ALJDEC decisions subject to certification as final

2014A-5002-ROC · Registrar of Contractors · 2015-04-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 15, 2015, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by John R. Tellier, Esq., Assistant Attorney General; Respondent Jeff Salt (“Mr. Salt”) appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On or about November 17, 2014, Denise L. Saxon (“Ms. Saxon”) filed a complaint with the Registrar that Mr. Salt doing business as Salty’s Quality Painting had entered into a contract to paint her house for the price of $3,250.00 and after Ms. Saxon paid a $1,625.00 deposit, had abandoned the project. The complaint was assigned to the Registrar’s Investigator Barry Maerker for investigation. On or about December 12, 2014, Investigator Maerker issued a Cease & Desist Order, a civil citation for violating of A.R.S. § 32-1151, and a civil citation for violating A.R.S. § 32-1165, based on Mr. Salt’s activities at Ms. Saxon’s project, and assessed civil penalties in the amount of $2,500.00.[1] Mr. Salt requested a formal hearing. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on April 15, 2015. The Registrar submitted seven exhibits and presented Investigator Maerker’s testimony. Mr. Salt testified on his own behalf. Additional Hearing Evidence On or about December 5, 2014, Investigator Maerker interviewed Ms. Saxon at her home. Ms. Saxon provided the following documents to Investigator Maerker: 1. A contract with Mr. Salt dated August 29, 2014, to powerwash and paint Ms. Saxon’s house at 1205 West Remington Drive in Chandler, Arizona for the total price of $3,250.00 for labor and materials, payable $1,625.00 down as a deposit for Mr. Salt to begin the job and $1,625.00 on completion of the job.[2] 2. Ms. Saxon’s personal check to Salty’s Quality Painting dated August 30, 2014, in the amount of $1,625.00, which Mr. Salt endorsed and cashed at Ms. Saxon’s credit union on that same date.[3] 3. Mr. Salt’s business card, which did not include the disclaimer, “not a licensed contractor.”[4] Investigator Maerker reported that Ms. Saxon said that her supervisor had recommended Mr. Salt and had given Ms. Saxon Mr. Salt’s business card.[5] 4. Two photographs that Ms. Saxon had taken of Mr. Salt’s van. One showed the back of the van, which had the logo for Ivan’s Chico Painting, LLC, and the legend, “ROC# 275166, Class K-34.”[6] The second photograph showed the driver’s side panel of the van, which displayed the same logo and license number, but another legend on which the words “Ivan’s Chico” had been covered with “Salty’s Quality.”[7] Mr. Salt’s van did not include the disclaimer, “not a licensed contractor.” Ms. Saxon told Investigator Maerker that after starting the job, Mr. Salt and his employee failed to appear to appear for more than a month. Ms. Saxon stated that Mr. Salt at one time had offered to return all or some of her money, but that he had never returned any money to her. Ms. Saxon also said that she went to the Registrar’s public website and discovered that the license number on Mr. Salt’s van belonged to a company called Ivan’s Chico Painting LLC and that the license had been placed on inactive status and then cancelled. Ms. Saxon called the telephone number on Mr. Salt’s van and spoke to Cathy Heath, who identified herself as Ivan Heath’s widow. Mrs. Heath told Ms. Saxon that after her husband passed away, she sold the van to Mr. Salt with specific instructions to remove the license number.[8] Mr. Salt acknowledged that the business card that Ms. Saxon had given Investigatory Maerker was his, but stated that he had not given the card to Ms. Saxon. Mr. Salt acknowledged that he had entered into a contract to paint Ms. Saxon’s house for the price of $3,250.00 and that he had accepted a payment of $1,625.00 for the job. Mr. Salt testified that he left $618.82 in materials at Ms. Saxon’s house and that he and his employee had spent 29½ man-hours on the job. If Mr. Salt and his employee were paid $30.00 per hour, the value of the materials and labor would be $1,503.32. Mr. Salt testified that Ms. Saxon’s house was in poor condition, but that when he left the job, the house was three quarters prepped for painting. Mr. Salt said that he had left the license number on the van out of respect for Mr. Heath. Mr. Salt testified that he had bought Mr. Heath’s business and that Mr. Heath had told him to leave the license number on the van because Mr. Heath had been in business for fifteen years and the information on the truck would bring Mr. Salt business. Mr. Salt testified that he took the license number and legends off the van and that now it was plain white. Investigator Maerker confirmed that he had received photographs of the van that showed the license number and legends had been removed. Mr. Salt testified that he was or had been licensed as a contractor in Alaska and Washington. Mr. Salt stated that he wanted to obtain a license in Arizona. Mr. Salt argued that the civil penalties were excessive in light of Ms. Saxon’s refusal to let him finish the job, the value of his work and materials to Ms. Saxon, and his inability to return any money to her to pay the civil penalties. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[9] The Registrar bears the burden of proof to establish Mr. Salt’s statutory violations by a preponderance of the evidence.[10] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[11] 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.”[12] 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.

Mr. Salt did not dispute that he contracted to perform and that he and his employee performed contracting work at Ms. Saxon’s residence. A.R.S. § 32- 1121(A)(14) sets forth the so-called “handyman’s exemption” to licensure requirements and 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. . . .

Because the amount of Mr. Salt’s contract with Ms. Saxon exceeded $1,000.00, the Registrar established that Mr. Salt violated A.R.S. § 32- 1151. The Registrar established that Mr. Salt advertised the services of his company, Salty’s Quality Painting, on his business card and van without including the disclaimer, “Not a licensed contractor.” 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 the handyman 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 Registrar established that Mr. Salt 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 in violation of A.R.S. § 32-1165, in relevant part as follows: In addition to all other remedies, when it appears to the registrar, either upon complaint or otherwise, that any person, firm, partnership, corporation, association or other organization, or a combination of any of them, has engaged in or is engaging in any act of contracting, practice or transaction which constitutes a violation of this chapter, or any rule or order of the registrar, the registrar may serve upon such person, firm, partnership, corporation, association or other organization not currently licensed under this chapter, by certified mail or by personal service, a cease and desist order requiring the person, firm, partnership, corporation, association or other organization to cease and desist immediately, upon receipt of the notice, from engaging in such act, practice or transaction. In conjunction with the cease and desist order, the registrar may issue a citation for a violation. Each citation shall be in writing and shall clearly describe the violation for which the citation was issued. Each citation shall contain an order to cease and desist and an assessment of 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. . . .

Mr. Salt left Ivan’s Chico Painting, LLC’s license number on the van that he purchased, even though he knew he did not have a license, because he felt it would induce people to contract with him. By leaving the license number on the van, Mr. Salt falsely represented himself to be a licensed contractor, which is a factor in aggravation of the penalty.[13] Therefore, a civil penalty in the amount of $1,500.00 for Mr. Salt’s violation of A.R.S. § 32-1151 and a civil penalty in the amount of $1,000.00 for Mr. Salt’s violation of A.R.S. § 32-1165, for total civil penalties in the amount of $2,500.00, are appropriate. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent Jeff Salt violated A.R.S. §§ 32-1151 and 32- 1165 and affirm the assessment of civil penalties in the total amount of $2,500.00. The aggregate 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, April 23, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 7. [2] See the Registrar’s Exhibit 3. [3] See the Registrar’s Exhibit 4. [4] See the Registrar’s Exhibit 6. [5] See the Registrar’s Exhibit 1 at 2. [6] The Registrar’s Exhibit 5 at 2. [7] The Registrar’s Exhibit 5 at 1. [8] See the Registrar’s Exhibit 1 at 2-3. [9] See A.R.S. § 32-1101 et seq. [10] 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). [11] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [12] Black’s Law Dictionary at page 1220 (8th ed. 1999). [13] See A.A.C. R4-9-131(1).

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