ALJDEC decisions subject to certification as final

2014A-1918-ROC · Registrar of Contractors · 2015-04-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 17, 2015, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Michael D. Raine, Esq., Assistant Attorney General; William Prather (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On or about May 14, 2014, the Registrar’s Investigator Joseph L. Shikany received an anonymous complaint that Respondent was advertising and contracting by performing staining on a commercial real estate office in Heber-Overgaard without a license. Respondent’s advertisement in the Heber- Overgaard newspaper was attached to the anonymous complaint and did not include the disclaimer, “Not a licensed contractor.” Because the construction project that Respondent was allegedly working on was in Heber-Overgaard, several hours from Investigator Shikany’s office in Flagstaff, he asked the Registrar’s Investigator Tom Sandoval of the Registrar’s Show Low office to go by the jobsite address. On May 20, 2014, Investigator Sandoval called to say that he had driven by the jobsite address but that he had not seen anyone performing staining work. On September 22, 2014, Investigator Shikany called the owner of the property at the jobsite address, Terri Bonadofski, and she informed him that she had hired Respondent to stain her business premises because he was the low bidder and that she had paid Respondent $3,450.00 for the job. Ms. Bonadofski refused to provide a copy of her contract with Respondent to Investigator Shikany or to help with the prosecution of the complaint against Respondent. Investigator Shikany ran Respondent’s name through the Registrar’s database and discovered that in 2013, the Registrar had previously issued a citation for Respondent for unlicensed contracting. Investigator Shikany also obtained Respondent’s Arizona driver’s license. On or about September 23, 2014, Investigator Shikany called Respondent at the telephone number on the advertisement, which was the same number as in the previous investigation. Respondent did not dispute that he had placed the advertisement in the Heber-Overgaard newspaper. After Respondent claimed to have been working under the so-called “handyman exemption,” Investigator Shikany informed him that he had spoken to Ms. Bonadofski and knew that the cost for Respondent to stain the commercial real estate office in Heber-Overgaard was more than $1,000.00. On or about November 22, 2014, Investigator Shikany on behalf of the Registrar issued a Cease & Desist Order, Civil Citation for Respondent’s violations of A.R.S. §§ 32-1151 and 32-1165, and assessment of civil penalties in the amount of $1,500.00 for the unlicensed contracting in violation of A.R.S. § 32-1151 and $1,000.00 for the unlicensed advertising in violation of A.R.S. § 32-1165. The Cease & Desist Order, Civil Citation, and assessment of civil penalties were served on Respondent by registered mail at the address on his driver’s license, 1861 Tenney Lane, Heber, AZ 85260-6306. On or about December 1, 2014, the Registrar received Respondent’s request for hearing. The address on Respondent’s request for hearing was P.O. Box 341, Heber, AZ 85928. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. On or about January 23, 2015, the Registrar issued a Notice of Hearing on Citation and Civil Penalty, setting a hearing at the OAH on March 17, 2015, at 8:00 a.m. The Registrar sent copies of the Notice of Hearing on Citation and Civil Penalty to Respondent at 1861 Tenney Lane, Heber, AZ 85260-6306 and at P.O. Box 341, Heber, AZ 85928. On or about January 28, 2015, at the Registrar’s attorney’s request, the Administrative Law Judge assigned to conduct the hearing at OAH issued an order allowing Investigator Shikany and Respondent to appear for the hearing via videoconferencing from the Registrar’s Flagstaff office. A hearing was held on March 17, 2015. The Registrar submitted three exhibits and presented Investigator Shikany’s testimony. 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 seventeen minutes to allow Respondent additional travel time, he did not appear, personally or through an attorney, at the OAH’s office on Phoenix or at the Registrar’s office in Flagstaff. Consequently, Respondent did not present any evidence to defend himself. Investigator Shikany testified to establish foundation for the Registrar’s exhibits and to establish the facts set forth above. Investigator Shikany explained that the Registrar has adopted a progressive policy for the assessment of civil penalties under which no penalty is assessed for a person’s first violation of A.R.S. §§ 32-1151 or 32-1165, but that for a second violation, the Registrar assesses a $1,500.00 civil penalty for unlicensed contracting and a $1,000.00 penalty for unlicensed advertising. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] The Notice of Hearing on Citation and Civil Penalty that the Registrar mailed to Respondent at the addresses on his driver’s license and request for hearing was reasonable and Respondent is deemed to have received notice of the hearing.[2] The Registrar bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] A.R.S. § 32-1151 prohibits contracting without a license, providing in relevant part as follows: It is unlawful for any person . . . 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 . . . as provided in this chapter, unless the person . . . is exempt as provided in this chapter. . . .

A.R.S. § 32-1121(A)(14) sets forth the so-called “handyman’s exemption” to licensure requirements and provides that certain persons are not required to be licensed, in relevant part 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 . . . is less than one thousand dollars. The work or operations that are exempt under this paragraph shall be of a casual or minor nature.

The Registrar established that Respondent engaged in unlicensed contracting when he stained the commercial real estate office in Heber-Overgaard for a contract price of $3,450.00. Therefore, the Registrar established that Respondent violated A.R.S. § 32-1151. The Registrar established that Respondent advertised his ability to perform staining in the Heber-Overgaard paper without including the disclaimer, “Not a licensed contractor.” 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)(c) provides that the handyman 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 without a license. A.R.S. § 32-1166(A) authorizes the Registrar to assess a civil penalty against any person who has been found to have contracted without a license in violation of A.R.S. § 32-1151 or to have advertised that he is able to perform a service for which a contractor’s license is required in violation of A.R.S. § 32-1165, in relevant part as follows: In addition to all other remedies, when it appears to the registrar, either upon complaint or otherwise, that any person, firm, partnership, corporation, association or other organization, or a combination of any of them, has engaged in or is engaging in any act of contracting, practice or transaction which constitutes a violation of this chapter, or any rule or order of the registrar, the registrar may serve upon such person, firm, partnership, corporation, association or other organization not currently licensed under this chapter, by certified mail or by personal service, a cease and desist order requiring the person, firm, partnership, corporation, association or other organization to cease and desist immediately, upon receipt of the notice, from engaging in such act, practice or transaction. In conjunction with the cease and desist order, the registrar may issue a citation for a violation. Each citation shall be in writing and shall clearly describe the violation for which the citation was issued. Each citation shall contain an order to cease and desist and an assessment of 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. . . .

The Registrar established that Respondent was cited in 2013 for unlicensed contracting activities. Therefore, civil penalties in the amounts of $1,500.00 for Respondent’s violation of A.R.S. § 32-1151 and $1,000.00 for Respondent’s violation of A.R.S. § 32-1165 are appropriate, for total aggregate civil penalties in the amount of $2,500.00. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent William Prather violated A.R.S. §§ 32-1151 and 32-1165 and affirm the assessment of civil penalties in the total amount of $2,500.00. The aggregate total of $2,500.00 in civil penalties shall 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, April 3, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1101 et seq. [2] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [3] 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). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

-----------------------

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