ALJDEC decisions subject to certification as final

2015A-369-ROC · Registrar of Contractors · 2015-07-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 7, 2015, at 8:00 a.m. APPEARANCES: RJR Contracting, Inc., Pending License No. KB-1.295126- D (hereinafter “Applicant” or “RJR”) appeared through its President and Qualifying Party, Robert Kevin Sanders, Jr. (hereinafter “Mr. Sanders”). The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General Seth T. Hargraves, Esq. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. Mr. Sanders is listed as the Qualifying Party and President for RJR. The Applicant filed an application for a Class KB-2 Contractors License on or about October 6, 2014.[1] 2. On or about December 23, 2014, the Registrar’s former Chief of Licensing sent a Notice of License Denial (hereinafter “Notice”) to the Applicant indicating that the Registrar was denying Applicant’s license application.[2] The Notice provided, in relevant part, as follows: You are hereby notified pursuant to A.R.S. § 32-1124 that your license application is denied. We find that the applicant does not qualify for the KB-1 Dual Residential and Small Commercial Contractor License based on the following:

1. Robert Kevin Sanders, Jr. misrepresented a material fact on his application in contravention to A.R.S. § 32-1122.D.

2. Robert Kevin Sanders, Jr. has failed to establish good character and reputation in contravention of A.R.S. § 32-1122.D, as he was and is a person named on C Investments, Inc. dba R K Sanders Co, License No. 205465, on the date of injury that resulted in the revocation of the license in one (1) matter.

4. The Registrar would violate the provisions of A.R.S. § 32- 1154.A.20 and A.R.S. § 32-1161.C, were it to allow Robert Kevin Sanders, Jr. to be named as a Qualifying Party and member on RJR Contracting, Inc.’s License No. 295126 because Robert Kevin Sanders, Jr. is a person named on the license of C Investments, Inc. dba R K Sanders Co. License No. 205465, on the date of injury that resulted in the revocation of the license in one (1) matter.

5. Mr. Sanders requested a hearing on the Registrar’s denial. 6. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 7. An evidentiary hearing was held on July 7, 2015, at 8:00 a.m. The Applicant presented the testimony of Mr. Sanders and Robert Kevin Sanders, Sr. and submitted one (1) exhibit. The Registrar presented the testimony of Assistant Chief of Licensing Paul Terek and five (5) exhibits. Hearing Evidence Testimony of Mr. Sanders 8. Mr. Sanders acknowledged that the Woodruff Domestic Water Improvement District (hereinafter “Woodruff”) filed a consumer complaint (P08-0340) against License No. 205465 of C Investments, Inc. dba R K Sanders Co. with the Registrar and that a formal Citation and Complaint was issued against License No. 205465 of C Investments, Inc. dba R K Sanders Co. 9. Mr. Sanders acknowledged that on or about June 4, 2009, the Registrar issued a Default Decision and Order which provided that License No. 205465 of C Investments, Inc. dba R K Sanders Co. would be revoked unless C Investments, Inc. dba R K Sanders Co. appropriately rectified the issues involved and detailed in the Complaint filed by Woodruff. 10. Mr. Sanders acknowledged that License No. 205465 of C Investments, Inc. dba R K Sanders Co. was revoked by the Registrar on or about September 17, 2009. 11. Mr. Sanders asserted that Woodruff had agreed to dismiss its Complaint against License No. 205465 of C Investments, Inc. dba R K Sanders Co.[3] 12. Mr. Sanders acknowledged that that he had not obtained the requested written proof of resolution of Woodruff’s Complaint as required by the Registrar. 13. Mr. Sanders acknowledged that on the Applicant’s license application, he failed to list and disclose that he had been listed on License No. 205465 of C Investments, Inc. dba R K Sanders Co. 14. Mr. Sanders acknowledged that he was and is named as the Vice President and Secretary for C Investments, Inc. dba R K Sanders Co., License No. 205465.[4] 15. Mr. Sanders acknowledged that he provided a false answer to the question, “Have any of the licenses listed in question 22 ever been suspended, revoked or otherwise disciplined.” Mr. Sanders answered “no” to the question. Mr. Sanders acknowledged that License No. 205465 of C Investments, Inc. dba R K Sanders Co. was revoked by the Registrar on or about September 17, 2009 16. Mr. Sanders testified that he did not know what was going on with his father’s company and was unaware of the Complaint filed by Woodruff until after License No. 205465 of C Investments, Inc. dba R K Sanders Co. was revoked. Testimony of Robert Kevin Sanders, Sr. 17. Robert Kevin Sanders, Sr. (hereinafter “Mr. Sanders, Sr.”) testified that he is the owner of License No. 205465 of C Investments, Inc. dba R K Sanders Co. Mr. Sanders, Sr. stated that he did not receive notice of the Complaint filed by Woodruff. Mr. Sanders, Sr. asserted that he had resolved the matter with Woodruff by “walking away” from the money that Woodruff owed to C Investments, Inc. dba R K Sanders Co. 18. Mr. Sanders, Sr., testified that Woodruff owed C Investments, Inc. dba R K Sanders Co. over $18,000.00 for the work that it performed for Woodruff. Mr. Sanders asserted that Mr. Sanders, Jr. was not involved in day-to-day business of C. Investments, Inc. dba R K Sanders Co. and would not have not known of the Complaint filed by Woodruff. Testimony of Paul Terek 19. Paul Terek (hereinafter “Mr. Terek”) testified that he is the Assistant Chief of the Licensing Department for the Registrar. Mr. Terek stated that the Licensing Department processes new license applications and license renewal applications for the Registrar. 20. Mr. Terek testified that the Applicant’s application for licensure was reviewed by the License Department. Mr. Terek stated that Mr. Sanders is listed as President and Qualifying Party on the license application.[5]

21. Mr. Terek testified that Mr. Sanders was a person named on C Investments, Inc. dba R K Sanders Co.’s License No. 205465 on the date of the injury that resulted in the revocation of said license in one matter. Mr. Terek said that on or about September 17, 2009, the Registrar revoked License No. 205465 of C Investments, Inc. dba R K Sanders Co. 22. Mr. Terek testified that Mr. Sanders provided a false answer to the question “Have any of the licenses listed in question 22 ever been suspended, revoked or otherwise disciplined?” Mr. Terek stated that Mr. Sanders answered “no” to the question. Mr. Terek said that Mr. Sanders was and is a person named on C Investments, Inc. dba R K Sanders Co.’s License No. 205465 and that License No. 205465 of C Investments, Inc. dba R K Sanders Co. was revoked by the Registrar on or about September 17, 2009. 23. Mr. Terek testified that RJR’s license application was denied because Mr. Sanders failed to establish good character and reputation because he is named on a revoked contractor’s license and because Mr. Sanders made material misrepresentations in RJR’s license application. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[6] 2. Mr. Sanders bears the burden of proof to establish that he meets statutory qualifications for a contractor’s license by a preponderance of the evidence.[7] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[8] 3. A.R.S. §32-1122(D) provides in pertinent part that to obtain a contractor’s license, a person shall be of good character and reputation. Lack of good character and reputation may be established by showing that the person has committed any act which is grounds for suspension or revocation of a license. 4. Mr. Sanders was and is a person named on C Investments, Inc. dba R K Sanders Co.’s License No. 205465. Mr. Sanders was listed on said license on the date of the injury that resulted in the revocation of the license. Mr. Sanders is named on a revoked contractor license. This Tribunal concludes that as a result of Mr. Sanders’ being named on a revoked license, RJR does not qualify for a new contractor’s license. 5. Mr. Sanders failed to disclose all of his contractor licenses, such as License No. 205465 of C Investments, Inc. dba R K Sanders Co. Mr. Sanders failed to disclose that License No. 205465 of C Investments, Inc. dba R K Sanders Co. was revoked by the Registrar on or about September 17, 2009. This Tribunal concludes that Mr. Sanders failed to establish good character by knowingly misrepresenting material facts on RJR’s license application. 6. A contractor’s license is a privilege, not a right. “[T]he Registrar is charged with the overall responsibility of protecting the welfare of the public dealing with persons engaged in the building contracting vocations and affording that public protection against incompetent, inexperienced, unlawful and fraudulent acts of building contractors.”[9] On this record, Mr. Sanders did not establish that he is eligible for the Registrar to grant him a contractor’s license without exposing the public to an unreasonable risk. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the decision to deny RJR’s License Application for Pending License No. KB- 1.295126-D. 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, July 14, 2015.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] See Exhibit No. 1 (10/6/14 License Application). [2] See Exhibit 2 (12/23/14 Notice of License Denial). [3] See Exhibit A (Email Chain). [4] See Exhibit 3 (C Investments Inc. dba R. K. Sanders Co.’s 2005 Application for A General Engineering License, 2007 Renewal Application; Notice of Bond Cancellation; and License Status). [5] See Exhibit No. 1 (10/6/14 License Application). [6] See A.R.S. § 32-1122. [7] 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). [8] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [9] Burrows v. Taylor, 129 Ariz. 212, 214, 630 P.2d 35, 37 (Ct. App. 1981); see also Laws 1985, Ch. 334, § 1 (“The goals and objectives of the registrar of contractors are to protect the public health, safety and welfare by licensing, bonding and regulating contractors engaged in residential construction . . . .”).

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