ALJDEC decisions subject to certification as final

2014A-4358-ROC · Registrar of Contractors · 2015-02-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 20, 2015, at 8:00 a.m. APPEARANCES: Applicant Solid Home Improvements LLC (“Solid Home”) appeared through Adam Villa, its qualifying party and member; the Arizona Registrar of Contractors (“the Registrar”) was represented by Seth T. Hargraves, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On or about July 18, 2014, Adam Villa on behalf of Solid Home filed an Application for Contractor’s License with the Registrar. Mr. Villa was listed on the application as Solid Home’ qualifying party and member.[1] 2. Mr. Villa answered “Yes” to the question 26 on the application, “Have you ever been convicted of a felony or a misdemeanor, or currently have a felony charge pending.”[2] Mr. Villa disclosed “dui 2010.”[3] 3. On or about September 30, 2014, the Registrar’s Chief of Licensing, Lawrence R. Mathews, sent a letter to Solid Home to notify it that the Registrar had determined to deny its license application under A.R.S. §§ 32-1122(D) and 32-1154(A)(5) based on Mr. Villa’s undisclosed July 29, 2009 conviction for two counts of Threat – Intimidation with Injury, Damage to Property, Being under the Influence of Alcohol/Drugs in Public, Failure to Obey Police Officer and Assault Apprehension, all misdemeanors, in Scottsdale City Court Case No. M-0751-CR-[number redacted]. In that case, Mr. Villa had been sentenced to serve thirty days in jail with twenty days suspended, one year of probation, and fines totaling $941.00. On or about July 12, 2010, a Summons for probation violation had been entered in Case No. M-0751-CR-[number redacted] based on Mr. Villa’s failure to pay fines.[4] 4. On or about December 24, 2014, Mr. Mathews sent Solid Home a second letter denying its license application under A.R.S. §§ 32- 1154(A)(5), 32-1122(D), and 32-1154(A)(7) based on Mr. Villa’s undisclosed convictions for five additional criminal offenses that the Registrar’s investigation had uncovered.[5] In addition to the July 29, 2009 misdemeanor convictions in Scottsdale City Court Case No. M-0751-CR-[number redacted], the Registrar alleged the following undisclosed convictions: 1. On or about March 14, 2001, Mr. Villa was convicted of Underage DUI and Underage Consumption, a Class 1 Misdemeanor, in Somerton Municipal Court Case No. M- 1442-CR-2001-00045. As a result of the conviction, Mr. Villa was ordered to pay a $416.00 fine. 2. On or about May 9, 2005, Mr. Villa was convicted of Unlawful Possession of Drug Paraphernalia, an open- ended Class 6 felony, in Santa Cruz County Superior Court Case No. CR2005-067. As a result of the conviction, Mr. Villa was placed on two years’ probation and ordered to pay probation fees and a Drug Enforcement Fee in the amount of $750.00. On or about May 8, 2007, Mr. Villa was discharged from probation. On or about May 9, 2007, the open-ended Class 6 felony was designated as a Class 1 misdemeanor. 3. On or about October 10, 2006, Mr. Villa was convicted of Open Container in Public, a misdemeanor, in Guadalupe Municipal Court Case No. M-0764-CR- [number redacted]. As a result of the conviction, Mr. Villa was ordered to pay a $95.00 fine, a court enhancement fee of $18.00, and a jail fine of $182.00. Mr. Villa was sentenced to serve one day in jail, with credit for one day served. 4. On or about October 8, 2007, Mr. Villa was convicted of Possession of Marijuana, a Class 1 misdemeanor, in Maricopa County Superior Court Case No. CR2007-163521. As a result of the conviction, Mr. Villa was sentenced to one year of probation, to a minimum of eight hours of drug education, to pay $750.00 in fines, and to pay probation service fees. On or about September 15, 2008, Mr. Villa’s probation officer noted that Mr. Villa had failed to comply with the special conditions of his probation. The probation officer opined that revocation of the probation was not appropriate because the case was “a misdemeanor Proposition 200 case” and Mr. Villa “[had] not been involved in any subsequent Superior Court action while on probation” and that “an unsuccessful discharge along with a Criminal Restitution Order for outstanding fees is being submitted, which should serve as a sufficient punitive sanction.”[6] 5. On or about November 28, 2011, Mr. Villa was convicted of Possession or Use of Marijuana, a Class 1 misdemeanor, in Maricopa County Superior Court Case No. CR2011-125095. As a result of the conviction, Mr. Villa was sentenced to eighteen months’ probation, to pay fines in the amount of $1,380.00, to pay probation fees, and to complete a total of 100 hours of community restitution. On or about May 15, 2013, Mr. Villa was found to have complied with certain conditions of his probation that he maintain employment or schooling and a stable residence, but had only completed 51 of the community restitution hours that had been ordered. The Order of Discharge from probation noted that Mr. Villa had been unemployed for a period of time, had struggled to complete all restitution hours, had submitted a letter from the Special Olympics of Tempe stated that he had completed 60 hours of community service, that the Adult Probation Department had not certified the hours. Therefore, the probation officer discharged Mr. Villa from probation but issued a Criminal Restitution Order for outstanding community restitution.[7] 5. Mr. Villa requested a hearing on the Registrar’s denial of Solid Home’s license application. 6. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 7. An evidentiary hearing was held on January 20, 2015. Mr. Villa submitted three exhibits and testified on Solid Home’s behalf. The Registrar submitted nine exhibits and presented the testimony of Mr. Mathews. Hearing Evidence Mr. Villa’s Criminal History 8. The Registrar submitted evidence to establish Mr. Villa’s March 14, 2001 conviction for Underage DUI and Underage Consumption, a Class misdemeanor, in Somerton Municipal Court Case No. M-1442-CR-2001- 00045,[8] Mr. Villa’s May 9, 2005 conviction for Unlawful Possession of Drug Paraphernalia, a Class 6 undesignated felony, in Santa Cruz County Superior Court Case No. CR2005-0067,[9] Mr. Villa’s October 10, 2006 conviction for Open Container in Public, a misdemeanor, in Guadalupe Municipal Court Case No. M-0764-CR- [number redacted],[10] Mr. Villa’s October 8, 2007 conviction for Possession of Marijuana, a Class 1 misdemeanor, in Maricopa County Superior Court Case No. CR-2007-163521,[11] Mr. Villa’s July 29, 2009 convictions for two counts of Threat – Intimidation with Injury, Damage to Property, Being under the Influence of Alcohol/Drugs in Public, Failure to Obey Police Officer and Assault Apprehension, all misdemeanors, in Scottsdale City Court Case No. M- 0751-Cr-[number redacted],[12] and Mr. Villa’s November 28, 2011 conviction for Possession or Use of Marijuana, a Class 1 misdemeanor, in Maricopa County Superior Court Case No. CR2011- 125095.[13] 9. The Registrar also submitted evidence to establish that on May 9, 2007, upon Mr. Villa’s successful completion of his sentence in Santa Cruz County Case No. CR2005-067, the Class 6 Open-Ended Felony was designated as a Class 1 Misdemeanor.[14] 10. The Registrar’s criminal background investigation did not verify the 2010 DUI that Mr. Villa disclosed on Solid Home’s license application. Other Hearing Evidence 11. Mr. Villa acknowledged that he signed the application under the following certification: I certify that I have reviewed the entire contents of this application and all statements, answers, and representations made in this application, including all supplementary statements attached hereto, are true and accurate. . . . I understand that pursuant to A.R.S. §§ 32-1154(A)(6)(20) & 32-1122(D) providing false information is cause for denial of this application and cause for discipline of ROC licenses.[15]

Mr. Villa acknowledged that his disclosure of his criminal history on Solid Home’s license application was inaccurate. 12. Mr. Mathews testified that he reviews license applications to ensure that the applicant possesses the requisite experience and education and that if the applicant is licensed, it will not threaten the health, safety, or welfare of the public. Mr. Mathews testified that question no. 26 on the application required the applicant to disclose his criminal history so that the Registrar could protect the public. 13. Mr. Mathews testified that Mr. Villa misrepresented his extensive criminal background on Solid Home’s license application by only disclosing a 2010 DUI. Mr. Mathews opined that Mr. Villa failed to disclose his other convictions because disclosure would lead the Registrar to deny the application. 14. Mr. Villa testified that he filled out Solid Home’s license application with the help of Arizona Contractors Center, whose classes he had taken to prepare for the license examination. Mr. Villa testified that someone at Arizona Contractors Center told him that he did not need to disclose all of his criminal history because the Registrar would independently discover his history the Registrar performed the criminal background investigation. Mr. Villa testified that he received bad advice when he filled out the application but that he did not mean to mislead anyone. 15. Mr. Mathews testified that the Arizona Contractors Center is not affiliated with the Registrar. The Registrar does not recommend that license applicants use commercial services to fill out license applications and applicants who use such services do so at their own risk. 16. Mr. Mathews testified that Mr. Villa’s long criminal history showed that he lacked judgment and that his failure to disclose his convictions showed that he has not been fully rehabilitated. Mr. Mathews opined that Mr. Villa has not established good character. 17. Mr. Villa testified that in the past few years, he has tried to change his outlook. He is a full-time student attending school to obtain an associate’s degree in facilities management. He is coaching adults and children with special needs for the Special Olympics, which he initially undertook as the community service required by one of his sentences of probation, but he has continued after completing the probation. He has been a member of the Church of God for five years. 18. Mr. Villa submitted three letters of reference that stated in relevant part: 1. Nellie Villa, his mother, stated that “[i]n these last seven years I have watched my son develop into a young responsible and reliable individual, who has held with great respect his view for his future.” Mrs. Villa stated that her son now considers the consequences of his actions and plans for his future. Mrs. Villa supports her son becoming a contractor.[16] 2. Pastor Carmen Ruiz of Inglesia De Dios Getsemani has known Mr. Villa for many years because he was a member of the Church of God and held leadership positions in the church. Pastor Ruiz stated that Mr. Villa has grown in his faith and that Mr. Villa is “organized, efficient, extremely competent, and has an excellent rapport with people of all ages.”[17] 3. Lupe Kramer stated as follows: I am a widow of 30 years who has struggled with receiving fair service and treatment from established businesses. This includes home, auto and appliance repairs with over inflated charges and inadequate service that @ times results in 2 or 3 call backs with additional fees for parts and service.

What a relief when [Mr. Villa] came to check ongoing A/C problem with $1100 cost, not yet resolved after previous two calls from technician.

[Mr. Villa] took his time to review parts installed and work performed on unit. He proceeded to check other sources to find precise problem and locate parts at a much cheaper price.

It was refreshing to see work ethic of this young man who used his own personal time to find the best deal for me. Not being accustomed to this kind of treatment, I was truly blessed with [Mr. Villa’s] help.[18]

19. Mr. Villa explained that Ms. Kramer is also a member of Pastor Ruiz’s congregation at the Church of God. Mr. Villa testified that after another contractor charged Ms. Kramer $1,100.00 but failed to fix her air conditioner system so that it provided sufficient heat, he cleaned the coils and replaced the filter with coil cleaner and foam. Mr. Villa testified that he also performed other maintenance work for Ms. Kramer, including unclogging a toilet. Mr. Villa testified that he only performed handyman-type work and that he did not know what Ms. Kramer meant by cheaper parts. 20. Mr. Mathews testified that performing air conditioner repair requires a contractor’s license unless it falls with the so-called “handyman’s exemption” under A.R.S. § 32-1121(A)(14), which allows such work to be performed if the aggregate cost of labor and materials is less than $1,000.00 and other conditions are met.[19] 21. Mr. Villa credibly testified that he has been working on his character for the last four or five years and that he would like to obtain a contractor’s license to start a legacy and to provide a better future for his family. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[20] 2. Solid Home bears the burden of proof to establish that it meets statutory qualifications for a contractor’s license by a preponderance of the evidence.[21] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[22] 3. A.R.S. § 32-1122(D) provides, in relevant part, as follows: To obtain or renew a license under this chapter, each person shall be of good character and reputation. Lack of good character and reputation may be established by showing that a person has engaged in contracting without a license or committed any act that, if committed or done by any licensed contractor, would be grounds for suspension or revocation of a contractor's license . . . .

A.R.S. § 32-1154(A)(7) includes among the grounds furnishing cause for the Registrar to revoke or suspend a contractor’s license “[c]onviction of a felony.” 4. Mr. Villa acknowledged that on or about May 9, 2005, he was convicted of unlawful possession of drug paraphernalia, an open-ended Class 6 felony, in Santa Cruz County Superior Court Case No. CR2005-067. The Registrar acknowledged that on or about May 9, 2007, the open-ended Class 6 felony was designated as a Class 1 misdemeanor. 5. In Arizona, once an undesignated offense is designated as a misdemeanor, a licensing agency can no longer treat the offense as a felony.[23] Because at the time Mr. Villa submitted Solid Home’s application and at the time of the hearing, his criminal history did not include a felony conviction, grounds do not exist under A.R.S. § 32-1154(A)(7) to deny Solid Home’s license application.[24] 6. The purpose of a licensing proceeding “is to maintain sound professional standards of conduct for the purpose of protecting the public and the standing of the . . . profession in the eyes of the public.’”[25] There are public interests at stake in a licensing proceeding that “are . . . not addressed by the underlying criminal proceeding.’”[26] In licensing proceedings, “‘preclusion from certain types of employment is not the kind of penalty or disability which is eliminated by expungement [or designation as a misdemeanor]. Such preclusion is intended for the protection of the public, not as further punishment . . . .’”[27] Even if Mr. Villa did not intend to mislead the Registrar, Mr. Villa knew that his response to question 26 on the application was false because it failed to disclose six misdemeanor convictions involving alcohol, marijuana, paraphernalia, and/or threats. Therefore, cause exists under A.R.S. § 32-1154(A)(5) to deny Solid Home’s license application.[28] 7. A contractor’s license is a privilege, not a right. Even though cause may exist to deny a license application, an applicant may establish that he is rehabilitated, that he has reestablished his good character, and that he no longer poses a threat to the public. Once good character is shown to be absent, however, it is not automatically regained by the mere passage of time and some positive and affirmative activities are required for a person to regain what was lost. The issue of what constitutes good character or a lack thereof is nebulous at best. Former United States Supreme Court Justice Frankfurter noted: No doubt satisfaction of the requirement of moral character involves an exercise of delicate judgment on the part of those who reach a conclusion, having heard and seen the applicant . . . , a judgment of which it may be said as it was of "many honest and sensible judgments" in a different context that it expresses "an intuition of experience which outruns analysis and sums up many unnamed and tangled impressions; impressions which may lie beneath consciousness without losing their worth." . . . [29]

Mr. Villa credibly testified that he has changed his life and wants to obtain a contractor’s license to better support his family. Mr. Villa acknowledged that he has an extensive criminal history and that his most recent conviction occurred less than four years ago. No one testified on his behalf subject to cross-examination and he did not testify about the specific changes that he has made in his life that make future criminal conduct unlikely. 8. “[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.”[30] Grounds exist under A.R.S. §§ 32-1122(D) and 32-1154(A)(5) to deny Solid Home’ Pending License No. R-62.294018- R. At this time, Mr. Villa did not establish that he is sufficiently rehabilitated for the Registrar to grant Solid Home’s application for a contractor’s license without exposing the public to an unreasonable risk of harm. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s order, the Registrar affirm the decision to deny Solid Home’s application for a contractor’s license. 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 2, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 3. [2] See id. at 2. [3] See id. [4] See the Registrar’s Exhibit 1. [5] See the Registrar’s Exhibit 2. [6] The Registrar’s Exhibit 7 at 18. [7] The Registrar’s Exhibit 9 at 19. [8] See the Registrar’s Exhibit 4. [9] See the Registrar’s Exhibit 5. [10] See the Registrar’s Exhibit 6. [11] See the Registrar’s Exhibit 7. [12] See the Registrar’s Exhibit 8. [13] See the Registrar’s Exhibit 9. [14] See the Registrar’s Exhibit 5 at 29. [15] The Registrar’s Exhibit 3 at 2. [16] See Applicant’s Exhibit A. [17] Applicant’s Exhibit C. [18] Applicant’s Exhibit B. [19] A.R.S. § 32-1121(A)(14) provides in relevant part as follows: Any person other than a licensed contractor engaging in any work or operation on one undertaking or project by one or more contracts, for which the aggregate contract price, including labor, materials and all other items . . . is less than one thousand dollars. The work or operations that are exempt under this paragraph shall be of a casual or minor nature. . . . . [20] See A.R.S. § 32-1122. [21] 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). [22] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [23] See Matter of Beren, 178 Ariz. 400, 402, 874 P.2d 320, 322 (1994) (“Beren’s offenses were designated misdemeanors before the Commission reviewed his case, and thus the Commission should have treated the offenses as misdemeanors” (citing A.R.S. § 13-702(G)). [24] A.R.S. § 32-1154(A)(5) proscribes various conduct by “[t]he holder of a license or any person listed on a license pursuant to this chapter” that may provide grounds for the revocation or suspension of a contractor’s license, including “[c]onviction of a felony.” [25] Schillerstrom v. State Board of Chiropractic Examiners, 180 Ariz. 468, 470, 885 P.2d 156, 158 (App. 1994), review denied, December 20, 1994 (quoting Kaplan v. Department of Registration and Educ., 46 Ill. App. 3d 968, 5 Ill. Dec. 303, 308, 361 N.E.2d 626, 631 (1977) (citations omitted). [26] Id. at 470-71, 885 P.2d at 158-59 (quoting Matter of Rabideau, 102 Wis. 2d 16, 26-27, 306 N.W.2d 1, 7, appeal dismissed, 454 U.S. 1025, 102 S. Ct. 559, 70 L. Ed. 2d 469 (1981) (citations omitted)). [27] Russell v. Royal Maccabees Life Ins. Co., 193 Ariz. 464, 469 ¶ 21, 974 P.2d 443, 448 (App. 1998) (quoting Adams v. County of Sacramento, 1 Cal. Rptr. 2d 138, 143-44 (App. 1991)). [28] A.R.S. § 32-1154(A)(7) proscribes various conduct by “[t]he holder of a license or any person listed on a license pursuant to this chapter” that may provide grounds for the revocation or suspension of a contractor’s license, including “[m]isrepresentation of a material fact by the applicant in obtaining a license.” [29] Schware v. Board of Bar Examiners of the State of New Mexico, 353 U.S. 232, 248, 77 S. Ct. 752, 761 (1957) (citation omitted; concurring opinion). [30] 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 . . . .”).

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