ALJDEC decisions subject to certification as final

2014A-4817-ROC · Registrar of Contractors · 2015-04-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 10, 2015 APPEARANCES: The Registrar of Contractors was represented by Assistant Attorney General Seth T. Hargraves. Respondent Roberto Bahena appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ Respondent appealed a Civil Citation issued by the Registrar of Contractors (Registrar) for contracting without a license. The Civil Citation imposed aggregate civil penalties in the amount of $2500.00. Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law, and Recommend Order are made, finding a violation and recommending assessment of a $200.00 civil penalty. FINDINGS OF FACT Background Respondent is not a licensed contractor in the State of Arizona. While investigating a complaint against Respondent, the Registrar made contact with Ruth Fisher, Office Manager for Mission View Properties. When explaining the purpose for his visit and requesting confirmation of Respondent’s address, Ms. Fisher mentioned to Registrar Investigator Manuel Bermudez that Respondent had submitted a bid for air conditioning work on the mobile home that Respondent’s daughter was renting at 31 West Los Reales Road, #53, Tucson, Arizona. Ms. Fisher provided a copy of the bid and indicated that Respondent did not perform any work. The bid provided two options with total costs, including labor and materials, of $4400.00 and $4900.00. On or about November 25, 2014, Investigator Bermudez made contact with Jairo Bahena, Respondent’s son. Investigator Bermudez informed Mr. Bahena that the Registrar had received information regarding a possible violation of contracting without a license with respect with the bid provided by Ms. Fisher. Mr. Bahena confirmed that the address identified was his sister’s address. Mr. Bahena indicated he was uncertain if his sister owned or rented the residence. Investigator Rhodes testified that Arizona contracting law allows an exemption from licensure, with certain limitations, for a “handyman.”[1] Investigator Rhodes stated that Respondent’s bid did not fit within the handyman exemption because the bid was in excess of the dollar amount allowed in the handyman exemption. Investigator Rhodes also testified that Respondent had previously been found to have been contracting without a license. Investigator Bermudez determined that Respondent had violated the provisions of A.R.S. § 32-1151 (Engaging in contracting without a license). A Cease & Desist Order was issued to Respondent on or about December 10, 2014, for violating the provisions of A.R.S. § 32-1151. A total of $2500.00 in civil penalties was assessed for contracting without a license on June 27, 2014.[2] Respondent testified that he never intended to perform the work in the bid, but provided his daughter with the bid so she had an estimate to give her landlord. Respondent indicated that the form used to submit the bid specifically stated “Not a Lic. Contractor” and that people would know from the form that he was not licensed. Respondent also stated that he is authorized to perform work for other entities that have licenses. Respondent’s son, Mr. Bahena, testified that Respondent merely put the bid on the wrong form and should have used the form of one of the entities for which he was authorized to perform work. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. The Registrar bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41- 1092.07(G)(2); 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). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). Arizona contracting law prohibits a person from acting as a contractor without a license.[3] The law allows an exemption from licensure, with certain limitations, for a “handyman.” An unlicensed handyman can perform construction work, with certain exclusions, such as that the work does not require a permit, as long as the aggregate price for the job, including labor and materials, does not exceed $1000.00.[4] The Registrar can order a person who performs contracting without a license and who is not exempt from licensure to cease and desist such activity and may impose a civil penalty of between $200.00 and $2500.00 for each violation, but not more than $2500.00 per day.[5] A.R.S. § 32-1121(A)(14) provides 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, but excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two pronged or three pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening device to the frame or foundation of any residential structure, is less than one thousand dollars. The work or operations that are exempt under this paragraph shall be of a casual or minor nature. This exemption does not apply:

(a) In any case in which the performance of the work requires a local building permit.

(b) In any case in which the work or construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made in contracts of amounts less than one thousand dollars, excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two pronged or three pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening device to the frame or foundation of any residential structure, for the purpose of evasion of this chapter or otherwise.

(c) To 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. § 32-1151 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. 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.

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.” With respect to the appropriate amount of civil penalties for violations of A.R.S. § 32-1151, A.R.S. § 32-1166(A) required the Registrar to “adopt rules covering the assessment of a civil penalty that give due consideration to the gravity of the violation and any history of previous violations.” Pursuant to this directive, the Registrar adopted A.A.C. R4-9-131.[6] The evidence established a violation of Arizona contracting laws. However, none of the aggravating factors identified in A.A.C. R4-9-131 are present in this matter. Thus, the civil penalty of $2500.00 is not warranted. Based on the specific and unique undisputed circumstances in this matter, the Tribunal concludes that a civil penalty of $200.00 is warranted in this case. RECOMMENDED ORDER Based upon the foregoing, it is recommended that the Registrar affirm the finding that Respondent violated A.R.S. § 32-1151, reverse the decision to assess a civil penalty in the amount of $2500.00, and assess a civil penalty of $200.00 to be paid in certified funds to the Registrar on or before the effective date of the Registrar’s 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 shall be forty (40) days from the date of certification. Done this day, April 29, 2015.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1121(A)(14). [2] The Cease & Desist Order issued to Respondent listed a $2500.00 civil penalty for the violation of contracting without a license, but erroneously listed the total civil penalty as $25002500.00. Investigator Bermudez testified that the total was a typographical error and the total civil penalty was $2500.00. [3] A.R.S. § 32-1164(A)(2). [4] A.R.S. § 32-1121(A)(14). [5] A.R.S. § 32-1166(A). [6] A.A.C. R4-9-131 sets forth permissible aggravating factors to be considered, in relevant part as follows: In assessing a civil penalty as provided for under A.R.S. § 32- 1166(A), the Registrar shall give due consideration to whether the person cited or any individual acting on that person’s behalf has committed one or more of the following acts in determining the gravity of the cited violation: 1. Falsely represented to be a licensed contractor. 2. Failed to perform any work for which money was received. 3. Executed or used any false or misleading documents for the purpose of inducing a person to enter into a contract or to pay money for work to be performed. 4. Made false or misleading statements for the purpose of inducing a person to enter into a contract or to pay money for work to be performed. 5. Failed or neglected to apply funds which were received for the purpose of obtaining or paying for services, labor, materials, or equipment. 6. Performed work that was or had the potential to become hazardous to the health, safety, or general welfare of the public. 7. Performed work that deliberately was in violation of building codes, safety laws, labor laws, workers’ compensation laws, or unemployment insurance laws. 8. Performed work that failed to meet minimum acceptable trade or industry standards or practices or was not performed in a good and workmanlike manner. 9. Has committed any other act which would otherwise be cause for disciplinary action if the person cited had been properly licensed pursuant to A.R.S. Title 32, Chapter 10. 10. Has committed two or more prior violations. 11. Performed work that has caused loss or damage to the structure, its appurtenances, or property being worked upon or has caused loss or injury to any person.

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