ALJDEC decisions subject to certification as final

2016A-2606-ROC · Registrar of Contractors · 2016-10-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

IN THE MATTER OF THE CIVIL PENALTY

CITATION ISSUED TO:

Phillip D. Keller

RESPONDENT

No. 2016A-2606-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 3, 2016

APPEARANCES: Respondent Phillip D. Keller did not appear. The Registrar of Contractors (Registrar) was represented by Assistant Attorney General Thomas Raine.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

Phillip D. Keller (Respondent) appealed a Cease and Desist and Civil Citation (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

Respondent is not a licensed contractor in the State of Arizona.

On or about July 21, 2016, Investigator Daniel Rhodes was performing an unlicensed activity patrol in Sun Lakes, Arizona. Investigator Rhodes observed a construction at 9340 East Sun Lakes Boulevard South, including drywall stacked in the driveway, insulation in the back of a pickup truck in the driveway, saws, wood, and Respondent working.

Investigator Rhodes approached Respondent who stated he was only cleaning up the area at the request of an absentee home owner, was being paid $8.00 per hour, and had just started working that day.

Investigator Rhodes asked Respondent to show him around the mobile home to see the work being done. Investigator Rhodes noted complete demolition of walls, framing and insulation being added, and what appeared to be an addition being added, exposed electrical connections, and fixture removal. Investigator Rhodes also observed excavation running the length of the home approximately three to four feet in depth with rebar placed in the ground and being prepped for concrete.

Respondent then took Investigator Rhodes into the back yard where he saw an individual raking. Investigator Rhodes asked Respondent to wait at the front of the home while he spoke to the individual. The individual identified himself as Robert Miller. Investigator Rhodes asked Mr. Miller about the job, who stated Respondent had hired him on Monday and was paying him $8.00 per hour.

Investigator Rhodes then confronted Respondent with the inconsistencies between Respondent’s statements, Investigator Rhodes’ observations, and Mr. Miller’s statements. Respondent admitted that he was actually installing insulation and drywall and that he had been working on the scene all week. Respondent acknowledged that the home owner was paying him in $500.00 increments for work completed on the considerable remodel project and that he had already received two to four $500.00 payments. Respondent also indicated that the home owner was waiting for permits and claimed that the permits had been applied for and were awaiting approval. Respondent acknowledged that permits were required for the work and had not yet been issued.

Respondent admitted that he was not a licensed contractor and had previously been cited for unlicensed contracting.

Investigator Rhodes used his car mounted computer to open an own motion case, completed a Civil Citation, activated his digital recorder, and made contact with Respondent again. Respondent again acknowledged he was unlicensed, that he had accepted over $1,000.00 in compensation, and that he knew the project required permits, and that the project would cost more than $10,000.00 total.

When Investigator Rhodes told Respondent that he was issuing the Civil Citation and asked him to sign it, Respondent became emotional and walked into the home and closed the door. Investigator Rhodes went around the back of the home and observed Respondent’s feet protruding out the back door. Investigator Rhodes said that because Respondent refused to sign, he was going to issue and serve the Civil Citation. Then Respondent took the completed Civil Citation and laid it on the ground beside him. Respondent called to Mr. Miller and had Mr. Miller help him get to a vehicle. Investigator Rhodes gave Respondent’s copy of the Civil Citation to Mr. Miller.

On or about August 15, 2016, the Registrar received Respondent’s appeal of the Civil Citation. In the appeal request, Respondent stated that he was a partial owner of the residence pursuant to a verbal agreement in August 2015. Respondent asserted that a warranty deed was filed to make the agreement formal as a result of the present issue with the Registrar. Respondent submitted a warranty deed dated August 7, 2016, that was recorded on August 10, 2016.

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

The Registrar issued a Notice of Hearing, setting a hearing at 1:00 p.m. on October 3, 2016. The Registrar mailed copies of the Notice of Hearing to Respondent at its address of record.

The Notice of Hearing informed Respondent that “[f]ailure to attend the scheduled hearing is likely to result in an adverse ruling against you.”

A hearing was held on October 3, 2016.

Investigator Rhodes testified that Respondent had a prior criminal conviction for contracting without a license and had been ordered to pay restitution of $10,000.00 to $12,000.00.

Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the hearing was delayed 20 minutes, Respondent did not appear. Consequently, Respondent did not present any evidence in his defense.

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. 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. § 32-1151 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.

The evidence established a violation of Arizona contracting laws. As to the aggravating factors identified in A.A.C. R4-9-131, Respondent had a prior violation of contracting without a license. Based on the specific and unique circumstances in this matter, the Tribunal concludes that a civil penalty of $2,500.00 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 and the decision to assess a civil penalty in the amount of $2,500.00 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, October 24, 2016.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors