ALJDEC decisions subject to certification as final

2015A-4905-ROC · Registrar of Contractors · 2016-02-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 23, 2016, at 10:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Thomas Raine, Esq., Assistant Attorney General; Robert Aguilar (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On or about May 3, 2015, Michael Lynn Steiner (“Mr. Steiner”) filed a complaint with the Registrar that Respondent doing business as Raca Construction had entered into a contract to perform certain remodeling at Mr. Steiner’s residence at 4229 N. Ocotillo Canyon Dr., Tucson, Arizona 85750 for the price of $5,100.00, but that after Mr. Steiner paid Respondent $2,550.00 and Respondent had replaced only one GFI outlet, Respondent had abandoned the job.[1] Mr. Steiner attached to his complaint his and his wife’s personal check made payable to Raca Construction on the amount of $2,550.00 that had been negotiated. The complaint was assigned to the Registrar’s Investigator James Vildusea (“Investigator Vildusea”) for investigation. Investigator Vildusea prepared an investigative report that summarized his investigation.[2] On or about December 14, 2015, Investigator Vildusea issued a Cease & Desist Order, a civil citation for unlicensed contracting in violation of A.R.S. § 32-1151, and a civil citation for unlicensed advertising in violation of A.R.S. § 32-1165 based on his investigation into Respondent’s activities. Investigator Vildusea assessed a civil penalty in the amount of $1,500.00 for the violation of A.R.S. § 32-1151 and a civil penalty in the amount of $1,000.00 for the violation of A.R.S. § 32-1165.[3] After Respondent failed to pick up the Cease & Desist Order, civil citations, and assessment of civil penalties that the Registrar had sent by certified mail, on December 24, 2015, the Registrar served the documents on Respondent through a process server. Respondent requested a formal hearing. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. On January 11, 2016, the Registrar issued a Notice of Hearing, setting a hearing on February 23, 2016, at 10:00 a.m. at OAH. The Registrar mailed a copy of the Notice of Hearing to Respondent at the same address where the Cease & Desist Order, civil citations, and assessment of civil penalties had been served on Respondent. A hearing was held on February 23, 2013. The Registrar submitted six exhibits and presented Investigator Vildusea’s testimony. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed almost 30 minutes to allow Respondent additional travel time, Respondent did not appear, personally or through an attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to controvert the evidence that the Registrar presented. Additional Hearing Evidence After Mr. Steiner filed the complaint with the Registrar against Respondent and Raca Construction, the Registrar’s customer service representative researched whether Respondent or Raca/R.A.C.A. Construction had ever been licensed. The Contact View Screen of the Registrar’s database showed that neither Respondent nor R.A.C.A. Construction had ever possessed any contracting credentials or licenses.[4] The Registrar’s customer service representative also checked the Arizona Corporation Commission’s (“ACC’s”) website for Respondent’s business, Raca/R.A.C.A. Construction. The ACC’s website shows that R.A.C.A. Construction LLC was incorporated on April 17, 2013, and that Respondent is R.A.C.A. Construction LLC’s only member.[5] Investigator Vildusea later performed an internet search of Respondent and R.A.C.A. Construction LLC. Investigator Vildusea discovered that R.A.C.A. Construction LLC with Respondent as the company contact was listed on manta.com and porch.com as a contractor or general contractor.[6] Investigator Vildusea testified that manta.com and porch.com are sites similar to craigslist or Angie’s list where potential customers can find contractors and other services. Neither the manta.com nor the porch.com listing for R.A.C.A. Construction LLC included the disclaimer, “not a licensed contractor.” CONCLUSIONS OF LAW The Notice of Hearing that the Registrar mailed to Respondent at the address where Respondent was served with the Cease & Desist Order, civil citations, and assessment of civil penalties was reasonable Respondent is deemed to have received notice of the hearing.[7] This matter lies within the Registrar’s jurisdiction.[8] The Registrar bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[9] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[10] 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.

The Registrar established that Respondent was unlicensed, that he contracted to perform certain remodeling work at Mr. Steiner’s residence for the price of $5,500.00, and that he accepted payment in the amount of $2,550.00 before he abandoned the job. 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. Steiner exceeded $1,000.00 and Respondent actually accepted $2,550.00 to perform the work, the handyman’s exemption does not apply. Therefore, the Registrar established that Respondent violated A.R.S. § 32-1151. The Registrar established that Respondent advertised the services of his company, R.A.C.A. Construction LLC, on the websites manta.com and porch.com 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.” 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, 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. . . .

A.A.C. R4-9-131 provides some factors that the Registrar may consider as factors to increase the amount of a civil penalty, including that the unlicensed contractor “[f]ailed to perform any work for which money was received.” Under the circumstances, a civil penalty in the amount of $1,500.00 for Respondent’s violation of A.R.S. § 32-1151 was not excessive. Respondent also failed to add the disclaimer, “not a licensed contractor,” to R.A.C.A. Construction LLC’s advertisements on manta.com and porch.com. Under the circumstances, a civil penalty in the amount of $1,000.00 for Respondent’s violation of A.R.S. § 32-1165 is not excessive. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent Robert Aguilar 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 or before 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, February 23, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 3. [2] See the Registrar’s Exhibit 2. [3] See the Registrar’s Exhibit 1. [4] See the Registrar’s Exhibit 4. [5] See the Registrar’s Exhibit 5. [6] See the Registrar’s Exhibit 6. [7] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [8] See A.R.S. § 32-1101 et seq. [9] 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). [10] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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