ALJDEC decisions subject to certification as final

2015A-3738-ROC · Registrar of Contractors · 2015-12-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 2, 2015 APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General John Tellier. Roger Davis, Qualifying Party, appeared on behalf of Respondent Acclaim Air LLC. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. Ronald Colen Dew is a person named on License No. 212859 held by Abode Air, LLC (Abode), as Abode’s Qualifying Party and member. 2. The Registrar first revoked Abode’s License No. 212859 on September 7, 2011, and has subsequently revoked Abode’s license 45 times. 3. The Residential Contractor’s Recovery Fund (the Fund) has paid $14,558.40 to persons injured by the actions of Abode. This amount, plus interest, has not been repaid to the Fund. 4. ACME Home Services, LLC (ACME) is an Arizona limited liability company. William Edward Dew is ACME’s manager and sole member. 5. On or about October 26, 2011, ACME submitted an Application for Contractor’s License with the Registrar. 6. On or about December 5, 2011, the Registrar denied ACME’s license application based on Ronald Colen Dew acting as ACME’s manager through a Limited Power of Attorney executed by his father, William Edward Dew. 7. Ronald Colen Dew runs the daily operations of ACME and is the functional equivalent of a managing member. 8. On or about June 20, 2012, ACME purchased M Drive Enterprises, Inc., (M Drive), an Arizona corporation and holder of License Nos. 261176 and 261175. 9. On or about August 17, 2012, William Edward Dew took office as a director and president of M Drive but did not advise the Registrar of the changes to M Drive’s officers, directors, or ownership as required by statute. 10. M Drive’s invoices stated it was “A wholly owned subsidiary of Acme Home Services, LLC” and provided the contact information as follows: MDrive Enterprises, Inc. 1867 E. Baseline Road Tempe, AZ 85283 (480) 777-ACME (2263)

11. Ronald Colen Dew ran the daily operations of M Drive and was the functional equivalent of an officer and a director of M Drive. 12. On March 18, 2014, the Registrar summarily suspended the licenses of M Drive. 13. On June 11, 2014, the Registrar revoked the licenses of M Drive for violations of A.R.S. § 32-1154(A)(10), (13), and (21).[1] 14. On or about May 16, 2014, ACME, acting through Ronald Colen Dew, entered into a “Marketing and Management Independent Contractor Agreement” with Respondent Acclaim Air, LLC. 15. Respondent is an Arizona limited liability company that applied for an Arizona contractor’s license on or about July 25, 2014, Roger Owen Davis is listed on Respondent’s license application as its sole member, manager, and Qualifying Party. 16. On or about August 8, 2014, the Registrar issued License No. 294097 to Respondent. According to the Registrar’s records, Respondent’s address is 12310 West Columbine Drive, El Mirage, Arizona. 17. On its website, Respondent’s address is listed as 1867 East Baseline Road, Tempe, Arizona. According to the GoDaddy.com registration information, the website was registered to Denise McGrath at 1867 East Baseline Road, Tempe, Arizona, with an email address of [email redacted] and a phone number of 480-777-2263. 18. Respondent’s invoices provided the contact information as follows: Acclaim Air, LLC MANAGED BY ACME HOME SERVICES, LLC 1867 E. Baseline Road, Tempe, AZ 85283 (480) 777-ACME (2263)

19. Ronald Colen Dew runs the daily operations of Respondent and is the functional equivalent of a managing member. 20. Records from the Arizona Department of Economic Security establish that during the calendar quarter ending June 30, 2014, six of M Drive’s seven employees were also employed by ACME and four of Respondent’s five employees were also employed by ACME. 21. Adam Stafford, Assistant Chief Counsel for the Registrar, testified that there are approximately 36,000 licenses issued by the Registrar. In any given year, approximately 93 percent of licenses have no complaints filed against them; 6 percent of licenses have one or two complaints filed against them; and 1 percent have more than two complaints filed against them. Mr. Stafford testified that since Respondent had been issued a license little over a year before the hearing, it had nine complaints filed against it. 22. Investigator Stephen Lawton testified that he interviewed Mr. Davis regarding his role with Respondent. Although Mr. Davis is Respondent’s Qualifying Party, Mr. Davis admitted that he was not involved in the day-to-day operations, did not keep records, did not know how many employees Respondent had, did not know how the employees got paid, and was not involved in the hiring or firing. Mr. Davis told Investigator Lawton that he was a signatory on Respondent’s bank account, but he did not have a checkbook. Mr. Davis also informed Investigator Lawton that his only role was to attend jobsite inspections relating to complaints filed with the Registrar. 23. Mr. Davis testified that he was paid $500.00 per week and a percentage of sales as part of his agreement with ACME to manage Respondent’s day- to-day operations. Mr. Davis stated that he was not contesting the requested revocation of Respondent’s license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32- 1122. 2. The Registrar bears the burden of proof by a preponderance of the evidence to establish that cause exists to discipline Respondent’s license. 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). “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). 3. A.R.S. § 32-1154(A) provides that the holder of a license or any person listed on a license shall not commit any of the following acts or omissions: 9. Aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one's license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.

4. The undisputed evidence established that Roger Owen Davis knowingly or recklessly conspired with Ronald Colen Dew, an unlicensed person, and ACME, an unlicensed person, to evade this chapter, namely A.R.S. § 32- 1122(D),[2] A.R.S. § 32-1139(B),[3] A.R.S. § 32-1154(A)(20),[4] and A.R.S. § 32-1161(C).[5] 5. The undisputed evidence established that Respondent allowed its license to be used by ACME with the intent to evade this chapter, namely A.R.S. § 32-1122(D), A.R.S. § 32-1139(B), A.R.S. § 32- 1154(A)(20), and A.R.S. § 32-1161(C). 6. Therefore, the Registrar established that Respondent’s license should be revoked. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar of Contractors’ Order in this matter, the Registrar of Contractors revoke Respondent Acclaim Air LLC’s License No. 294097. 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 40 days from the date of that certification. Done this day, December 22, 2015.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] The Second Regular Session of Arizona’s Fifty-First Legislature passed S.B. 1160 that amended Chapter 10 of Title 32 and renumbered these subsections as A.R.S. § 32-1154(A)(9), (12), and (20), respectively, effective July 24, 2014. [2] A.R.S. § 32-1122(D) provides 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 engaged in contracting without a license or committed any act that, if committed or done by any licensed contractor, would be grounds for suspension or revocation of a contractor's license or by showing that the person was named on a contractor's license that was suspended or revoked in another state.

[3] 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.

[4] A.R.S. § 32-1154(A)(20) provides as follows:

Having a person named on the license who is or was named on any other license in this state or in another state that is under suspension or revocation for any act or omission that occurs while the person is or was named on the license unless the prior revocation was based solely on a violation of this paragraph.

[5] A.R.S. § 32-1161(C)

After revocation of a license upon any of the grounds set forth in section 32-1154, the license shall not be renewed or reissued for one year after final determination of revocation and then only on proper showing that all loss caused by the act or omission for which the license was revoked has been fully satisfied.

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