ALJDEC decisions subject to certification as final

2015A-586-ROC · Registrar of Contractors · 2015-05-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 20, 2015, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General Seth T. Hargraves. George Purselley (hereinafter “Respondent” or “Mr. Purselley”) appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Mr. Purselley appealed a Civil Citation issued by the Registrar for contracting without a license. The Civil Citation imposed a civil penalty in the amount of $1,500.00. Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law, and Recommend Order are made, finding a violation and recommending imposition of a civil penalty in the amount of $1,500.00. FINDINGS OF FACT Background and Procedure Mr. Purselley is not a licensed contractor in the State of Arizona.[1] On or about September 23, 2014, the Registrar received a written Complaint alleging that Mr. Purselley aka Out West Steel had submitted a bid proposing to perform construction work on a commercial construction project for the sum of $15,985.00, and that Mr. Purselley aka Out West Steel had performed construction work on a construction project. The Complaint asserted that Mr. Purselley knew that he was not licensed when he entered into a contract with the person who submitted the complaint and that Mr. Purselley performed unsatisfactory work on the construction project. The Complaint was assigned to Registrar Investigator Manual Bermudez (hereinafter “Investigator Bermudez”). Investigator Bermudez initiated an investigation of the Complaint. On October 8, 2014, Investigator Bermudez checked the Registrar’s computer database and found that Mr. Purselley had never applied for and or been granted a contractor’s license in the State of Arizona.[2] On or about February 4, 2015, Investigator Bermudez contacted Michele Hart (hereinafter “Ms. Hart”), the individual who had filed the Complaint against Mr. Purselley. Ms. Hart stated that Mr. Purselley disclosed that he was not a licensed contractor but asserted that he was working under someone else’s license. Investigator Bermudez totaled the checks that were attached to the Complaint and found that Ms. Hart had paid a total of $24,554.27 to Mr. Purselley. Investigator Bermudez mailed a warning letter to the Respondent on February 4, 2015. Investigator Bermudez made telephone contact with Mr. Purselley on February 4, 2015. Mr. Purselley acknowledged that he was not a licensed contractor and that he had performed steel work for Ms. Hart. Mr. Purselley stated that he was working as a laborer for Ms. Hart. Mr. Purselley acknowledged that he had provided a bid proposal to Ms. Hart for the fabrication, delivery, and erection of a commercial building for the sum of $15,985.00. Mr. Purselley denied that he had ever represented to Ms. Hart that he was a licensed contractor.[3] Mr. Purselley asserted that he had a bond and insurance and that he had filed all of the paperwork necessary to obtain a contractor’s license. Mr. Purselley received a total of $24,554.27 from Ms. Hart for the construction project. Mr. Purselley said that additional money included the cost of materials and overtime. Investigator Bermudez then informed Mr. Purselley about statutes regarding the total dollar value of a construction project when considering whether the handyman exemption applied. Investigator Bermudez determined that Mr. Purselley had violated the provisions of A.R.S. § 32-1151 (Engaging in contracting without a license). A Cease & Desist Order was issued to Mr. Purselley on or about February 10, 2015, for violating the provisions of A.R.S. § 32-1151. A civil penalty in the sum of $1,500.00 was assessed for one (1) count of contracting without a license for submission of a bid proposal for construction work on a commercial construction project in the State of Arizona at 307 E. First St., Mesa, Arizona for the sum of $15,985.00 and for performing the construction work on the construction project at the same address.[4] Testimony Investigator Bermudez testified that he is an Investigator with the Registrar of Contractors. Investigator Bermudez stated that he investigates complaints of unlicensed contracting, or proposing to perform or performing construction work without a contractor’s license from the Registrar. Investigator Bermudez testified that he conducted the investigation of Mr. Purselley and prepared the Official Departmental Report. Investigator Bermudez reviewed and summarized the Official Departmental Report. Investigator Bermudez testified that Mr. Purselley is not a licensed contractor in the State of Arizona. Investigator Bermudez stated that Mr. Purselley was not in compliance with Arizona contracting laws. Investigator Bermudez said that on or about July 9, 2014, Mr. Purselley violated A.R.S. § 32-1151 by contacting without a license by submitting a bid proposal for construction work on a commercial construction project at 307 E. First St., Mesa, Arizona for the sum of $15,985.00 and that Mr. Purselley aka Out West Steel then violated A.R.S. § 32-1151 by performing construction work on a construction project without a contractor’s license. Investigator Bermudez testified that Arizona contracting law allows an exemption from licensure, with certain limitations, for a “handyman.”[5] Investigator Bermudez stated that Mr. Purselley’s construction work did not fit within the handyman exemption because the cost of the construction work was in excess of the dollar amount allowed in the handyman exemption. Investigator Rhodes said that the Registrar issued a Cease & Desist Order and a Civil Citation for the unlicensed activity, imposing a civil penalty in the amount of $1,500.00. Investigator Bermudez acknowledged that Out West Steel LLC had obtained a CR-17 License on April 29, 2015.[6] Investigator Bermudez testified that Mr. Purselley is not listed on the license for Out West Steel LLC. Investigator Bermudez’s testimony is found to be credible. Mr. Purselley acknowledged that he is not a licensed contractor and that he had provided a bid proposal to Ms. Hart for the fabrication, delivery, and erection of a commercial building for the sum of $15,985.00. Mr. Purselley acknowledged that the checks issued to him by Ms. Hart for the construction project totaled the sum of $24,554.27. Mr. Purselley acknowledged that he is not listed as a member or qualifying party on the contractor’s license for Out West Steel LLC. Mr. Purselley asserted that Ms. Hart was aware that he was not a licensed contractor when she accepted the bid proposal. CONCLUSIONS OF LAW The Registrar bears the burden of proof to establish Mr. Purselley’s violation of A.R.S. § 32-1151 by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[7] 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.”[8] Arizona contracting law prohibits a person from acting as a contractor without a license.[9] The law allows an exemption from licensure, with certain limitations, for a “handyman.” An unlicensed handyman can perform construction work, with certain exclusions, such as that the work does not require a permit, as long as the aggregate price for the job, including labor and materials, does not exceed $1,000.00.[10] 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.[11] A.R.S. § 32-1121(A)(14) provides 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, but excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two pronged or three pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening device to the frame or foundation of any residential structure, is less than one thousand dollars. The work or operations that are exempt under this paragraph shall be of a casual or minor nature. This exemption does not apply:

(a) In any case in which the performance of the work requires a local building permit.

(b) In any case in which the work or construction is only a part of a larger or major operation, whether undertaken by the same or a different contractor, or in which a division of the operation is made in contracts of amounts less than one thousand dollars, excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two pronged or three pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening device to the frame or foundation of any residential structure, for the purpose of evasion of this chapter or otherwise.

(c) To 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

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. § 32-1166(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 the total civil penalties for Respondent’s continuing 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.[12] The preponderance of the evidence established that Mr. Purselley is not a licensed contractor. Mr. Purselley submitted a bid proposal for construction work on a commercial construction project in the State of Arizona at 307 E. First St., Mesa, Arizona for the sum of $15,985.00. Mr. Purselley acknowledged that he had received a total of $24,554.27 from Ms. Hart for materials and labor on the construction project. This Tribunal concludes that a civil penalty in the sum of $1,500.00 is warranted in this case. RECOMMENDED ORDER Based upon the foregoing, it is recommended that the Registrar affirm the finding that Mr. Purselley violated A.R.S. § 32-1151 and affirm the decision to assess a civil penalty in the amount of $1,500.00, 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 five (5) days from the date of certification. Done this day, May 28, 2015.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] See Exhibit 2 (Investigation Report with Attachments).

[2] See Exhibit 2 (Investigation Report with Attachments). [3] See Exhibit 2 (Investigation Report and Attachments). [4] See Exhibit 3 (Cease & Desist Order). [5] See A.R.S. § 32-1121(A)(14). [6] ROC License Number 297238. [7] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [8] Black’s Law Dictionary at page 1220 (8th ed. 1999). [9] A.R.S. § 32-1164(A)(2). [10] A.R.S. § 32-1121(A)(14). [11] A.R.S. § 32-1166(A). [12] A.A.C. R4-9-131 sets forth permissible aggravating and mitigating 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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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826