] 12. Mr. O’Connor testified that in May or June 2000, he was approached by Desert Mountain, a master planned community builder, about undertaking a large project. Mr. O’Connor testified that he was advised that he should abandon the license held by his sole proprietorship, Chuckwalla, and obtain a license that would be held by a corporation to avoid personal liability for the large project. Mr. O’Connor testified that he filed C W Inc.’s application in anticipation that he would be awarded the large project by Desert Mountain. Mr. O’Connor testified that he never activated C W Inc.’s license because in mid-June 2000, he was notified that he had not been awarded the Desert Mountain project. 13. The Registrar issued License No. C-2.156328-R to C W Inc. On or about June 23, 2000, the Registrar sent a letter to Chuckwalla at the address on C W Inc.’s license application to inform Mr. O’Connor that the Registrar had granted his request to cancel Chuckwalla’s License No. C-2.136398-R, effective June 18, 2000. The Registrar reminded Mr. O’Connor “that you are responsible for responding to any complaints that may be filed against the cancelled license within the statutory two year time period. Failure to respond to such complaints may affect your ability to be re-licensed or to remain on any other licenses.”[6] 14. Mr. O’Connor testified that during the summer of 2000, he started the process of obtaining a divorce from his wife at the time. Mr. O’Connor stated that at that time, he moved from the address that was on C W Inc.’s license application. Mr. O’Connor testified that because C W Inc. had not done any construction jobs and he did not know where he would be living, he did not file a notice of change of address with the Registrar or the United States Postal Service (“USPS”). Mr. O’Connor testified that after he did not get the Desert Mountain job and started the process of divorcing his wife, his mind was cloudy. Hardin Trucking’s Complaint against C W Inc. in Case No. G01-0246 15. On or about September 8, 2000, Tricia Monk, as office manager of Hardin Trucking, Inc. (“Hardin Trucking”), on its behalf filed a Complaint with the Registrar against “Chuckwalla aka: C W Excavating John O’Connor and John Gamble” for nonpayment of $2,187.50.[7] Hardin Trucking provided its address as 6908 W. Nancy Rd., Peoria, AZ 85382, and Chuckwalla/C W Inc.’s address as the address on C W Inc.’s license application. According to Hardin Trucking’s Complaint, on August 15, 2000, Chuckwalla/C W Inc. had promised to pay its debt but that after that date, Ms. Monk had not been able to contact Chuckwalla/C W Inc.[8] The Registrar designated Hardin Trucking’s Complaint as Case No. G01-0246.[9] 16. Hardin Trucking attached to its Complaint in Case No. G01-0246 copies of five hauling receipts and three invoices to Chuckwalla at the address on C W Inc.’s license application, as follows: 1. Hauling receipt #14676 dated June 23, 2000, for 11 loads of dirt to Foldors Estate at “138 & Dynamite” from C.M. Trucking, 716 Grove Circle, Mesa, AZ 85210[10]; 2. Invoice #336 dated July 6, 2000, for #14676 at Foldors Estate from Hardin Trucking in the amount of $375.00[11]; 3. Hauling receipt #2536 dated July 14, 2000, for 16 loads of dirt to Pinnacle Canyon Lot #41 from Hardin Trucking[12]; 4. Hauling receipt #2537 dated July 14, 2000, for 15 loads of dirt to Lot #41 from Hardin Trucking[13]; 5. Invoice #369 dated July 19, 2000, for #2536 and #2537 from Hardin Trucking in the amount of $750.00[14]; 6. Hauling receipt #2450 dated July 19, 2000, for 16 loads of dirt to “Dynamie and 108th Pl.” from Hardin Trucking[15]; 7. Hauling receipt #2546 dated July 19, 2000, for 21 loads of dirt to Pinnacle Canyon Lot #41 and Bella Tierra, Lot 5352 from Hardin Trucking[16]; and 8. Invoice #375 dated July 27, 2000, for #2546 and #2450 from Hardin Trucking in the amount of $1,062.50.[17] 17. Mr. O’Connor denied that Hardin Trucking had ever worked for him, Chuckwalla, or C W Inc. Mr. O’Connor testified that when he was in business as Chuckwalla, he had an unwritten agreement to use a particular group of subcontractors that did not include Hardin Trucking. Mr. O’Connor denied that he, Chuckwalla, or C W Inc. had ever performed construction work at the addresses listed on Hardin Trucking’s hauling receipts and invoices. 18. On or about September 13, 2000, the Registrar’s inspector, Gary Gerke, sent copies of Hardin Trucking’s Complaint and attachments in Case No. G01-0264 to C W Inc. at the address on its application for licensure, reminding it that “A.R.S. § 32-1154, section A, paragraph 11, provides for the suspension or revocation of a contractor’s license should it be determined that any portion of the payment due was unjustly withheld.”[18] 19. Inspector Gerke’s notes for Case No. G01-0264 stated that on October 17, 2000, he spoke to Mr. O’Connor: Spoke to Respondent (John O’Connor) – says times are hard at this time & can’t pay – Told him I was going to cite this for a hearing & that it would be apx 3 or 4 months before actual hearing & that should give him time to pay – He said OK[19]

20. Mr. O’Connor acknowledged that Inspector Gerke’s case notes included the above statement. Mr. O’Connor did not confirm the accuracy of Inspector Gerke’s statement. 21. On or about October 4, 2000, Ms. Monk requested a hearing in Case No. G01-0264 stating that although she had left voice mails for Mr. O’Connor and Mr. “Gambel,” they had not responded to her calls or paid Hardin Trucking.[20] On or about October 10, 2000, Inspector Gerke sent a letter to C W Inc. at the address on its license application, informing it that the Registrar had received a request for a citation against its license.[21] 22. On or about October 24, 2000, the Registrar issued a Citation and Complaint against C W Inc. in Case No. G01-0246, charging violations of A.R.S. § 32-1154(A)(11)[22] and former A.R.S. § 32- 1154(A)(7).[23] The Citation and Complaint informed C W Inc. that it was required to file a written answer within fifteen days and that failure to file a timely written answer would be deemed an admission of the allegations in Hardin Trucking’s Complaint.[24] 23. The Registrar mailed a copy of the Citation and Complaint in Case No. G01-0246 by certified mail to C W Inc. at the address on its license application. On or about November 7, 2000, the USPS returned the letter as undeliverable due to “moved left no address.”[25] 24. C W Inc. failed to file a written answer to the Citation and Complaint in Case No. G01-0246. On or about November 17, 2000, the Registrar issued a Decision and Order finding that pursuant to A.R.S. § 32-1155(B), C W Inc. was deemed to have admitted the charges contained in the Complaint. As a result of C W Inc.’s admitted violations of the statutes charged in the Citation and Complaint, the Registrar required C W Inc. to provide proof that it had paid Hardin Trucking the balance of the money that it claimed was owed on or before December 27, 2000, or the Registrar would suspend its License No. C-2.156328-R.[26] 25. The Registrar sent a copy of the Decision and Order in Case No. G01-0246 to C W Inc. by certified mail to the address on its application. On or about November 29, 2000, the USPS returned the Decision and Order to the Registrar as undeliverable because “moved left no address.”[27] 26. Mr. Terek testified that contractors are required to keep current their address of record with the Registrar. Mr. Terek testified that it is the general practice in business to leave a forwarding address unless the business proprietor does not want to be found. 27. Mr. O’Connor admitted that he should have provided a forwarding address for C W Inc. Mr. Connor denied that his failures to provide a forwarding address, to include C W Inc. on 3FC LLC’s license application, or to disclose Hardin Trucking’s Complaint on the license application were intended to deceive anyone. 28. Mr. Terek testified that he believed that Mr. O’Connor knew about Hardin Trucking’s Complaint in Case No. G01-0246 based on Ms. Monk’s statements in the Complaint and request for hearing that she had spoken to Mr. O’Connor and Inspector Gerke’s statement to the same effect in the case notes. 29. Mr. Terek testified that Mr. O’Connor must have known that the Registrar had issued a license to C W Inc. because he filed C W Inc.’s license application and requested that the Registrar cancel Chuckwalla’s license when the Registrar issued the license to C W Inc. 30. Mr. O’Connor denied that he ever received any of the documents relating to Hardin Trucking’s Complaint in Case No. G01-0246 until the hearing on 3FC LLC’s license application. Mr. O’Connor testified that once he did not get the Desert Mountain project, he did not think about C W Inc.’s license application because he was not doing any jobs as Chuckwalla or C W Inc. Mr. O’Connor testified that until the Registrar denied 3FC LLC’s license application, he did not know about Hardin Trucking’s Complaint. The Formation of 3FC LLC 31. Mr. O’Connor testified that after he did not get the Desert Mountain job in mid-June 2000, he left his location at the time because he had not worked for months, but that he did not owe anyone any money when he moved, he had a month-to-month lease. Mr. O’Conner testified that he went to work for a large general contractor as a night supervisor for excavation. Mr. O’Connor testified that subsequently, he worked as a manager for the Arizona Department of Transportation and then went to work for a corporation that was later acquired by Jacobsen Construction (“Jacobsen”). 32. Mr. O’Connor testified that while he worked for Jacobsen, he managed a $245 million contract with the federal government to improve border security in Arizona. Mr. O’Connor testified that an extensive background check and security clearance were required to work on the federal contract. Mr. O’Connor testified that he met Mr. Ross and Mr. White while he managed the border security project and they worked for the Border Patrol. 33. Mr. Ross testified that he recently retired after 24 years in active duty in the armed services as combat engineer and that during his service, he was awarded a bronze star and four meritorious service medals. Mr. Ross testified that in 2005-2006, he was deployed along the border fence, where he met Mr. O’Connor and Mr. White. 34. Mr. Ross testified that Mr. O’Connor took over as a consultant for the Army Corps of Engineers for the Yuma sector on the border fence project. Mr. Ross testified that before Mr. O’Connor became involved, the project had struggled. Mr. Ross testified that based on his experience with Mr. O’Connor on the border fence project, he grew to trust Mr. O’Connor and formed the opinion that Mr. O’Connor would be a good business partner. Mr. Ross testified that Mr. O’Connor is a good family man. 35. Mr. Ross testified 3FC LLC was intended to be a design-build firm that would perform pre-construction services as well as construction. Mr. Ross testified that he and the other two principals of 3FC LLC invested time and money on their business name and developing their business plan. Mr. Ross testified that Mr. O’Connor went to school to take a refresher course on the Registrar’s examination for licensure because it had been thirteen years since he had run his own construction business. Mr. Ross testified that he does not believe that Mr. O’Connor would have taken the course, sat for the examination, and become involved in 3FC LLC if he had known that he had any issues with his former contracting businesses that would prevent licensure. 36. Mr. White testified that he is a college graduate, has a masters degree in business, was a police officer for 12 years, and was in the military for 24 years. Mr. White testified that he worked two years in the Pentagon, where he had a high security clearance. 37. Mr. White testified that he decided to open a business in a niche market because he has been certified as a disabled veteran. Mr. White testified that it took 10 months to be certified as a disabled veteran and to obtain disabled-veteran-owned status for 3FC LLC. Mr. White testified that one of 3FC LLC’s business goals is to employ other veterans. 38. Mr. White testified that losing Mr. O’Connor as qualifying party would put 3FC LLC back at square one. Mr. White testified that when he, Mr. Ross, and Mr. O’Connor first started discussing going into business together, Mr. O’Connor disclosed his experience with Chuckwalla. Mr. White testified that when he entered Chuckwalla’s and Mr. O’Connor’s names into the Registrar’s public website, he did not find any negative information[28] and decided to go forward with the business plan. 3FC LLC’s Response to the License Denial and Resolution of Hardin Trucking’s Complaint in Case No. G01-0246 39. Mr. O’Connor testified that after the Registrar denied 3FC LLC’s license application, Mr. Terek advised him to resolve Hardin Trucking’s Complaint against C W Inc. in Case No. G01-0246. Mr. O’Connor testified that because Hardin Trucking was no longer in business, he obtained its former officers’ addresses from the Arizona Department of Revenue’s and the Arizona Corporation Commission’s records. Mr. O’Connor testified that he sent letters to and personally visited all the addresses that he obtained, but that he was unable to locate any of Hardin Trucking’s former officers. 40. Mr. White testified that after Mr. O’Connor was unsuccessful in tracking down Hardin Trucking’s officers going door-to-door, Mr. White obtained an address in Yuma for a rental property. The tenants provided an address in Kentucky to which they sent their rent. Mr. White testified that he sent letters to Yuma and to Kentucky and after the third letter, Patricia Hardin (“Ms. Hardin”) called him. Mr. White testified that Ms. Hardin was the former Tricia Monk, who had filed the Complaint in Case No. G01-0246 on Hardin Trucking’s behalf. Mr. White testified that the search took five months. 41. Mr. White testified that Ms. Hardin informed him that because the weather was warming up, she was leaving Yuma for the White Tank Mountains. Mr. White testified that Ms. Hardin could not remember any business dealings with Mr. O’Connor, Chuckwalla, or C W Inc. and that Hardin Trucking’s old business records were in storage in Prescott. Mr. White testified that, nonetheless, Ms. Hardin agreed to settle Hardin Trucking’s Complaint in Case No. G01-0246. 42. 3FC LLC submitted a letter from Mr. White to Ms. Hardin dated June 20, 2013, enclosing 3FC LLC’s check in the amount of $2,175.00 to Ms. Hardin to resolve the Complaint in Case No. G01-0246.[29] Ms. Hardin signed the June 20, 2013 letter to certify that by cashing the check, she agreed that the payment constituted payment in full of C W Inc.’s debt and resolved Hardin Trucking’s Complaint in Case No. G01-0246. 3FC LLC also submitted its check to Ms. Hardin dated June 20, 2013, in the amount of $2,175.00 with her endorsement on the back.[30] 43. Mr. White testified that he filled out 3FC LLC’s license application with Mr. O’Connor. Mr. White testified that Mr. O’Connor has always been honest with him. Mr. White testified that although it was the right thing for 3FC LLC to pay Hardin Trucking once it learned of Mr. O’Connor’s and C W Inc.’s debt, the Registrar’s evidence did not change his opinion of Mr. O’Connor because nothing showed that he was deliberately avoiding C W Inc.’s debt to Hardin Trucking. 44. Mr. White’s attention was called to Mr. O’Connor’s February 28, 2013 letter in response to Mr. Terek’s discovery of Hardin Trucking’s Complaint in Case No. G01-0246 during the Registrar’s investigation of 3FC LLC’s license application. Mr. O’Connor’s February 28, 2013 letter including the following summary of events: In the fall of 2000, John O’Connor owned CW Excavating and made a business decision to close his company and this was completed by December 2000. While CW Excavating was in the process of dissolving, a complaint was filed by Hardin Trucking (complaint #G01-0246) alleging an unpaid debt of approximately $2,100. A review of CW Excavating records did not find any unpaid work orders and John has no recollection of conducting business with Hardin Trucking.[31]

45. Mr. White testified that Mr. O’Connor had told him about Chuckwalla, but not C W Inc. Mr. White stated that after the Registrar called 3FC LLC’s principals’ attention to C W Inc.’s license, Mr. O’Connor explained that he applied for the license as a last chance to salvage his contracting business, but that when the job he was counting on did not materialize, C W Inc. never got off the ground. 46. Mr. White acknowledged that the February 28, 2013 letter seemed to imply that Mr. O’Connor knew about Hardin Trucking’s Complaint in Case No. G01-0246 when he closed down C W Inc.’s business and that Mr. O’Connor signed the letter. 47. Mr. White explained that although Mr. O’Connor said that the paragraph was inaccurate, Mr. O’Connor signed the letter after Mr. White said that he wrote the paragraph only to summarize the paperwork and information that the Registrar had provided to 3FC LLC. Mr. White testified that he told Mr. O’Connor that the paragraph was a recapitulation of the Registrar’s documents, not a statement of what had actually occurred. / / / / / / / / CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[32] 2. 3FC LLC bears the burden of proof to establish that it meets statutory qualifications for a contractor’s license by a preponderance of the evidence.[33] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[34] 3. Hardin Trucking’s Complaint in Case No. G01-0246 was filed over twelve years before 3FC LLC filed its license application. During that time, Mr. O’Connor, Mr. Ross, and Mr. White credibly testified that they were all law-abiding and productive citizens. Mr. O’Connor and Mr. White credibly testified that they had engaged in occupations that required high security clearances. 4. The statements in Ms. Hardin’s Complaint and request for hearing and in Inspector Gerke’s case notes are hearsay.[35] Although hearsay may be admitted in an administrative hearing,[36] it should not be relied upon if it is not the kind of evidence that reasonable persons would rely upon in serious matters.[37] Ms. Hardin’s and Inspector Gerke’s hearsay statements are not the kind of evidence upon which reasonable persons would rely to deny a contractor’s license application and opportunity to begin a business. Therefore, Mr. O’Connor, Mr. Ross, and Mr. White established that they possess the good character and reputation that A.R.S. §§ 32-1122(D)[38] requires for licensure. 5. Mr. O’Connor credibly testified that he had forgotten about the application for licensure that he had filed on C W Inc.’s behalf because he never worked under that license and that before the Registrar investigated 3FC LLC’s license application, he had never received any notification that the license had been issued or that Hardin Trucking had filed the Complaint in Case No. G01-0246. The use of the third person in the February 28, 2013 letter indicates that Mr. O’Connor did not write the letter and Mr. White’s explanation of why he wrote the paragraph was credible. Because Mr. O’Connor did not intentionally omit C W Inc.’s license on 3FC LLC’s license application, cause does not exist under A.R.S. §§ 32-1122(D) and 32- 1154(A)(6)[39] to deny 3FC LLC’s license application. 6. Mr. O’Connor acknowledged that he should have filed a notice of change of address with the Registrar and the USPS when he closed his construction business during the summer of 2000 and moved. 7. Once 3FC LLC’s principals learned about Hardin Trucking’s Complaint and the Registrar’s final Decision and Order in Case No. G01-0246, they located Ms. Hardin, paid the alleged debt, and obtained Ms. Hardin’s release. Therefore, cause does not exist under A.R.S. §§ 32- 1122(D), 32-1154(A)(11), and former 32-1154(A)(7) to deny 3FC LLC’s license application. 8. Although the effective date of the Registrar’s Decision and Order in Case No. G01-0246 has long past, suspension is not automatic and no evidence established that the Registrar ever actually suspended C W Inc.’s License No. C-2.156328-R. The Registrar’s public website does not indicate the suspension and, as noted above, 3FC LLC has remedied the reasons for any possible suspension. Therefore, cause does not exist under A.R.S. §§ 32-1122(D) and 32-1154(A)(21)[40] to deny 3FC LLC’s license application. 9. Although “the Registrar is charged with the overall responsibility of protecting the welfare of the public dealing with persons engaged in the building contracting vocations and afford the public protection against incompetent, inexperienced, unlawful and fraudulent acts of building contractors,”[41] the record in this matter does not indicate that licensure of 3FC would pose a danger to the welfare of the public. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s order, the Registrar grant 3FC LLC’s application for a contractor’s license. It is further recommended that upon issuance of the license, the Registrar shall place 3FC LLC’s license on disciplinary probation for a period of six months after the date of issuance. 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, July 26, 2013.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 2. [2] See the Registrar’s Exhibit 1. [3] See the Registrar’s Exhibit 3. [4] See the Registrar’s Exhibit 6. [5] See the Registrar’s Exhibit 4. [6] The Registrar’s Exhibit 5. [7] The Registrar’s Exhibit 7 at 4. The record does not reflect Mr. Gamble’s capacity; one John Burnum Gable was the only other person listed on C W Inc.’s license application. See the Registrar’s Exhibit 6. [8] The Registrar’s Exhibit 7 at 4. [9] The Registrar later redesignated Complaint No. G01-0246 as Case No. 2001-2462225. Because Case No. G01-0246 is the only case number that appears on all the documents that the Registrar submitted, the remainder of this recommended decision will refer to Hardin Trucking’s Complaint as Case No. G01-0246. [10] See the Registrar Exhibit 7 at 6. The record does not reflect C.M. Trucking’s relationship, if any, to Hardin Trucking. [11] See the Registrar’s Exhibit 7 at 5. [12] See the Registrar’s Exhibit 7 at 8. [13] See the Registrar’s Exhibit 7 at 9. [14] See the Registrar’s Exhibit 7 at 7. [15] See the Registrar’s Exhibit 7 at 11. [16] See the Registrar’s Exhibit 7 at 12. [17] See the Registrar’s Exhibit 7 at 10. [18] The Registrar’s Exhibit 7 at 1. [19] The Registrar’s Exhibit 7 at 3. [20] See the Registrar’s Exhibit 8. [21] See the Registrar’s Exhibit 9. [22] A.R.S. § 32-1154(A)(11) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.” [23] A.R.S. § 32-1154(A)(7) formerly included among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” [24] See the Registrar’s Exhibit 10. [25] The Registrar’s Exhibit 12 at 1. [26] See the Registrar’s Exhibit 11. [27] See the Registrar’s Exhibit 12 at 2. [28] Administrative notice is taken of the Registrar’s public website on July 24, 2013. No information appears about Mr. O’Connor, Chuckwalla, or C W Inc. [29] See 3FC LLC’s Exhibit A [30] See 3FC LLC’s Exhibit B. The record does not reflect why 3FC LLC offered and Ms. Hardin accepted a lesser amount to satisfy its debt to Hardin Trucking than Ms. Hardin alleged in the Complaint in Case No. G01- 0246. [31] The Registrar’s Exhibit 13. [32] See A.R.S. § 32-1122. [33] 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). [34] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [35] See Ariz. R. Evid. 801(c) (“‘Hearsay’ is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”). [36] See A.R.S. § 41-1092.07(F)(1). [37] See Plowman v. Arizona State Liquor Board, 152 Ariz. 331, 337, 732 P.2d 222, 228 (App. 1986) (citing Begay v. Arizona Department of Economic Security, 128 Ariz. 407, 626 P.2d 137 (App. 1981)). [38] A.R.S. § 32-1122(D) provides in relevant part as follows: To obtain or renew a license under this chapter, each person shall be of good character and reputation. Lack of good character and reputation may be established by showing that a person has . . . committed any act that, if committed or done by any licensed contractor, would be grounds for suspension or revocation of a contractor's license or by showing that the person was named on a contractor's license that was suspended or revoked in another state. [39] A.R.S. § 32-1154(A)(6) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[m]isrepresentation of a material fact by the applicant in obtaining a license.” A misrepresentation is “[t]he act of making a false or misleading assertion about something, usu. with the intent to deceive.” Black’s Law Dictionary, supra, at 1022. A material misrepresentation is “[a] false statement to which a reasonable person would attach importance in deciding how to act in the transaction in question or to which the maker knows or has reason to know that the recipient attaches some importance.” Id. [40] A.R.S. § 32-1154(A)(21) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[h]aving a person named on the license who is named on any other license in this state or in another state which is under suspension or revocation unless the prior revocation was based solely on a violation of this paragraph.” [41] Burrows v. Taylor, 129 Ariz. 212, 214, 630 P.2d 35, 37 (Ct. App. 1981); see also Laws 1985, Ch. 334, § 1 (“The goals and objectives of the registrar of contractors are to protect the public health, safety and welfare by licensing, bonding and regulating contractors engaged in residential construction . . . .”).

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