ALJDEC decisions subject to certification as final

2014A-1936-ROC · Registrar of Contractors · 2014-11-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 6, 2014, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Michael D. Raine, Esq., Assistant Attorney General; Christopher P. Lewallen (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure The Registrar issued Cease & Desist Orders and Civil Citations and assessed civil penalties against Respondent for contracting without a license in this matter and for contracting without a license and advertising without a license in Case No. 2014-880, based on his activities in the Yuma area. Respondent requested hearings in both cases. The Registrar referred Case No. 2014-880 to the Office of Administrative Hearings (“OAH”), an independent agency, for an evidentiary hearing. An evidentiary hearing was scheduled in Case No. 2014-880 on July 11, 2014. The Registrar subsequently referred this matter to OAH for an evidentiary hearing. On August 26, 2014, the Registrar issued a Notice of Hearing setting a hearing in this matter on September 9, 2014. The Registrar mailed copies of the Notice of Hearing to Respondent at his address of record and to his attorney. Brian Brendan Tully, the Administrative Law Judge (“ALJ”) assigned to hear both matters, subsequently consolidated this matter with Case No. 2014-880 for a consolidated hearing on September 9, 2014. On September 9, 2014, Respondent and his attorney appeared for the duly noticed consolidated hearing. At Respondent’s request, due to notice issues, Judge Tully severed this matter from Case No. 2014-880, and Case No. 2014-880 proceeded to a hearing on the merits. On September 9, 2014, ALJ Tully issued an order continuing the hearing in this matter to November 6, 2014, at 8:00 a.m. The September 9, 2014 order was mailed to Respondent’s attorney. On September 29, 2014, ALJ Tully’s decision in Case No. 2014-880 was transmitted to the Registrar. ALJ Tully found that Respondent was not responsible for one of the contracts at issue, but recommended that the Registrar affirm its decision to impose total civil penalties in the amount of $132,000.00 for contracting without a license for the remaining 70 contracts and for advertising without a license.[1] On October 7, 2014, the Registrar issued an order accepting ALJ Tully’s decision in Case No. 2014-880. The Registrar’s order was mailed to Respondent at his address of record and to Respondent’s attorney. The Registrar’s decision in Case No. 2014-880 has become final. A continued hearing was held in this matter on November 6, 2014. The Registrar’s attorney and witness, Investigator Cort Bacon of the Registrar’s Yuma office, appeared for the duly noticed continued hearing. Respondent did not request to appear telephonically at the continued hearing and did not request that the hearing be continued a second time. Although the start of the duly noticed continued hearing was delayed more than fifteen minutes to allow Respondent additional travel time, Respondent did not appear, personally or through an attorney, and did not contact OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to dispute the Registrar’s evidence. Hearing Evidence Investigator Bacon received a telephone call from the building official for the City of Yuma (“City”), Randy Crist, informing him that homeowners had contacted the City because they had entered into a contract with a contractor for the installation of solar photovoltaic cells, but that no work had been performed on the contract and the contractor stated that project was being held up by the City’s delay in issuing permits. Mr. Crist informed Investigator Bacon that the City did not have any permit applications on file for the homeowners’ address. Investigator Bacon is familiar with Respondent and G Energy based on his investigation in Case No. 2014-880. Investigator Bacon testified that neither Respondent nor G Energy is a licensed contractor. On May 1, 2014, Investigator Bacon interviewed the homeowners, Edwin and Merylene Williams, at their home located at 6198 E. 47th Place, Yuma, Arizona. Mr. and Mrs. Williams stated that they had entered into a contract with G Energy. Based on his investigation in Case No. 2014-880, Investigator Bacon knew that Respondent was the owner of G Energy. Mr. and Mrs. Williams told Investigator Bacon that they had responded to G Energy’s telephone solicitation, resulting in G Energy’s sales representative meeting them at their house. Mr. and Mrs. Williams provided copies of documents that they had obtained in their dealings and transactions with G Energy. Mr. and Mrs. Williams signed the first contract that G Energy’s sales representative provided, which listed Top Choice Electric, an electrical contractor that was licensed in Arizona, as the installer. Investigator Bacon testified that he knew from his investigation in Case No. 2014-880 that the relationship between G Energy and Top Choice Electric had deteriorated. On or about March 24, 2014, Mr. and Mrs. Williams signed a contract with G Energy that showed Anatone Corporation would install a solar photovoltaic system at their house for $24,500.00, with a $7,775.00 deposit.[2] G Energy’s sales representative, Geraldine Gutierrez, signed the contract on its behalf.[3] Mr. and Mrs. Williams paid G Energy the deposit of $7,775.00 under the contract.[4] Investigator Bacon testified that Anatone Corporation was licensed as a contractor in California, but not in Arizona, and that Mr. and Ms. Williams did not tell him that they ever spoke to any representative of Anatone Corporation. Investigator Bacon testified that Mr. and Mrs. Williams told him that during their initial meeting, the G Energy’s sales representative placed a telephone call to Green Sky to arrange financing for the portion of the contract that they would need to finance. Investigator Bacon explained that Green Sky had a financing relationship with Top Choice Electric. Investigator Bacon testified that Mr. and Mrs. Williams stated that after the G Energy representative placed the call to Green Sky, she put Mr. and Mrs. Williams on the telephone. After they provided the information requested, Green Sky committed to finance the remainder of the contract price under certain terms.[5] Mr. and Mrs. Williams gave Inspector Bacon an advertisement that they had received for G Energy’s contracting services.[6] The advertisement did not include the disclaimer, “Not a licensed contractor.” On or about May 4, 2014, Mr. and Mrs. Williams’ daughter sent an e-mail to G Energy’s representative, requesting that it cancel the contract with them.[7] On or about May 14, 2014, G Energy cancelled Mr. and Mrs. Williams’ contract and refunded $7,375.00 of their deposit.[8] On or about June 25, 2014, the Registrar issued a Cease & Desist Order and Civil Citation and assessed a $2,500.00 civil penalty against Respondent for unlicensed contracting in violation of A.R.S. § 32-1151 on Mr. and Mrs. Williams’ project.[9] The Citation did not charge Respondent with advertising without a license in violation of A.R.S. § 32-1165. On June 25, 2014, Respondent’s attorney on his behalf accepted service of the Cease & Desist Order, Civil Citation, and assessment of civil penalty from the Registrar’s Investigator Alex Figueroa.[10] CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[11] The Notice of Hearing on Citation and Civil Penalty that the Registrar mailed Respondent at his address of record and to his attorney and ALJ Tully’s order continuing the hearing at Respondent’s request that OAH mailed to Respondent’s attorney were reasonable and Respondent is deemed to have received notice of the continued hearing.[12] The Registrar bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[13] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[14] A.R.S. § 32-1101(A)(3) defines “contractor” in relevant part as follows: "Contractor" is synonymous with the term "builder" and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to:

(a) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or any other structure or work in connection with the construction.

(b) Connect such structure or improvements to utility service lines and metering devices and the sewer line.

The Registrar established that when Respondent’s company, G Energy, under his authority entered into a contract to install a photovoltaic solar system on Mr. and Mrs. Williams’ house for the contract price of $24,500.00 and accepted their deposit in the amount of $7,775.00, he violated A.R.S. § 32-1151. 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) authorizes the Registrar to “give due consideration to the gravity of the violation and any history of previous violations.” As a factor in aggravation of the penalty, the Registrar established that Respondent was found to have violated A.R.S. § 32-1151 in entering into 70 separate contracts in Case No. 2014-880. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent Christopher P. Lewallen violated A.R.S. § 32- 1151 and affirm the decision to assess a civil penalty under A.R.S. § 32- 1166(A) in the 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 will be five days from the date of that certification. Done this day, November 20, 2014.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 10 at 6. [2] See the Registrar’s Exhibit 4. [3] The Registrar submitted Ms. Gutierrez’s business card as Exhibit 6. [4] See the Registrar’s Exhibit 4 at 5. [5] See the Registrar’s Exhibit 5. [6] See the Registrar’s Exhibit 7. [7] See the Registrar’s Exhibit 9. [8] See the Registrar’s Exhibit 8. [9] See the Registrar’s Exhibit 3. [10] See the Registrar’s Exhibit 2. [11] See A.R.S. § 32-1101 et seq. [12] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [13] 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). [14] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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