ALJDEC decisions subject to certification as final

2015A-1041-ROC · Registrar of Contractors · 2015-06-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 5, 2015, at 8:00 a.m. APPEARANCES: Francis Clyde Milam, Jr. DBA: Phoenix Pool Equipment Services (“Applicant”) appeared on his own behalf; 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 December 22, 2014, Applicant submitted an Application for Contractor’s License to the Registrar. The business and mailing address that Applicant provided on the application was 2531 E. Lupine Ave., Phoenix, AZ 85028.[1] 2. On the application, Applicant disclosed that he had been listed on cancelled License No. ROC067451 previously issued to Tucson Pools and answered “yes” to the question, “Have any of the licenses listed . . . ever been suspended, revoked or otherwise disciplined,” explaining that the cause of the discipline was “[p]ost-cancellation ROC Activity.”[2] 3. On or about February 20, 2015, the Registrar issued a Notice of License Denial under A.R.S. § 32-1122(D) because Applicant had failed to establish good character and reputation, under A.R.S. § 32- 1154(A)(20) because Applicant had been listed on Tucson Pools’ license that had been revoked, and under A.R.S. § 32-1139(B) because the Registrar had made four payouts from the Residential Contractors’ Recovery Fund (“the Fund”) that had been charged against Tucson Pools’ license that had not been repaid.[3] 4. Applicant requested a hearing on the Registrar’s denial.[4] The Registrar referred the matter to the Office of Administrative Hearings, an independent State agency, for an evidentiary hearing. 5. A hearing was held on June 5, 2015. The Registrar submitted 16 exhibits, cross-examined Applicant, and presented the testimony of Paul Terek, the Registrar’s Assistant Chief of Licensing. Applicant testified on his own behalf and submitted one exhibit. Hearing Evidence Tucson Pools and Spas Inc. dba Tucson Pools License No. ROC067451 6. In approximately March 1987, KJW Enterprises Inc. dba Blue Haven Pools of Tucson (“KJW Enterprises”) submitted a license application that listed Applicant as the qualifying party. On or about April 6, 1987, the Registrar issued License No. ROC067451 to KJW Enterprises. 7. On or about April 2, 1998, Applicant on behalf of KJW Enterprises submitted a request to change the licensee’s name to Tucson Pools and Spas Inc. dba Tucson Pools (“Tucson Pools”).[5] On or about March 15, 2000, Applicant filed a form with the Registrar to add his wife, Tammy Jane Milam, as vice president/secretary to the persons listed on the license.[6] On or about July 24, 2001, Mrs. Milam filed a change of address form with the Registrar to change Tucson Pools’ address of record from 4615 N. 1st Ave., Tucson, AZ 85718, to P.O. Box 68890, Tucson, AZ 85737.[7] The Registrar changed Tucson Pools’ address of record to P.O. Box 68890, Tucson, AZ 85737. 8. On or about January 24, 2002, Applicant as president and qualifying party of Tucson Pools filed a letter with the Registrar to request that its License No. ROC067451 be cancelled, effective immediately.[8] 9. On or about January 28, 2002, the Registrar’s Licensing Department acknowledged receipt of Tucson Pools’ request for cancellation of License No. ROC067451 and informed Applicant that the request was granted, effective January 24, 2002. The letter warned Applicant that “you are responsible for responding to any complaints that may be filed against the cancelled license within the statutory two year time period. Failure to respond to such complaints may affect your ability to be re-licensed or to remain on any other licenses.”[9] Workmanship Complaints and Fund Payouts against Tucson Pools Tony Vera’s Workmanship Complaint against Tucson Pools in Case No. T03-0075 10. On or about July 25, 2002, Tony Vera filed a complaint with the Registrar against Tucson Pools. The Registrar designated Mr. Vera’s complaint as Case No. T03-0075. On or about August 9, 2002, after the Registrar’s inspector performed a jobsite inspection, he issued a Corrective Work Order that directed Tucson Pools to perform certain repairs to Mr. Vera’s pool cleaning system and skimmers.[10] 11. On or about October 16, 2002, the Registrar issued a Citation and Complaint in Case No. T03-0075 against Tucson Pools charging violations of A.R.S. §§ 32-1154(A)(7),[11] 32-1154(A)(23),[12] and 32- 1154(A)(3),[13] namely A.A.C. R4-9-108.[14] The Citation and Complaint included the following advisement to Tucson Pools: RESPONDENT IS ADVISED AND NOTIFIED THAT FAILURE TO ANSWER WITHIN 10 DAYS SHALL BE DEEMED AN ADMISSION BY YOU OF THE CHARGES MADE BY THE COMPLAINANT, AND THE REGISTRAR OF CONTRACTORS MAY REVOKE OR SUSPEND YOUR LICENSE OR INCREASE YOUR LICENSE BOND REQUIREMENTS WITHOUT ANY FURTHER PROCEEDINGS PURSUANT TO A.R.S. §32-1101 ET SEQ.[15]

The Registrar sent the Citation and Complaint in Case No. T03-0075 to Tucson Pools at its address of record at P.O. Box 68890, Tucson, AZ 85737 via certified mail, as well as at its former address on 1st Ave. via regular mail.[16] 12. Applicant’s wife, Tammy Milam, signed the certified mail receipt for the Citation and Complaint in Case No. T03-0075.[17] Tucson Pools did not file a written answer to the Citation and Complaint in Case No. T03-0075. 13. On or about November 8, 2002, the Registrar issued a default Decision and Order in Case No. T03-0075, finding that pursuant to A.R.S. § 32- 1155(B), Tucson Pools’ failure to file a written answer was deemed an admission of the charges in the Citation and Complaint and as a result, revoking Tucson Pools’ license on the effective date of the order, December 18, 2002.[18] The Decision and Order also advised Tucson Pools of its right to request a rehearing or to appeal the order to superior court.[19] The Registrar sent the default Decision and Order to Tucson Pools at its address of record at P.O. Box 68890, Tucson, AZ 85737 via certified mail, as well as at its former address on 1st Ave. via regular mail.[20] 14. On or about November 13, 2002, Samantha Milam signed the certified mail receipt for the default Decision and Order in Case No. T03- 0075.[21] 15. On or about December 23, 2002, the Registrar revoked Tucson Pools’ License No. ROC067451 as a result of the statutory violations established in Case No. T03-0075.[22] Tony Vera’s Claim to the Fund in Case No. RF04-0055 16. On or about July 25, 2003, Mr. Vera filed a claim to the Fund, which the Registrar designated as Case No. RF04-0055.[23] 17. On or about January 22, 2004, the Registrar issued a Notice to Contractor of Claim for Administrative Payout in Case No. RF04-0055, which was sent via certified mail to Tucson Pools’ address of record at P.O. Box 68890, Tucson, AZ 85737-8890, as well as by regular mail to Applicant and his wife at 2531 E. Lupine Avenue, Phoenix, AZ 85028- 1833 (“the Lupine Avenue address in Phoenix”),[24] which is the same as the business and mailing address that Applicant provided on his December 22, 2014 application. The United States Post Office (“USPS”) returned as undeliverable the certified mail receipt to the Registrar.[25] Mr. Terek testified that the copy of the Notice to Contractor of Claim for Administrative Payout that was sent via regular mail to the Lupine Avenue address in Phoenix was not returned to the Registrar. 18. The Notice to Contractor of Claim for Administrative Payout in Case No. RF04-0055 contained the following advisements to Tucson Pools: A Decision, Order and Award may be entered without convening a hearing unless a written request for a hearing is received by the Registrar of Contractors . . . .[26] . . . .

The Contractor/Defendant is expressly advised that a payment from the Recovery Fund made as the result of a claim must be repaid in full. Until a full repayment, together with all applicable interest has been made to the Fund the following suspensions or restrictions shall apply to all licenses held by the licensee: . . . .

(c) Any individual named on a license which is under suspension for failure to repay monies to the Recovery Fund shall not be eligible to be named on or to receive any new license in the future.[27]

Neither Applicant nor anyone else requested a hearing on the intended payout from the Fund to Mr. Vera. 19. On or about September 20, 2004, the Registrar issued a check to Mr. Vera in Case No. RF04-0055 in the amount of $3,573.20.[28] The Registrar has not been repaid for that Fund payout. Toby Rakish and Cindy Cozzi’s Workmanship Complaint against Tucson Pools in Case No. T03-0092

20. On or about July 30, 2002, Toby Rakish and Cindy Cozzi filed a complaint with the Registrar against Tucson Pools. The Registrar designated Mr. Rakish and Ms. Cozzi’s complaint as Case No. T03-0092. On or about August 9, 2002, after the Registrar’s inspector performed a jobsite inspection, he issued a Corrective Work Order that directed Tucson Pools to perform certain repairs to Mr. Rakish and Ms. Cozzi’s pool deck and pool deck coating.[29] 21. On or about October 16, 2002, the Registrar issued a Citation and Complaint in Case No. T03-0092 against Tucson Pools charging violations of A.R.S. §§ 32-1154(A)(7), 32-1154(A)(23), and 32- 1154(A)(3), namely A.A.C. R4-9-108. The Citation and Complaint included the same advisement that was quoted above in Finding of Fact No. 11.[30] The Registrar sent the Citation and Complaint in Case No. T03-0092 to Tucson Pools at its address of record at P.O. Box 68890, Tucson, AZ 85737 via certified mail, as well as at an address at 2840 N. Country Club Road, Tucson, AZ 85716-6500 (“the Country Club Road address in Tucson”) via regular mail.[31] 22. Applicant’s wife, Tammy Milam, signed the certified mail receipt for the Citation and Complaint in Case No. T03-0092.[32] Tucson Pools did not file a written answer to the Citation and Complaint in Case No. T03-0092. 23. On or about November 8, 2002, the Registrar issued a default Decision and Order in Case No. T03-0092, finding that pursuant to A.R.S. § 32- 1155(B), Tucson Pools’ failure to file a written answer was deemed an admission of the charges in the Citation and Complaint and as a result, revoking Tucson Pools’ license on the effective date of the order, December 18, 2002.[33] The Decision and Order also advised Tucson Pools of its right to request a rehearing or to appeal the order to superior court.[34] The Registrar sent the default Decision and Order to Tucson Pools at its address of record at P.O. Box 68890, Tucson, AZ 85737 via certified mail, as well as at the Country Club Road address in Tucson via regular mail.[35] 24. On or about November 13, 2002, Samantha Milam signed the certified mail receipt for the default Decision and Order in Case No. T03- 0092.[36] 25. On or about December 23, 2002, the Registrar revoked Tucson Pools’ License No. ROC067451 as a result of the statutory violations established in Case No. T03-0092.[37] Mr. Rakish and Ms. Cozzi’s Claim to the Fund in Case No. RF03-0454 26. On or about February 19, 2003, Mr. Rakish and Ms. Cozzi filed a claim to the Fund, which the Registrar designated as Case No. RF03-0454.[38]

27. On or about May 29, 2003, the Registrar issued a Notice to Contractor of Claim for Administrative Payout in Case No. RF03-0454, which was sent via certified mail to Tucson Pools’ address of record at P.O. Box 68890, Tucson, AZ 85737-8890.[39] On or about June 4, 2003, Samantha Milam signed the certified mail receipt for the Notice to Contractor of Claim for Administrative Payout in Case No. RF03-0454.[40] 28. The Notice to Contractor of Claim for Administrative Payout in Case No. RF03-0454 contained the same advisements to Tucson Pools that were quoted in Finding of Fact No. 18 above.[41] Neither Applicant nor anyone else requested a hearing on the intended payout from the Fund to Mr. Rakish and Ms. Cozzi. 29. On or about August 15, 2003, the Registrar issued a check to Mr. Rakish and Ms. Cozzi in Case No. RF03-0454 in the amount of $1,202.22.[42] The Registrar has not been repaid for that Fund payout. Thomas J. Penttinen’s Workmanship Complaint against Tucson Pools in Case No. T03-0435

30. On or about November 4, 2002, Thomas J. Penttinen filed a complaint with the Registrar against Tucson Pools. The Registrar designated Mr. Penttinen’s complaint as Case No. T03-0435.[43] 31. On or about January 13, 2003, the Registrar issued a Citation and Complaint in Case No. T03-0435 against Tucson Pools charging violations of A.R.S. §§ 32-1154(A)(7) and 32-1154(A)(3), namely A.A.C. R4-9-108. The Citation and Complaint included the same advisement that was quoted above in Finding of Fact No. 11.[44] The Registrar sent the Citation and Complaint in Case No. T03-0435 to Tucson Pools at its address of record at P.O. Box 68890, Tucson, AZ 85737 via certified mail.[45] 32. On or about January 18, 2003, Samantha Milam signed the certified mail receipt for the Citation and Complaint in Case No. T03-0435.[46] Tucson Pools did not file a written answer to the Citation and Complaint in Case No. T03-0435. 33. On or about February 6, 2003, the Registrar issued a default Decision and Order in Case No. T03-0435, finding that pursuant to A.R.S. § 32- 1155(B), Tucson Pools’ failure to file a written answer was deemed an admission of the charges in the Citation and Complaint and as a result, revoking Tucson Pools’ license on the effective date of the order, March 18, 2003.[47] The Decision and Order also advised Tucson Pools of its right to request a rehearing or to appeal the order to superior court.[48] The Registrar sent the default Decision and Order to Tucson Pools at its address of record at P.O. Box 68890, Tucson, AZ 85737 via certified mail.[49] 34. On or about February 11, 2003, Applicant’s wife, Tammy Milam, signed the certified mail receipt for the default Decision and Order in Case No. T03-0435.[50] 35. On or about March 20, 2003, the Registrar revoked Tucson Pools’ License No. ROC067451 as a result of the statutory violations established in Case No. T03-0435.[51] Mr. Penttinen’s Claim to the Fund in Case No. RF04-0060 36. On or about July 28, 2003, Mr. Penttinen filed a claim to the Fund, which the Registrar designated as Case No. RF04-0060.[52] 37. On or about October 27, 2003, the Registrar issued a Notice to Contractor of Claim for Administrative Payout in Case No. RF04-0060, which was sent to Tucson Pools’ address of record at P.O. Box 68890, Tucson, AZ 85737-8890 via certified mail, as well as to 5151 N. Oracle Road, Suite 100, Tucson, AZ 85704, the Country Club Road address in Tucson, and the Lupine Avenue address in Phoenix via regular mail.[53] The USPS returned to the Registrar the Notice to Contractor of Claim for Administrative Payout that had been sent via certified mail to Tucson Pools’ address of record.[54] 38. The Notice to Contractor of Claim for Administrative Payout in Case No. RF04-0060 contained the same advisements to Tucson Pools that were quoted in Finding of Fact No. 18 above.[55] Neither Applicant nor anyone else requested a hearing on the intended payout from the Fund to Mr. Penttinen. 39. On or about March 17, 2004, the Registrar issued a check to Mr. Penttinen in Case No. RF04-0060 in the amount of $3,553.26.[56] The Registrar has not been repaid for that Fund payout. Joyce and Ray Offutt’s Workmanship Complaint against Tucson Pools in Case No. T04-0094

40. On or about July 22, 2003, Joyce and Ray Offutt filed a complaint with the Registrar against Tucson Pools. The Registrar designated Mr. and Mrs. Offutt’s complaint as Case No. T04-0094.[57] The complaint alleged that Tucson Pools had made a contract with Mr. and Mrs. Offutt on November 12, 1999, that they had filed a complaint with the Registrar about Tucson Pools’ work on or about December 7, 2001, that to resolve the prior complaint, Applicant on behalf of Tucson Pools had promised to repair the plaster in the pool, but that Tucson Pools had gone out of business before it completed the repairs, and that the appearance of the plaster was worsening.[58] 41. On or about August 14, 2003, the Registrar issued a Citation and Complaint in Case No. T04-0094 against Tucson Pools charging violations of A.R.S. §§ 32-1154(A)(7) and 1154(A)(3), namely A.A.C. R4- 9-108. The Citation and Complaint included the same advisement that was quoted above in Finding of Fact No. 11.[59] The Registrar sent the Citation and Complaint in Case No. T04-0093 to Tucson Pools at its address of record at P.O. Box 68890, Tucson, AZ 85737 via certified mail, as well as at the Country Club Road address in Tucson via regular mail.[60] 42. The USPS returned the Citation and Complaint that had been sent via registered mail to Tucson Pools' address of record in Case No. T04- 0094, but provided the forwarding address on Lupine Avenue in Phoenix.[61] The Registrar subsequently sent the Citation and Complaint via regular mail to the Lupine Avenue address in Phoenix.[62] Tucson Pools did not file a written answer to the Citation and Complaint in Case No. T04-0094. 43. On or about September 16, 2003, the Registrar issued a default Decision and Order in Case No. T04-0094, finding that pursuant to A.R.S. § 32-1155(B), Tucson Pools’ failure to file a written answer was deemed an admission of the charges in the Citation and Complaint and as a result, revoking Tucson Pools license on the effective date of the order, October 26, 2003.[63] The Decision and Order also advised Tucson Pools of its right to request a rehearing or to appeal the order to superior court.[64] The Registrar sent the default Decision and Order to Tucson Pools at its address of record at P.O. Box 68890, Tucson, AZ 85737 via certified mail and at the address on Lupine Avenue in Phoenix via regular mail.[65] 44. On or about October 28, 2003, the Registrar revoked Tucson Pools’ License No. ROC067451 as a result of the statutory violations established in Case No. T04-0094.[66] Mr. and Mrs. Offutt’s Claim to the Fund in Case No. RF04-0323 45. On or about December 10, 2003, Mr. and Mrs. Offutt filed a claim to the Fund, which the Registrar designated as Case No. RF04-0323.[67] 46. On or about April 7, 2004, the Registrar issued a Notice to Contractor of Claim for Administrative Payout in Case No. RF04-0323, which was sent to Tucson Pools’ address of record at P.O. Box 68890, Tucson, AZ 85737-8890 via certified mail, as well as to the Country Club address in Tucson and the Lupine Avenue address in Phoenix via regular mail.[68] The USPS returned to the Registrar the Notice to Contractor of Claim for Administrative Payout that had been sent to Tucson Pools’ address of record via certified mail.[69] 47. The Notice to Contractor of Claim for Administrative Payout in Case No. RF04-0323 contained the same advisements to Tucson Pools that were quoted in Finding of Fact No. 18 above.[70] Neither Applicant nor anyone else requested a hearing on the intended payout from the Fund to Mr. and Mrs. Offutt. 48. On or about April 29, 2004, the Registrar issued a Decision, Order and Award in Case No. RF04-0323, ordering that the agency finalize payment procedures to Mr. and Mrs. Offutt to award them a payout in the amount of $4,128.00 from the Fund for their damages.[71] The Decision, Order and Award in Case No. RF04-0323 was sent to Applicant and Tucson Pools at its address of record via certified mail and to the address on Lupine Avenue in Phoenix via regular mail.[72] On or about June 16, 2004, the Registrar issued a check to Mr. and Mrs. Offutt in Case No. RF04-0323 in the amount of $4,128.00.[73] The Registrar has not been repaid for that Fund payout. Additional Hearing Evidence 49. Mr. Terek testified that after the Registrar changed Tucson Pools’ address of record to P.O. Box 68890, Tucson, AZ 85737-8890 at Applicant’s wife’s request, the Registrar did not receive any other requests to change Tucson Pools’ address of record. 50. Mr. Terek testified that the Registrar is only required to send notices via certified mail to a licensee’s address of record. However, if the Registrar acquires information from other sources that a licensee may be found at other addresses, the information will be added to the case file notes and as a courtesy, the Registrar will send additional copies via regular mail to the other addresses. The Registrar does not copy other addresses from one case file into other case files that involve the same licensee. 51. Mr. Terek acknowledged that 80% of complaints are resolved before hearing and that only a small percentage of complaints result in a payout from the Fund. 52. Applicant testified that after September 11, 2001, economic and other factors forced him to close Tucson Pools’ business. After Tucson Pools’ license was cancelled, it was unable to perform any corrective action. In addition, Applicant and his wife moved to Phoenix. Because he had three small children at the time, Applicant testified that he would not have been able to travel to Tucson to perform repairs or to attend hearings. 53. Applicant testified that he relied on the Registrar to properly vet and investigate the four workmanship complaints and four claims to the Fund that had been made against Tucson Pools. Applicant attempted to argue and present evidence that Mr. and Mrs. Offutt’s workmanship complaint was untimely and that the four payouts from the Fund far exceeded the claimants’ actual damages. The Administrative Law Judge, however, sustained the Registrar’s attorney’s objection that the Registrar’s final Decisions and Orders in the workmanship complaints and final payouts in the claims to the Fund collaterally estopped Applicant from making such argument or presenting such evidence at the hearing on the Registrar’s denial of Applicant’s license application.

CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[74] 2. Applicant bears the burden of proof to establish that he meets statutory qualifications for a contractor’s license by a preponderance of the evidence.[75] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[76] 3. “‘Under the doctrine of res judicata, a judgment on the merits in a prior suit involving the same parties or their privies bars a second suit based on the same cause of action.’”[77] A default judgment "is conclusive . . . on all issues which were or could have been litigated and is not subject to collateral impeachment at a subsequent time."[78] Because the issues in the four workmanship complaints and four payouts from the Fund are not identical to the issue of whether Applicant meets statutory requirements to be licensed as a contractor in Arizona, the doctrine of collateral estoppel, rather than res judicata, bars relitigation of the validity of the workmanship complaints or the propriety of the payouts from the Fund in this licensing proceeding if Applicant received the statutorily prescribed notice of the prior proceedings.[79] 4. A.R.S. § 32-1155 provides in relevant part as follows: A. On the filing of a written complaint with the registrar charging a licensee with the commission, within two years before the date of filing the complaint, of an act that is cause for suspension or revocation of a license, the registrar after investigation, in its sole discretion, may issue a citation directing the licensee, within ten days after service of the citation on the licensee, to appear by filing with the registrar the licensee's written answer to the citation and complaint showing cause, if any, why the licensee's license should not be suspended or revoked. Service of citation on the licensee shall be fully effected by personal service or by mailing a true copy thereof, together with a true copy of the complaint, by registered mail in a sealed envelope with postage prepaid and addressed to the licensee at the licensee's latest address of record in the registrar's office. Service of the citation and complaint shall be complete at the time of personal service or five days after deposit in the mail. . . .

B. Failure of the licensee to answer within ten days after service shall be deemed an admission by the licensee of the licensee's commission of the act or acts charged in the complaint, and the registrar may then suspend or revoke the licensee's license.

(Emphasis added.) The Registrar complied with the requirements of A.R.S. § 32-1155(A) when it served the Citations and Complaints for Mr. Vera’s workmanship complaint in Case No. T03-0075, Mr. Rakish and Ms. Cozzi’s workmanship complaint in Case No. T03-0092, Mr. Penttinen’s workmanship complaint in Case No. T03-0435, and Mr. and Mrs. Offutt’s workmanship complaint in Case No. T04-0094 upon Tucson Pools via certified mail at its address of record. It appears that Applicant’s wife or other family member received actual notice of at least some of these Citations and Complaints. The possible inconvenience that Applicant might have suffered in responding to a complaint does not vitiate the fact that he received all the notice that is required by statute. 5. A.R.S. § 32-1154(A)(20) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[h]aving a person named on the license who is named on any other license in this state or in another state which is under suspension or revocation unless the prior revocation was based solely on a violation of this paragraph.” Because Applicant is a person named on Tucson Pools’ License No. ROC067451 and that license was revoked four times for various violations of A.R.S. § 32-1154(A), cause exists for discipline under A.R.S. § 32-1154(A)(20). 6. 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 . . . committed any act that, if committed or done by any licensed contractor, would be grounds for suspension or revocation of a contractor's license . . . .

(Emphasis added.) Because Applicant committed an act described in A.R.S. § 32-1154(A)(20) that would be grounds for suspension of a contractor’s license by being listed on Tucson Pools’ previously revoked License No. ROC067451, at this time, Applicant has failed to establish that he is a person of good character and reputation who is eligible to be licensed as a contractor in the State of Arizona under A.R.S. § 32-1122(D). 7. A.R.S. § 32-1154(G) provides in relevant part as follows: Notwithstanding any other provisions in this chapter, if a contractor's license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter, the registrar may order payment from the residential contractors' recovery fund to remedy the violation. The registrar shall serve the contractor with a notice setting forth the amount claimed or to be awarded. If the contractor contests the amount or propriety of the payment, the contractor shall respond within ten days of the date of service by requesting a hearing to determine the amount or propriety of the payment. Failure by the contractor to respond in writing within ten days of the date of service shall be deemed a waiver by the contractor of the right to contest the amount claimed or to be awarded. Service may be made by personal service to the contractor or by mailing a copy of the notice by registered mail with postage prepaid to the contractor's latest address of record on file in the registrar's office. If service is made by registered mail, it is effective five days after the notice is mailed.

(Emphasis added.) The Registrar complied with the requirements of A.R.S. § 32-1154(G) when it served the Notices to Contractor of Claims for Administrative Payouts for Mr. Vera’s claim to the Fund in Case No. RF04- 0055, Mr. Rakish and Ms. Cozzi’s claim to the Fund in Case No. RF03-0454, Mr. Penttinen’s claim to the Fund in Case No. RF04-0060, and Mr. and Mrs. Offutt’s claim to the Fund in Case No. RF04-0323 upon Tucson Pools via certified mail at its address of record. It appears that Applicant’s wife or other family member received notice of at least some of these claims to the Fund. 8. 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.

(Emphasis added.) Mr. Vera’s Fund claim in Case No. RF04-0055, Mr. Rakish and Ms. Cozzi’s Fund claim in Case No. RF03-0454, Mr. Penttinen’s Fund claim in Case No. RF04-0060, and Mr. and Mrs. Offutt’s Fund claim in Case No. RF04-0323 all resulted in payouts from the Fund. None of these payouts have been repaid as A.R.S. § 32-1139(B) requires. Therefore, Applicant has not establish that he is qualified to be issued a contractor’s license under A.R.S. § 32-1139(B). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order, the decision to deny Francis Clyde Milam, Jr. DBA: Phoenix Pool Equipment Services’ application for a contractor’s license be affirmed. 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, June 19, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 1 at 1. [2] Id. at 2. [3] See the Registrar’s Exhibit 2. [4] See the Registrar’s Exhibit 12. [5] See the Registrar’s Exhibit 3 at 5; the Registrar’s Exhibit 13. [6] See id. at 6. [7] See id. at 8. [8] See id. at 9. [9] Id. at 10. [10] See the Registrar’s Exhibit 4 at 1-2. [11] Former A.R.S. § 32-1154(A)(7) included among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” A.R.S. § 32-1154(A)(7) since has been amended to omit the words, “wrongful or.” [12] Former A.R.S. § 32-1154(A)(23) included among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.” A.R.S. § 32-1154(A)(23) has been renumbered as A.R.S. § 32-1154(A)(22). [13] A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” [14] A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [15] Id. at 5. [16] See id. at 7. [17] See id. at 8. [18] See id. at 9-10. [19] See id. at 10. [20] See id. at 11. [21] See id. at 12. [22] See id. at 13. [23] See the Registrar’s Exhibit 5 at 1. [24] See the Registrar’s Exhibit 14 at 1-3. [25] See id. at 4. [26] Id. at 1. [27] Id. at 2. [28] See the Registrar’s Exhibit 5 at 3-4. [29] See the Registrar’s Exhibit 6 at 1-3. [30] See id. at 7. [31] See id. at 9. [32] See id. at 10. [33] See id. at 11-12. [34] See id. at 12. [35] See id. at 13. [36] See id. at 14. [37] See id. at 15. [38] See the Registrar’s Exhibit 7 at 1. [39] See the Registrar’s Exhibit 15 at 1-2. [40] See id. at 3. [41] See id. at 1-2. [42] See the Registrar’s Exhibit 7 at 2-3. [43] See the Registrar’s Exhibit 8 at 1. [44] See id. at 3. [45] See id. at 4. [46] See id. at 5. [47] See id. at 6-7. [48] See id. at 7. [49] See id. at 8. [50] See id. at 9. [51] See id. at 10. [52] See the Registrar’s Exhibit 9 at 1. [53] See the Registrar’s Exhibit 16 at 1-2. [54] See id. at 4. [55] See id. at 1-2. [56] See the Registrar’s Exhibit 9 at 2-3. [57] See the Registrar’s Exhibit 10 at 1. [58] See id. at 4. [59] See id. at 6. [60] See id. at 7. [61] See id. at 8. [62] See id. [63] See id. at 9-10. [64] See id. at 10. [65] See id. at 11-12. [66] See id. at 13. [67] See the Registrar’s Exhibit 11 at 1. [68] See id. at 2-4. [69] See id. at 4. [70] See id. at 2-3. [71] See id. at 5-6. [72] See id. at 7. [73] See id. at 8-10. [74] See A.R.S. § 32-1122. [75] 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). [76] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [77] Hawkins v. State of Arizona, Department of Economic Security, 183 Ariz. 100, 103, 900 P.2d 1236, 1239 (App. 1995) (quoting Gilbert v. Board of Medical Examiners, 155 Ariz. 169, 174, 745 P.2d 617, 622 (App. 1987); emphasis added). [78] Dairyland Ins. Co. v. Richards, 108 Ariz. 89, 91, 492 P.2d 1196, 1198 (1972); see also Technical Air Products, Inc. v. Sheridan-Gray, Inc., 103 Ariz. 450, 452, 445 P.2d 426, 428 (1968). [79] The Arizona Court of Appeals has held:

The doctrine of “collateral estoppel” is a doctrine of issue preclusion. It bars a party from relitigating an issue identical to one he has previously litigated to a determination on the merits in another action. The elements necessary to invoke collateral estoppel are: the issue is actually litigated in the previous proceeding, there is a full and fair opportunity to litigate the issue, resolution of such issue is essential to the decision, there is a valid and final decision on the merits, and there is a common identity of the parties.

Gilbert, 155 Ariz. at 169, 745 P.2d at 622 (quoted in Hawkins, 183 Ariz. at 103, 900 P.2d at 1239).

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