ALJDEC decisions subject to certification as final

2014A-3056-ROC · Registrar of Contractors · 2014-09-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 5, 2014 APPEARANCES: The Registrar of Contractors (“Registrar”) was represented by Assistant Attorney General Seth T. Hargraves. Grace Contracting Services, Inc. (“Grace”) and Faith Restoration, Inc. (“Faith”) were represented by their attorney, Thomas Moring, Esq. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Pursuant to the Citations and Notices of Hearing issued by the Registrar in Case No. 2014-3055 against Grace and in Case No. 2014-3056 against Faith, the above-captioned matters came on for a consolidated hearing before the Office of Administrative Hearings. Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Orders: FINDINGS OF FACT 1. At the hearing, the Registrar presented its case through the testimony of Everett Junior Higginbotham II and Adam Stafford, Esq., Assistant Chief Counsel at the Registrar, and through six exhibits consisting of the following: (i) Faith’s Application for License, License, and License Status;[1] (ii) Grace’s Application for License, New Name Change Request, License, and License Status;[2] (iii) Correspondence from the Maricopa County Superior Court Clerk;[3] (iv) Faith’s 2013 Online Renewal Application;[4] (v) Grace’s 2013 On-line Renewal Application;[5] and (vi) Maricopa County Superior Court Records in CR2012-149231-001.[6] 2. Grace and Faith presented their cases through the testimony of Dee Dee Higginbotham and the Declaration of Shirley McBreen.[7] Case No. 2014-3055 3. On May 6, 2009, the Registrar issued License No. K-61.254659-D, presently reclassified as CR61-254659-D, to Grace Plumbing Services, Inc., an Arizona corporation. 4. Grace Plumbing Services, Inc.’s license application lists Ms. Higginbotham as its president and Mr. Higginbotham as its secretary and qualifying party. 5. In Grace Plumbing Services, Inc.’s license application, it answered “Yes” to question 12a, “Has any person listed in question 9 or 11 been convicted of a felony?” 6. Before Grace Plumbing Services, Inc. submitted its license application, the Registrar had completed a review of the information and circumstances concerning the felony disclosure and determined that Mr. Higginbotham’s past felony history would not be grounds to deny a contractor’s license. 7. On or about February 22, 2013, Mr. Higginbotham pleaded guilty to Aggravated Assault, a Class 5 Felony, committed on September 16, 2012.[8] 8. On or about July 24, 2013, Grace Plumbing Services, Inc. electronically submitted its license renewal application using the Registrar’s online license renewal process. 9. Grace Plumbing Services, Inc.’s 2013 license renewal application answered “No” to question 2, “Has the qualifying party or a person (as defined per A.R.S. § 32-1101) named on a license been convicted of a felony not previously disclosed or been convicted of a felony since the last renewal time period?” 10. The license renewal application contained the following attestation: I hereby certify, under penalty of perjury, that I am a person (as defined per ARS 32-1101) named on this license and that I am authorized by the licensee and Arizona Law to process this renewal and that all information provided herein is true to the best of my knowledge.

11. The name of the person attesting the license renewal application was “Dee Dee Higginbotham.” 12. Grace Plumbing Services, Inc. answered “Yes” to the following declaration: “I declare, under penalty of perjury, that information provided herein is true of my own knowledge.” 13. On October 30, 2013, the Registrar approved a request to change the name of the licensee to Grace’s name. 14. On August 13, 2014, the Registrar summarily suspended Grace’s License No. CR37.208634-D. 15. On August 13, 2014, the Registrar issued a Citation and Notice of Hearing in Case No. 2014-3055 charging Grace with violating the provisions of A.R.S. §§ 32-1154(A)(5) and 32-1154(A)(7). Case No. 2014A-3056 16. On May 6, 2009, the Registrar issued License No. K-61.254659-D, presently reclassified as CR61-254659-D, to Faith, an Arizona corporation. 17. Faith’s license application lists Everett Junior Higginbotham II as its president and qualifying party. 18. In Faith’s license application, it answered “Yes” to question 12a, “Has any person listed in question 9 or 11 been convicted of a felony?” 19. On or about April 2, 2009, at the time Faith submitted its license application, Mr. Higginbotham submitted correspondence to the Registrar stating that his felony conviction had been previously disclosed in the license application for Grace Plumbing Services, Inc. 20. On or about February 22, 2013, Mr. Higginbotham pleaded guilty to Aggravated Assault, a Class 5 Felony, which is his second felony conviction. 21. On or about June 3, 2013, Faith electronically submitted its license renewal application using the Registrar’s online renewal process. Faith did not disclose Mr. Higginbotham’s 2013 felony conviction. The license renewal application contains Mr. Higginbotham’s name as the person attesting to the accuracy of the information contained in Faith’s license renewal application. 22. On August 13, 2014, the Registrar summarily suspended Faith’s License No. CR61.254659-D. 23. On August 13, 2014, the Registrar issued a Citation and Notice of Hearing in Case No. 2014-3056 charging Faith with violating the provisions of A.R.S. §§ 32-1154(A)(5) and 32-1154(A)(7). Testimony at the Hearing 24. Mr. Higginbotham testified that he gave up his ownership interest in Faith and changed Faith’s corporate records to reflect that change with the Arizona Corporation Commission. However, Mr. Higginbotham did not submit the change in ownership to the Registrar. 25. Mr. Higginbotham stated that he did not know who electronically submitted Faith’s 2013 license renewal application to the Registrar. Mr. Higginbotham contended that either Carlota Reglin or Shirley McBreen, who worked in Grace and Faith’s Accounts Payable department.[9] Neither Ms. Reglin nor Ms. McBreen is named on Faith or Grace’s license. 26. Mr. Higginbotham testified that police responded to a disturbance at Faith and Grace’s common offices in June 2014. Mr. Higginbotham was fighting with Ms. Higginbotham while at work. 27. Mr. Higginbotham testified that after he received the Citation and Notice of Hearing issued to Faith, he decided to transfer ownership of Faith to Ms. Higginbotham and Faith’s employees. Mr. Higginbotham further testified that he is willing to resign his ownership interests in both Faith and Grace to avoid layoffs. 28. Mr. Higginbotham stated that he never disclosed his felony convictions to any employees. 29. Adam Stafford, Esq., the Registrar’s Assistant Chief Counsel, testified that the Registrar’s Licensing Department was contacted by the Superior Court Clerk’s office on May 13, 2013, and advised of Mr. Higginbotham’s 2013 felony conviction. However, because Grace and Faith had filed their 2013 license renewal applications electronically and failed to disclose Mr. Higginbotham’s 2013 felony conviction in those applications, the Registrar’s renewal process approved the applications. 30. Mr. Stafford testified that the Registrar’s Legal Department became aware of Mr. Higginbotham’s 2013 felony conviction in July 2014 and recommended the summary suspensions of Faith’s and Grace’s licenses. 31. Ms. Higginbotham testified that she is owner of a 51% interest in Grace and has no ownership interest in Faith. 32. Ms. Higginbotham stated that she did not complete Grace’s 2013 license renewal application. She contended that someone whom she could not identify in Faith and Grace’s Accounts Payable department completed and submitted the application under her name. CONCLUSIONS OF LAW 1. Pursuant to A.R.S. § 41-1092.07(G)(2), the Registrar has the burden of proof in these matters. The standard of proof is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. A.R.S. § 41-1092.11(B) authorizes the Registrar to summarily suspend a license pending proceedings to impose disciplinary action against the licensee to protect the public health, safety or welfare, subject to the proceedings being “promptly instituted and determined.” 3. A.R.S. § 32-1154(B) authorizes the Registrar to impose disciplinary action upon a licensee who violates the provisions of A.R.S. § 32- 1154(A). 4. Grace’s and Faith’s license renewal applications were required to be attested by a person as defined in A.R.S. § 32-1101.[10] The evidence of record established that Mr. and Ms. Higginbotham were the only persons named on the license for Grace who were authorized to complete and submit Grace’s 2013 license renewal application. 5. Mr. Higginbotham was the only person named on the license for Faith who was authorized to complete and submit Faith’s 2013 license renewal application. 6. Neither Ms. Reglin nor Ms. McBreen were “persons” as defined by A.R.S. § 32-1101(6). Even if Mr. and Ms. Higginbotham delegated the completion and submission of Grace’s and Faith’s 2013 license renewal applications to others, Mr. and Ms. Higginbotham were responsible for the contents or omissions in the license renewal applications submitted under their names to the Registrar. Case No. 2014-3055 7. The evidence of record established that Mr. Higginbotham pleaded guilty to Aggravated Assault, a Class 5 Felony, on February 22, 2013, in violation of A.R.S. § 32-1154(A)(7). A matter in aggravation was that on June 2013, police were called to Grace and Faith’s common business offices due to a disturbance involving Mr. and Ms. Higginbotham while they were at work. 8. The evidence of record established that Grace violated the provisions of A.R.S. § 32-1154(A)(5) by failing to disclose Mr. Higginbotham’s second felony conviction in its 2013 license renewal application. Case No. 2014-3036 9. The evidence of record established that Mr. Higginbotham pleaded guilty to Aggravated Assault, a Class 5 Felony, on February 22, 2013, in violation of A.R.S. § 32-1154(A)(7). A matter in aggravation was that on June 2013, police were called to Grace and Faith’s common business offices due to a disturbance involving Mr. and Ms. Higginbotham while they were at work. 10. The evidence of record established that Faith violated the provisions of A.R.S. § 32-1154(A)(5) by failing to disclose Mr. Higginbotham’s second felony conviction in its 2013 license renewal application. RECOMMENDED ORDER Case No. 2014-3055 Based on the foregoing, it is recommended that Grace’s License No. CR37.208634-D be revoked on the effective date of the Order entered in Case No. 2014-3055. Case No. 2014-3056 Based on the foregoing, it is recommended that Faith’s License No. CR61.254659-D be revoked on the effective date of the Order entered in Case No. 2014-3056.

In the event of certifications of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order shall be forty (40) days from the date of the certifications.

Done this day, September 24, 2014.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See Exhibit 1. [2] See Exhibit 2. [3] See Exhibit 3. [4] See Exhibit 4. [5] See Exhibit 5. [6] See Exhibit 6. [7] See Exhibit 7. [8] Mr. Higginbotham pleaded guilty to aggravated assault on a police officer. [9] In the Declaration of Shirley McBreen submitted by Grace and Faith, Ms. McBreen wrote that the Grace’s and Faith’s license renewal applications “would have been prepared by Carlota Reglin, who is not longer employed in the Grace and Faith’s Accounts Payable department. Although Ms. McBreen contented that Mr. and Ms. Higginbotham were not involved with Grace’s and Faith’s renewals, Ms. McBreen did not state how she was aware who actually prepared and submitted the renewal applications. [10] A.R.S. § 32-1101(6) defines “Person” as follows:

"Person" means an applicant, an individual, a member of a limited liability company, a qualifying party, any partner of a partnership or limited liability partnership or any officer, director, qualifying party, trustee of a trust, beneficiary of a trust or owner of at least twenty-five per cent of the stock or beneficial interest of a corporation.

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