ALJDEC decisions subject to certification as final

2013A-3271-ROC · Registrar of Contractors · 2014-08-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 29, 2014

APPEARANCES: Respondent Joe Espinosa Peterson appeared on his own behalf; the State of Arizona, Registrar of Contractors, was represented by Assistant Attorney General Seth Hargraves.

WITNESSES: Mark Adams, ROC Investigator Judith Christella Cruz Joe Peterson

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Respondent appeals a Cease & Desist Order and Civil Penalty Citation issued by the Arizona Registrar of Contractors (“ROC”) for operating unlawfully as an unlicensed contractor. The ROC alleges that Respondent took a bid of $4,000.00 to do roofing work that required a license when Respondent did not have a license. The Citation imposes a civil penalty of $1,500.00. Respondent appeared at hearing challenging (1) the ROC’s authority to bring the action due to A.R.S. § 32-1166.02, which provides a time limit, and (2) the facts the ROC relies upon. This tribunal entered marked Exhibits 1 through 3 offered by the ROC, and Exhibit A from Respondent. The parties presented evidence and testimony from the witnesses listed above.[1] Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommend Order finding a violation and recommending imposition of a $1,500.00 civil penalty. FINDINGS OF FACT 1. Respondent is not a licensed contractor, and has never been one. At hearing he stated that his full name is Joe Espinosa Peterson. 2. Judith Christella Cruz (“Cruz”) credibly testified that in November 2010 she entered into a contract with Respondent for roof repair/replacement. She met face-to-face with Respondent at her home, and he presented her with a written proposal that she agreed to and that shows a signature for him. She testified that he signed the proposal in her presence. 3. Exhibit 1 contains a copy of the written proposal that Cruz testified about at hearing. She identified the document as such. The written proposal has a signature that purports to be the signature of Respondent. It also references “Cadrial Construction” with a telephone number. Cadrial Construction is a licensed general residential contractor. 4. Cruz gave Respondent an initial deposit of $4,000.00 in cash. 5. No work was performed. Cruz attempted to contact Respondent but could not do so. She eventually contacted Richard Cadrial of Cadrial Construction. He knew nothing about the project and stated that it was never authorized by his company. Respondent was a personal friend of Cadrial. Respondent had given Cadrial referrals in the past, but Respondent did not work, and had never worked, for Cadrial. 6. Cruz filed an ROC complaint against Respondent on July 8, 2013.[2] ROC Investigator Mark Adams investigated the case, speaking with Respondent, Cruz, and Cadrial.[3] 7. The ROC issued a Cease & Desist Order and Civil Citation to Respondent for unlicensed contracting activity, imposing a civil penalty of $1,500.00.[4] Respondent requested a hearing. 8. At hearing, Respondent testified that he took the money from Cruz and bought roofing materials for her project because he worked at Home Depot and could buy materials at a discounted price. He testified that he then held the materials in storage for Cruz, but did not intend to perform the work. He testified that he spent the money he was given on the materials and, therefore, could not give it back. He testified that he tried to give the materials to Cruz, but was not able to do so. He denied that the signature on the written proposal was his, but had no reasonable explanation as to why his name was otherwise on it or as to who would forge his signature. 9. The Administrative Law Judge finds Christella Cruz’ testimony to be more reliable and credible than Respondent’s. CONCLUSIONS OF LAW 1. Arizona contracting law prohibits persons from acting as a contractor without a license.[5] The law allows an exemption from licensure, with certain limitations, for a “handyman.” An unlicensed handyman can perform construction work, excluding certain activities, as long as the aggregate price for the job does not exceed $1,000.00[6] The ROC can order a person who performs contracting without a license and who is not exempt from licensure to cease and desist such activity and may impose a civil penalty of at least $200.00 and up to $2,500.00 for each violation but not more than $2,500.00 per day.[7] 2. Respondent first asserts that the ROC may not bring this action due to A.R.S. § 32-1166.02, which states: A [Cease and Desist Order and Civil Penalty Citation] shall be issued by the registrar within ninety days after actual discovery of the offense by this state or the political subdivision having jurisdiction.

The evidence shows that Cruz filed her complaint on July 8, 2013, which is the date of actual discovery by the ROC. The Cease & Desist Order and Civil Citation was issued March 14, 2014. This is more than 90 days later. 3. However, the Administrative Law Judge does not find that A.R.S. § 32-1166.02 is jurisdictional in nature; that is, it does not mean that the ROC is powerless to issue a citation after the 60 days has run. The Administrative Law Judge finds the statute to be directive rather than mandatory, much like Article 6, Section 15 of the Arizona Constitution, which requires superior court judges to issue decisions within 60 days. That constitutional provision has been interpreted for the better part of a century to be directive and not mandatory, even though the word “shall” is used.[8] Other similar provisions of the Arizona statutes have also been similarly interpreted.[9] 4. Because A.R.S. § 32-1166.02 is not jurisdictional because it is not mandatory, the ROC had the authority to issue the Cease & Desist Order and Civil Citation to Respondent in this matter, even though it was past 60 days since the ROC was put on actual notice. 5. A.R.S. § 32-1151 prohibits unlicensed contracting: It is unlawful for any person, firm, partnership, corporation, association or other organization, or a combination of any of them, to engage in the business of, submit a bid or respond to a request for qualification or a request for proposals for construction services as, act or offer to act in the capacity of or purport to have the capacity of a contractor without having a contractor's license in good standing in the name of the person, firm, partnership, corporation, association or other organization as provided in this chapter, unless the person, firm, partnership, corporation, association or other organization is exempt as provided in this chapter. Evidence of securing a permit from a governmental agency or the employment of a person on a construction project shall be accepted in any court as prima facie evidence of existence of a contract.

As noted above, unlicensed contracting is grounds for a civil penalty under A.R.S. § 32-1166(A). 6. Here, the evidence shows that Respondent engaged in unlicensed contracting. Regardless of the written proposal, the evidence is uncontested that Respondent took $4,000.00 from Cruz and bought materials with it for the project. There is no reliable evidence that anyone other than Respondent was going to do the work. 7. The testimony of Christella Cruz is credible and entitled to substantial weight. She very firmly testified that she entered into the agreement with Respondent and no one else. Regardless of the possible discrepancy of the signature on the written proposal, the testimony establishes that Respondent engaged in unlicensed contracting by submitting a proposal and accepting $4,000.00 from Cruz. 8. The evidence shows a violation of Arizona contracting laws. Thus, a civil penalty as imposed by the ROC is warranted. RECOMMENDED ORDER IT IS RECOMMENDED that the Registrar of Contractors enforce the Cease & Desist Order and Civil Penalty Citation issued March 14, 2014 and impose a civil penalty of $1,500.00 against Joe Espinosa Peterson.

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, August 18, 2014.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Due to a mechanical malfunction of the recording equipment, only the opening portion of the hearing and the testimony of Christella Cruz was recorded on the audio record for this matter. The Administrative Law Judge has used his notes taken during the hearing and his memory of the testimony of Mark Adams and Respondent to make factual findings for this Recommended Decision. [2] Exhibit 1. [3] Exhibit 2. [4] Exhibit 3. [5] A.R.S. § 32-1164(A)(2). [6] A.R.S. § 32-1121(A)(14). [7] A.R.S. § 32-1166(A). [8] See Williams v. Williams, 29 Ariz. 538, 243 P. 402 (1926) (the Arizona Constitutional provision requiring that judges “shall” issue decisions within 60 days is directive, not mandatory). [9] McCurry v. Industrial Comm’n of Ariz., 228 Az. 1, 261 P.3d 776 (Ct. App. 2011) (holding that A.R.S. § 23-942(A), which requires Worker’s Compensation decisions to be issued within 30 days, is prescriptive and not mandatory).

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