ALJDEC decisions subject to certification as final

2015A-3024-ROC · Registrar of Contractors · 2015-11-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 6, 2015, at 8:00 a.m. APPEARANCES: Jonathan Wayne Cushing (hereinafter “Mr. Cushing” or “Respondent”) appeared telephonically. The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General Thomas Raine. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________

Mr. Cushing appealed a Civil Citation issued by the Registrar for contracting without a license. The Civil Citation imposed a penalty of $2,500.00. Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law, and Recommend Order are made, finding a violation and recommending imposition of a total of $2,500.00 in civil penalties. FINDINGS OF FACT Background and Procedure Mr. Cushing is not a licensed contractor in the State of Arizona.[1] On or about July 15, 2015, the Registrar received a complaint from Kayleen Weyer (Mrs. Weyer) alleging that Respondent (who she inadvertently identified as Jon Cushion) had contracted to perform work at her home located at 14233 N. 28th Lane, Yuma, Arizona 85367, given her an estimate, accepted a deposit of $1,500.00, began working on wiring, but was subsequently fired because he had no knowledge of wiring and refused to return $864.00 of the deposit. See Exhibit 1 at page 2. The Complaint attached a handwritten form dated July 12, 2015, which contained descriptions and prices for a kitchen remodel, bathroom remodel and hallway work. The form indicated that the total cost for all the work described was $4,795.00. The form specified “payment” had been made in the amount of $1,500.00, leaving a balance of $3,275.00.[2] The Registrar’s Investigator, Danial Rhodes (hereinafter “Investigator Rhodes”), initiated an investigation of the complaint. Investigator Rhodes testified that he went to the Weyer’s residence and interviewed Mrs. Weyer on July 15, 2015. At that time, she explained that she contacted Respondent regarding buying some new cabinets he had advertised in the White Sheet. She said she first met Respondent on Sunday, July 12, 2015, when he agreed to meet with them and was shown what they wanted done regarding cabinetry work. According to Mrs. Weyer, Respondent offered to repair and remodel the existing cabinets because the cabinets he had would not work in their home. Mrs. Weyer recalled telling Respondent about some bathroom work she and her husband wanted completed and being given a verbal estimate. Mrs. Weyer indicated that Respondent asked for $1,500.00 to begin the project and buy materials. Mrs. Weyer wrote a check for $1,500.00 and gave it to Respondent. At some point, the parties decided that the project would move faster if Respondent received cash in lieu of a check. Investigator Rhodes said that Mrs. Weyer told him Respondent accompanied her to the bank and was given $1,500.00 cash on Monday, July 13, 2015. At hearing, Respondent denied accompanying Mrs. Weyer to the bank. He indicated that he told Mrs. Weyer that he only needed $880.00 to do the kitchen cabinet work and was unaware that she gave him fifteen $100 bills. In any event, both Respondent and Mrs. Weyer agreed that he began work to repair a faulty switch in an outlet in the kitchen and that Mrs. Weyer became upset over the amount of time the work was taking, leading her to fire Respondent. Respondent agreed that Mrs. Weyer demanded her money back in its entirety, but that he was unable to pay all of it. He said he gave her $750.00 cash that was still in his pocket and also returned materials amounting to $166.00 and gave Mrs. Weyer that money as well. He could not return the remainder because he had used $250.00 to pay his rent, spent money on gas and paid some personal bills. Mrs. Weyer refused to allow Respondent to remove his tools from her home and called the sheriff who advised this was a civil matter and allowed Respondent to leave with his tools. Mrs. Weyer also filed a complaint with the Registrar. On July 16, 2015, Investigator Rhodes positively identified and interviewed Mr. Cushing. During that interview, Mr. Cushing acknowledged that he had received $1,500.00 from Mrs. Weyer of which he had repaid $864.00. Mr. Cushing agreed that he was not a licensed contractor in the state of Arizona because he was retired. He was aware that he could not do work over $1,000.00 and said that he did not ask for the $1,500.00 he was given by Mrs. Weyer. Mr. Cushing stated that the estimate he provided was not for a single project and that he was going to do the work in stages. During that interview, inspector Rhodes informed Respondent that accepting the $1,500.00 deposit from Mrs. Weyer was itself a violation of the Registrar’s statutes and demonstrated that Mr. Cushing was purporting to have the ability to act in the capacity of a contractor. Investigator Rhodes determined that Mr. Morgan had violated the provisions of A.R.S. § 32-1151 (Engaging in contracting without a license). A Cease & Desist Order was issued to Mr. Cushing for violating the provisions of A.R.S. § 32-1151. A total of $2,500.00 in civil penalties was assessed for one count of contracting without a license Inspector Rhodes testified that pursuant to the Registrar’s policy, Mr. Cushing was fined $2,500.00 because he had two previous violations of contracting without a license. The specifics of those complaints and cease and desist orders are detailed in Exhibit 5. Although Respondent claims not to have a memory of the cease and desist order issued on January 2, 2008, he agreed that the name and address associated with that order was his. The record also establishes that Respondent was aware of a different cease and desist order issued to him by the Registrar on October 10, 2006, and that he pled guilty to the offense in Yuma municipal court receiving a sentence of two years’ probation. See Exhibit 5. Inspector Rhodes also noted that the Registrar’s records indicated that Mr. Cushing had previously shown the capacity to be a qualifying party, holding QP 7044332. Respondent had also been the holder of two contractors’ licenses in the name of Cushing Construction. The first, License No. B.079159-R., was revoked in 1989 after Respondent made only partial reimbursement of a recovery fund payout and the second, License No. B- 2.08512-C, was revoked because in 1991 presumably because Respondent could not keep an active license while another of his licenses was revoked. He said these licenses show that Respondent was aware of the Registrar’s rules and regulations, including the prohibition of giving an estimate for work over $1,000.00 or accepting a deposit in excess of that amount. Inspector Rhodes explained that projects under $1,000.00 are subject to a “handyman exception,” but that this remodeling project was an aggregated project for in excess of $4,000.00 and that even the partial payment of $1,500.00 exceeded the handyman threshold. Mr. Cushing testified that the handwritten form he wrote at the Weyer’s was simply notes of future projects they wanted done and he never intended to do any present work. He denied having the ability to do all the work specified because he was in his seventies and had had both a heart attack and stroke. He said that he returned the $1,500.00 check because it was more than he needed to repair the kitchen cabinets which amounted to $880.00. He said he did not realize until he got home on Monday July 13, 2015 that Mrs. Weyer gave him $1,500.00 in cash. Mr. Cushing said he was fixing the outlet for no charge and had not even begun work on the cabinets when he was fired. He commented that he had never met a person as impatient as Mrs. Weyer and suspected she was part of a sting operation the Registrar had set up. In his view, a customer is usually happy when you agree to return their money even if it takes some time. Mrs. Weyer did not do that. She called the Sheriff immediately and filed a complaint with the Registrar the next day CONCLUSIONS OF LAW The Registrar bears the burden of proof to establish Mr. Cushing’s violation of A.R.S. § 32-1151 by a preponderance of the evidence. 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 $1,000.00.[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 $2,500.00 for each violation, but not more than $2,500.00 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.

After review of all the evidence, the Tribunal concludes that the Registrar has proven that Respondent engaged in contracting without a license when he submitted his handwritten bid for the Weyer’s remodeling project and accepted a deposit of $1,500.00 to begin work. Cushing’s own handwriting, whether it is referred to as a bid or notes, constitutes a violation of the contracting laws. In addition, the acceptance of a deposit in excess of the handyman exception in A.R.S. §32-1121(A)(14) also violates these laws. The fact that Respondent may have later attempted to return some of the money does not excuse the violation. 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 the total civil penalties for Respondent’s continuing 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] Respondent’s prior instances of unlicensed contracting support the imposition of a $2,500.00 penalty pursuant to A.A.C. R4-9-131(10). RECOMMENDED ORDER Based upon the foregoing, it is recommended that the Registrar affirm the finding that Mr. Cushing violated A.R.S. § 32-1151 and affirm the decision to assess civil penalties in the amount of $2,500.00 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, November 19, 2015.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See Exhibit 3 (Investigation Report with Attachments). 1. See Exhibit 3. (Investigation Unit Report) [2] This math appears to be incorrect; the remaining two levels should have been of $3,295.00. [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 and mitigating 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