ALJDEC decisions subject to certification as final

2016A-1092-ROC · Registrar of Contractors · 2016-09-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 26, 2016 APPEARANCES: Respondent James Flynn appeared on his own behalf. Investigator Mike Nation appeared on behalf of the Registrar of Contractors. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT Respondent James Flynn is not a licensed contractor in the State of Arizona. On or about April 1, 2016, the Registrar received a complaint from Robert Tarics regarding Respondent. The complaint alleged that Respondent entered into a contract to build a clean and polish marble tile flooring for $1,556.31, failed to complete the work, and the work done did not meet minimum workmanship standards. On or about June 2, 2016, Investigator Mike Nation contacted Mr. Tarics regarding the complaint. Mr. Tarics stated that in February 2016, he found Respondent through a website and hired him to clean and polish his marble floors at his home. Respondent agreed to perform the work for $60.00 per hour. Mr. Tarics indicated that Respondent requested payment for the materials up front and the time for his labor to be paid at the end of each day. Mr. Tarics stated he received an invoice from Respondent on the first day only, but did not any further invoices. Mr. Tarics indicated that the first invoice was for materials and for 7.5 hours of labor. Mr. Tarics provided copies of checks paid to Respondent. Those checks were dated and were in the amounts as follows: January 28, 2016 $609.79 February 12, 2016 $455.07 February 15, 2016 $186.58 February 16, 2016 $85.17 February 17, 2016 $52.58 February 18, 2016 $167.12

According to Mr. Tarics, he was unsatisfied with the work performed and, on or about March 24, 2016, he contacted Respondent and demanded that Respondent return to correct his mistakes. According to Mr. Tarics, Respondent would not admit fault and wanted more money up front if he agreed to come back to do the work. Mr. Tarics provided copies of emails and texts to support his statement.[1] On or about June 6, 2016, Investigator Nation contacted Respondent regarding the complaint. Respondent stated that he agreed to perform the work for Mr. Tarics for $60.00 per hour. Respondent acknowledged he was paid $1,556.31 in total for the job, but he only netted $420.00 and the rest of the payment was spent on materials and equipment. Respondent stated Mr. Tarics had filed suit against him at McDowell Mountain Justice Court. Investigator Nation testified that Arizona contracting law allows an exemption from licensure, with certain limitations, for a “handyman.”[2] Investigator Nation stated that Respondent’s work did not fit within the handyman exemption because it exceeded the $1,000.00 limit. Investigator Nation determined that Respondent had violated the provisions of A.R.S. § 32-1151 (Engaging in contracting without a license). A Cease & Desist Order was sent via certified mail to Respondent on June 6, 2016, for violating the provisions of A.R.S. § 32-1151. A total of $1,500.00 in civil penalties was assessed. At hearing, Investigator Nation testified that in 2007, the Registrar had received two prior complaints against Respondent for contracting without a license. Respondent was found to be guilty of contracting without a license in both of those complaints. At hearing, Respondent testified that he entered into the contract with Mr. Tarics for a total cost of $609.79. Respondent advised Mr. Tarics not to go on the floor or to let the dogs on the floor for at least an hour and to ensure that the materials were dry before walking on the floor. Respondent testified that he observed Mr. Tarics, his partner, and the dogs on the flooring before Respondent had left the home. Respondent stated that before he got home, Mr. Tarics was calling to report splotches throughout the home meaning Mr. Tarics would have had to walk across the flooring. When Respondent when back to the home to look at the flooring, he saw papers that Mr. Tarics had left on the floor near an area of concern that had dried into the material on the floor and that footprints were visible in the material. Respondent stated that he agreed to come back to the house and redo the flooring without charging Respondent for labor if Respondent agreed to pay for the materials. Respondent testified that the payments made in February 2016 were for materials Respondent purchased to redo the work and that he was not paid for his time. Respondent also stated that he agreed to come back and buff and/or polish the floors after redoing the work, but he would need to be paid for his time. Mr. Tarics was not called as a witness during the hearing. 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.[3] 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.[4] 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.[5] The evidence failed to establish a violation of Arizona contracting laws by a preponderance of the evidence. Respondent’s credible testimony detailed that the original contract for the project was for $609.79 paid on January 28, 2016. The following payments more than two weeks later are more properly considered a separate contract to perform additional work on the project. This is especially true in this case where the need for the additional work on the project was necessitated by Mr. Tarics failure to follow instructions to stay off the flooring. Thus, the assessed civil penalty of $1,500.00 is not warranted. RECOMMENDED ORDER Based upon the foregoing, it is recommended that the Registrar reverse the decision to assess a civil penalty in the amount of $1,500.00. 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, September 14, 2016.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Notably, the emails and texts submitted were in the form of emails from Mr. Tarics to Mr. Tarics. Thus, it cannot be determined if the messages were actually sent to or received from Respondent, much less the original date and time the messages may have been sent. For example, on one email dated March 24, 2016 at 1:44 p.m., the message states, “Jim, we need to restart the repair work on the floors no later than March 8.” [2] See A.R.S. § 32-1121(A)(14). [3] 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. [4] A.R.S. § 32-1166(A). [5] 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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