ALJDEC decisions subject to certification as final

2014A-1014-ROC · Registrar of Contractors · 2014-06-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 19, 2014

APPEARANCES: 5 Star All Scape Designs LLC was represented by Mark Hanson, Esq., accompanied by Qualifying Party Eric Gomez; the State of Arizona, Registrar of Contractors, was represented by Assistant Attorney General Elizabeth Campbell and ROC Chief of Licensing Lawrence Matthews.

WITNESSES: Lawrence Matthews, ROC Chief of Licensing Jennifer Crothers, Maricopa County Adult Probation Veronica Walsh, Therapist, Mountain Valley Counseling Eric Gomez, Qualifying Party

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Star All Scape Designs LLC (“Appellant”) appeals the Arizona Registrar of Contractors’ (“ROC” or “Registrar”) denial of a renewal application for License No. K-21.274481-D. The ROC based the denial upon finding that Appellant’s Qualifying Party lacks good character and reputation due to a felony conviction for which he is currently on probation. Appellant requested a hearing to show that he has been rehabilitated. This tribunal entered into the record ROC Exhibits S1, S2, S3, S5, and S6, and Appellant’s Exhibits R3, R8, R9, R10, R11, and R13. Testimony from the witnesses listed above was presented. Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommend Order finding that grounds exist to deny renewal of the license and that Appellant has not shown rehabilitation. FINDINGS OF FACT 1. Appellant is the holder of License No. K-21.274481-D. Appellant’s Qualifying Party is Eric Gomez. In August 2013, Appellant timely filed for renewal of its Class K-21 license with the ROC.[1] On February 19, 2014, the ROC issued a letter denying the renewal application for these reasons: 1. Eric Nicholas Gomez has failed to establish good character and reputation in contravention of A.R.S. § 32-1122.D.

2. Eric Nicholas Gomez was convicted of a felony in contravention of A.R.S. § 32-1154.A.8.[2]

These statements are fully supported by the evidence presented at hearing. In fact, there is no dispute that Eric Gomez has a felony conviction. 2. The evidence shows that Eric Gomez, Appellant’s Qualifying Party, was convicted of Attempted Unlawful Sexual Conduct with a Person in Custody, a felony, in Maricopa County June 29, 2012 and was sentenced to ten years of probation beginning June 29, 2012.[3] 3. Eric Gomez is still on probation at this time. 4. Appellant presented testimony from Gomez’ Probation Officer and from his therapist. They both testified that he is doing well at this time and making progress toward successful completion of probation. Eric Gomez testified that he plans to request early termination of probation when he has served five years, which will occur in 2017. 5. The evidence does not show that Eric Gomez has been rehabilitated at this time.[4] CONCLUSIONS OF LAW 1. The ROC may refuse to renew a license if a contractor has violated A.R.S. § 32-1154(A),[5] which sets grounds for suspending, revoking, or otherwise disciplining a contractor’s license. Because a refusal to renew a license is essentially disciplinary in nature, the ROC bears the burden of proof when denying renewal.[6] Further, the standard of proof at hearing is by preponderance of the evidence.[7] Therefore, the ROC bears the burden of showing, by a preponderance of the evidence, that Appellant has violated one or more of the provisions of A.R.S. § 32-1154(A) and, thus, that the ROC has grounds to refuse renewal.[8] The ROC has met that burden. 2. Eric Gomez, Appellant’s Qualifying Party, has been convicted of a felony. This is a violation of A.R.S. § 32-1154(A)(8) and is grounds for denial of renewal as it shows lack of good character and reputation. 3. Appellant asserts that Eric Gomez has re-established good character.[9] However, Eric Gomez is currently on probation for a felony. Although he argues that he has been rehabilitated, and presented evidence at the hearing to attempt to prove that, there can be no rehabilitation from a felony conviction unless and until there has been, at minimum, successful completion of all aspects of the criminal sentence, including incarceration, if any, and all terms of probation. For a person placed on probation, rehabilitation cannot be accomplished until successful completion of probation has been achieved. 4. Eric Gomez has eight years of probation left to serve. If the criminal court releases him from probation early, finding that he has successfully completed it, he may wish to then show the ROC that he has been rehabilitated at that time. However, successful completion of probation is a necessary component of successful rehabilitation and until it happens, a person cannot be said to be rehabilitated. 5. The ROC has grounds to deny renewal of Appellant’s license. Appellant has not shown that Eric Gomez is rehabilitated from his felony conviction. Without that showing, Appellant has not shown that he is a person of good character and reputation at this time. RECOMMENDED ORDER IT IS RECOMMENDED that the Registrar of Contractors deny renewal of License No. K-21.274481-D.

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 5 days from the date of that certification.

Done this day, June 6, 2014.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit S1. [2] Exhibit S5. [3] Exhibit S3. [4] This Administrative Law Judge Decision does not make specific findings about the actions taken by Eric Gomez while on probation because, as concluded below, the primary and necessary step for rehabilitation is successful completion of probation, which has not yet occurred. [5] A.R.S. § 32-1125(A). Grounds for denial of renewal are also stated in A.R.S. § 32-1122(D). [6] It is long-settled that a person who holds a license does not bear the burden of proof when an agency alleges a violation of statute or rule. As the Arizona Supreme Court has pointed out, there is a significant difference between an applicant for a license and a license holder: It seems to us that the learned trial court failed to draw a distinction between appeals by (1) an applicant for a license, and (2) a person whose license has been revoked. In the first case it would be incumbent upon the applicant to assume the burden of proof and show that he had complied with all of the requirements. . . . Whereas in the case at bar the superintendent of liquor control asserted the affirmative, i.e., that the licensee had violated certain rules. It then became incumbent upon the state, both in the hearing before the superintendent and on appeal before the superior court to present its case first and bear the burden of proof.

Vazzano v. Superior Court, 74 Ariz. 369, 371-72, 249 P.2d 837, *** (1952), reaffirmed in Garza v. Industrial Comm’n, 17 Ariz. App. 525, 530, 498 P.2d 599, *** (1972). Here, Appellant initially met the requirements for licensure and was issued a license. The ROC has now asserted, upon the occasion of renewal of the license, that a person associated with Appellant, Eric Gomez, lacks good character and reputation and that Appellant no longer meets the requirements for licensure. The Legislature has given the ROC authority to refuse to renew a license upon certain grounds. A.R.S. § 32-1125(A). If those grounds do not exist, the ROC does not have authority to deny renewal. Therefore, the ROC bears the burden of proving that Appellant engaged in conduct that would be grounds to deny renewal. [7] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [8] See Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [9] The burden of proving rehabilitation is squarely on Appellant. The ROC has legal grounds to deny renewal due to the felony conviction. It is Appellant’s burden to persuade the ROC not to exercise its discretion to rely on those grounds.

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