ALJDEC decisions subject to certification as final

2015A-4046-ROC · Registrar of Contractors · 2015-12-15

“IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 14, 2015, at 1:00 p.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Thomas Raine, Esq., Assistant Attorney General; Guadalupe Cardenas (“Respondent”) appeared telephonically on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On or about April 20, 2015, David and Della Thomas (“Mr. and Mrs. Thomas”) filed a complaint with the Registrar alleging that Respondent doing business as Guadalupe Cardenas & Sons had entered into a contract to construct a circular concrete driveway at their property for the price of $4,900.00, that they had paid Respondent a total of $7,500.00, and that the driveway had multiple deficiencies. The complaint was assigned to the Registrar’s Investigator, Johnnie Rodney Hamilton (“Investigator Hamilton”), for investigation. On or about September 24, 2015, Investigator Hamilton issued a Cease & Desist Order, two civil citation for violating of A.R.S. §§ 32-1151 and 32- 1165, based on Respondent’s activities at Mr. and Mrs. Thomas’s property, and assessed civil penalties in the total amount of $2,500.00.[1] The Registrar served the Cease & Desist Order and civil citations on Respondent by registered mail. Respondent signed the U.S. Postal Services’ certified mail receipt. Respondent requested a formal hearing. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on December 14, 2015. The Registrar submitted eight exhibits and presented Investigator Hamilton’s testimony. Respondent testified on his own behalf. Additional Hearing Evidence Mr. and Mrs. Thomas attached the following documents to the complaint that they filed with the Registrar: 1. An invoice from Lupe Cardenas/Pride Landscaping, Concrete Driveways & Patio Walls dated December 29, 2014, with an estimate of $4,900.00 for “circular drive & a double driveway . . . using 3000 psi 4 inches thick, also there will be escavation [sic] for the drive.”[2] The invoice stated that Respondent was “Licensed” and did not include the disclaimer, “not a licensed contractor.” 2. Checks drawn on the account of Mr. and Mrs. Thomas’s business, Lovecare Co., between December 17, 2014, and January 3, 2015, made payable to Respondent in the total amount of $7,500.00.[3] 3. Respondent’s estimate on a printed note for Odyssey Hospice in the amount of $1,500.00 to repair damage to the concrete caused by a Fed Ex’s employee’s footprint.[4] 4. Respondent’s business cards, which solicited various construction work, including concrete driveways, patio walls, and tile work, but did not include the disclaimer, “not a licensed contractor.”[5] Investigator Hamilton testified that installing concrete driveways, patio walls, and tile may require a contractor’s license, depending on the size and price of the project. 5. Numerous photographs of Respondent’s concrete work at Mr. and Mrs. Thomas’s property, which showed cracks, concrete that was not level, inadequate grading, and drainage and flooding issues.[6]

After receiving Mr. and Mrs. Thomas’s complaint, Investigator Hamilton checked the Registrar’s database and determined that Respondent was neither licensed nor had filed a pending license application. Investigator Hamilton interviewed Mr. and Mrs. Thomas and prepared a report of his investigation.[7] Investigator Hamilton testified that if a project cost more than $999.99, including labor and materials, it requires a contractor’s license to perform. Investigator Hamilton also testified that advertising to perform contracting work, including business cards and invoices, must either show a valid contractor’s license number or the disclaimer, “not a licensed contractor.” Investigator Hamilton testified that he had interviewed Respondent and that Respondent had stated that he informed Mr. and Mrs. Thomas that he did not have a license. Investigator Hamilton stated that even if Respondent made that verbal disclaimer to Mr. and Mrs. Thomas, it would not be a defense to a violation of A.R.S. §§ 32-1151 and 32-1165. Investigator Hamilton testified that his review of the Registrar’s database revealed that at least five complaints had been made against Respondent for unlicensed contracting and/or unlicensed advertising, including the following: 1. On or about June 6, 2011, the Registrar received a complaint from Andrew Rendes against Respondent that Respondent had contracted to repair and recoat the roof on Mr. Rendes’ house for $1,020.00. The Registrar referred the matter to the Pima County Attorney’s Office for criminal prosecution.[8] 2. In approximately July 2014, in Pima County Justice Court Case No. CR14-423191-MI, a criminal case, Respondent had pled guilty of unlicensed contracting, was fined $2,000.00, and was ordered to pay criminal restitution in the amount of $16,295.00. As of October 23, 2015, Respondent still owed $17,295.00.[9] 3. On or about October 27, 2015, the Registrar received a complaint from Gloria Fuentes that alleged that Respondent had contracted to cut a tree and to install 100 feet of river rock, mortar, and cement for a total price of $2,800.00 and had been paid a total of $5,000.00 for the project. The Registrar had referred the complaint to the Pima County Attorney’s Office for review and prosecution and as of the date of the hearing in this matter, the matter was pending.[10] Respondent testified that he planned to pay all the restitution on Pima County Justice Court Case No. CR14-423191-MI and that he was willing to make payments on the civil penalties assessed in this matter. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[11] The Registrar bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[12] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[13] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[14] A.R.S. § 32-1151 prohibits contracting without a license, providing in relevant part 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.

Respondent did not dispute that he contracted to perform and that he actually performed contracting work at Mr. and Mrs. Thomas’s property. A.R.S. § 32-1121(A)(14) sets forth the so-called “handyman’s exemption” to licensure requirements and provides in relevant part 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 . . . is less than one thousand dollars. The work or operations that are exempt under this paragraph shall be of a casual or minor nature. . . .

Because the amount of Respondent’s contract with Mr. and Mrs. Thomas exceeded $999.99, the Registrar established that Respondent violated A.R.S. § 32-1151. The Registrar established that Respondent advertised that he was qualified to perform contracting services on his invoice, which falsely stated that he was licensed, and on his business card without including the disclaimer, “not a licensed contractor.” A.R.S. § 32-1165 provides as follows: Except as authorized by section 32-1121, subsection A, paragraph 14, subdivision (c), it is a class 1 misdemeanor for any person to advertise that he is able to perform any service or contract for compensation subject to regulation by the registrar under the terms of this chapter unless a license under the terms of this chapter is first obtained regardless of whether his operations as a contractor are otherwise exempt.

A.R.S. § 32-1121(A)(14)(c) provides that the handyman exemption does not apply “[t]o 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.” The statute requires the disclaimer to be in writing. Respondent’s claim to be licensed on the invoice is false and contradicts the oral disclaimer that he told Investigator Hamilton he gave Mr. and Mrs. Thomas. Even if Respondent established that he gave the oral disclaimer, it would not be a defense to unlicensed advertising under applicable statutes. Therefore, the Registrar established that Respondent violated A.R.S. § 32-1165 by advertising without a license. A.R.S. § 32-1166(A) authorizes the Registrar to assess a civil penalty against a person who has been found to have contracted without a license in violation of A.R.S. § 32-1151 or to have advertised that he is able to perform a service for which a contractor’s license is required in violation of A.R.S. § 32-1165, providing in relevant part as follows: In addition to all other remedies, when it appears to the registrar, either upon complaint or otherwise, that any person, firm, partnership, corporation, association or other organization, or a combination of any of them, has engaged in or is engaging in any act of contracting, practice or transaction which constitutes a violation of this chapter, or any rule or order of the registrar, the registrar may serve upon such person, firm, partnership, corporation, association or other organization not currently licensed under this chapter, by certified mail or by personal service, a cease and desist order requiring the person, firm, partnership, corporation, association or other organization to cease and desist immediately, upon receipt of the notice, from engaging in such act, practice or transaction. In conjunction with the cease and desist order, the registrar may issue a citation for a violation. Each citation shall be in writing and shall clearly describe the violation for which the citation was issued. Each citation shall contain an order to cease and desist and an assessment of 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. . . .

Respondent falsely claimed to be a licensed contractor on his invoice, performed work that did not meet minimum acceptable trade or industry standards and was not performed in a good and workmanlike manner, and has committed two or more violations. These are all factors that may be considered in imposing a higher civil penalty.[15] Therefore, a civil penalty in the amount of $1,500.00 for Respondent’s violation of A.R.S. § 32-1151 and a civil penalty in the amount of $1,000.00 for Respondent’s violation of A.R.S. § 32-1165, for total civil penalties in the amount of $2,500.00, are appropriate. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent Guadalupe Cardenas violated A.R.S. §§ 32-1151 and 32-1165 and affirm the assessment of civil penalties in the total amount of $2,500.00. The aggregate total of $2,500.00 in civil penalties shall be paid in certified funds to the Registrar on the effective date of the 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 will be five days from the date of that certification. Done this day, December 15, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 3. [2] The Registrar’s Exhibit 1 at 3. [3] See the Registrar’s Exhibit 1 at 4 and 5. [4] See the Registrar’s Exhibit 1 at 6. [5] See the Registrar’s Exhibit 1 at 7, 8, and 9. [6] The Registrar’s Exhibit 1 at 10-34. [7] See the Registrar’s Exhibit 2. [8] See the Registrar’s Exhibit 7. The record does not contain the outcome. [9] See the Registrar’s Exhibit 8. The criminal complaint apparently resulted from the Registrar’s referral to the Pima County Attorney’s Office of a consumer complaint from Irene C. Ray. See the Registrar’s Exhibit 6. [10] See the Registrar’s Exhibit 5. [11] See A.R.S. § 32-1101 et seq. [12] See A.R.S. § 41-1092.07(G)(3); A.A.C. R2-19-119(A) and A.A.C. R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [13] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [14] Black’s Law Dictionary at page 1220 (8th ed. 1999). [15] See A.A.C. R4-9-131. This regulation provides 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. . . . . 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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