ALJDEC decisions subject to certification as final

2013A-5755-ROC · Registrar of Contractors · 2014-02-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 5, 2014, at 8:00 a.m. APPEARANCES: Arizona Luxury Pools & Landscapes LLC Pending License No. B- 5.287121-R and Pending License No. C-21.287123-R (hereinafter “Applicant”) was represented by its attorney, Fidelis V. Garcia. The Arizona Registrar of Contractors (hereinafter “the Registrar”) was represented by Assistant Attorney General, Seth Hargraves. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

FINDINGS OF FACT Background Applicant has filed an application for a Class B-5 General Swimming Pool contractor’s license.[1] Applicant has also filed an application for a Class C-21 Landscaping and Irrigation Systems contractor’s license.[2] John Henry Charnock is the managing member, owner, and proposed qualifying party for Applicant. On November 26, 2013, the Registrar denied the license applications at issue on the following bases: 1. John Henry Charnock has failed to establish relevant experience necessary to obtain Pending License Nos. 297121 and 287123 in his applications in contravention of A.R.S. § 32- 1122.F.1.

2. Arizona Luxury Pools & Landscapes, LLC has failed to establish good character and reputation as required by A.R.S. § 32- 1122D.

The applications for the General Swimming Pool contractor’s license and the Landscaping and Irrigation Systems contractor’s license contain twenty-five Project Information affidavits (hereinafter “affidavits’), all signed by the same verifier, Zack McKinley (hereinafter “Mr. McKinley”). In the affidavits, Mr. McKinley indicates that he was John Henry Charnock’s supervisor for the twenty-five projects. All of the twenty-five construction projects were completed while Mr. McKinley and John Henry Charnock were employed by Dreamscapes Lighting and Landscape LLC.[3] The managing member and owner of Dreamscapes Lighting and Landscape LLC is Jonathon Ronald Charnock. Jonathon Ronald Charnock is John Henry Charnock’s son. Jonathan Ronald Charnock is listed and named on License No. K-21.218384-D held by Dreamscapes Lighting and Landscape LLC (“Dreamscapes”) since it was issued on April 9, 2006, and on License No. B- 5.262271 held by Dreamscapes since it was issued on March 2, 2010. On or about November 15, 2012, Jonathon Ronald Charnock, on behalf of Arizona Pools & Landscape LLC, submitted two applications for contractor’s licenses to the Registrar. Jonathon Ronald Charnock was listed on the license applications as the qualifying party and owner of Arizona Pools & Landscape LLC. The Registrar denied Jonathon Ronald Charnock’s license applications. The Registrar found that Jonathon Ronald Charnock, failed to establish good character and reputation as required by A.R.S. § 32-1122(D). John Henry Charnock is not listed as a member, owner, or qualifying party for Dreamscapes. John Henry Charnock is not listed as a member, owner, or qualifying party for Arizona Pools & Landscape LLC. All of John Henry Charnock’s work experience as provided in the affidavits filed for the two license applications at issue related to swimming pool and landscape construction work that John Henry Charnock performed for Dreamscapes Lighting and Landscape LLC. John Henry Charnock owned and operated his own electrical contracting company in the State of Ohio from 1979 through 1986. John Henry Charnock then worked as a branch manager for Drexel until 1995. In 1995, John Henry Charnock served as vice president of operations for Dickman Industrial and Electrical Supply (hereinafter “Dickman”) until he retired and moved to Arizona. John Henry Charnock is still employed as a part-time consultant for Dickman. Testimony of Lawrence Mathews Lawrence Mathews (hereinafter “Mr. Mathews”) testified that he is the Chief of Licensing for the Registrar. Mr. Mathews stated that a Class B-5 and a Class C-21 license both require four years of relevant experience. Mr. Mathews testified that he looks for verification for the required work experience from an individual that has the same type of contractor’s license that is being applied for. Mr. Mathews testified that he was unable to ascertain if Mr. McKinley had the qualifications to verify John Henry Charnock’s work experience.[4] Mr. Mathews stated that he personally spoke with Mr. McKinley. Mr. Mathews testified that Mr. McKinley stated that he thought John Henry Charnock was applying for an electrical contractor’s license. Mr. Mathews testified that John Henry Charnock listed his work experience as “self-employed” from January 2008, through October 2012. Mr. Mathews stated that John Henry Charnock listed his job title as “superintendent” and indicated that he supervised forty people for one hundred residential and five commercial construction projects. Mr. Mathews testified that he reviewed several of the construction projects listed in the affidavits. Mr. Mathews stated that he did not find the affidavits to be credible. Mr. Mathews testified that the Registrar reviewed John Henry Charnock’s federal individual tax returns for 2009, 2010, 2011, and 2012. Mr. Mathews stated that income is used to verify that work alleged to have been performed was actually performed. Mr. Mathews testified that John Henry Charnock’s income tax records for 2009, 2010, 2011, and 2012, did not support a finding that John Henry Charnock reported wages for full-time employment as a superintendent in 2009, 2010, 2011, and 2012. Mr. Mathews testified that after a full review of the license applications, the Registrar determined that John Henry Charnock did not have the required four years of experience in swimming pool and landscape construction required for the two license applications. Mr. Mathews stated that he believed that John Henry Charnock had misrepresented his work experience on the license applications. Mr. Mathews’ testimony is found to be credible. Testimony of Paul Terek Paul Terek (hereinafter “Mr. Terek”) testified that he is the Assistant Chief of Licensing for the Registrar. Mr. Terek stated that he personally reviewed the affidavits and personal references listed on the license applications. Mr. Terek testified that he spoke with Lillian Walker (hereinafter “Ms. Walker”) regarding the construction work performed at her residence. Mr. Terek testified that Ms. Walker denied seeing anyone who was John Henry Charnock’s age at the construction project. Mr. Terek stated that Ms. Walker said that Zack McKinley performed most of the work at her residence. Mr. Terek testified that he was unable to verify that John Henry Charnock had the work experience claimed in the affidavit for the Walker residence. Mr. Terek testified that Marvin Stammen (hereinafter “Mr. Stammen”) was listed as a personal reference on the license applications. Mr. Terek stated that he spoke with Mr. Stammen regarding John Henry Charnock. Mr. Terek testified that Mr. Stammen stated that he had known John Henry Charnock for a long time. Mr. Terek testified that Mr. Stammen said that John Henry Charnock had experience as an electrical contractor but did not build swimming pools or perform landscaping. Mr. Terek stated that Mr. Stammen’s statements contradicted John Henry Charnock’s representation that he had the requisite experience for a swimming pool and a landscaping license. Mr. Terek testified that several of the construction projects listed in the affidavits were performed while the contractor’s license for Dreamscapes Lighting and Landscapes LLC was under suspension. Mr. Terek stated that construction projects performed while a contractor’s license is under suspension could not be utilized to satisfy the Registrar’s requirement that an Applicant submit twenty-five verifiable construction projects for a license application. Mr. Terek testified that John Henry Charnock failed to provide the Registrar with twenty-five verifiable construction projects required in the license application to verify John Henry Charnock’s claimed construction experience. Mr. Terek opined that John Henry Charnock did not have the construction experience required for a landscaping and a swimming pool contractor’s license. Mr. Terek testified that he believed that John Henry Charnock had knowingly misrepresented his construction experience in an attempt to obtain the swimming pool and landscaping licenses. Mr. Terek opined that the landscaping and swimming pool license applications were an attempt to obtain contractor’s licenses for John Henry Charnock’s son. Mr. Terek acknowledged that he had only spoken with Ms. Walker and Mr. Stammen regarding the license applications. Mr. Terek testified that he had left telephone messages for other references and homeowners for the jobsites listed on the affidavits but none of his telephone calls were returned. Mr. Terek’s testimony is found to be credible. Testimony of Marvin J. Stammen Mr. Stammen testified that he had known John Henry Charnock for an extended period of time. Mr. Stammen stated that, initially, he was John Henry Charnock’s banker in the State of Ohio. Mr. Stammen testified that John Henry Charnock is one of the bank’s best customers. Mr. Stammen stated that John Henry Charnock is a successful businessman and that John Henry Charnock was financially secure. Mr. Stammen testified he was “incredibly surprised” that the Registrar had questioned John Henry Charnock’s character. Mr. Stammen stated that John Henry Charnock’s character was beyond question. Mr. Stammen acknowledged that he was a friend of John Henry Charnock. Mr. Stammen acknowledged that he had informed Mr. Terek that John Henry Charnock was an electrical contractor and that John Henry Charnock’s son was the landscape and swimming pool contractor. Mr. Stammen’s testimony is found to be credible. Testimony of John Henry Charnock John Henry Charnock testified that he did have the requisite four years of experience in swimming pool construction and landscaping work required for licensure. John Henry Charnock stated that his income tax records for the last four years were not reflective of the construction work that he performed for Dreamscapes Lighting and Landscapes LLC because that work was performed without compensation. John Henry Charnock testified that he worked without compensation in an attempt to help his son. John Henry Charnock testified that he had passed the business management and other tests and that the only issues remaining were his experience and his character. John Henry Charnock stated that he had no formal training or education as a swimming pool contractor or a landscaping contractor. John Henry Charnock testified that he had worked for the last four years and nine months as an unpaid superintendant for Dreamscapes Lighting and Landscapes LLC. John Henry Charnock stated that Mr. McKinley was not his supervisor. John Henry Charnock acknowledged that he was not Mr. McKinley’s supervisor. John Henry Charnock testified that the construction licensing school that he had attended had filled out the license applications for him. John Henry Charnock stated that he had performed unpaid supervisory work for Dreamscapes Lighting and Landscapes LLC for over one hundred construction projects. John Henry Charnock testified that if the Registrar had asked for additional verification in support of his construction experience, he would have provided it. John Henry Charnock testified that he was a decorated war veteran and a successful businessman. John Henry Charnock stated that he was extremely upset that the Registrar would question his character. John Henry Charnock testified that he had no criminal record and that he had been a licensed electrical contractor in the State of Ohio for over twenty years. John Henry Charnock stated that there had been no complaints filed against his contractor’s license in the State of Ohio. John Henry Charnock testified that he wanted the landscaping and swimming pool licenses because he wanted to perform landscaping and swimming pool construction work in the State of Arizona. John Henry Charnock denied that the landscaping and swimming pool license applications were an attempt to obtain contractor’s licenses for his son. John Henry Charnock asserted that he was the victim of age discrimination by the Registrar.

CONCLUSIONS OF LAW Character 1. A.R.S. § 32-1122(D) provides in pertinent part that to obtain a license, a person shall be of good character and reputation. Lack of good character and reputation may be established by showing the person has committed any act that is grounds for suspension or revocation of a contractor’s license. 2. Under A.R.S. § 41-1092.07(G)(1), in a hearing on a denial of a permit or a license, the burden of proof is on the Applicant. 3. The Registrar’s concern in this case is legitimate and well-founded. 4. The issue of what constitutes good character or a lack thereof is nebulous at best. A review of cases does not provide a ready or facile definition. As stated by Justice Frankfurter in his concurring opinion in Schware v. Board of Bar Examiners of the State of New Mexico, 533 U. S. 234, 77 S.Ct. 752 (1957): No doubt satisfaction of the requirement of moral character involves an exercise of delicate judgment on the part of those who reach a conclusion, having heard and seen the applicant for admission, a judgment …that it expresses ’an intuition of experience which outruns analysis and sums up many unnamed and tangled impressions, impressions which may lie beneath consciousness without losing their worth.

5. Although A.R.S. § 32-1122(D) is permissive, the Registrar’s discretion to deny a license must be based on standards that apply equally to all applicants. The Registrar is given discretion to deny a license if the applicant has been shown not to be a person good character and reputation. Absent specific rules, discretion as allowed by the statute means an exercise of sound judgment based upon the application of reason and generally accepted principles of what constitutes good character, or lack thereof, to the facts presented in the case. Good character is not amenable to being described with mathematical precision and in the absence of such precision or clearly defined standards, good character or the lack thereof must be decided on a case-by-case basis. 6. Credible testimony and evidence established that John Henry Charnock has established good character in the State of Ohio and is well- regarded for his honesty and ability in the State of Ohio. John Henry Charnock has no criminal convictions and there are no unresolved complaints against his electrical contractor’s license in the State of Ohio. There was no evidence that John Henry Charnock has been listed on a contractor’s license that has been revoked or suspended in the State of Arizona or any other state. Many of the affidavits provided in support of the license applications at issue are inaccurate. However, the evidence of record is insufficient to support a finding that the affidavits were knowingly false. The evidence of record is insufficient to support a finding that the license applications are an attempt to circumvent the licensing requirements of the State of Arizona. This Tribunal concludes that Applicant has met its burden of proof to establish that John Henry Charnock has sufficient good character and reputation to satisfy the statutory good character and reputation requirement for a license. Experience The burden of proof to establish the requisite construction experience necessary to obtain a contractor’s license is upon the Applicant in all cases. A.R.S. § 32-1122(F)(1) provides, in pertinent part, as follows: F. Before a license is issued, the qualifying party shall:

1. Have had a minimum of four years' practical or management trade experience, at least two of which must have been within the last ten years, dealing specifically with the type of construction, or its equivalent, for which the applicant is applying for a license. Technical training in an accredited college or university or in a manufacturer's accredited training program may be substituted for a portion of such experience, but in no case may credited technical training exceed two years of the required four years' experience. The registrar of contractors may reduce the four years' practical or management experience requirement if in the registrar's opinion it has been conclusively shown by custom and usage in the particular industry or craft involved that the four year requirement is excessive. The registrar may waive the work experience documentation and verification or the examination requirement if the records reflect that the qualifying party is currently or has previously been a qualifying party for a licensee in this state in the same classification within the preceding five years.

The credible testimony and evidence of record was insufficient and failed to support a finding that the Applicant’s qualifying party, John Henry Charnock, has provided the requisite verification of experience in swimming pool construction and landscaping and irrigation work required by applicable statute. The failure of Applicant to provide satisfactory verification of John Henry Charnock’s construction experience as required by applicable statute for all applicants for licensure precludes the issuance of the pending Class B-5 General Swimming Pool contractor’s license and the pending Class C-21 Landscaping and Irrigation Systems contractor’s license. RECOMMENDED ORDER It is recommended that on the effective date of the final Order in this matter, the decision by the Registrar of Contractors to deny Applicant’s pending applications for the Class B-5 General Swimming Pool contractor’s license and the Class C-21 Landscaping and Irrigation Systems contractor’s license be affirmed based upon the Applicant’s failure to provide the requisite verification of John Henry Charnock’s construction experience. 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 20, 2014.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] Pending License No. B-5.287121-R. [2] Pending License No. C-21.287123-R. [3] Administrative notice is taken of Dreamscapes Lighting and Landscapes LLC license records as reflected on the Registrar of Contractors’ public website on February 14, 2014. Such license records reflect that License No. K-21.218384-D was suspended for lack of bond on February 21, 2013, canceled on March 15, 2013, and revoked on November 14, 2013. License B- 5.262271-R suspended for lack of bond from February 23, 2012, through February 15, 2012, suspended for lack of bond from June 21, 2012, through June 26, 2012, suspended for lack of bond on January 13, 2013, canceled on March 15, 2013, revoked on November 14, 2013, and revoked on December 3, 2013. [4] Administrative notice is taken of a search conducted on the Registrar of Contractors’ public website on February 14, 2014. This Tribunal could not locate a contractor’s license for Zack McKinley.

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