ALJDEC decisions subject to certification as final

2014A-1785-ROC · Registrar of Contractors · 2014-12-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 19, 2014, at 8:00 a.m. APPEARANCES: Andrei Lele (hereinafter “Respondent” or “Mr. Lele”) appeared on his own behalf. The Arizona Registrar of Contractors was represented by Assistant Attorney General Seth T. Hargraves, Esq. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Mr. Lele appealed a Civil Citation issued by the Registrar for advertising without a license. The Civil Citation imposed a civil penalty in the amount of $1,000.00. Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law, and Recommend Order are made, finding a violation and recommending imposition of a civil penalty in the amount of $1,000.00. FINDINGS OF FACT Background 1. Mr. Lele is not a licensed contractor in the State of Arizona. 2. On or about May 2, 2014, the Registrar received a telephone complaint against Mr. Lele, alleging that he was advertising his services on the internet and not including the words “not a licensed contractor.” 3. Pursuant to the filing of the telephone complaint, an assigned Registrar Investigator, Barry Maerker (hereinafter “Investigator Maerker”), initiated an investigation of the complaint. Investigator Maerker checked the Registrar’s computer database and discovered that Mr. Lele had previously been a licensed Arizona contractor under License No. 247554 issued to Mr. Cabinet LLC but that the license had expired on September 1, 2013.[1] 4. Investigator Maerker discovered that Mr. Lele had advertised on Craigslist for construction work without including the words “not a licensed contractor” in the Craigslist advertisement.[2] 5. Investigator Maerker concluded his initial investigation and determined that Mr. Lele had violated the provisions of A.R.S. § 32- 1165 (advertising without a license). A Cease & Desist Order was issued to Mr. Lele on August 27, 2014, for violating A.R.S. § 32-1165. A Civil Penalty of $1,000.00 was assessed in the August 27, 2014 Cease & Desist Order.[3] 6. On or about September 12, 2014, Mr. Lele filed a request for an administrative hearing.[4] Testimony of Registrar Investigator Barry Maerker 4. Investigator Maerker testified that he is a Criminal Investigator with the Registrar of Contractors. Investigator Maerker stated that he normally investigates complaints for unlicensed contracting and complaints for violations of A.R.S. § 32-1165 (advertising without a license). 5. Investigator Maerker testified that he prepared the Official Departmental Report.[5] Investigator Maerker stated that the Official Departmental Report was a standard report for this type of investigation. 6. Investigator Maerker reviewed and summarized the Official Departmental Report. Investigator Maerker testified that Mr. Lele is not a licensed contractor in the State of Arizona. Investigator Maerker stated that Mr. Lele was not in compliance with Arizona contracting law. 7. Investigator Maerker testified that Arizona contracting law allows an exemption from licensure, with certain limitations, for a “handyman.”[6] Investigator Maerker stated that the words, “not a licensed contractor,” must be contained in any advertisement by an unlicensed contractor. 8. Investigator Maerker testified that he had spoken with Mr. Lele and explained the handyman exemption to him. Investigator Maerker stated that Mr. Lele had four (4) prior complaints for advertising without a license. Investigator Maerker testified that after the Citation and Complaint in this matter was issued, he found that Mr. Lele had another advertisement on Angie’s List for construction work that did not contain the words “not a license contractor.” 9. Investigator Maerker’s testimony is found to be credible. Testimony of Andrei Lele 10. Mr. Lele testified that he was from Europe. Mr. Lele stated that he learned how to build cabinetry after he arrived in this country. 11. Mr. Lele testified that he had been ill and that during his illness; someone else had placed the advertisements on Craigslist and Angie’s List. Mr. Lele stated that several operations had been performed on one of his eyes. Mr. Lele said that during his convalescence, the individual who was operating his business for him tried to wrongfully take the business from him. Mr. Lele testified that business had been very slow for him and that if he could be provided with sixty (60) days, he could earn enough money to pay the $1,000.00 Civil Penalty and renew the contractor’s license for Mr. Cabinet LLC. CONCLUSIONS OF LAW The Registrar bears the burden of proof to establish Mr. Lele’s violation of A.R.S. § 32-1165 by a preponderance of the evidence. Arizona contracting law prohibits a person from acting as a contractor without a license.[7] The law allows an exemption from licensure, with certain limitations, for a “handyman.” An unlicensed handyman can perform construction work, with certain exclusions, such as that the work does not require a permit, as long as the aggregate price for the job does not exceed $1,000.00.[8] The Registrar can order a person who performs contracting without a license and who is not exempt from licensure to cease and desist such activity and may impose a civil penalty of at least $200.00 and up to $2,500.00 for each violation, but not more than $2,500.00 per day.[9] 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

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,

The Registrar established that Mr. Lele violated A.R.S. § 32-1165 by advertising on the internet 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 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.[10] A factor in aggravation of the penalty is that the Mr. Lele has had four (4) prior complaints filed against him for advertising without a license and Investigator Maerker found an additional advertisement on Angie’s List after the Citation and Complaint had been issued. The Registrar established a violation of Arizona contracting law. Thus, a civil penalty is warranted. The evidence established that Mr. Lele violated the charged provisions of A.R.S. § 32-1165 (advertising without a license) and that Mr. Lele has had four prior complaints for advertising without a license. This Tribunal concludes that a civil penalty in the amount of $1,000.00 is warranted in this case. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Mr. Lele violated A.R.S. § 32-1165 and affirm the decision to assess a total 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 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 will be 5 days from the date of that certification. Done this day, December 23, 2014.

/s/ M. Douglas Administrative Law Judge Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit 4 (Licensing screen for Mr. Cabinet LLC). [2] See Exhibit 3 (Investigative Report). [3] See Exhibit 5 (8/27/14 Violation and Cease & Desist Order). [4] See Exhibit 6 ((9/12/14 Request for Administrative Hearing). [5] See Exhibit 3 (Investigative Report). [6] See A.R.S. § 32-1121(A)(14). [7] A.R.S. § 32-1164(A)(2). [8] A.R.S. § 32-1121(A)(14). [9] A.R.S. § 32-1166(A). [10] 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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