ALJDEC decisions subject to certification as final

2016A-2309-CPA-ROC · Registrar of Contractors · 2017-08-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

IN THE MATTER OF THE CIVIL PENALTY CITATION ISSUED TO:

Mario A. Rios

No. 2016A-2309CPA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 28, 2017

APPEARANCES: Mario A. Rios (hereinafter “Mr. Rios” or “Respondent”) appeared in person. The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General Thomas Raine.

ADMINISTRATIVE LAW JUDGE: Suzanne Marwil

_____________________________________________________________________

Mr. Rios appealed a Civil Citation issued by the Registrar for contracting without a license. The Civil Citation imposed a penalty 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 imposition of a total of $1,500.00 in civil penalties.

FINDINGS OF FACT

Background and Procedure

Mr. Rios is not a licensed contractor in the State of Arizona.

On or about May 16, 2016, the Registrar received a complaint from Kenneth and Teddy Burns (hereinafter “the Burns”) they had contracted with their real estate agent, Bruce Goetz (hereinafter “Mr. Goetz”), to remodel a home he had helped them purchase. This remodel project was originally supposed to cost approximately $25,000.00 and take place over three to four months. Mr. Goetz had MC Fix It Maintenance and Repair and its owner Mr. Rios do most of the work. The Burns alleged the work was substandard and that they ultimately paid considerably more than the amount of the contract. See Exhibit 3.

The Registrar’s Investigator, Daniel Rhodes (hereinafter “Investigator Rhodes”), initiated an investigation of the complaint.

Investigator Rhodes testified that during the course of the investigation he met with the Burns and confirmed that Mr. Goetz disassociated from the job in question and that the Burns worked directly with Mr. Rios to continue the job. See Exhibit 4. Investigator Rhodes confirmed that Mr. Rios was paid more than $20,000.00 to continue work on the remodel project.

Investigator Rhodes determined that Mr. Rios had violated the provisions of A.R.S. § 32-1151 (Engaging in contracting without a license). A Cease & Desist Order was issued to Mr. Rios for violating the provisions of A.R.S. § 32-1151. The Order could not be served as originally planned in July 1, 2016, but was ultimately personally served on Mr. Rios during a break in his San Marcos justice court proceedings on June 5, 2017. A total of $2,500.00 in civil penalties was assessed for one count of contracting without a license. Investigator Rhodes explained that projects under $1,000.00 are subject to a “handyman exception,” but that this project far exceeded that amount. He also noted that the exemption does not apply to the electrical and plumbing work involved in the project, which should have been permitted.

Investigator Rhodes noted that other homeowners within the same subdivision had filed complaints against both Mr. Goetz and Mr. Rios, which he investigated and confirmed. These complaints were all received around the same time.

7. Mr. Rios acknowledged that he was not a licensed contractor in Arizona and that MC Fix It Maintenance and Repair could only undertake independent, small projects. He indicated that his work on the Burns project started off that way, but then morphed into something more when he attempted to help the Burns complete their project after Mr. Goetz disappeared. Mr. Rios pled guilty to doing unlicensed work on the Burns home and the San Marcos justice court is considering the appropriate amount of restitution. Mr. Rios said he would comply with the court’s restitution order and would apply for a contracting license one year from his plea once he was eligible to do so. Mr. Rios requested that the Administrative Law Judge reduce the amount of the Civil Citation in view of his intentions.

CONCLUSIONS OF LAW

The Registrar bears the burden of proof to establish Mr. Rios’ violation of A.R.S. § 32-1151 by a preponderance of the evidence.

Arizona contracting law prohibits a person from acting as a contractor without a license. 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. 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.

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.

Emphasis added.

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.

After review of all the evidence, the Tribunal concludes that the Registrar has proven that Respondent engaged in contracting without a license when he received in excess of $20,000 for the Burns project. Respondent has already pled guilty to engaging in this conduct in justice court.

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 civil penalty for Respondent’s violation 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.

After review of all the evidence, the Administrative Law Judge finds it appropriate that a $1,500.00 Civil Penalty be assessed to Respondent pursuant to A.A.C. R4-9-131(10). This reduction is based on Respondent’s stated willingness to pay the Burns restitution and become a licensed contractor when eligible to do so. In addition, although Respondent faced multiple complaints of unlicensed contracting, they all arose around the same time frame as a consequence of Mr. Rios’ association with Mr. Goetz. The Administrative Law Judge accepts as credible Respondent’s stated commitment to make his victims whole and refrain from future unlicensed activity.

RECOMMENDED ORDER

Based upon the foregoing, it is recommended that the Registrar affirm the finding that Mr. Rios violated A.R.S. § 32-1151 and affirm the decision to assess a civil penalty with a reduction in the amount of the civil penalty to $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 forty (40) days from the date of certification.

Done this day, August 30, 2017.

/s/ Suzanne Marwil

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors