ALJDEC decisions subject to certification as final

2013A-797-ROC · Registrar of Contractors · 2013-04-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 12, 2013, at 8:00 a.m. APPEARANCES: BMR Air Conditioning & Heating LLC (“Applicant”) appeared through its qualifying party and sole member, Manuel Santiago Gonzales; the Arizona Registrar of Contractors was represented by Mary DeLaat Williams, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On or about July 20, 2012, Manuel Santiago Gonzales on behalf of BMR Air Conditioning & Heating LLC (“BMR”) submitted an Application for Contractor’s License to the Tucson office the Arizona Registrar of Contractors (“the Registrar”). Mr. Gonzales was listed on the application as BMR’s qualifying party and owner. 2. Mr. Gonzales answered “No” to the question on the application about whether anyone listed on the application had been convicted of a felony. 3. Mr. Gonzales answered “Yes” to the questions on the application about whether he had been convicted any misdemeanors and whether he had been listed on a contractor’s license that had been suspended, revoked, or otherwise disciplined. Mr. Gonzales disclosed that he had been convicted of writing a bad check in 2008 in Tucson City Court and that he had been listed on License No. K-39.221168-D issued to Building Maintenance and Repair LLC (“Building Maintenance and Repair”), which had been revoked. 4. Mr. Gonzales provided BMR’s address on the application as 8178 East Ramsay Road, Hereford, Arizona 85615. 5. On or about January 28, 2013, the Registrar’s Assistant Chief of Licensing sent a letter to BMR to notify it that the Registrar had determined to deny its license application under A.R.S. §§ 32- 1122(D), 32-1154(A)(8), 32-1122(E), 32-1161(C), 32-1154(A)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(21). 6. BMR’s attorney on its behalf requested a hearing on the Registrar’s denial. 7. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 8. An evidentiary hearing was held on April 12, 2013. Mr. Gonzales appeared and stated that he had terminated BMR’s attorney’s further representation. Mr. Gonzales testified on BMR’s behalf, submitted sixteen exhibits, and presented the testimony of Danielle Gonzales, his wife. The Registrar submitted six exhibits and presented the testimony of Lawrence Mathews, its Chief of Licensing. Hearing Evidence Mr. Gonzales’ Criminal History Mr. Gonzales’ 1989 Felony Conviction 9. On or about January 19, 1989, Mr. Gonzales pled guilty to the crime of Driving While Under the Influence of Intoxicating Liquor While License Was Suspended, Cancelled, Revoked or Refused, a Class 5 felony, in Case No. CR-23934 in Pima County Superior Court. Imposition of sentence was suspended and Mr. Gonzales was placed on three years of probation with the condition of a six-month term of imprisonment. 10. On or about January 3, 1992, the court in Case No. CR-23934 revoked Mr. Gonzales’ probation because it found that he had violated its conditions. As a result, the court sentenced Mr. Gonzales to 18 months in prison, with credit for 119 days served. 11. Mr. Gonzales testified that his 16-year-old brother died in 1986, when Mr. Gonzales was only nineteen years old.[1] Mr. Gonzales testified that he drank during his twenties as a way of mourning for his brother and that as a result of his drinking, he spent time in prison. Mr. Gonzales’ Misdemeanor Convictions from 1987 to 2009 12. On or about October 22, 2012, Mr. Gonzales submitted some records of criminal convictions to the Registrar. On or about December 26, 2012, the Registrar’s Assistant Chief of Investigations submitted a public records request to Pima County Consolidated Justice Courts and obtained evidence of seven misdemeanor convictions. On or about January 14, 2013, the Registrar received from Mr. Gonzales records of six misdemeanor crimes for which he had been convicted between December 1987, and March 2005. 13. On or about December 12, 1987, Mr. Gonzales was convicted of False Report to Law Enforcement and Driving on a Suspended License, both misdemeanors, in Tucson City Court Case No. CR-87079809 and was sentenced to pay a fine. On or about October 20, 1990, after Mr. Gonzales failed to pay the fine, a default judgment was entered. On or about November 1991, a partial payment was made and on or about February 22, 2005, the final payment was made. 14. On or about June 12, 1998, Mr. Gonzales was convicted of Unlawful Means of Transportation—Control and Violation of Promise to Appear, both misdemeanors, in Tucson City Court Case No. CR-98219554. As a result of those convictions, Mr. Gonzales was ordered to pay a $430.00 fine. 15. On or about March 8, 2000, Mr. Gonzales was convicted of Theft, Violation of Promise to Appear, and Failure to Appear 2nd Degree, all misdemeanors, in Tucson City Court Case No. CR-98218433 and was ordered to pay $200.00 in restitution and fines. The case was closed on February 22, 2005, after Mr. Gonzales paid the restitution and fines. 16. On or about December 20, 2000, Mr. Gonzales was convicted of Interfering with Judicial Proceedings, a misdemeanor, in Pima County Consolidated Justice Court Case No. CR00-022436. As a result, Mr. Gonzales were ordered to pay a fine of $212.00 and placed on 12 months of probation. 17. On or about February 27, 2001, Mr. Gonzales was convicted of Criminal Trespass 1st Degree and Threat—Intimidate, both misdemeanors, in South Tucson Magistrate Court Case No. CR- [number redacted]. Mr. Gonzales was ordered to pay $444.00 in fines and surcharges. 18. On or about March 2, 2001, Mr. Gonzales pled guilty to writing a bad check, a Class 1 misdemeanor, in Pima County Consolidated Justice Court Case No. CR00-009182 and through the Pima County Attorney’s Bad Check Program agreed to pay $75.00 in surcharges and Bad Check School Fees, $210.00 in restitution, $20.00 in court fees, and $192.00 in fines, plus a $20.00 time payment fee. 19. On or about March 12, 2001, Mr. Gonzales was convicted of issuing a bad check, a misdemeanor, in Pima County Consolidated Justice Court Case No. CR01-103285A-MI through the Pima County Attorney’s Bad Check Program. That case was closed on November 25, 2004, after a failure to pay warrant was issued and the bond amount of $465.00 was satisfied. 20. On or about March 12, 2001, Mr. Gonzales was convicted of issuing a bad check, a Class 1 misdemeanor, in Pima County Consolidated Justice Court Case No. CR01-109285. On or about November 2, 2001, May 13, 2003, and January 26, 2004, arrests warrants were issued because Mr. Gonzales failed to make the payments required by his sentence. On or about April 23, 2004, a condition of release was filed that ordered Mr. Gonzales to resume making payments. On or about October 6, 2004, another arrest warrant was issued after Mr. Gonzales failed to make the payments required by his sentence. On or about November 26, 2004, the Proceeding Entry stated, “Pd in full, suspend fines/fees, close case.” 21. On or about March 28, 2005, Mr. Gonzales was convicted of Possession of Drug Paraphernalia, a misdemeanor, in Tucson City Court Case No. CR-4052145 and was fined $400.00. 22. On or about July 2, 2009, Mr. Gonzales was convicted of two counts of issuing a bad check, both misdemeanors, in Pima County Consolidated Justice Court Case No. CR08-807282A. Mr. Gonzales was ordered to pay $536.00 in fines, a $20.00 preexisting time payment fee, and a $100.00 preexisting warrant fee, for a total of $656.00. It was noted that Mr. Gonzales had been in custody for six days and was employed. 23. On or about July 2, 2009, Mr. Gonzales was convicted of Issuing a bad check, a misdemeanor, in Pima County Consolidated Justice Court Case No. CR08-805298A. Mr. Gonzales was ordered to pay $268.00 in fines, a $20.00 preexisting time payment fee and a $100.00 preexisting warrant fee, for a total of $388.00. It was noted that Mr. Gonzales had been in custody for six days and was employed. 24. On or about July 2, 2009, Mr. Gonzales was convicted of three counts of issuing a bad check, all misdemeanors, in Pima County Consolidated Justice Court Case No. CR08-801800A. Mr. Gonzales was ordered to pay $786.00 in fines, a JCEF fee of $20.00, a $20.00 preexisting time payment fee, and a $100.00 preexisting warrant fee, for a total of $926.00. It was noted that Mr. Gonzales had been in custody for two days and that he had another matter pending before a different judge. 25. On or about July 20, 2009, Mr. Gonzales was convicted of issuing a bad check, a misdemeanor, in Pima County Consolidated Justice Court Case No. CR08-823043A. Mr. Gonzales was ordered to pay $12.87 in restitution, a $20.00 victim fee, a $50.00 Bad Check Program fee, a $268.00 fine, and a $20.00 time payment fee. It was noted that the fine and the $20.00 time payment fee may be waived if Mr. Gonzales completed the Bad Check Program within six months. 26. Mr. Gonzales did not dispute any of the misdemeanor convictions that the Registrar alleged in his criminal history. Regarding the 2009 convictions, Mr. Gonzales acknowledged that he wrote approximately $4,000.00 worth of checks to suppliers that bounced due to a cash flow problem. 27. Mr. Gonzales testified that he is a small air conditioning business that spends about $55,000.00 annually for product costs to perform one or two jobs per month. Mr. Gonzales testified that although he was not downplaying the bounced checks, he has “made it right” with his suppliers and that he depends on his suppliers to run his business. 28. Mr. Gonzales testified that he has spent of total of 18 days in jail over the last ten years for writing bad checks. Mr. Gonzales testified that he is not a “bad guy”; eighteen days is only 0.5% of ten years. Builders Maintenance & Repair’s License History 29. On or about August 16, 2006, Mr. Gonzales on behalf of Building Maintenance and Repair submitted an Application for Contractor’s License to the Registrar. On or about August 29, 2006, the Registrar issued License No. K-39.221168-D for air conditioning, refrigeration, and heating to Building Maintenance and Repair. 30. Mr. Gonzales was the qualifying party, member, and only person listed on Building Maintenance and Repair’s license. The address on Building Maintenance and Repair’s license application and its most recent address of record was 3040 North Flanwill Blvd., Tucson, Arizona 85716-1607. 31. Administrative notice is taken of Building Maintenance and Repair’s License record as reflected on the Registrar’s public website. Such prior License record reflects that Building Maintenance and Repair’s License No. K-39.221168-D was administratively suspended for lack of bond on December 15, 2007, and never reinstated. The Nicholas Complaint 32. On or about November 19, 2007, attorney Mark A. Kirkorsky filed a complaint with the Registrar on behalf of Nicholas Consolidated that alleged that Building Maintenance and Repair had failed to pay $475.85 for materials that it had purchased on credit to use in its contracting business. The Registrar designated Nicholas Consolidated’s complaint as Case No. M08-0872. 33. After Building Maintenance and Repair failed to resolve Nicholas Consolidated’s complaint, the Registrar issued a Citation and Complaint in Case No. M08-0872 charging Building Maintenance and Repair with a possible violation of former A.R.S. § 32- 1154(A)(7)[2] and A.R.S. § 32-1154(A)(11).[3] The Registrar sent the Citation and Complaint to Building Maintenance and Repair at its address of record. 34. After Building Maintenance and Repair failed to file a timely written answer to the Citation and Complaint in Case No. M08-0872, on or about November 4, 2008, the Registrar issued a Decision and Order finding that Building Maintenance and Repair’s failure was deemed an admission of the charges under A.R.S. § 32-1155(B). As a result of Building Maintenance and Repair’s admitted violations in Case No. M08-0872, the Registrar imposed a disciplinary suspension on its License No. K-39.221168-D effective January 26, 2009. The Warfield Complaint 35. On or about May 23, 2008, Ronald D. Warfield filed a complaint with the Registrar alleging that Building Maintenance and Repair had contracted to install an HVAC system in his guesthouse at 1424 North Euclid Avenue, Tucson, Arizona. Mr. Warfield alleged that after he paid Building Maintenance and Repair $4,672.00 of the contract price of $6,675.00, “[j]ob was only initiated to allow our check to clear” and that “[a]ll subsequent phone calls have been ignored or hung-up on.” According to the complaint, Building Maintenance and Repair contracted to perform the work on April 29, 2008, and last performed work on the project on May 8, 2008. The Registrar designated Mr. Warfield’s complaint as Case No. T08-1377. 36. After Building Maintenance and Repair failed to resolve Mr. Warfield’s complaint, the Registrar issued a Citation and Complaint in Case No. T08-1377 charging Building Maintenance and Repair with possible violations of A.R.S. § 32-1154(A)(1),[4] former A.R.S. § 32-1154(A)(7), A.R.S. § 32-1154(A)(18),[5] and A.R.S. § 32- 1154(A)(13), namely A.R.S. § 32-1124(B).[6] The Registrar sent the Citation and Complaint to Building Maintenance and Repair at its address of record. 37. After Building Maintenance and Repair failed to file a timely written answer to the Citation and Complaint in Case No. T08-1377, on or about March 11, 2009, the Registrar issued a Decision and Order finding that Building Maintenance and Repair’s failure was deemed an admission of the charges under A.R.S. § 32-1155(B). As a result of Building Maintenance and Repair’s admitted violations in Case No. T08-1377, the Registrar revoked its License No. K- 39.221168-D unless it rectified the issues identified in Mr. Warfield’s complaint and paid a civil penalty in the amount of $1,000.00 under A.R.S. § 32-1154(E). 38. Building Maintenance and Repair failed to comply with the Registrar’s Decision and Order in Case No. T08-1377. As a result, the Registrar revoked Building Maintenance and Repair’s License No. K-39.221168-D, effective April 30, 2009. Building Maintenance and Repair also failed to pay the civil penalty imposed in the Registrar’s Decision and Order in Case No. T08-1377. As a result, the Registrar revoked Building Maintenance and Repair’s License No. K-39.221168-D a second time, effective June 3, 2009. The Resolution of the Nicholas Consolidated and Warfield Complaints 39. On or about March 20, 2009, the disciplinary suspension of Building Maintenance and Repair’s License No. K-39.221168-K imposed in Nicholas Consolidated’s complaint in Case No. M08-0872 was lifted because the outstanding amount owed was satisfied. Mr. Mathews testified that although he did not know whether Mr. Gonzales had paid the amount owed, usually if a complaint against a contractor’s license is satisfied, the responsible employee on a license knows about the complaint. 40. On or about February 23, 2012, Mr. Gonzales paid the $1,000.00 civil penalty that had been imposed in Case No. T08-1377, which had been renumbered Case No. 2008-13770944. 41. On or about September 27, 2012, the Registrar informed BMR that its license application could not be processed until it provided proof that Mr. Warfield’s complaint against Building Maintenance and Repair’s License No. K-39.221168-D in Case No. 2008-13770944 (formerly Case No. T08-1377) had been resolved. 42. Mr. Gonzales testified that he thought that the Registrar had satisfied Mr. Warfield’s complaint in Case No. 2008-13770944 (formerly Case No. T08-1377) through a payout from the Residential Contractors’ Recovery Fund and that he did not know how to contact Mr. Warfield to resolve the complaint. Mr. Gonzales indicated that on October 12, 2012, he learned that Mr. Warfield had not obtained a payout from the Residential Contractors’ Recovery Fund. 43. On or about October 12, 2012, Mr. Gonzales submitted a signed agreement between himself and Mr. Warfield under which Mr. Warfield agreed to withdraw the complaint in Case No. 2008-13770944 (formerly Case No. T08-1377) in consideration for Mr. Gonzales’ promise to pay three monthly installments in the amount $1,000.00 each to resolve the complaint. Mr. Gonzales’ Letters of Reference and Evidence of Current Qualifications 44. Mr. Gonzales submitted an undated letter of reference from William Sizemore that stated in relevant part as follows: Please accept this submission as my testament to the character of Manny Gonzalez [sic]. While I have only known Manny for a little over a year, we have been afforded [the] opportunity at length about Manny’s past.

In speaking with Manny, he is not only remorseful of his past transgressions but, he is also cognizant of the gravity of his actions and accepts and understands that those types of activities hold consequences. For Manny, his consequences have not only been material and tangible, they have been in his relationships with family and friends as well.

Manny has made enormous efforts to atone for those acts and has made enormous and commendable efforts to change his life. He has developed and grown his faith, his marriage and other personal relationships, and he has sought [an] understanding of his past activities through support and other avenues in hopes to never repeat them.

Clearly, the activities of Manny’s past are what lead him and you to the very process being undertaken in this moment. I for one, in all my experience, have seen humanity turnaround from far worse. While the Manny of pastimes is before you for examination in files, on paper; the Manny who sits before you is a man of remorse, decency, and change fueled by understanding. The man before you now is a man of faith and character.

Please mind you, the words I speak on Manny’s behalf do not come lightly; nor should they be used for anyone. If I did not believe for a moment these words were not the truth, I would not commit them and my own reputation on Manny’s behalf. . . .

Mr. Gonzales testified that Mr. Sizemore was a police officer in Florida whom he met a couple of years ago through Alcoholics Anonymous. 45. Mr. Gonzales submitted a letter dated January 3, 2013, from Pastor Jack Tinney, Assistant Pastor to Calvary Chapel Sierra Vista, that stated in relevant part as follows: I had the pleasure of meeting with Manny on a consistent basis during his pre-marital counseling session with me and I can easily testify to his change of not only character, but also his behavior for the good.

I find Manny to be trustworthy as well as dependable and honest.

I would not hesitate to call upon him personally if I needed some heating or cooling work done.

Mr. Gonzales testified that Pastor Tinney was the assistant pastor of a church that had over 2,000 members and that in 2012, Pastor Tinney had performed the marriage ceremony for Mr. Gonzales and his wife. 46. Mr. Gonzales submitted an undated letter from Retired Lieutenant Colonel Robert J. Sherry that stated in relevant part as follows: Mr. Manny Gonsalez [sic] deserves another chance and should be granted the privilege to obtain an Arizona Contractors license. Mr. Gonsalez [sic] would be an exemplary and proud holder as a licensee. He has demonstrated outstanding work in my presence on numerous occasions by delivering estimates, providing material, and completing several jobs for me. I trust Mr. Gonsalez’s [sic] work ethics, morals, and self character.

I met Mr. Gonsalez [sic] and his then fiancée Danielle, now married, over a year ago. Each of them has supported each other in very difficult times and remains a wonderful team, couple, and partners. Together they would run an extraordinary business by providing the best workmanship, quality, and responsibility to their customers. I have personally witnessed their compassion, love, and respect for each other and this is definitely a great recipe for a successful business.

Many times we make mistakes in our life that we must accept and move forward. There is neither a trial period nor a manual on how to live your life. I know this first hand. I have commanded over 1000 men and woman [sic], owned my own business, and was responsible for contractors on Fort Huachuca, AZ. I have had the privilege to choose who I wanted to work for me in the best interest of the United States Government and for my business. I’ve Hired and fired individuals and have learned who to trust, who would be responsible, and who could complete a mission. Mr. Gonsalez [sic] would definitely be one of those individuals that I would choose to work for me.

47. Mr. Gonzales submitted a letter of reference dated July 26, 2012, from Margarita U. Murrieta that stated in relevant part as follows: [I]t is with great pleasure that I write this letter of recommendation for Mr. Manny Gonzales. I have known Mr. Gonzales for two years. As co-owner of Juan’s Barbershop, he has been hired to carry out a variety of jobs such as repairing and maintaining the air conditioner for my business and the adjoining suites in my building. Mr. Gonzales’ knowledge and expertise gave me the confidence to also hire him to complete jobs at my residence and rental property. Mr. Gonzales maintains and repairs the air conditioning unit and furnace at each location and has also resolved electrical problems for my rental unit.

Mr. Gonzales is very skilled and knowledgeable in a variety of areas. He is able to thoroughly describe the repairs needed and explain why these repairs are necessary. Mr. Gonzales gives accurate estimates prior to beginning a job and is punctual to all appointments. He completes jobs in a timely manner and is extremely clean and tidy in his workplace.

Mr. Gonzales is a skilled and knowledgeable technician. He always conducts himself with utmost professionalism and I highly recommend him for any employment opportunities he may seek.

Mr. Gonzales testified that Juan’s Barbershop has five chairs and that he changes HVAC filters for Ms. Murrieta. 48. Mr. Gonzales submitted a letter dated January 1, 2013, from Mario Gonzalez, the Vice President of Grasp Heating and Cooling Inc.,[7] that stated in relevant part as follows: [I h]ave known Manuel Gonzales, and have worked with him for the past two years, and he has been a very responsible, reliable, and an asset for our company. I have no doubt of his positive attitude and honesty; I trust him and look forward to working with him in the future.

Mr. Gonzales testified that he has done a lot of work for Grasp Heating and Cooling Inc. in its shops in Bisbee and Douglas. 49. Mr. Gonzales submitted an undated letter from Terry L. Maddux, the Senior Supervisor Operations for the Freeport-McMoRan Copper Queen Branch in Bisbee, that stated in relevant part as follows: We have used Manny Gonzales (BMR Air Conditioning & Heating) for quite some time now. We went through three different licensed contractors before finding one that could handle all of our needs in an industrial setting in an honest and professional manner. Manny is the only one that our Company will do business with in Southern Arizona. We have found him to be honest and highly skilled. Besides being very trust[worthy] we have also found him to be the most competent technician in all of Southern Arizona.

Mr. Gonzales testified that he comes from a mining background and that this father and grandfather both worked in the mines. Mr. Gonzales testified that Freeport-McMoRan is a billion dollar industry and that he takes care of its industrial air conditioning system. Other Evidence 50. Mr. Gonzales indicated that he paid the civil penalty in Case No. 2008-13770944 (formerly Case No. T08-1377) after the Registrar’s employees in the Tucson office informed him in February 2012, that he could not reactivate Building Maintenance and Repair’s License No. K-39.221168-D and that he would have to “start [the licensing process] over” and satisfy all of Building Maintenance and Repair’s obligations before a new license could be issued to a different entity. 51. In March 2012, Mr. Gonzales enrolled in the Arizona Contractor License Center (“AzCLC”) in Tucson. Mr. Gonzales testified that personnel at AzCLC informed him that he would be issued a contractor’s license five weeks after he submitted a license application. 52. Mr. Mathews testified that the Registrar is not affiliated in any way with AzCLC. 53. Mr. Gonzales testified that the Registrar misplaced the original cashier’s check in the amount of $1,265.00 for the licensing fee that he sent in August 2012. As a result, Mr. Gonzales testified that he had to take out a business loan to issue a stop payment and obtain another cashier’s check in the amount of $1,265.00. 54. The Registrar’s September 27, 2012 letter in Case No. 2008- 13770944 (formerly Case No. T08-1377) was sent to BMR at 8178 East Ramsey Road in Tucson, rather than Hereford, Arizona at the zip code on BMR’s license application. Mr. Gonzales indicated that on October 11, 2012, he drove to the Registrar’s office in Phoenix and obtained the September 27, 2012 letter. 55. Mr. Gonzales testified that in November 2012, the Registrar sent BMR a letter requesting an extension of time to process its license application. 56. Mr. Gonzales testified that in January 2013, was the deadline for submitting an advertisement for the Dex Hereford Yellow Pages. Although the Registrar had not issued a license yet, Mr. Gonzales submitted the advertisement because it was necessary to generate work for a new small business. BMR’s Yellow Pages listing does not disclose its unlicensed status. 57. Mr. Gonzales submitted a photograph of his work van that was taken on a snowy day in Hereford. Mr. Gonzales testified that there was a lot of HVAC work in Hereford and that many unlicensed contractors perform contracting work in Hereford. 58. Mr. Gonzales acknowledged that the van showed BMR’s name and telephone number, but did not disclose that BMR did not have a current contractor’s license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[8] 2. BMR bears the burden of proof to establish that it meets statutory qualifications for a contractor’s license by a preponderance of the evidence.[9] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[10] 3. Mr. Gonzales did not dispute that he was convicted of a felony on January 19, 1989, that he has a long history of misdemeanor offenses, including for numerous bad checks that he wrote to suppliers, and that he was listed on Building Maintenance and Repair’s License No. K- 39.22168-D, which was disciplined for violations of A.R.S. § 32- 1154(A) in Case Nos. M08-0872 and 2008-13770944 (formerly Case No. T08- 1377). The felony conviction, extensive history of misdemeanor convictions, and past discipline provide evidence of lack of good character and reputation under A.R.S. §§ 32-1122(D)[11] and 32- 1122(E)[12] due to Mr. Gonzales’ past violations of A.R.S. § 32- 1154(A)(3), specifically A.A.C. R4-9-108,[13] A.R.S. § 32- 1154(A)(8),[14] and A.R.S. § 32-1154(A)(21).[15] Mr. Gonzales was not eligible to reinstate Building Maintenance and Repair’s License No. K- 39.221168-D under A.R.S. § 32-1161(C).[16] 4. A contractor’s license is a privilege, not a right. Even though cause may exist to deny a license application, however, an applicant may establish that he is rehabilitated and no longer poses a danger to the public. It appears that between 1989 and 2009, Mr. Gonzales may have abused alcohol or another substance and that during the past two or three years, he has made significant changes in his life, including joining Alcoholics Anonymous, joining a church, and getting married. Although Mr. Gonzales has remediated the statutory violations found in Case Nos. M08-0872 and 2008-13770944 (formerly Case No. T08-1377), Mr. Gonzales has a long criminal history and the most recent criminal offenses involved his writing seven bad checks to suppliers who provided materials for his contracting business. Evidence of rehabilitation must be commensurate with the history of misconduct. Mr. Gonzales did not testify about the specific changes that he has made in his life to avoid future acts of financial misconduct and nonpayment. Mr. Gonzales did not present the testimony of anyone who knows about his criminal history about the specific changes that he has made in his life and the support system that will avoid future financial misconduct that could damage suppliers or the public. 5. Due to the volatile nature of the construction industry, small contracting businesses frequently experience cash flow problems. “[T]he Registrar is charged with the overall responsibility of protecting the welfare of the public dealing with persons engaged in the building contracting vocations and afford the public protection against incompetent, inexperienced, unlawful and fraudulent acts of building contractors.”[17] On this record, Mr. Gonzales did not establish that he is sufficiently rehabilitated for the Registrar to grant BMR a contractor’s license without exposing the public to an unreasonable risk of financial loss. / / / / RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s order, the Registrar affirm the decision to deny BMR’s application for a contractor’s license. 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, April 29, 2013.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] According to BMR’s license application, Mr. Gonzales was born in 1966. [2] A.R.S. § 32-1154(A)(7) formerly included among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” The statute was later amended to omit the words, “wrongful or.” [3] A.R.S. § 32-1154(A)(11) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.” [4] A.R.S. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” [5] A.R.S. § 32-1154(A)(18) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[c]ontracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.” [6] A.R.S. § 32-1154(A)(13) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” A.R.S. § 32-1124(B) requires that licensed contractors include their license number “preceded by the acronym ‘ROC’” on “all written bids submitted by the licensee and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.” [7] According to the Registrar’s public website, Grasp Heating and Cooling Inc. holds License No. K-39.199788-D. [8] See A.R.S. § 32-1122. [9] See A.R.S. § 41-1092.07(G)(1); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [10] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [11] A.R.S. § 32-1122(D) provides in relevant part as follows: To obtain or renew a license under this chapter, each person shall be of good character and reputation. Lack of good character and reputation may be established by showing that a person has . . . committed any act that, if committed or done by any licensed contractor, would be grounds for suspension or revocation of a contractor's license or by showing that the person was named on a contractor's license that was suspended or revoked in another state. [12] A.R.S. § 32-1122(E) provides in relevant part as follows: To obtain a license under this chapter, a person shall not have had a license refused or revoked, within one year before the person's application, or shall not have engaged in the contracting business, nor shall the person have submitted a bid without first having been licensed within one year before the person's application, nor shall a person act as a contractor between the filing of the application and actual issuance of the license. The registrar may find any of those actions or circumstances to be excusable if there was reasonable doubt as to the need for licensure or the actions of the applicant did not result in an unremedied hardship or danger or loss to the public. A person who has been convicted of contracting without a license is not eligible to obtain a license under this chapter for one year after the date of the last conviction. [13] A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [14] A.R.S. § 32-1154(A)(8) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[c]onviction of a felony.” [15] A.R.S. § 32-1154(A)(21) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[h]aving a person named on the license who is named on any other license in this state or in another state which is under suspension or revocation unless the prior revocation was based solely on a violation of this paragraph.” [16] A.R.S. § 32-1161(C) provides as follows: After revocation of a license upon any of the grounds set forth in section 32-1154, the license shall not be renewed or reissued for one year after final determination of revocation and then only on proper showing that all loss caused by the act or omission for which the license was revoked has been fully satisfied. [17] Burrows v. Taylor, 129 Ariz. 212, 214, 630 P.2d 35, 37 (Ct. App. 1981); see also Laws 1985, Ch. 334, § 1 (“The goals and objectives of the registrar of contractors are to protect the public health, safety and welfare by licensing, bonding and regulating contractors engaged in residential construction . . . .”).

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