ALJDEC decisions subject to certification as final

2013A-5751-ROC · Registrar of Contractors · 2014-12-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 12, 2014, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Seth T. Hargraves, Esq., Assistant Attorney General; Respondent Paul Robert Williams appeared telephonically on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On or about December 12, 2013, the Registrar received an email from Sandy Griffis, the Executive Director of the Yavapai County Contractors Association, that “the chimney sweep” was offering to tar roofs for leaks, even though he was not licensed.[1] Ms. Griffis later provided a printed advertisement from Master Sweep in the publication, Money in the Mail, that offered to perform various services, including a thorough chimney cleaning, tar to prevent roof leaks, and “Spark Arrester/CAPS.”[2] The advertisement did not include the disclaimer, “not a licensed contractor.” The Registrar assigned the hotline tip to its criminal investigator, Steven Willoughby, to investigate. Investigator Willoughby consulted the Arizona Secretary of State’s records and found that Master Sweep was a trade name registered to Paul Robert Williams, who was listed as the owner of the company.[3] Investigator Willoughby also consulted the Registrar’s records and found that neither Mr. Williams nor Master Sweep had a current or pending contractor’s license in Arizona, although Mr. Williams had been listed on a contractor’s license that had expired in 2002.[4] Investigator Willoughby also found that in a Case No. 2012-4058, the Registrar had issued a Cease & Desist Order against Mr. Williams for advertising without a license.[5] On December 12, 2013, Investigator Willoughby on behalf of the Registrar issued a Cease & Desist Order, a Civil Citation, and imposed a civil penalty in the amount of $1,500.00 against Mr. Williams for advertising without a license in violation of A.R.S. § 32-1165.[6] The Registrar initially was unable to serve the document on Mr. Williams because the address on Mr. Williams’ driver’s license did not apparently exist. On January 17, 2014, Investigator Willoughby called the telephone number on Master Sweep’s advertisement and received a message, “You have reached Daniel.” Investigator Willoughby left a message for Mr. Williams, but no one returned the call.[7] On August 12, 2014, Investigator Willoughby left another message at the telephone number on Master Sweep’s advertisement and heard a lengthy message explaining that Mr. Williams was taking the month of August off, but that he would check his messages weekly. Investigator Willoughby left another message, requesting that Mr. Williams contact him. Investigator Willoughby also sent a letter to Mr. Williams at his address on the county assessor’s records.[8] Eventually, Mr. Williams contacted Investigator Willoughby and provided his Post Office Box number. Investigator Willoughby reissued the Civil Citation and notice of civil penalty and Mr. Williams accepted service of it. On or about September 5, 2014, Mr. Williams requested a hearing, stating that he did not place the advertisement, that he had not worked in the chimney sweep business since April 2013, and that although he was trying to restart his business, his customer list had been stolen.[9] The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on December 12, 2014. The Registrar presented the testimony of Investigator Willoughby and submitted six exhibits. Mr. Williams testified on his own behalf and submitted one exhibit. Hearing Evidence Investigator Willoughby testified that a contractor must be licensed to apply roof tar if the cost of the job is more than $1,000.00. Inspector Willoughby testified that if the cost of the job is less than $1,000.00, the contractor could perform the job under the so-called “handyman exemption.” Investigator Willoughby testified that that the contractor still must include the disclaimer, “not a licensed contractor,” in advertisements that offer to apply roof tar to avoid advertising without a license in violation of A.R.S. § 32-1165. Mr. Williams testified that in September 2013, he asked Daniel and Natalie Cutter to run the business of Master Sweep because he was in rehabilitation for a health condition. Mr. Williams explained that he had known the Cutters for 19 years and that, although he knew that they had gotten into trouble when they were younger, he trusted them and rented his property to them. Mr. Williams testified that if Mr. and Mrs. Cutter successfully operated Master Sweep for one year in his absence, he agreed to sell one-half of the business to them. Mr. Williams submitted an invoice from Zion Marketing, LLC that was signed by Natalie Cutter as “co-owner” of Master Sweep and dated October 13, 2013, for four months of the advertisement in Money in the Mail between November 14, 2013, and February 13, 2014.[10] Mr. Williams testified that he did not give Mrs. Cutter permission to advertise Master Sweep’s services and that he did not know anything about the advertisement until he received the Registrar’s Civil Citation and notice of civil penalty. Mr. Williams testified that Mr. Cutter wrote checks to himself on Master Sweep’s business account. After a short time, Mr. Williams terminated his agreement with Mr. and Mrs. Cutter, but they tried to steal Master Sweep’s business. Mr. Williams testified that eventually, he had to threaten to sue or to call the police on Mr. and Mrs. Cutter. Mr. Williams testified that he only returned to work at Master Sweep in September 2014. Mr. Williams testified that Mr. Cutter continues to do service calls under Master Sweep’s name. The Registrar submitted a printout from Master Sweep’s website that showed a print date of October 24, 2014.[11] In addition to cleaning chimneys, the website states that Master Sweep will check and monitor “roof tar and seals” and that if the tar has cracked, apply a tar patch.[12] Master Sweep’s website does not include the disclaimer, “not a licensed contractor.” The prices set forth at the website are $55.00 for an inspection and $129.00 for a full sweep.[13] Mr. Williams testified that he does not charge for tarring roofs, but that when he cleans a chimney, he inspects the tar around the chimney for cracking and if necessary, he applies a fresh coat of roof tar. Mr. Williams testified that he allowed Mrs. Cutter to modify the website and she changed the password. It was very difficult for him to change the password so that he could access the website. Mr. Williams testified that because he is not very computer savvy, he has not yet added the disclaimer, “not a licensed contractor,” to the website. Mr. Williams testified that he is a pillar of the community in Prescott and Yavapai County. He has been in business for 12 years and the fire department and community depend on his services. Mr. Williams testified that many chimney sweeps have gone out of business and that he is the only reputable chimney sweep business remaining in Yavapai County. Mr. Williams testified that $1,500.00 represents a month’s income and may force him out of business. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[14] The Registrar bears the burden of proof to establish Mr. Williams’ statutory violation by a preponderance of the evidence.[15] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[16] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[17] A.R.S. § 32-1165 provides as follows: Except as authorized by section 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 exemption” 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 an advertisement was placed in the publication, Money in the Mail, on behalf of Mr. Williams’ company, Master Sweep, that solicited work that may have been within the so-called “handyman exemption” established by A.R.S. § 32-1122(A)(14), except that the advertisement did not contain the disclaimer, “not a licensed contractor,” as required by A.R.S. § 32-1122(A)(14)(c). Mr. Williams established that he did not personally place and did not authorize Mrs. Cutter to place the advertisement. However, Mr. Williams acknowledged that he hired Mr. and Mrs. Cutter to run Master Sweep’s business. Because Mr. Williams was responsible for supervising his employees, the Registrar established that Mr. Williams violated A.R.S. § 32- 1165 when Mrs. Cutter placed the advertisement for applying roof tar in the publication, Money in the Mail, without including the disclaimer, “not a licensed contractor.”[18] 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 second violation of A.R.S. § 32-1165, A.R.S. § 32-1166(A) requires the Registrar to “give due consideration to the gravity of the violation and any history of previous violations.” The fact that Mr. Williams did not personally place the advertisement is a factor in mitigation of the penalty. Other factors in mitigation of the penalty are Mr. Williams’ modest charges for Master Sweep’s services and his credible testimony about his limited income.[19] The fact that Mr. Williams still has not changed Master Sweep’s website to include the disclaimer, “not a licensed contractor,” while not a separate violation of A.R.S. § 32-1165 at this time, is a factor in aggravation of the penalty. Considering all the factors in mitigation and in aggravation of the penalty, at this time, a civil penalty in the amount of $500.00 is appropriate. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent Paul Robert Williams violated A.R.S. § 32-1165 and modify the decision to assess a civil penalty under A.R.S. § 32-1166(A) in the amount of $500.00, to be paid in certified funds to the Registrar on or before thirty days after the effective date of the 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 will be five days from the date of that certification. Done this day, December 19, 2014.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 1. [2] Id. at 2. [3] See the Registrar’s Exhibit 2. [4] See the Registrar’s Exhibit 3 at 2. [5] See id. [6] See the Registrar’s Exhibit 4. [7] See the Registrar’s Exhibit 3 at 2. [8] See id. at 2-3. [9] See the Registrar’s Exhibit 5 at 2. [10] See Mr. Williams’ Exhibit A. [11] See the Registrar’s Exhibit 6. [12] See id. at 2-3. [13] See id. at 6. [14] See A.R.S. § 32-1101 et seq. [15] 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). [16] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [17] Black’s Law Dictionary at page 1220 (8th ed. 1999). [18] See, e.g., State v. Superior Court in and for Maricopa County, 111 Ariz. 130, 132, 524 P.2d 951, 953 (1974) (If employment relationship existed, employer is responsible for employee’s acts if the employer had the right to control the employee’s conduct). [19] See, e.g., Dazzio v. Federal Deposit Insurance Corporation, 970 F.2d 71, 81-82 (5th Cir. 1992) (In assessing a civil penalty, it is appropriate to consider the regulated party’s ability to pay).

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826