ALJDEC decisions subject to certification as final

2014A-1731-ROC · Registrar of Contractors · 2014-07-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 7, 2014, at 1:00 p.m. APPEARANCES: The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General Seth Hargraves, Esq. Mike Ernest Hillyer (hereinafter “Mr. Hillyer”) failed to appear. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

The Registrar established that its proposed $2,500.00 civil penalty against Mr. Hillyer was proper. Therefore, it must be recommended that this appeal be denied. FINDINGS OF FACT Background On or about May 1, 2014, the Registrar received an anonymous complaint against Mr. Hillyer regarding his unlicensed contracting activities at 2501 Stockton Hill Road, Kingman, Arizona.[1] After investigating the complaint, the Registrar issued a Cease & Desist Order to Mr. Hillyer for failing to comply with A.R.S. § 32-1165 for advertising without a license and for failing to comply with A.R.S. § 32- 1151 for contracting without a license. The Cease & Desist Order imposed a civil penalty in the amount of $1,500.00 for violation of A.R.S. § 32-1151 and a civil penalty in the amount of $1,000.00 for violation of A.R.S. § 32- 1165. Mr. Hillyer requested an administrative hearing on the civil penalties. The Registrar forwarded the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing.[2] Testimony Testimony of Registrar Investigator Martha Watson Registrar Investigator Martha Watson (hereinafter “Investigator Watson”) testified that she had been an Investigator for the Registrar for approximately fifteen months. Investigator Watson stated that she had previously cited Mr. Hillyer for unlicensed activity in February 2014. Investigator Watson testified that when she arrived at 2501 Stockton Hill Road, Kingman, Arizona, she observed Mr. Hillyer’s white service truck with the name, “All American Handyman,” on it that was parked in the rear of the building at that address. Investigator Watson testified that she asked Mr. Hillyer if he had corrected the advertisement on his truck to include the words, “not a licensed contractor.” Investigator Watson stated that Mr. Hillyer acknowledged that he had not corrected the advertisement on his vehicle. Investigator Watson testified that she observed that the advertisement on Mr. Hillyer’s truck did not contain the words, “not a licensed contractor.” Investigator Watson testified that according to the Registrar’s records, Mr. Hlllyer is not a licensed contractor. Investigator Watson stated that Mr. Hillyer’s work at 2501 Stockton Hill Road, Kingman, Arizona did not fall within the statutory “handyman” exemption because a local building permit was required for the construction work that Mr. Hillyer was performing and because Mr. Hillyer had utilized advertising that did not include the phrase, “not a licensed contractor.” Investigator Watson testified that she contacted the owner of the building at 2501 Stockton Hill Road, Kingman, Arizona and that the owner of the building informed her that he was not aware that Mr. Hillyer was performing tile work at the leased property. Investigator Watson testified that the owner of the building accompanied her to the leased premises at the rear of the building and that she observed Mr. Hillyer cutting and installing tile in the building. Investigator Watson testified that she asked Mr. Hillyer to stop work and to speak with her regarding the citation that she was preparing. Investigator Watson stated that Mr. Hillyer refused to sign the citation and walked away from her. Investigator Watson’s testimony is found to be credible. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[3] The Registrar bears the burden of proof to establish Mr. Hillyer’s statutory violations by a preponderance of the evidence.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] A.R.S. § 32-1165 provides as follows: Except as authorized by § 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. § 32-1151 provides as follows: It is unlawful for any person, firm, partnership, corporation, association or other organization, or a combination of any of them, to engage in the business of, submit a bid or respond to a request for qualification or a request for proposals for construction services as, act or offer to act in the capacity of or purport to have the capacity of a contractor without having a contractor's license in good standing in the name of the person, firm, partnership, corporation, association or other organization as provided in this chapter, unless the person, firm, partnership, corporation, association or other organization is exempt as provided in this chapter. Evidence of securing a permit from a governmental agency or the employment of a person on a construction project shall be accepted in any court as prima facie evidence of existence of a contract.

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.” [6] The Registrar established that Mr. Hillyer violated A.R.S. § 32-1165 by advertising on his truck without including the disclaimer, “not a licensed contractor.” The Registrar also established that Mr. Hillyer violated A.R.S. § 32-1151 by contracting without a license by performing work on a construction project that required a local building permit and by performing work without a contractor’s license after advertising for such work without disclosing that he was 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 Mr. Hillyer’s continuing violation of A.R.S. § 32-1151, A.R.S. § 32-1166(A) required the Registrar to “adopt rules covering the assessment of a civil penalty that give due consideration to the gravity of the violation and any history of previous violations.” Pursuant to this directive, the Registrar adopted A.A.C. R4-9-131.[7] Mr. Hillyer has previously been cited by the Registrar for unlicensed activity. This Tribunal concludes that Mr. Hillyer violated the charged provisions of A.R.S. §§ 32-1151 and 32-1165 and that the proposed civil penalties are appropriate. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Mr. Hillyer violated the charged provisions of A.R.S. §§ 32-1151 and 32-1165 and affirm the decision to assess civil penalties under A.R.S. § 32-1166(A) in the aggregate amount of $2,500.00, to be paid in certified funds to the Registrar on or before the effective date of the Registrar’s 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 shall be forty (40) days from the date of the certification.

Done this day, July 23, 2014. /s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Registrar’s Exhibit 1 (Investigative Report). [2] See Registrar’s Exhibit 3 (Response and Request for hearing). [3] See A.R.S. § 32-1101 et seq. [4] 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). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] A.R.S. § 32-1121(A)(14) provides as follows:

Any person other than a licensed contractor engaging in any work or operation on one undertaking or project by one or more contracts, for which the aggregate contract price, including labor, materials and all other items, but excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two pronged or three pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening device to the frame or foundation of any residential structure, is less than one thousand dollars. The work or operations that are exempt under this paragraph shall be of a casual or minor nature. This exemption does not apply: (a) In any case in which the performance of the work requires a local building permit. (b) In any case in which the work or construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made in contracts of amounts less than one thousand dollars, excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two pronged or three pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening device to the frame or foundation of any residential structure, for the purpose of evasion of this chapter or otherwise. (c) To 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

[7] A.A.C. R4-9-131 sets forth permissible aggravating and mitigating factors to be considered, in relevant part as follows: In assessing a civil penalty as provided for under A.R.S. § 32- 1166(A), the Registrar shall give due consideration to whether the person cited or any individual acting on that person’s behalf has committed one or more of the following acts in determining the gravity of the cited violation: 1. Falsely represented to be a licensed contractor. 2. Failed to perform any work for which money was received. 3. Executed or used any false or misleading documents for the purpose of inducing a person to enter into a contract or to pay money for work to be performed. 4. Made false or misleading statements for the purpose of inducing a person to enter into a contract or to pay money for work to be performed. 5. Failed or neglected to apply funds which were received for the purpose of obtaining or paying for services, labor, materials, or equipment. 6. Performed work that was or had the potential to become hazardous to the health, safety, or general welfare of the public. 7. Performed work that deliberately was in violation of building codes, safety laws, labor laws, workers’ compensation laws, or unemployment insurance laws. 8. Performed work that failed to meet minimum acceptable trade or industry standards or practices or was not performed in a good and workmanlike manner. 9. Has committed any other act which would otherwise be cause for disciplinary action if the person cited had been properly licensed pursuant to A.R.S. Title 32, Chapter 10. 10. Has committed two or more prior violations. 11. Performed work that has caused loss or damage to the structure, its appurtenances, or property being worked upon or has caused loss or injury to any person.

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