ALJDEC decisions subject to certification as final

2013A-4588-ROC · Registrar of Contractors · 2014-02-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 24, 2014, at 8:00 a.m. APPEARANCES: Richard Theodore Malin (hereinafter “Mr. Malin” or “Respondent”) appeared on his own behalf. The Arizona Registrar of Contractors was represented by Assistant Attorney General, John Tellier, Esq. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT The Registrar of Contractors (“Registrar”) received a complaint against Mr. Malin, doing business as All Services Handyman regarding his unlicensed contracting activities.[1] After investigating the complaint, the Registrar’s assigned Investigator, Alfred Lindbergh (hereinafter “Investigator Lindbergh”), issued a Cease & Desist Order dated October 25, 2013,[2] to Respondent for his failure to comply with A.R.S. § 32-1165 by stating that he was “not a licensed contractor” in advertising on an internet website, as required by A.R.S. § 32-1121(A)(14)(c).[3] Investigator Lindbergh also issued to Respondent a Civil Complaint for advertising without a license in violation of A.R.S. § 32-1165 and imposed a civil penalty in the amount of $1,000.00 against Respondent.[4] Respondent requested an administrative hearing on the Civil Complaint. The Registrar forwarded the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. At the hearing, Investigator Oscar Rivera (hereinafter “Investigator Rivera”) testified that he is the Assistant Chief of Investigations for the Registrar of Contractors. Investigator Rivera stated that Investigator Lindbergh had retired. Investigator Rivera testified he reviewed the entire file for this matter and that he agreed with Investigator Lindbergh’s actions. Investigator Rivera testified that during his review, he checked the electronic records for the Arizona Office of the Secretary of State. Investigator Rivera stated that he discovered that the name “All Service Handyman LLC” was registered to Respondent.[5] Investigator Rivera further testified that he also conducted an internet search of Respondent’s business and found an active online advertisement for that business on “Angie’s List” that did not contain the required language, “not a licensed contractor.”[6] Investigator Rivera explained that the Registrar’s policy is to impose a civil penalty in the amount of $1,000.00 for a violation of A.R.S. § 32- 1165 for a business without a prior complaint. At the hearing, Mr. Malin testified that an unintentional mistake had been made by “Angie’s List.” Mr. Malin acknowledged that his advertisement on Angie’s list provided, in relevant part, as follows: “Licensed: Yes, I am appropriately licensed for my trade.” Mr. Malin acknowledged that his advertisement on Angie’s list does not contain the required language “not a licensed contractor.” CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[7] The Registrar bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[8] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[9] 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.

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.” The Registrar established that Respondent violated A.R.S. § 32-1165 by advertising on the internet without including the disclaimer, “not a licensed contractor.” 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 violation of A.R.S. § 32-1165, A.R.S. § 32- 1166(A) requires 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.[10] In light of the evidence submitted at the hearing, the factors set forth in A.A.C. R4-9-131 support the imposition of a civil penalty against Respondent in the amount of $1,000.00. RECOMMENDED ORDER Based on the foregoing, it is recommended that the finding that Respondent violated A.R.S. § 32-1165 be affirmed and that the assessment of a civil penalty under A.R.S. § 32-1166(A) in the amount of $1,000.00, to be paid in certified funds to the Registrar on or before the effective date of the Registrar’s final order in this matter, also be affirmed. In the event of certification of this 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 the certification Done this day, February 10, 2014.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit 1. [2] See Exhibit 4 at 2. [3] See Exhibit 3. [4] See Exhibit 1. [5] See Exhibit 6. [6] See Exhibit 3. [7] See A.R.S. § 32-1101 et seq. [8] 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). [9] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [10] 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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