ALJDEC decisions subject to certification as final

2014A-951-ROC · Registrar of Contractors · 2014-09-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 26, 2014, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General John Tellier, Esq. Capital Pacific Development Group of Arizona, an Arizona Close Corporation dba Capital Pacific Homes (hereinafter “Development”) was represented by its qualifying party, Mark Russell Sites. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law, and Recommended Order are made: FINDINGS OF FACT Background and Procedure Development is the holder of License No. B.259735-R issued by the Registrar. License B.259735-R is a general residential contractor’s license. Mark Russell Sites (hereinafter “Mr. Sites”) is listed on the license as vice-president and qualifying party for Development.[1] Mr. Sites is also listed on the suspended license of Capital Pacific Homes of Arizona Inc.’s License No. B.113321-R (hereinafter “Capital Pacific”) as qualifying party from November 5, 1999 through July 9, 2009.[2] License No.B.113321-R of Capital Pacific was revoked on September 8, 2010.[3] An award from the Arizona Residential Contractors’ Recovery Fund (hereinafter “Fund”) based on a claim by Silvia May Stokes (hereinafter “Ms. Stokes”) was paid out by the Fund in the amount of $13,857.65 on September 5, 2012, all of which was charged against the license of Capital Pacific, thereby automatically suspending such license.[4] The date of the act or omission at issue that led to the Fund payout was June 22, 2009.[5] On March 31, 2014, the Registrar of Contractors issued a Notice and Order suspending Development’s License No. B.259735-R pursuant to A.R.S. § 32- 1139(B) until the amount paid from the Fund plus interest at the rate of ten per cent a year was repaid in full.[6] Development requested an administrative hearing and on or about May 9, 2014, a Notice of Recovery Fund Eligibility/Payout Hearing (hereinafter “Notice’) was issued by the Registrar of Contractors. The Notice provided in relevant part, as follows: RESPONDENT IS HEREBY NOTIFIED that a Hearing will be held by the Office of Administrative Hearings … to determine if Respondent can show cause why his license, License no. B.259735-R, should not be suspended pursuant to A.R.S. § 32-1139(B).

Testimony of Eric Ulinger Eric Ulinger (hereinafter “Mr. Ulinger”) testified that he had been employed by the Registrar of Contractors for approximately nine years and that he had been the supervisor for the Fund for the last two years. Mr. Ulinger testified that Mr. Sites was the qualifying party for Capital Pacific throughout its operational existence. Mr. Ulinger stated that there was no record that Capital Pacific had performed any work on the Stokes residence after June 16, 2009.[7] Mr. Ulinger testified that on or about October 12, 2009, Capital Pacific filed a letter stating that it was going out of business and requesting that its contracting license be canceled. Mr. Ulinger stated that the letter provided that any further questions could be directed to Mr. Sites.[8] Mr. Ulinger testified that Capital Pacific’s contracting license was canceled as a result of the letter and that Capital Pacific could no longer operate as a licensed contractor as of October 14, 2009.[9] Mr. Ulinger testified that Ms. Stokes filed a second complaint with the Registrar of Contractors against Capital Pacific on November 6, 2009. Mr. Ulinger stated that the new complaint was treated as an addendum to Ms. Stokes’ first complaint, which was still open. Mr. Ulinger testified that the complaint led to the issuance of a Citation and Complaint against Capital Pacific by the Registrar of Contractors.[10] Mr. Ulinger stated that Capital Pacific filed an Answer to the Complaint signed by Mr. Sites on or about March 11, 2010.[11] An administrative hearing was held on June 14, 2010. On July 19, 2010, the Registrar issued an Order revoking Capital Pacific’s License No. B.11332- R.[12] Mr. Ulinger testified that Ms. Stokes then filed a claim with the Fund. Mr. Ulinger stated that Ms. Stokes’ claim was reviewed by an assigned investigator to determine what Ms. Stokes’ actual damages were.[13] Mr. Ulinger stated that a Decision and Award from the Fund was issued on August 23, 2011.[14] Mr. Ulinger testified that the Fund payout to Ms. Stokes was not actually made until September 5, 2012, because the Fund lacked sufficient funds to pay in a timely fashion. Mr. Ulinger testified that pursuant to applicable statute, a license that names any person who is or was at the time of an act or omission named on a license that was suspended due to a payment from the Fund shall also be suspended and the person is not eligible to receive a new license or retain another existing license. Mr. Ulinger testified that any license suspended due to a payout from the Fund shall not be reactivated until the amount paid from the Fund plus interest is repaid in full.[15] Mr. Ulinger testified that Mr. Sites is listed as vice-president and qualifying party for Development. Mr. Ulinger stated that Mr. Sites is also listed on the suspended license of Capital Pacific’s License No. B.113321-R as qualifying party from November 5, 1999, through July 9, 2009. Mr. Ulinger testified that License No.B.113321-R of Capital Pacific was revoked on September 8, 2010. Mr. Ulinger testified that an award from the Fund based on a claim by Ms. Stokes was paid out by the Fund in the amount of $13,857.65 on September 5, 2012, all of which was charged against the license of Capital Pacific, thereby automatically suspending such license. Mr. Ulinger stated that Mr. Sites was listed as the qualifying party for Capital Pacific throughout its operational existence. Mr. Ulinger testified that the same Mark Russell Sites is listed vice-president and qualifying party for Development. Mr. Ulinger’s testimony is found to be credible. Development presented eleven exhibits during the hearing. All of the Exhibits were duplicates of Exhibits presented by the Registrar of Contractors. No testimony was presented by Development. CONCLUSIONS OF LAW The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119.[16] 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). A.R.S. § 32-1139(B) provides as follows: If any amount is paid from the fund in settlement of a claim arising from the act, representation, transaction or conduct of a residential contractor, the license of the contractor shall be automatically suspended by operation of law until the amount paid from the fund is repaid in full, plus interest at the rate of ten per cent a year. Any person who is or was, at the time of the act or omission, named on a license that has been suspended because of a payment from the recovery fund is not eligible to receive a new license or retain another existing license that also shall be suspended by operation of law, nor shall any suspended license be reactivated, until the amount paid from the fund is repaid as provided in this subsection.

Mr. Sites is listed vice-president and qualifying party for Development. Mr. Sites was also listed on the suspended license of Capital Pacific’s License No. B.113321-R as qualifying party from November 5, 1999, through July 9, 2009. An award from the Fund based on a claim by Ms. Stokes was paid out by the Fund in the amount of $13,857.65 on September 5, 2012, all of which was charged against the license of Capital Pacific, thereby automatically suspending such license. License No.B.113321-R of Capital Pacific was revoked on September 8, 2010. In this matter Development had the burden to show cause why License No. B.259735-R of Development should not be suspended pursuant to A.R.S. § 32-1139(B). This Tribunal concludes that Development failed to meet this burden. RECOMMENDed order In view of the foregoing, it is recommended that License No. B.259735- R of Development shall be suspended until the $13,857.65 Fund payout is repaid in full, plus interest at the rate of ten percent per year. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of the certification. Done this day, September 12, 2014.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit 16 (License Application for Capital Pacific Development Group of Arizona). [2] See Exhibit 4 (11/4/99 Application, 11/8/99 Letter giving date of qualification, and 7/9/09 Notice of Disassociation). [3] See Exhibit 15 (Printout of license history for license number B.113321- R from public website for the Registrar of Contractors). [4] See Exhibit 14 (8/23/11 Decision, Order and Award and 9/5/12 payout). [5] See Exhibit 7 (Letter from Capital Pacific stated that all items on Corrective Work Order have been completed received by the Registrar of Contractors on or about 6/22/09). [6] See Exhibit 1 (3/31/14 Notice and Order Imposing § 32-1139(B) suspension). [7] See Exhibit No. 7 (Letter from Capital Pacific stated that all items on Corrective Work Order have been completed received by the Registrar of Contractors on or about 6/22/09). [8] See Exhibit 8 (10/12/09 Letter received by Registrar of Contractors on 10/14/09). [9] See Exhibit 15(Printout of license history for license number B.113321- R from public website for the Registrar of Contractors). [10] See Exhibit 10 (Citation and Complaint). [11] See Exhibit 11 (3/11/10 Answer). [12] See Exhibit 12 (Order and Administrative Law Judge Decision). [13] See Exhibit 13 (Recovery Fund Claim). [14] See Exhibit 14 (Decision, Order and Award). [15] A.R.S. § 32-1139(B) provides as follows:

If any amount is paid from the fund in settlement of a claim arising from the act, representation, transaction or conduct of a residential contractor, the license of the contractor shall be automatically suspended by operation of law until the amount paid from the fund is repaid in full, plus interest at the rate of ten per cent a year. Any person who is or was, at the time of the act or omission, named on a license that has been suspended because of a payment from the recovery fund is not eligible to receive a new license or retain another existing license that also shall be suspended by operation of law, nor shall any suspended license be reactivated, until the amount paid from the fund is repaid as provided in this subsection.

[16] A.A.C. R2-19-119 provides as follows:

A. Standard of proof. Unless otherwise provided by law, the standard of proof is a preponderance of the evidence. B. Burden of proof. Unless otherwise provided by law: 1. The party asserting a claim, right, or entitlement has the burden of proof; 2. A party asserting an affirmative defense has the burden of establishing the affirmative defense; and 3. The proponent of a motion shall establish the grounds to support the motion.

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