ALJDEC decisions subject to certification as final

2015A-5139-ROC · Registrar of Contractors · 2016-03-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 8, 2016 APPEARANCES: John P. Heinzkill appeared on his own behalf. The Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ Respondent appealed a Civil Citation issued by the Registrar of Contractors (Registrar) for contracting without a license. The Civil Citation imposed aggregate civil penalties in the amount 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 assessment of a $400.00 civil penalty. FINDINGS OF FACT Background Respondent is not a licensed contractor in the State of Arizona. On or about November 13, 2015, the Registrar received a complaint from Carlo Antoniolli regarding Azteca Improvements and John P. Heinzkill (Respondent). The complaint alleged that Respondent entered into a contract to paint a home for $1,400.00 and included a copy of a business card and flyer for Azteca Improvements. On or about December 10, 2015, Investigator Manuel Bermudez contacted Mr. Antoniolli regarding the complaint. Mr. Antoniolli stated that Respondent was in the neighborhood passing out flyers and Mr. Antoniolli’s neighbor had hired Respondent to do some painting at their home. Mr. Antoniolli indicated he hired Respondent to do some painting and patching some cracks at his house. Mr. Antoniolli identified Respondent in a photo line-up. On or about December 11, 2015, Investigator Bermudez contracted Respondent regarding the complaint. Respondent stated that Mr. Antoniolli was a very difficult customer who argued about every aspect of the project. Respondent acknowledged that the total cost of the job was $1,400.00 and that he was not a licensed contractor. Respondent stated he had received $700.00 from Mr. Antoniolli toward the contract and had spent $300.00 on materials. Respondent offered to refund Mr. Antoniolli some amount of funds. Investigator Bermudez testified that Arizona contracting law allows an exemption from licensure, with certain limitations, for a “handyman.”[1] Investigator Bermudez stated that Respondent’s work did not fit within the handyman exemption because it exceeded the $1,000.00 limit. Investigator Bermudez determined that Respondent had violated the provisions of A.R.S. § 32-1151 (Engaging in contracting without a license) and A.R.S. § 32-1165 (Advertising without a license). A Cease & Desist Order was issued to Respondent on December 15, 2015, for violating the provisions of A.R.S. § 32-1151 and A.R.S. § 32-1165. A total of $2,500.00 in civil penalties was assessed. Investigator Bermudez testified that based on Respondent’s evidence that he had made full restitution to Mr. Antoniolli, the Registrar was willing to reduce the civil penalty to the minimum fine of $1,000.00. Respondent acknowledged that he entered into a contract with Mr. Antoniolli for $1,400.00 and that the contract was in excess of the handyman exemption limit. Respondent testified that he moved here from another state and was unaware that the limit for the handyman exemption was $1,000.00. Respondent stated that the $1,000.00 limit was not sufficient to enable honest, hardworking people like him to make a living. Respondent also testified that he was receiving treatment for prostate cancer, had $12,000.00 in outstanding medical bills, and would be undergoing surgery in the coming weeks. Respondent asked that the civil penalty be reduced. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. The Registrar bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41- 1092.07(G)(2); 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). “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). Arizona contracting law prohibits a person from acting as a contractor without a license.[2] 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.[3] 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.

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. § 32-1166(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 civil penalties for 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.[4] The evidence established a violation of Arizona contracting laws. As to the aggravating factors identified in A.A.C. R4-9-131, it is unclear if Respondent represented to Mr. Antoniolli that he was a licensed contractor, but it is clear Respondent did not have any prior violations. While Respondent did not complete the job in question, he did make full restitution to Mr. Antoniolli and presumably lost money on the materials purchased for the project. Thus, the assessed civil penalty of $2,500.00 and the reduced civil penalty of $1,000.00 is not warranted. Based on the specific and unique circumstances in this matter, the Tribunal concludes that a civil penalty of $200.00 per violation, or $400.00 total is warranted in this case. RECOMMENDED ORDER Based upon the foregoing, it is recommended that the Registrar affirm the finding that Respondent violated A.R.S. § 32-1151, reverse the decision to assess a civil penalty in the amount of $2,500.00, and assess a civil penalty of $400.00 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, March 28, 2016.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1121(A)(14). [2] A.R.S. § 32-1164(A)(2). It is noted that Investigator Bermudez testified to a $500.00 minimum civil penalty per violation; however, that testimony is inconsistent with the statute. [3] A.R.S. § 32-1166(A). [4] A.A.C. R4-9-131 sets forth permissible aggravating 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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