ALJDEC decisions subject to certification as final

2013A-2642-ROC · Registrar of Contractors · 2013-11-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 4, 2013, at 8:00 a.m. APPEARANCES: Complainant the Registrar of Contractors was represented by Michael D. Raine, Esq., Assistant Attorney General; Respondent D R Custom Painting appeared through Donald Benjamin Romero, its President and Qualifying Party. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. On or about June 20, 2002, D R Custom Painting Inc. (“Respondent”) submitted an Application for Contractor’s License to the Arizona Registrar of Contractors (“the Registrar”). The application listed Donald Benjamin Romero as Respondent’s President/Treasurer and Qualifying Party and Mary Jo Romero as Respondent’s Vice President/Secretary.[1] 2. On or about July 26, 2002, Mr. Romero pled guilty to the crime of aggravated driving while under the influence of intoxicating liquor (“DUI”), a Class 4 felony, in violation of A.R.S. §§ 28-1383(A)(1) , 28-1371(A)(1), 13-701, and 13-801, in Mohave County Superior Court Case No. CR-2002-0165.[2] According to the plea agreement, Mr. Romero committed the crime on December 10, 2001. Under the plea agreement, Mr. Romero agreed to serve four months in prison and to be placed on probation for a term of three years. 3. On August 7, 2002, the Registrar issued License No. C-34.176659-R to Respondent. 4. On or about August 12, 2004, Respondent submitted to the Registrar an application to renew License No. C-34.176659-R. The answer “no” was checked in response to the question on the application, “Has any person listed on this renewal form been convicted of a felony?” Mrs. Romero signed the August 12, 2004 renewal application on Respondent’s behalf under the statement, “I . . . certify that no person listed herein has been convicted of a felony which has not been previously disclosed to the Registrar.”[3] 5. On or about January 3, 2006, Mr. Romero pled guilty to the crime of aggravated DUI, a Class 4 felony, in violation of the terms of his probation, in Mohave County Superior Court Case Nos. CR-2002- 0165/CR-2005-0675. According to the plea agreement, the date of the second DUI was March 17, 2005. As a result of the guilty plea, Mr. Romero’s probation was revoked in Case No. CR-2002-0165 and he was sentenced to serve two and one-half years in prison in Case No. CR-2005-0675.[4] 6. On or about February 27, 2006, Mr. Romero pled guilty to a third aggravated DUI, a Class 4 felony, in La Paz County Superior Court Case No. CR-20050355. According to the plea agreement, the date of the third DUI was August 13, 2005. As a result of the guilty plea, Mr. Romero was sentenced to serve an aggravated term of three years’ imprisonment.[5] 7. On or about September 1, 2006, Respondent submitted to the Registrar an application to renew License No. C-34.176659-R. The answer “no” was checked in response to the question on the application, “Has the qualifying party or a principal party been convicted of a felony that has not been previously disclosed?” Mrs. Romero signed the September 1, 2006 renewal application on Respondent’s behalf under the statement, “I certify that I have read both sides of this form and all the information is true and correct, or the necessary corrections appear above or on the attached sheet.”[6] Respondent did not make any corrections to its September 1, 2006 license renewal application. 8. On or about August 29, 2008, Respondent submitted to the Registrar an application to renew License No. C-34.176659-R. The answer “no” was checked in response to the question on the application, “Has the qualifying party or a principal party been convicted of a felony that has not been previously disclosed?” Mrs. Romero signed the August 29, 2008 renewal application on Respondent’s behalf under the statement, “I certify that I have read both sides of this form and all the information is true and correct, or the necessary corrections appear above or on the attached sheet.”[7] Respondent did not make any corrections to its August 29, 2008 license renewal application. 9. On or about August 30, 2010, Respondent submitted to the Registrar an application to renew License No. C-34.176659-R. The answer “no” was checked in response to the question on the application, “Has the qualifying party or a principal party been convicted of a felony that has not been previously disclosed?” Mr. Romero signed the August 30, 2010 renewal application on Respondent’s behalf under the statement, “I certify that I have read both sides of this form and all the information is true and correct, or the necessary corrections appear above or on the attached sheet.”[8] Respondent did not make any corrections to its August 30, 2010 license renewal application. 10. On or about August 31, 2012, Respondent electronically submitted to the Registrar an application to renew License No. C-34.176659-R. The answer “no” was given in response to the question on the application, “Has the qualifying party or a person (as defined per ARS 32-1101) named on a license been convicted of a felony not previously disclosed . . . .” Mr. Romero attested on the August 31, 2012 electronic license renewal application that “I hereby certify, under penalty of perjury, that I am a persons (as defined by ARS 32-1101) named on this license and that I am authorized by the licensee and Arizona Law to process this renewal and that all information provided herein is true to the best of my knowledge.”[9] 11. On June 20, 2013, the Registrar summarily suspended Respondent’s License No. C-34.176659-R pursuant to A.R.S. § 41-1092.11(B), finding that the public health, safety, and welfare required emergency action due to Mr. Romero’s three felony convictions and Respondent’s knowing failure to disclose the felony convictions on five separate license renewal applications. 12. On June 20, 2013, the Registrar issued a Citation and Complaint against Respondent’s License No. C-34-176659-R, charging three possible violations of A.R.S. § 32-1154(A)(8), five possible violations of A.R.S. § 32-1154(A)(6), and one possible violation of A.R.S. § 32-1154(A)(20). 13. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing in the expedited course of docketing. 14. An evidentiary hearing was held on November 4, 2013. The Registrar submitted nine exhibits and presented the testimony of Adam Stafford, Esq., the Assistant Chief of the Registrar’s Legal Department, to establish the facts set forth above. 15. Mr. Romero acknowledged that he had been convicted of three felony DUIs and that Respondent had not disclosed the felony DUIs in response to specific questions on the 2004, 2006, 2008, 2010, and 2012 license applications. 16. Mr. Romero testified that shortly after the first felony DUI conviction, he called the Registrar’s office to ask if the conviction would affect Respondent’s license because he was preparing for his incarceration. Mr. Romero testified that he was told that since the conviction did not involve fraud or misconduct that related to Respondent’s contracting activities, it would not affect Respondent’s license. 17. Mr. Romero acknowledged that no one at the Registrar ever told him that he did not need to disclose the felony DUI convictions on Respondent’s license renewal applications. 18. Mr. Romero testified that he had a drinking problem and that he has not had a drink in eight years. Mr. Romero testified that when he was still drinking alcohol, it did not affect Respondent’s contracting business because he only drank in the evenings. Mr. Romero testified that Respondent did good work and treated its customers fairly. 19. Mr. Romero testified that his wife prepared Respondent’s license renewal applications and that he only signed the forms that she gave him. Mrs. Romero testified that when she filled out the license renewal applications, she assumed that she did not have to disclose the felony DUIs based on what she had been told. Mrs. Romero testified that she did not mean to mislead anyone, but thought that she only had to disclose crimes like murder, theft, and fraud, not DUIs. 20. Mrs. Romero testified that she understood that she did not have to disclose Mr. Romero’s felony DUIs because they did not relate to Respondent’s contracting business. Mrs. Romero acknowledged that she never contacted the Registrar to confirm her understanding. 21. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on November 19, 2013. Such prior License record reflects that in addition to the June 20, 2013 summary suspension, Respondent’s License No. C- 34.176659-R was suspended for non-renewal between September 1, 2010, and September 7, 2010, suspended for lack of bond between May 14, 2005, and November 22, 2005, suspended for non-renewal between September 1, 2006, and September 14, 2006, and suspended as discipline in Case No. L07-0374 between August 6, 2008, and October 22, 2008. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[10] 2. The Registrar bears the burden of proof to establish Respondent’s violation of the statutes charged in the Citation and Complaint by a preponderance of the evidence.[11] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[12] 3. Mr. and Mrs. Romero acknowledged that Mr. Romero, Respondent’s Qualifying Party and President, was convicted of felony DUI pursuant to his plea agreements on July 26, 2002, January 3, 2006, and February 27, 2006. Therefore, the Registrar has established that each of the three felony convictions constitutes grounds to impose discipline against Respondent’s license under A.R.S. § 32-1154(A)(8).[13] 4. 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.” Misrepresentation is “[t]he act of making a false or misleading assertion about something, usu. with the intent to deceive.”[14] Mr. and Mrs. Romero acknowledged that Respondent did not disclose Mr. Romero’s three felony convictions in response to direct and unequivocal questions on its 2004, 2006, 2008, 2010, and 2012 license renewal applications. 5. Mr. and Mrs. Romero did not argue that the Registrar should be estopped[15] from revoking License No. C-34.176659-R because the Registrar’s unnamed employee advised Mr. Romero that Respondent did not need to report his felony convictions on its license renewal applications. Instead, Mr. and Mrs. Romero testified that they understood the Registrar’s unnamed employee’s advice that Respondent would not necessarily lose its license due to Mr. Romero’s felony DUI convictions to mean that they did not need to report the convictions on Respondent’s license renewal applications. 6. Everyone is presumed to know the law.[16] “As a matter of public policy, all persons are charged with knowledge of law pertaining to their transactions . . . .”[17] Because everyone is presumed to know the law’s requirements, a mistake as to such requirements does not excuse failure to meet them.[18] 7. “[E]stoppel may apply against the state only when the public interest will not be unduly damaged and when its application will not substantially and adversely affect the exercise of government powers.”[19] Estoppel should not apply if its application “would frustrate the purpose of . . . licensing requirements, which is to promote uniform standards of quality.”[20] Under the contractors’ licensing statutes, uniform standards are at least in part achieved by the requirement that a licensee report whether any of the persons listed on its license under A.R.S. § 32-1101 have been convicted of a felony so that the Registrar may investigate whether the felony affects the licensee’s contracting operations or threatens the public. The Registrar established that Respondent’s failures to disclose Mr. Romero’s felony DUI convictions on its 2004, 2006, 2008, 2010, and 2012 license renewal applications constitute grounds to impose discipline on Respondent’s license under A.R.S. § 32-1154(A)(6). 8. If the Registrar had known of Mr. Romero’s felony DUIs and Respondent’s failure to disclose the DUIs on its 2004, 2006, 2008, 2010, and 2012 license renewal applications, the Registrar would have had grounds to deny Respondent’s license renewal applications. Therefore, the Registrar established grounds under A.R.S. § 32- 1154(A)(20)[21] to impose discipline on Respondent’s license at this time. 9. The Registrar established that in light of Mr. Romero’s three felony DUIs and Respondent’s repeated failures to report the DUIs on five different license renewal applications, the public health, safety, or welfare required the Registrar to summarily suspend Respondent’s license pending an inquiry into Respondent’s statutory violations. 10. Mr. Romero credibly testified that he no longer drinks and that when he was drinking, it did not affect Respondent’s contracting business. Mr. Romero has not committed the crime of DUI since August 2005, more than eight years ago, and has fully served his criminal sentences. 11. However, “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.”[22] Evidence of rehabilitation must be commensurate with the history of misconduct. Although the evidence does not show that Respondent has ever harmed any member of the public through its contracting activities or Mr. Romero’s felony DUIs, Respondent’s license history indicates a persistent inattention to the disclosure and documentation required to maintain licensure. As noted above, the Registrar requires licensed contractors to make these disclosures and to timely submit this documentation to protect the public. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s order, the Registrar revoke Respondent D R Custom Painting Inc.’s License No. C-34.176659-R. 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 21, 2013.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 1. [2] See the Registrar’s Exhibit 2. [3] The Registrar’s Exhibit 3. [4] See the Registrar’s Exhibit 4. [5] See the Registrar’s Exhibit 5. [6] The Registrar’s Exhibit 6. [7] The Registrar’s Exhibit 7. [8] The Registrar’s Exhibit 8. [9] The Registrar’s Exhibit 9. [10] See A.R.S. § 32-1154. [11] 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). [12] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [13] A.R.S. § 32-1154(A)(8) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[c]onviction of a felony.” [14] Black’s Law Dictionary at 1022 (8th ed. 1999). [15] “Estop” means “[t]o stop, bar, or impede; to prevent; to preclude.” Black’s Law Dictionary, supra, at 551. “‘Estoppel’ means that a party is prevented by his own acts from claiming a right to detriment of other party who was entitled to rely on such conduct and has acted accordingly. Id. (citing Graham v. Asbury, 112 Ariz. 184, 186, 540 P.2d 656, 658 (1975)).

[16] See Conway v. State Consolidated Publishing Co., 57 Ariz. 162, 171, 112 P.2d 218 (1941). [17] Turner v. State Employees Retirement System, 485 So. 2d 765 (Ala. App. 1986). [18] See Newman v. Fidelity Savings and Loan Ass’n, 14 Ariz. 354, 359, 128 P. 53 (1912). [19] Valencia Energy Co. v. Arizona Dept. of Revenue, 191 Ariz. 565, 578, 959 P.2d 1256, 1269 (1998). [20] Hansson v. State Board of Dental Examiners, 195 Ariz. 66, 70, 985 P.2d 551, 555 (App. 1999). [21] A.R.S. § 32-1154(A)(20) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[s]ubsequent discovery of facts which if known at the time of issuance of a license or the renewal of the license would have been grounds to deny the issuance or renewal of the license.” [22] 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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