ALJDEC decisions subject to certification as final

2014A-4112-ROC · Registrar of Contractors · 2015-10-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 18, 2015, at 8:00 a.m. The record in the matter was held open until October 2, 2015. APPEARANCES: The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General Seth T. Hargraves. Ahmad Zarifi (hereinafter “Respondent,” “Mr. Zarifi,” or “Zarifi”) was represented by his attorney, Michael Vingelli, Esq. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

FINDINGS OF FACT Background 1. Mr. Zarifi is not a licensed contractor in the State of Arizona.[1] 2. On October 9, 2014, Registrar’s Investigator Manuel Bermudez (hereinafter “Investigator Bermudez”) on behalf of the Registrar issued a Cease & Desist Order and a Civil Citation and imposed civil penalties against Mr. Zarifi in the amounts of $1,500.00 for contracting without a license in violation of A.R.S. § 32-1151 and $1,000.00 for advertising without a license in violation of A.R.S. § 32-1165.[2] Mr. Zarifi disagreed with citation and requested a formal hearing.[3] 3. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on September 18, 2015. The Registrar presented the testimony of Investigator Bermudez and submitted eleven exhibits. Respondent presented the testimony of Mr. Zarifi and Juan Carlos Juarista and submitted two exhibits. Testimony 4. Investigator Bermudez testified that on or about June 10, 2014, the Registrar received a complaint that Mr. Zarifi had entered into a contract with the complaining party for the performance of construction work on a commercial property. The Complaint alleged that Mr. Zarifi had performed repair work on a commercial property located at 3085 East Valencia Rd., Tucson, Arizona. The Complaint further alleged that Mr. Zarifi was not a licensed contractor. The Complaint included an invoice in the sum of $13,892.00 for work performed by Mr. Zarifi at the commercial construction project.[4] 5. Investigator Bermudez said that he consulted the Registrar’s records and discovered that Mr. Zarifi did not have an active or pending commercial contractor’s license in the State of Arizona. Investigator Bermudez discovered that Mr. Zarifi had previously been a licensed Arizona contractor under Southwest Foothills Homes’ License Nos. 190450 (expired) and 111930 (expired). Mr. Zarifi had also been a licensed Arizona contractor under Architect Builder’s License Nos. 073584 (suspended) and 067365 (revoked). Mr. Bermudez also discovered that Mr. Zarifi had several other complaints filed against him.[5] 6. Investigator Bermudez contacted Mr. Zarifi on the telephone on October 2, 2014. Investigator Bermudez’s notes of his interview with Mr. Zarifi provided, in relevant part, as follows:[6] I then asked if any of the $10,000.00 went to RL Ventures. Zarifi answered “I’m not really sure but I don’t think so.” I then reiterated that was for the trailer, truck and the guys that worked for Zarifi. Zarifi said “the guys that work for me all the time that was for those things yes sir.” I then asked if the guys that work for him did the painting. Zarifi said “I did not do and the guys I give him the guys Manny I don’t remember if it was for 2 weeks or 3 weeks I don’t even know what they did. I know that they had my trailer for all that time and they went to the dump many, many, many times. They collect all the stuff, they were there and they went to the dump they also had pay the dump fee and stuff like that; at that time if they were doing a little painting or cleaning the building or something like that I really don’t know. He has like 25 or 30 acres and I didn’t know what he did.”

As our conversation continued Zarifi said “I’m not a licensed contractor you have talked to me before when someone was using my company name you told me to take it down and I did. To my knowledge if a friend comes and asks to give him my trailer or my truck or give him a couple of laborers I will do that I can tell you right now. If you consider that contracting without me having a contract or anything. If I get in trouble because of that I will do what I have to do. I am not a licensed contractor I am an individual and I can do this kind of stuff. Is that against [the law] for an individual, I mean for a person in the United States having a friend, is it against the law to go and give his equipment and laborers that work for him on his property to somebody else?

I answered if he was doing it for free it was not against the law. Zarifi then said “not for free, there is nothing for free. So you mean to tell me that I put my equipment I put diesel is that against the law?” I answered that’s not against the law at the point where you provide someone with an invoice and use a different company’s name to prevent any confusion and you acknowledge that you received a certain amount of money and there are individual lines identifying work done and amount charged to include tax. That goes beyond lending someone your vehicle. ….

Zarifi continued by saying “basically what you said is exactly what happened. I had a verbal agreement [with] him on all those things just like you said, the only thing that happened is that I didn’t want to get the money under my personal name I said maybe if he just pays RL Ventures and then there is less confusion because he was paying a lot of bills and stuff like that. Maybe I made a mistake there but aside from that everything that I told you it was a verbal agreement and he paid according to that verbal agreement….

7. Investigator Bermudez testified that License No. 264742 of R L Ventures LLC had been revoked by the Registrar on September 11, 2013. Investigator Bermudez said that Mr. Zarifi acknowledged that he received $10,000.00 for work performed at the commercial construction project at 3085 East Valencia Rd., Tucson, Arizona. Investigator Bermudez said that during his recorded interview, Mr. Zarifi agreed that he was not a licensed contractor and that he did not have authority to represent R L Ventures when Mr. Zarifi presented the invoice to the owner of the commercial construction project at 3085 East Valencia Rd., Tucson, Arizona. 8. Investigator Bermudez testified that Mr. Zarifi used R L Ventures’ name on the invoice without the knowledge or authority of R L Ventures. Investigator Bermudez said that on October 9, 2012, he issued a Cease & Desist Order and Civil Citation against Mr. Zarifi. Investigator Bermudez said that Mr. Zarifi was assessed a civil penalty in the sum of $1,500.00 for violating A.R.S. § 32-1151 (Contracting without a license) and $1,000.00 for violating A.R.S. § 32-1165 (Advertising without a license). 9. Investigator Dalesio’s testimony is found to be credible. 10. Mr. Zarifi testified that the complaint against him was filed because of a personal grudge against him. Mr. Zarifi acknowledged that he is not a licensed contractor. Mr. Zarifi acknowledged that he prepared the invoice in the sum of $13,892.00 for work performed at the commercial construction project at 3085 East Valencia Rd., Tucson, Arizona. Mr. Zarifi asserted that the agreement with the property owner was that the owner would pay Mr. Zarifi’s employees an hourly wage for their work at the commercial construction project. Mr. Zarifi acknowledged that he first paid his employees and then sought payment from the owner of the commercial property. 11. Juan Carlos Juarista (hereinafter “Mr. Juarista”) testified that he performed construction work at the commercial property at 3085 East Valencia Rd., Tucson, Arizona. Mr. Juarista testified that Mr. Zarifi paid him for his work at the construction project. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[7] The Registrar bears the burden of proof to establish Mr. Zarifi’s statutory violations by a preponderance of the evidence.[8] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[9] A preponderance of the evidence is “[t]he 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.”[10] A.R.S. § 32-1151 prohibits contracting without a license, providing in relevant part 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. Evidence of securing a permit from a governmental agency or the employment of a person on a construction project shall be accepted in any court as prima facie evidence of existence of a contract.

The preponderance of the evidence established that Mr. Zarifi engaged in unlicensed contracting in violation of A.R.S. § 32-1151. A.R.S. § 32-1121(A)(14)(a) sets forth the so-called “handyman’s exemption” to licensure requirements for contractors who perform work whose aggregate contract price, including labor and materials, is less than $1,000.00. The handyman exemption does not apply to the commercial work at issue because the invoice prepared by Mr. Zarifi was for $13,892.00 and there was no dispute that Mr. Zarifi was paid $10,000.00. A.R.S. § 32-1165 provides as follows: Except as authorized by section 32-1121, subsection A, paragraph 14, subdivision (c), it is a class 1 misdemeanor for any person to advertise that he is able to perform any service or contract for compensation subject to regulation by the registrar under the terms of this chapter unless a license under the terms of this chapter is first obtained regardless of whether his operations as a contractor are otherwise exempt.

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.” The invoice prepared by Mr. Zarifi did not disclose that Mr. Zarifi was not a licensed contractor. The preponderance of the evidence established that Mr. Zarifi violated A.R.S. § 32-1165 by advertising without a license. A.R.S. § 32-1166(A) authorizes the Registrar to assess a civil penalty against a person who has been found to have contracted without a license in violation of A.R.S. § 32-1151 or to have advertised that he is able to perform a service for which a contractor’s license is required. Mr. Zarifi used R L Ventures’ name on a written invoice without the knowledge or authority of R L Ventures. This Tribunal concludes that Respondent violated the charged provision of A.R.S. § 32-1165 by advertising without a license and that the imposition of a civil penalty in the amount of $1,000.00 is warranted. Mr. Zarifi prepared and submitted an invoice in the sum of $13,892.00 for work performed on a commercial property located at 3085 East Valencia Rd., Tucson, Arizona. Mr. Zarifi is not a licensed contractor. This Tribunal concludes that Respondent violated the charged provision of A.R.S. § 32- 1151 and that the imposition of a $1,500.00 civil penalty is warranted. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent violated A.R.S. §§ 32-1151 and 32-1165, affirm the assessment of a civil penalty in the amount of $1,500.00 for Mr. Zarifi’s unlicensed contracting in violation of A.R.S. § 32-1151, and affirm the assessment of a civil penalty in the amount of $1,000.00 for his advertising without a license in violation of A.R.S. § 32-1165. The combined total of $2,500.00 in civil penalties shall 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, October 6, 2015.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] See Exhibit 2 (Investigation Report). [2] See Exhibit 10 (Citation & Cease and Desist Order). [3]See Exhibit 11 (11/7/14 Request for Hearing). [4] See Exhibit 1 (Complaint with Attachments). [5]See Exhibit 2 (Registrar’s Investigation Report with Attachments). [6] See Exhibit 2 (Registrar’s Investigation Report with Attachments).

[7] See A.R.S. § 32-1101 et seq. [8] 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). [9] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [10] Black’s Law Dictionary at page 1220 (8th ed. 1999).

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