ALJDEC decisions subject to certification as final

2014A-2383-ROC · Registrar of Contractors · 2014-09-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 3, 2014, at 8:00 a.m. APPEARANCES: Innovative Technology Development Group LLC (hereinafter “Applicant”) appeared through its attorney, Corey B. Larson, Esq., Waterfall, Economidis, Caldwell, Hanshaw & Villamana, P.C. The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General, Seth Hargraves, Esq. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. David John Williamson (hereinafter “Mr. Williamson”) is person named on Pending License Nos. 289128, 290193, and 290194 of Applicant. Mr. Williamson is listed as a Manager and Member of Applicant.[1] 2. On or about November 15, 2013, Mr. Williamson, on behalf of Applicant, submitted an Application for a Class L-11 Electrical License (289128) to the Registrar. Mr. Williamson was listed on the application as Applicant’s qualifying party, manager and member. [2] 3. On or about November 19, 2013, Mr. Williamson, on behalf of Applicant, submitted Applications for a Class B-1 Commercial Contractor’s License (290193) and a Class C-11 Residential Electrical License (290194) to the Registrar. Mr. Williamson was listed on the applications as Applicant’s qualifying party, manager and member.[3] 4. Mr. Williamson is a person named on License No. 160015 of D J Williamson Enterprises Inc., when it was revoked.[4] 5. On or about May 14, 2014, the Registrar’s Chief of Licensing sent a letter to Applicant indicating that the Registrar was denying its license applications.[5] The letter provided, in relevant part, as follows: You are hereby notified pursuant to A.R.S. § 32-1124 that your license application is denied. We find that the applicant does not qualify for the L-11 Commercial Electrical Contractor license, C-11 Residential Contractor license or B-1 General Commercial Contractor license based on the following:

1. David John Williamson misrepresented a material fact in his application in contravention of A.R.S. § 32-1154.A.6.

2. David John Williamson has failed to establish good character and reputation in contravention of A.R.S. § 32-1122.D as he was and is a person named on D J Williamson Enterprises, Inc., License No. 160015, which had one (1) complaint that resulted in the revocation of the license.

3. The Registrar would violate the provisions of A.R.S. §§ 32- 1154.A.21 and 32-1161.C, were it to allow David John Williamson to be named as a Member on Innovative Technology Development Group, LLC’s License Nos. 289128, 290193 and 290194 because David John Williamson is a person named on the license of D J Williamson Enterprises, Inc., License No. 160015, when it was revoked.

6. Applicant requested a hearing on the Registrar’s denial. 7. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 8. An evidentiary hearing was held on September 3, 2014. Mr. Williamson testified on Applicant’s behalf. The Registrar presented the testimony of Paul Terek, Assistant Chief of Licensing. Hearing Evidence 9. License No. 160015 of D J Williamson Inc. was revoked in Case No. 2011- 103 for failure to comply with an Order of the Registrar. D J Williamson Enterprises Inc. was found to have violated the provisions of A.R.S. § 32-1154(A)(11). No documentation has been provided to the Registrar showing that the matter has been resolved.[6] 10. On Part 3 of the Personnel Information Form of the Application for Contractor’s License form, Question 22 provides as follows: Have you ever been on a contractor’s license issued by Arizona or any other State? If necessary, use additional pages to indicate all previous licenses.[7]

11. On all of the pending license applications, Mr. Williamson acknowledged that he had been listed on License Nos. 112947 and 112948 of D J Williamson Enterprises, Inc. Mr. Williamson did not disclose that he was also listed on License Nos. 106774, 106769, 196340, and 160015 of D J Williamson Enterprises, Inc.[8] 12. On Part 3 of the Personnel Information Form of the Application for Contractor’s License form, Question 23 provides as follows:[9] Have any of the licenses listed in question 22 ever been suspended, revoked or otherwise disciplined?

13. On all of the pending license applications for Innovative Technology Development Group, LLC. Mr. Williamson answered no to question 22. Mr. Williamson was listed as a member of D J Williamson Enterprises, Inc., License No. 160015, when it was revoked by the Registrar in Case No. 2011-103. BANKRUPTCY 14. D. J. Williamson Enterprises, Inc. filed for Chapter 11 Bankruptcy on October 19, 2010.[10] 15. The Registrar issued an Order of Closing Case for No. 2011-103 on April 11, 2011.[11] 16. The United States Trustee for the District of Arizona lodged a form of order dismissing the Chapter 11 Bankruptcy of D. J. Williamson Enterprises, Inc (Chapter 11 No. 4:10-bk-33540-EWH). On or about August 17, 2011 the Bankruptcy Judge issued an Order dismissing the Chapter 11 Bankruptcy of D. J. Williamson Enterprises, Inc.[12] 17. On or about April 5, 2012, the Registrar of Contractors issued an Order Reopening Complaint in Case No. 2011-103.[13] Pursuant to the terms of the Order Reopening Complaint a Citation and Complaint was issued against License No. KB-1.160015-D of D J Williamson Enterprises, Inc.[14] 18. On or about July 30, 2012, the Registrar of Contractors issued a Decision and Order in Case 2011-103. The Decision and Order provided, in relevant part, as follows: 19. License No. KB-1.160015-D of D J Williamson Enterprises, Inc., was revoked by the Registrar of Contractors on September 26, 2012. HEARING TESTIMONY Testimony of Paul Terek 20. Paul Terek (hereinafter “Mr. Terek”) testified that he is the Assistant Chief of the Licensing Department for the Registrar. Mr. Terek testified that the Licensing Department processes new license applications and license renewal applications for the Registrar. 21. Mr. Terek testified that that the Applicant’s applications for licensure were reviewed by the License Department. Mr. Terek testified that Mr. Williamson was listed as member and qualifying party on the license applications. 22. Mr. Terek testified that Mr. Williamson had previously been listed on License Nos. 112947, 112948, 106774, 106769, 196340, and 160015 of D J Williamson Enterprises, Inc. Mr. Terek stated that Applicant misrepresented a material fact in its license applications by not listing all of the contractor’s licenses that Mr. Williamson had been listed on in contravention of A.R.S. § 32-1154.A.6. Mr. Terek testified that the Applicant misrepresented a material fact in its license applications by not disclosing that Mr. Williamson was listed as a member of D J Williamson Enterprises, Inc., License No. 160015, when that license was revoked by the Registrar in Case No. 2011-103. 23. Mr. Terek testified that the previous contracting history of an Applicant gives the Registrar an idea of what it can expect if it issues a new license to individuals that were previously listed on a different contractor’s license. Mr. Terek stated that after review, the ultimate decision by the Registrar was to deny the Applicant’s Licensee Applications. 24. Mr. Terek testified that a license applicant whose personnel were previously listed on licenses issued by the Registrar, such as the Applicant, must provide the Registrar with acceptable proof that all issues that have led to previous disciplinary actions against previously disciplined contractor’s license have been fully resolved. Mr. Terek stated that License No. 160015 of D J Williamson Enterprises, Inc. was revoked in Case No. 2011-103 for its failure to comply with an Order of the Registrar. Mr. Terek testified that no documentation has been provided to the Registrar showing that the violation of A.R.S. § 32-1154(A)(11)[15] had been resolved . 25. Mr. Terek opined that the Registrar would violate the provisions of A.R.S. §§ 32-1154(A)(21) and 32-1161(C) if it allowed Mr. Williamson to be named as a Member on Innovative Technology Development Group, LLC’s pending License Nos. 289128, 290193 and 290194 because Mr. Williamson is a person named on D J Williamson Enterprises, Inc.’s License No. 160015 when it was revoked. 26. Mr. Terek’s testimony is found to be credible. Testimony of David John Williamson 27. Mr. Williamson testified that he had been in the contracting business since 1974. Mr. Williamson stated that he had previously had an exemplary record as a licensed contractor with the Registrar of Contractors. Mr. Williamson testified that D J Williamson Enterprises, Inc. experienced money problems and was unable to pay all of its debts because it was not paid for a major construction project. 28. Mr. Williamson testified that he had failed to disclose that he was listed on License Nos. 106774, 106769, 196340, and 160015 of D J Williamson Enterprises, Inc. because he had disassociated himself from the licenses. Mr. Williamson stated that License No. 160015 of D J Williamson Enterprises, Inc., was owned by his mother. 29. Mr. Williamson acknowledged that the bankruptcy petition for D J Williamson Enterprises, Inc. had been dismissed by the Bankruptcy Court. 30. Mr. Williamson testified that he answered “no” to question 22 on the license Application Forms because he had checked the public website for the Registrar of Contractors and did not see himself listed on License No. 160015. Mr. Williamson stated that he relied on the information that was provided on the public website of the Registrar of Contractors. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[16] 2. Applicant bears the burden of proof to establish that it meets statutory qualifications for a contractor’s license by a preponderance of the evidence.[17] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[18] 3. Mr. Williamson’s failed to indicate on Applicant’s License Applications that he was listed on License Nos. 106774, 106769, 196340, and 160015 of D J Williamson Enterprises, Inc., and that he was listed as a member of D J Williamson Enterprises, Inc.’s License No. 160015 when that license was revoked by the Registrar in Case No. 2011-103. This Tribunal concludes that Applicant’s failure is a misrepresentation of a material fact in violation of A.R.S. § 32- 1154(A)(5).[19] 4. Mr. Williamson was a person named on License No. 160015 of D J Williamson Enterprises Inc. when it was revoked. There was no documentation presented to establish that the Complaint that led to the revocation of License No. 160015 of D J Williamson Enterprises Inc. had been resolved. This Tribunal concludes that the applicable provisions of A.R.S. §§ 32-1154(A)(20)[20] and 32-1161(C)[21] preclude the issuance of Pending License Nos. 289128, 290193 and 290194 to Applicant. 5. A contractor’s license is a privilege, not a right. “[T]he Registrar is charged with the overall responsibility of protecting the welfare of the public dealing with persons engaged in the building contracting vocations and afford the public protection against incompetent, inexperienced, unlawful and fraudulent acts of building contractors.”[22] On this record, Applicant did not establish that it is eligible for the Registrar to grant Applicant a contractor’s license without exposing the public to an unreasonable risk of loss. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the decision to deny the application for Pending License Nos. 289128, 290193 and 290194. Done this day, September 17, 2014.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit Nos. 2, 3 and 4 (Innovative Technology Development Group LLC’s application for a L-11 Commercial Electrical License, Innovative Technology Development Group LLC’s application for a B-1 General Contractor’s License and Innovative Technology Development Group LLC’s application for a C-11 Residential Electrical Contractor’s License). [2] See Exhibit No. 2 [3] See Exhibit Nos. 3 and 4 (Innovative Technology Development Group, LLC’s Application for a B-1 General Contractor’s License and Innovative Technology Development Group, LLC’s Application for a C-11 Residential Electrical License. [4] See Exhibit 8 (DJ Williamson Enterprises, Inc.’s Application for KB.01 License No. 160015). [5] See Exhibit 1 (5/14/14 Denial Letter). [6] See Exhibit No. 10 (Decision and Order re: Case no. 2011-103). [7] See Exhibit Nos. 2, 3 and 4 (License Applications for Innovative Technology Development Group, LLC). [8] See Exhibit Nos. 5, 6, 7 and 8 (License Applications for DJ Williamson Enterprises, Inc). [9] See Exhibit Nos. 2, 3 and 4 (License Applications for Innovative Technology Development Group, LLC).

[10] See Exhibit No. 12 (Written Answer). [11] See Exhibit No. 13 (Order of Closing). [12] See Exhibit No. 14 (Case Summary for No. 4:10-bk-33540-EWH, Chapter 11 Bankruptcy Petition for D J Williamson Enterprises, Inc). [13] See Exhibit No. 15 (Order Reopening Complaint). [14] See Exhibit No. 16 (Citation and Complaint). [15] Effective July 24, 2014, the provisions of A.R.S. § 32-1154(A)(11) are now found in A.R.S. § 32-1154(A)(10). A.R.S. § 32-1154(A)(10) provides as follows:

A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: 10. Failure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee's operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

[16] See A.R.S. § 32-1122. [17] See A.R.S. § 41-1092.07(G)(1); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [18] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [19] A.R.S. § 32-1154(A)(5) provides as follows:

A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: Misrepresentation of a material fact by the applicant in obtaining a license

[20] A.R.S. § 32-1154(A)(20) provides as follows:

Having a person named on the license who is or was named on any other license in this state or in another state that is under suspension or revocation for any act or omission that occurs while the person is or was named on the license unless the prior revocation was based solely on a violation of this paragraph.

[21] A.R.S. § 32-1161(C) provides as follows:

After revocation of a license upon any of the grounds set forth in section 32-1154, the license shall not be renewed or reissued for one year after final determination of revocation and then only on proper showing that all loss caused by the act or omission for which the license was revoked has been fully satisfied.

[22] Burrows v. Taylor, 129 Ariz. 212, 214, 630 P.2d 35, 37 (Ct. App. 1981); see also Laws 1985, Ch. 334, § 1 (“The goals and objectives of the registrar of contractors are to protect the public health, safety and welfare by licensing, bonding and regulating contractors engaged in residential construction . . . .”).

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

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