ALJDEC decisions subject to certification as final

2014A-3433-ROC · Registrar of Contractors · 2015-02-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 23, 2015, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Seth T. Hargraves, Esq., Assistant Attorney General; Respondent Larry Lee Reinhart (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On or about August 27, 2014, the Registrar received a complaint from Victor Murillo that on or about March 17, 2010, Respondent had contracted to remove and replace the roof on Mr. Murillo and his wife’s house at 517 W. Calle Garcia in Tucson, Arizona, for $5,000.00.[1] Mr. Murillo stated that he paid Respondent $5,000.00 in cash and that Respondent replaced the roof.

Mr. Murillo attached to his complaint a copy of the estimate that Respondent had prepared for the work that became the parties’ contract after Mr. Murillo and Respondent signed the estimate on March 17, 2010.[2] The letterhead on the contract did not state, “not a licensed contractor.” Mr. Murillo stated further that Respondent, who was his godson, orally agreed to recoat the roof every two years at no additional charge. Mr. Murillo stated that in early 2012, after he noticed pieces of paint in his yard, he made numerous unsuccessful attempts to contact Respondent to request that he perform the promised warranty work. Mr. Murillo stated that finally, he was forced to hire another contractor to repair his roof.[3] The Registrar assigned the complaint to its criminal investigator, Johnnie Rodney Hamilton, to investigate. Investigator Hamilton consulted the Registrar’s records and determined that Respondent did not possess a contractor’s license in Arizona. Investigator Hamilton testified that under the so-called “handyman exemption” set forth in A.R.S. § 32- 1121(A)(14), because the cost of the job was more than $1,000.00, a license was required to perform the job. On September 19, 2014, Investigator Hamilton met with Mr. Murillo and his wife. Investigator Hamilton testified that Mr. Murillo stated that he did not understand why Respondent had refused to perform the warranty work, since he was Mr. Murillo’s godson. Mr. and Mrs. Murillo also told Investigator Hamilton that Mr. Murillo had obtained a civil judgment in the amount of $1,078.85 against Respondent in Pima County Consolidated Justice Court Case No. CV14-014219 in their lawsuit against him for his failure to repair the roof. Investigator Hamilton prepared a report of his investigation. He noted that Respondent had been served with Cease & Desist Orders in three separate cases in 2002 and 2010 for advertising without a license.[4] On or about September 19, 2014, Investigator Hamilton on behalf of the Registrar issued a Cease & Desist Order, a Civil Citation, and imposed a civil penalty in the amount of $2,500.00 against Respondent for contracting without a license in violation of A.R.S. § 32-1151.[5] The Registrar served the document containing the Cease & Desist Order, Civil Citation, and notice of civil penalty on Respondent by registered mail at his address of record.[6] Respondent subsequently requested a hearing. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. On November 6, 2014, the Registrar issued a Notice of Hearing on Citation and Civil Penalty. The Registrar mailed the Notice of Hearing on Citation and Civil Penalty to Respondent at his address of record. 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 more than thirty minutes to allow Respondent additional travel time, he did not appear, personally or through attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence or make any argument in his own defense. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[7] The Notice of Hearing on Citation and Civil Penalty that the Registrar mailed to Respondent at his address of record was reasonable and Respondent is deemed to have received notice of the hearing.[8] The Registrar bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[9] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[10] A.R.S. § 32-1151 provides as follows: It is unlawful for any person, firm, partnership, corporation, association or other organization, or a combination of any of them, 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, firm, partnership, corporation, association or other organization as provided in this chapter, unless the person, firm, partnership, corporation, association or other organization is exempt as provided in this chapter. . . .

A.R.S. § 32-1121(A)(14) sets forth the so-called “handyman’s exception” to licensure requirements for contractors who perform work whose aggregate contract price, including labor and materials, is less than $1,000.00 if other requirements are met. A.R.S. § 32-1121(A)(14)(c) provides that “[t]his 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.” 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 . . . [who], 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:

(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.

(Emphasis added.) The Registrar established that Respondent violated A.R.S. § 32-1151 by submitting a bid to and actually performing the work to remove and replace Mr. Murillo’s roof for the contract price of $5,000.00. 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.” In light of Respondent’s history of past violations, Respondent’s failure to perform promised work, and the consequent injury to Mr. and Mrs. Murillo,[11] the Registrar established that a civil penalty in the amount of $2,500.00 is appropriate for Respondent’s proven violation of A.R.S. § 32-1151. / / / / RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent Larry Lee Reinhart 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 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, February 6, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 1 at 1. [2] See id. at 7. [3] See id. at 12. [4] See the Registrar’s Exhibit 2 at 2. [5] See the Registrar’s Exhibit 3 at 3. [6] See the Registrar’s Exhibit 3 at 5. [7] See A.R.S. § 32-1101 et seq. [8] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [9] 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). [10] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [11] See A.A.C. R4-9-131(2), (8), (10), and (11).

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

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