ALJDEC decisions subject to certification as final

2014A-2722-ROC · Registrar of Contractors · 2014-11-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 28, 2014 APPEARANCES: James Ballard appeared for James Fariss Ballard Jr. d.b.a. Skyline Roofing; Seth T. Hargraves, Esq. appeared for the Registrar of Contractors ADMINISTRATIVE LAW JUDGE: Thomas Shedden _____________________________________________________________________ FINDINGS OF FACT 1. On August 6, 2014, the Arizona Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on October 8, 2014, at the Office of Administrative Hearings in Phoenix, Arizona. 2. The Notice of Hearing shows the issue as James Fariss Ballard Jr. d.b.a. Skyline Roofing’s (“Mr. Ballard”) appeal of the ROC’s denial of his application for a contractor’s license. 3. The matter was continued and the hearing was conducted on October 28, 2014. 4. Mr. Ballard appeared and testified on his own behalf. ROC presented the testimony of its Chief of Licensing, Lawrence Mathews. 5. ROC received Mr. Ballard’s application for a C-42 Residential Roofing Contractor license on February 18, 2014. 6. In that application, Mr. Ballard disclosed that he had been the qualifying party for All Star Exteriors LLC (“All Star”), which held license number 269835. 7. Mr. Ballard was All Star’s qualifying party from the time its license was issued in December 2010 through December 6, 2011, when he filed with ROC a Notice of Disassociation. 8. On August 25, 2011, Nadine C. Jones filed with ROC a complaint alleging, among other things, that a roof installed at her house by All Star leaked. 9. In a Corrective Work Order dated September 20, 2011, ROC instructed All Star to correct by appropriate means a number of deficiencies related to its work at Ms. Jones’s home. The Corrective Work Order shows that All Star had voluntarily canceled its license as of July 13, 2011. 10. On November 4, 2011, ROC issued to All Star a “Citation and Complaint,” in which ROC alleged that All Star had violated Ariz. Rev. Stat. sections 32-1154(A)(3) (violation of a rule adopted by ROC) and (A)(23)( failure to comply with a corrective work order). 11. On March 20, 2012, ROC issued a “Decision and Order” finding that All Star had violated Ariz. Rev. Stat. section 32-1154(A) as charged in the “Citation and Complaint.” 12. As a result of its violations of Ariz. Rev. Stat. section 32- 1154(A), All Star’s license was revoked and it was ordered to pay a $500.00 civil penalty. 13. On January 16, 2013, ROC issued a “Default Decision, Order and Award” finding that Ms. Jones was entitled to receive a payment of $5,375.00 from the Residential Contractors’ Recovery Fund for damages sustained as a result of All Star’s acts or omissions. These acts or omissions occurred during the time that Mr. Ballard was All Star’s qualifying party. 14. In a letter dated June 11, 2014, ROC informed Mr. Ballard that his application had been denied and that he did not qualify for a license because: (1) he failed to establish good character because he was a person named on All Star’s license that had been revoked; (2) granting Mr. Ballard a license would be a violation of Ariz. Rev. Stat. sections 32-1154(A)(21)[1] and 32- 1161(C); and (3) granting Mr. Ballard a license would be a violation of Ariz. Rev. Stat. section 32-1139(B). 15. Mr. Mathews testified that under the applicable statutes, a person who was named on a license for which a Recovery Fund payout has been made may not obtain license unless the Recovery Fund has been repaid. 16. As of the date of the hearing in this matter, the Recovery Fund had not been repaid the $5,375.00 it paid to Ms. Jones for the damages she sustained as a result of All Star’s acts or omissions. 17. Mr. Mathews also testified that under the applicable statutes, a person who was named on a license that was subject to discipline, as was All Star’s, essentially may not obtain a license unless the underlying cause of the discipline has been addressed. 18. Mr. Ballard testified that although he was All Star’s qualifying party, he was not involved in All Star’s day-to-day operations. According to Mr. Ballard, All Star’s owner, Brian Mater, was paying Mr. Ballard to use the license Mr. Ballard had previously held. On cross examination, Mr. Ballard acknowledged that he was listed as All Star’s qualifying party only so that All Star could get its license and that he was not actually working for All Star. 19. Mr. Ballard had introduced into evidence an “Agreement for Purchase and Sale” dated November 15, 2010. That Agreement shows that Mr. Ballard sold to All Star Exteriors, Inc. 100% of Skyline Roofing, LLC, which held license 228324, and that as part of that transaction, Mr. Ballard would continue to act as Skyline Roofing, LLC’s qualifying party and that Mr. Ballard would do all things necessary to change Skyline Roofing, LLC’s name to All Star Exteriors, Inc. and to qualify on a new contractor’s license. 20. The “Agreement for Purchase and Sale” references a “Qualifying Party Agreement” between the parties, but the Qualifying Party Agreement was not presented at the hearing. 21. Mr. Ballard testified as to his opinion that under the terms of the “Agreement for Purchase and Sale” All Star was indemnifying him from any claims related to All Star’s work after the sale was complete. 22. Mr. Ballard also had introduced into evidence documents related to a civil lawsuit between Mr. Ballard and All Star’s Mr. Mater. These documents show that Mr. Mater and All Star were acknowledging that they were responsible for the work performed at Ms. Jones’s home and that Mr. Ballard had no responsibility for that work. 23. Mr. Ballard testified that Mr. Mater had agreed to repay the Recovery Fund the $5,375.00 it had paid to Ms. Jones and that Mr. Mater had paid to ROC the $500.00 civil penalty that had been assessed against All Star. 24. Mr. Mathews testified that the arrangement between All Star and Mr. Ballard raised serious concerns and had that arrangement become known to ROC, ROC would have moved to summarily suspend All Star’s license for making a material misrepresentation on its license application. Mr. Mathews also testified that this arrangement raised issues related to whether Mr. Ballard possessed the requisite good character to be named on a license. CONCLUSIONS OF LAW 1. Mr. Ballard bears the burden of persuasion to show that his application should be granted. Ariz. Rev. Stat. § 41- 1092.07(G)(1). 2. The standard of proof on all issues is that of the preponderance of the evidence. Ariz. Admin. Code § R2-19-119. 3. A preponderance of the evidence is: The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

Black’s Law Dictionary 1301 (9th ed. 2009).

4. Mr. Ballard has not shown by a preponderance of the evidence that he is a person of good character within the meaning of Ariz. Rev. Stat. section 32-1122(D). 5. The preponderance of the evidence does not show that the loss caused by the acts or omissions that led to All Star’s license being revoked has been fully satisfied. Consequently, Mr. Ballard is not eligible to hold a license. See Ariz. Rev. Stat. §§ 32-1161(C) and 32-1154(A)(20). 6. Because the Recovery Fund has not been repaid the $5,375.00 it paid to Ms. Jones for damages she sustained as a result of All Star’s acts or omissions, Mr. Ballard is not eligible to hold a license. Ariz. Rev. Stat. § 32-1139(B). 7. Mr. Ballard has failed to show by a preponderance of the evidence that he meets the qualifications required to hold a contractor’s license. Consequently, Mr. Ballard’s appeal should be dismissed. ORDER IT IS ORDERED that James Fariss Ballard Jr. d.b.a. Skyline Roofing’s appeal is dismissed.

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 forty days after the date of that certification.

Done this day, November 14, 2014.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Ariz. Rev. Stat. section 32-1154(A)(21) has subsequently been renumbered as section 32-1154(A)(20).

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

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