ALJDEC decisions subject to certification as final

2013A-4259-ROC · Registrar of Contractors · 2014-03-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 7, 2014

APPEARANCES: Seth Hargraves, Assistant Attorney General representing the Registrar of Contractors; Carlos M. Garza, Respondent; Alex Figueroa, Registrar of Contractors witness; Iliana Estrada, Respondent’s wife; Barry Maerker, observer

ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________

The Registrar of Contractors has established that its proposed $2,500.00 civil penalty against Respondent was proper. Therefore, it must be recommended that this appeal be denied. FINDINGS OF FACT 1. The Registrar of Contractors (“Registrar”) received a complaint against Carlos M. Garza, doing business as Carlos M. Garza (“Respondent”), regarding his unlicensed contracting activities. 2. After investigating the complaint, the Registrar issued a Cease & Desist Order to Respondent for failing to comply with A.R.S. § 32-1165 for advertising without a license and for failing to comply with A.R.S. § 32- 1151 for contracting without a license. The Cease & Desist Order imposed a civil penalty in the amount of $1,500.00 for violation of A.R.S. § 32-1151 and a civil penalty in the amount of $1,000.00 for violation of A.R.S. § 32- 1165. 3. Respondent requested an administrative hearing on the civil penalty. The Registrar forwarded the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 4. At the hearing, Investigator Alex Figueroa testified that the complaint by Respondent’s customer included a copy of Respondent’s business card and evidence of the contracting work Respondent performed for the customer. Investigator Figueroa testified that he called the customer who stated that she had seen Carlos M. Garza when he was working on another project in the neighborhood and told him she had work she needed done. She said Mr. Garza gave her a bid and did the remodel work, for which she paid over $1,000.00. Investigator Figueroa stated that according to the Registrar’s records, Respondent is not a licensed contractor. 5. Investigator Figueroa testified that the contract in question was for $10,225.00. 6. Respondent did not dispute the facts as presented by the Registrar. Respondent’s wife stated that Frank Garza, Respondent’s son, was doing the checks for the business and won’t help them now. She said Respondent has been retired for a year and they have been relying on her income. However, Respondent declined the opportunity to hold the record open in order to submit documentary evidence of the household’s income. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[1] 2. The Registrar bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] 3. A.R.S. § 32-1165 provides as follows: Except as authorized by § 32-1121, subsection A, paragraph 14, subdivision (c), it is a class 1 misdemeanor for any person to advertise that he is able to perform any service or contract for compensation subject to regulation by the registrar under the terms of this chapter unless a license under the terms of this chapter is first obtained regardless of whether his operations as a contractor are otherwise exempt. 4. A.R.S. § 32-1151 provides as follows:

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. 5. A.R.S. § 32-1121(A)(14) sets forth the so-called “handyman’s exception” to licensure requirements for contractors who perform work whose aggregate contract price, including labor and materials, is less than $1,000.00 if other requirements are met. A.R.S. § 32-1121(A)(14)(c) provides that “[t]his exemption does not apply . . . [t]o a person who utilizes any form of advertising to the public in which the person's unlicensed status is not disclosed by including the words ‘not a licensed contractor’ in the advertisement.” 6. The Registrar established that Respondent violated A.R.S. § 32- 1165 by advertising on his business cards without including the disclaimer, “not a licensed contractor.” The Registrar also established that Respondent violated A.R.S. § 32-1151 by contracting without a license for more than $1,000.00. 7. A.R.S. § 32-1166(A) authorizes the Registrar to assess “a civil penalty in an amount of at least two hundred dollars for each violation but not more than two thousand five hundred dollars for the multiple violations committed on the same day.” With respect to the appropriate amount of the civil penalty for Respondent’s continuing violation of A.R.S. § 32-1151, A.R.S. § 32-1166(A) required the Registrar to “adopt rules covering the assessment of a civil penalty that give due consideration to the gravity of the violation and any history of previous violations.” Pursuant to this directive, the Registrar adopted A.A.C. R4-9-131.[4] 8. A factor in mitigation of the penalty was that the Registrar had no prior complaints against Respondent for past violations. 9. Although Respondent alleged that the proposed civil penalty will be a hardship for him, he declined the opportunity to submit documentary evidence in support of that allegation. Therefore, it is not appropriate to consider this defense. Since the evidence established that Respondent violated A.R.S. §§ 32-1151 and 32-1165, the proposed civil penalty is appropriate. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent violated A.R.S. §§ 32-1151 and 32-1165 and affirm the decision to assess a civil penalty under A.R.S. § 32-1166(A) in the amount of $2,500.00, to be paid in certified funds to the Registrar on or before the effective date of the Registrar’s final order in this matter.

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 shall be forty (40) days from the date of the certification.

Done this day, March 24, 2014.

/s/ Dorinda M. Lang Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1101 et seq. [2] See A.R.S. § 41-1092.07(G)(3); A.A.C. R2-19-119(A) and A.A.C. R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] A.A.C. R4-9-131 sets forth permissible aggravating and mitigating factors to be considered, in relevant part as follows: In assessing a civil penalty as provided for under A.R.S. § 32- 1166(A), the Registrar shall give due consideration to whether the person cited or any individual acting on that person’s behalf has committed one or more of the following acts in determining the gravity of the cited violation: 1. Falsely represented to be a licensed contractor. 2. Failed to perform any work for which money was received. 3. Executed or used any false or misleading documents for the purpose of inducing a person to enter into a contract or to pay money for work to be performed. 4. Made false or misleading statements for the purpose of inducing a person to enter into a contract or to pay money for work to be performed. 5. Failed or neglected to apply funds which were received for the purpose of obtaining or paying for services, labor, materials, or equipment. 6. Performed work that was or had the potential to become hazardous to the health, safety, or general welfare of the public. 7. Performed work that deliberately was in violation of building codes, safety laws, labor laws, workers’ compensation laws, or unemployment insurance laws. 8. Performed work that failed to meet minimum acceptable trade or industry standards or practices or was not performed in a good and workmanlike manner. 9. Has committed any other act which would otherwise be cause for disciplinary action if the person cited had been properly licensed pursuant to A.R.S. Title 32, Chapter 10. 10. Has committed two or more prior violations. 11. Performed work that has caused loss or damage to the structure, its appurtenances, or property being worked upon or has caused loss or injury to any person.

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