ALJDEC decisions subject to certification as final

2014A-1141-ROC · Registrar of Contractors · 2014-09-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 13, 2014 APPEARANCES: The Registrar of Contractors was represented by Assistant Attorney General Seth T. Hargraves. Respondent was represented by Louis Horowitz. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. On December 6, 2007, Sunrise Mobile Home Service Inc. (Sunrise) applied to the Registrar of Contractors (Registrar) for a KB-02 Contractors License. On the application, Joshua Christopher Wendt (Mr. Wendt) was listed as “Partner, Sec.” That application was approved and Sunrise was issued License Number KB-2.240657-D. Exhibit at 1. 2. On December 30, 2009, Sunrise filed a renewal application with the Registrar. On the renewal application, Mr. Wendt was listed as the Secretary. Exhibit 3 at 6. 3. On June 20, 2011, the Registrar received a complaint against Sunrise. Exhibit 4 at 1. 4. On October 25, 2011, the Registrar issued a Citation and Complaint to Sunrise in Case No. 2011-3551. The Citation and Complaint alleged violations of A.R.S. § 32-1154(A)(2), (3), and (23) with respect to a project at the complainant’s home. Exhibit 4 at 27-29. 5. On November 8, 2011, Sunrise filed a renewal application with the Registrar. Mr. Wendt was not listed as an officer. Exhibit 3 at 9. 6. On November 18, 2011, Wendt Contracting Inc. dba W5 Construction (W5 Construction) applied to the Registrar for a KB-02 Contractors License. On the application, Mr. Wendt was listed as the Qualifying Party and Owner. Exhibit 2 at 1. 7. On December 19, 2011, Mr. Wendt filed a letter with the Registrar that read as follows: I recently received a letter from Janna Yaw in regards to proof for cases 2011-3551 and 2011-6281. ROC records were not correct due to Sunrise not notifying the ROC when Sunrise took Josh Wendt off as a corporate officer. Sunrise took Josh Wendt off as a corporate officer on June 16th, 2009. Since Josh Wendt was legally not a corporate officer at the time the work was performed in regards to the two complaints, I believe Josh Wendt should not be held responsible.

Exhibit 3 at 11. The letter also included documentation from the Arizona Corporation Commission showing that Mr. Wendt was not listed as an officer of Sunrise on the May 2010 annual filing. Exhibit 3 at 12-14. 8. On December 30, 2011, W5 Construction’s application was approved and W5 Construction was issued License Number KB-2.275921-D. Exhibit 2 at 5. 9. On January 30, 2012, a hearing on the complaint in Case No. 2011-3551 was held. Following the hearing, the Administrative Law Judge determined Sunrise did violate A.R.S. § 32-1154(A)(3) and (23). On March 1, 2012, the Registrar adopted the Administrative Law Judge’s Recommended Order with minor modifications. Exhibit 4 at 25-26. 10. On September 25, 2012, the Registrar issued a Decision, Order, and Award in Case No. 2011-3551 indicating that the complainant in that case should be issued a payment from the Residential Contractors’ Recovery Fund (Fund) in the amount of $11,207.14 based on the damages sustained as a result of Sunrise’s acts or omissions. Exhibit 5 at 9- 10. 11. On May 5, 2014, the Registrar issued a Notice and Order Imposing § 32- 1139(B) Suspension(s) to W5 Construction indicating that the date of the act or omission that led to the Fund award against Sunrise was on September 4, 2010, and that Mr. Wendt appeared on the license of Sunrise on the date of the acts or omissions that led to the Fund payout. As a result, the Registrar indicated it was required to suspend W5 Construction’s license pursuant to A.R.S. § 32-1139(B) until the amount paid from the Fund in Case No. 2011-3551 was repaid to the Registrar. Exhibit 1. 12. Mr. Wendt testified that he was removed as an officer with Sunrise in June 2010 and that any business conducted by Sunrise after that date could not be attributable to him. Mr. Wendt acknowledged that the Registrar was not notified of the change until December 2011, but indicated that because the Arizona Corporation Commission was aware of the change, the Registrar should have accepted the Arizona Corporation Commission’s documentation to make the change retroactive to that date. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32- 1122. 2. The Registrar bears the burden of proof by a preponderance of the evidence to establish that cause exists to discipline Respondent’s licenses. 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). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. A.R.S. § 32-1139(B) provides as follows: If any amount is paid from the fund in settlement of a claim arising from the act, representation, transaction or conduct of a residential contractor, the license of the contractor shall be automatically suspended by operation of law until the amount paid from the fund is repaid in full, plus interest at the rate of ten per cent a year. Any person who is or was, at the time of the act or omission, named on a license that has been suspended because of a payment from the recovery fund is not eligible to receive a new license or retain another existing license that also shall be suspended by operation of law, nor shall any suspended license be reactivated, until the amount paid from the fund is repaid as provided in this subsection.

4. The undisputed evidence established that Mr. Wendt was named on the Sunrise license as of September 4, 2010, the date of the act or omission that led to the payment from the Fund. The hearing record demonstrates that Mr. Wendt was not removed from the Sunrise license in the Registrar’s records until December 2011. 5. Therefore, the Registrar established that W5 Construction’s license should be suspended. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar of Contractors’ Order in this matter, the Registrar of Contractors’ Notice and Order Imposing § 32-1139(B) Suspension(s) in Case No. 2014-1141 be affirmed. 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, September 2, 2014.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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