ALJDEC decisions subject to certification as final

2014A-1331-ROC · Registrar of Contractors · 2014-12-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 9, 2014, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Seth T. Hargraves, Esq., Assistant Attorney General; Kevin Poulin (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On or about April 4, 2014, the Registrar received a tip on its hotline from a concerned citizen that Respondent and his company, KP Tree and Cactus, were performing contracting activities in Tucson, even though they were not licensed.[1] The tip provided Respondent’s street address of 9909 N. Volk, Marana, Arizona 85653, and telephone number of 520-971-5922. The Registrar assigned the hotline tip to its criminal investigator, Manuel Bermudez, to investigate. Investigator Bermudez consulted the Registrar’s records and found that neither Respondent nor his company had ever applied for or been issued a contractor’s license in Arizona. Investigator Bermudez also found that in a prior case, the Registrar had issued a Cease & Desist Order against Respondent for advertising without a license. Investigator Bermudez checked the Arizona Secretary of State’s records and determined that “KP Trees” was a trade name that was registered to Respondent at the address and telephone number in the hotline tip.[2] On June 20, 2014, Investigator Bermudez found an advertisement on Craigslist that had been posted on June 11, 2014, that advertised that Kevin at KP Tree and Cactus Service could remove any tree in Tucson and provided a telephone number, which was the same telephone number provided in the hotline tip and Secretary of State’s records.[3] The Craigslist advertisement did not include the disclaimer, “not a licensed contractor.” On June 20, 2014, Investigator Bermudez conducted a telephonic ruse on Respondent by calling the number in the Craigslist advertisement, posing as a potential client, informing Respondent that Investigator Bermudez had a large tree next to his house that he wanted removed and asking if Respondent removed trees completely, including stump grinding. Investigator Bermudez explained that while a contractor’s license is not required to trim trees, stump grinding or any other activity that disturbs or interferes with the topsoil requires a landscaping license to legally perform, unless the requirements of the handyman exemption are met. Investigator Bermudez testified that in their telephone conversation on June 6, 2014, Respondent twice stated that he would grind the stump to 6” below the ground surface and would remove all traces of the tree. Respondent stated that “I’ve been doing this for 30 years and I’m handing [the business] down to my son. We do everything; the biggest tree we cut down was 48 feet around.”[4] On June 20, 2014, Investigator Bermudez on behalf of the Registrar issued a Cease & Desist Order, a Civil Citation, and imposed a civil penalty in the amount of $1,000.00 against Respondent for advertising without a license in violation of A.R.S. § 32-1165.[5] The Registrar served the document containing the Cease & Desist Order, Civil Citation, and notice of civil penalty on Respondent by registered mail at the address on the hotline tip and Secretary of State’s record. According to the United State’s Postal Service’s tracking form, the document was served on Respondent on July 14, 2014, at 10:56 a.m.[6] Respondent subsequently requested a hearing. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. On October 2, 2014, the Registrar issued a Notice of Hearing on Citation and Civil Penalty. The Registrar mailed the Notice of Hearing on Citation and Civil Penalty to Respondent at the address on N. Volk Ave. in Marana, the same address on the hotline tip, in the Secretary of State’s record, and on the Registrar’s notice of Cease & Desist Order, Civil Citation, and Civil Penalty. Respondent did not request to appear telephonically at the hearing and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed thirty minutes to allow Respondent additional travel time, Respondent did not appear, personally or through attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence or make any argument in his own defense. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[7] The Notice of Hearing on Citation and Civil Penalty that the Registrar mailed to Respondent at the address on the Secretary of State’s records and on the notice of Cease & Desist Order, Civil Citation, and Civil Penalty that Respondent had appealed was reasonable and Respondent is deemed to have received notice of the hearing.[8] The Registrar bears the burden of proof to establish Respondent’s statutory violation 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] 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 exception” 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 Respondent violated A.R.S. § 32-1165 by advertising on Craigslist without including the disclaimer, “not a licensed contractor.” 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.” In light of Respondent’s past history, a $1,000.00 civil penalty is appropriate. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent Kevin Poulin violated A.R.S. § 32-1165 and affirm the decision to assess a civil penalty under A.R.S. § 32-1166(A) in the amount of $1,000.00, 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 17, 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] See the Registrar’s Exhibit 2. [3] See the Registrar’s Exhibit 3. [4] The Registrar’s Exhibit 4 at 2 (Investigator Bermudez’s Investigative Report). [5] See the Registrar’s Exhibit 5. [6] See Exhibit 5 at 6. [7] See A.R.S. § 32-1101 et seq. [8] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [9] 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). [10] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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