FINACT2016A-4011-ROC.pdf

2016A-4011-ROC · Registrar of Contractors · 2016-11-08

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Registrar of Contractors, Case No. 2016-4011

COMPLAINANT, Docket No. 2016A-4011-ROC

v. FINAL ADMINISTRATIVE DECISION AND Harte Contracting Services, LLC, ORDER License No. CR61.289565-D License No. KB-1.307223-D

RESPONDENT.

On October 14, 2016, the Registrar summarily suspended the contracting licenses of Harte Contracting Services. On October 24 and 25, the Office of Administrative Hearings held a hearing about the summary suspension and the discipline of Harte Contracting’s licenses. On November 2, the administrative law judge issued an Administrative Law Judge Decision. In the decision, the administrative law judge recommended that Harte Contracting’s licenses be reinstated and that no additional discipline beyond the summary suspension be imposed. ALJ Dec. 22:22–23:7. Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an administrative law judge’s written decision. If the Registrar modifies that decision, then the Registrar must provide written justification setting forth the reasons for the modification. The Registrar sets forth its modification and justification below. MODIFICATION AND WRITTEN JUSTIFICATION In July 2016, Harte Contracting, as a general contractor, entered into a construction contract for which it was not duly licensed. ALJ Dec. 5:9–14. During the underlying construction project, Harte Contracting allowed a licensed contractor (Az Tech Crete LLC) to perform work on the project outside the scope of that contractor’s license. ALJ Dec. 15:15–17. (The only valid contractor’s license held by AZ Tech Crete LLC — License No. 182397 — is for residential work, but the project is commercial.)

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 During the project, Harte Contracting also entered into a framing subcontract with a person

(Teodulo Rafael Vasquez) not duly licensed for the framing work (indeed, not licensed for any

contracting work). ALJ Dec. 6:1–5. On October 3, 2016, when Harte Contracting’s unlicensed framer was

installing trusses for the project’s roof, the roof collapsed and several workers were injured. ALJ Dec.

6:7–9. Two of the workers were hospitalized: one worker for at least one day; another worker for at least

four days. ALJ Dec. 6:19–23.

Harte Contracting’s project was marked by other anomalies.

In July 2016, Harte Contracting (before being issued the contractor’s license required for the

project) contacted the town of Queen Creek’s permitting department. ALJ Dec. 10:10–16. On July 12,

Harte Contracting signed the permit application for the project using another license (a license already

held, but inadequate for the project). ALJ Dec. 10:16–18. On July 18, Queen Creek’s permitting

department issued the permit with Harte Contracting’s name on it, ALJ Dec. 10:23–27, despite knowing

that Harte Contracting had not yet received the proper license. ALJ Dec. 10:27–29.

In addition to the premature permitting, the record contains documents which on their face suggest

that Harte Contracting was actually working and receiving payment before it received the appropriate

contractor’s license. ALJ Dec. 12:13–18. That license was issued on August 1, 2016, ALJ Dec. 1:23–25,

but the record contains:

• Harte Contracting’s Application and Certificate for Payment, signed

by Harte on July 14, 2016, and in which Harte certifies that $304,000

worth of work has been completed (i.e., more than two weeks before

it received the proper license);

• Harte Contracting’s Conditional Waiver and Release, signed July 14,

2016 (again, more than two weeks before it received the proper

license); and

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 • Harte Contracting’s Invoice 4143, showing that Harte Contracting

had been paid $304,000 as of August 1, 2016 (i.e., the very day that

it received the proper license).

(Summarized at ALJ Dec. 12:13–18.)

In response to the existence of the July 14, 2016 Application and Certificate for Payment, a witness

for Harte Contracting (Laurie Sigrist) testified that “as a practical reality, the certification language in the

AIA pay-app form is not taken to be true and that it is a common practice to include in these pay-apps

work that has not yet been completed, despite the language certifying it has been completed.” ALJ Dec.

12:21–25; but cf. A.R.S. §§ 32-1129 – 1129.07 (Arizona’s Prompt Pay Act: a statutory system predicated

on honest and accurate certifications of a contractor’s work having been completed).

The above facts notwithstanding, the Administrative Law Judge Decision concluded: “Considering

the nature of the allegations that were proven, and that Harte’s licenses have been suspended since

October 14, 2016, no further discipline is appropriate and the suspension of Harte’s licenses should be

ended and its licenses reinstated.” ALJ Dec. 22:22–27. The Administrative Law Judge Decision

recommended reinstatement of Harte Contracting’s two licenses: License No. 289565 (the CR-61) and

License No. 307223 (the KB-1).

The Registrar accepts the Administrative Law Judge’s Decision that Harte Contracting violated

state contracting law by:

• Entering a contract for the project before being properly licensed,

thereby violating A.R.S. § 32-1154(A)(16)).

• Entering a contract with an unlicensed person, thereby violating

A.R.S. § 32-1154(A)(13).

(ALJ Dec. 21:2–10 & 22:3–11.)

The Registrar adds to the mitigating factors in the Administrative Law Judge’s Decisions (ALJ Dec.

18:15–25) the following aggravating factors:

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 • Two of the unlicensed person’s workers were hospitalized during

work on Hart Contracting’s project. ALJ Dec.6:19–23.

• Harte Contracting’s principals admitted ignorance of key elements in

Arizona’s law governing contractors. ALJ Dec. 11:24–28 (describing

Justin Harte’s and Nick Harte’s testimony that “they were not aware

that entering the contract itself was a violation of law ….”); ALJ

Dec. 15:24–27 (describing Justin Harte’s and Nick Harte’s testimony

about their belief that the project’s owner “could perform the

concrete work without a commercial license”).

• By admitting ignorance of key elements in Arizona’s law governing

contractors, Harte Contracting weakens the force of those mitigating

factors pertaining to Harte Contracting’s supposed compliance with

safety requirements. See ALJ Dec. 18:18–19.

In its conclusion, the Administrative Law Judge Decision uses the phrase “further discipline”

inappropriately if it implies that the summary suspension commenced on October 14 was by itself a form

of discipline. A summary suspension is not a form of discipline; a summary suspension is a form of

“emergency action.” A.R.S. § 41-1092.11(B). The Registrar has authority to take such emergency action

when the Registrar finds that the public health, safety, or welfare imperatively requires it, A.R.S. § 41-

1092.11(B), as the Registrar found in this case.

CONCLUSION AND ORDER

In accordance with the justification set forth above, the Registrar hereby modifies the conclusion

and order in the Administrative Law Judge Decision to the exent necessary to make it consistent with the

following orders:

1. The Registrar orders that Harte Contracting’s License No. 289565 (the CR-61) be reinstated

effective immediately.

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 2. The Registrar orders that Harte Contracting’s License No. 307223 (the KB-1) be reinstated

effective immediately.

3. The Registrar orders that the suspension of License No. 307223 (the KB-1), initially

undertaken summarily under A.R.S. § 41-1092.11 for the protection of public health, safety,

and welfare, be deemed to have been suspended as a matter of discipline because of Harte

Contracting’s violations of A.R.S. § 32-1154(A)(13) and A.R.S. § 32-1154(A)(16) and

because of the aggravating factors cited above.

4. The Registrar orders that any party may use the facts and violations established in this case as

aggravating factors in any administrative case brought against Harte Contracting.

Dated this 4th day of November 2016.

Registrar of Contractors /s/ James N. Hanson ----------------------------------------------------------- James N. Hanson Assistant Director, Legal Department Copy mailed via USPS First Class mail this 4th day of November 2016 to: Respondent Harte Contracting Services LLC 521 S 48th St Ste 109 Tempe, AZ 85281-2320 Nat Clarkson, Esq. Anderson Banta Clarkson PLLC N MacDonald Mesa, AZ 85201-7329 And copy electronically mailed this same date to: Registrar’s Counsel John Tellier, Assistant Attorney General Office of Administrative Hearings Case No. 2016-4011/an

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 11.2.2016 ROC LEGAL IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Registrar of Contractors No. 2016A-4011-ROC -v-

Harte's Contracting Services, LLC ADMINISTRATIVE LAW JUDGE License No. CR61.289565-D DECISION License No. KB-1.307223-D RESPONDENT

HEARING: October 24 and 25, 2016 APPEARANCES: John R. Tellier, Esq. for the Registrar of Contractors; Nat Clarkson, Esq. for Respondent Harte’s Contracting Services LLC ADMINISTRATIVE LAW JUDGE: Thomas Shedden _____________________________________________________________________ FINDINGS OF FACT 1. On October 14, 2016, the Registrar of Contractors (“ROC”) issued an ORDER OF SUMMARY SUSPENSION & NOTICE OF PROMPTLY INSTITUTED PROCEEDING (“ORDER”) setting the above-captioned matter for hearing on October 24, 2016, at the Office of Administrative Hearings. 2. Respondent Harte’s Contracting Services LLC holds license numbers CR61.289565-D and KB-1.207223-D issued by ROC.1 3. Justin Harte is Harte’s owner and his brother Nicholas Harte is its qualifying party. Harte’s CR61 license was issued on February 18, 2014 and its KB-1

license on August 1, 2016.

4. In the ORDER, ROC presented its determination that the public welfare

imperatively required emergency action and it summarily suspended Harte’s licenses.

Citing ARIZ. REV. STAT. § 41-1092.11(B).

ROC’s website and license certificates ROC had entered into evidence (Exhibits 3 and 7) show Harte’s license numbers as 289565 and 307223. Consistent with existing policy, the numbers in the caption are used in this DECISION.

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 11.2.2016 ROC LEGAL

5. ROC issued the SUPPLEMENTAL NOTICE to afford Harte’s “adequate opportunity to defend against” the charges that ROC believes support revocation of Harte’s licenses. 6. The SUPPLEMENTAL NOTICE provided a Statement of Facts and a Formal Statement of Alleged Violations in which ROC listed eight Charges alleging that Harte’s had violated ARIZ. REV. STAT. sections 32-1154(A)(3)(specifically, ARIZ. ADMIN. CODE section R4-9-108), (A)(9), (A)(11), (A)(12)(violation of ARIZ. REV. STAT. section 32- 1169), (A)(13), and (A)(16). 7. ROC is requesting that Harte’s licenses be revoked. 8. The alleged violations relate to contracts and work at a church-building project at which Harte’s is the general contractor. 9. In formulating the Charges, ROC relied on its own records, news accounts of an accident at the construction site, and documents received from Harte’s in response to a subpoena. Witnesses at the Hearing 10. At the hearing, ROC presented the testimony of staff attorney Joseph Citelli. Mr. Citelli drafted the ORDER for ROC’s assistant director of compliance’s signature and he signed the SUPPLEMENTAL ORDER. 11. Harte’s presented the testimony of Justin Harte and Nick Harte, Laurie Sigrist, Laurie Vilhauer, William L. Van Camp, Jr., Michael J. Williams, and Robert Mechsner. 12. Mr. Van Camp is the pastor, president and CEO of Heart Cry Church, which hired Harte’s to construct a new Building in the Town of Queen Creek. 13. Mr. Williams is Queen Creek’s Building Official, Building Safety Division Manager and had responsibility for issuing the building permit. 14. Mr. Mechsner worked for ROC for seventeen years, starting as an inspector and retiring at the end of 2012 as chief of compliance. Mr. Mechsner was a certified building inspector while at ROC and he also has experience as a framing foreman, carpenter, and general superintendent on commercial and residential projects.

RECEIVED 11.2.2016 ROC LEGAL

15. Ms. Sigrist’s business provides administrative functions, including bookkeeping, for Harte’s. Ms. Sigrist works for Harte’s on only Wednesdays, Thursdays, and Fridays, for about thirteen hours per week. 16. Ms. Vilhauer is the administrator for the Church. Her duties as germane to this matter included communicating with Harte’s about the required KB-1 license. 17. All of the witnesses provided credible testimony. At times however, witnesses were uncertain as to the dates and sequencing of events or precisely when documents were prepared. Additionally, the weight that can be given to any particular testimony is limited by the witness’s personal knowledge of the issue at hand. The Church Building 18. Pastor Van Camp founded the Heart Cry Church about twelve years ago. Heart Cry’s denomination is Southern Baptist. 19. Justin and Nick Harte are members of the Church. 20. Pastor Van Camp also owns Az Tech Crete LLC that holds ROC license numbers 182397 (B Residential General Contractor) and 280375 (B-2 General Small Commercial). Az Tech’s B-2 license has expired, but would be reactivated if Az Tech paid the proper fee. 21. Pastor Van Camp has substantial commercial and residential construction experience dating back to 1975. He rose from laborer to president of a large commercial contractor and in 1993 he began to run his own construction companies. 22. Starting in 2004, Pastor Van Camp began a transition based on a “calling” to build churches. 23. Pastor Van Camp has built churches in Alaska, Texas and New Mexico, rebuilt churches after hurricanes, and is a board member of the North American Mission that spends millions of dollars building churches. 24. It is common for Southern Baptists to “self-perform” or build their own churches through an affiliate of the North American Mission and with the help of volunteer labor. 25. Pastor Van Camp explained that these volunteers are participating in building a “Kingdom” with the buildings themselves being referred to as a “Wall of Witness.” RECEIVED 11.2.2016 ROC LEGAL

26. The use of volunteer labor keeps costs down. Pastor Van Camp testified to the effect that without volunteer labor, the Church’s Building would cost over $3 million to complete, whereas with volunteers they can do it for $1.2 million.2 27. Currently the Church holds its services in rented spaces. In addition to the rental cost, there is a labor issue as thousands of chairs are being set up and taken down each week. 28. About two and a half years ago, the Church began working toward building its own Building. The Church raised money and purchased the land and began working with Queen Creek to get the required permits. 29. Pastor Van Camp intended to construct the building himself under the auspices of Az Tech’s B-2 commercial license.3 30. Queen Creek would not approve the permits however, unless the Church had a contractor holding a class KB-1 license. The lender also required a contractor other than Az Tech.4 31. Pastor Van Camp informed the congregation of this situation and Justin Harte agreed that he and Nick would take on the project without payment or profit.5 The Hartes did this to help their Church. 32. At that time however, Harte’s did not have its KB-1 license, so the plan was for Harte’s to obtain the proper license. Originally, Harte’s applied for a KB-2 license, but while the application was pending, the request was changed to a KB-1. 33. The Church entered a loan agreement with the Church Finance Company, which the parties at hearing typically referred to as the “Bank,” for a construction loan of up to $1.2 million. The Church Finance Company was also referred to as the New Mexico Baptist Foundation. 34. This Bank is a specialty lender that lends to churches. Pastor Van Camp explained that and is not a typical lender that issues draws “by the book,” but rather is in

2 ROC argues that this led Harte’s to “cut corners,” but it presented no substantial evidence to support this argument. In contrast, Justin Harte, Nick Harte, and Pastor Van Camp all testified to the effect that Harte’s had not done so. Although that license is expired, the bond is in place and the license would be reactivated if Pastor Van Camp paid the required fee. According to Pastor Van Camp, the lender informed him that this was the result of changed regulations. Harte’s did bill $84,000 for General Conditions. RECEIVED 11.2.2016 ROC LEGAL

a relationship with the borrower, and he testified to the effect that the Bank is a partner in the Church’s desire to build a “Wall of Witness.” 35. The Bank committed to make the loan in May 2016, but would not close on the loan without a signed contract with a general contractor, the building permit, and firm bids. 36. Pastor Van Camp acknowledged that the Church was anxious (and excited) to get the Building completed. Justin Harte, Nick Harte, and Pastor Van Camp each explained that the parties were working to get all the pieces in place, so that on the first day Harte’s was properly licensed, construction could begin. 37. On or about July 12, 2016, Harte’s entered a contract with the Church to construct the new Building. At the time it entered the contract, Harte’s did not have its KB-1 license, but Nick Harte had received from ROC proof that he had passed the licensing examination. The Church was aware of the status of Harte’s KB-1 license when it entered the contract.6 38. The building permit was issued to Harte’s on July 18, 2016. As discussed below, Queen Creek’s Mr. Williams was aware that Harte’s had met the requirements for ROC to issue the KB-1 license and that ROC had had not yet issued that license. 39. The loan closed on July 18, 2016, and shows a debit of $453,063.88 against the Church for the first draw. Of this amount, $304,000 was for items in the Building contract, with the remainder covering permitting fees the Church had already expended. As set out below, the Bank required the Church to submit to the Bank a completed AIA Application and Certification for Payment in order to receive that first draw, although construction had not started when that draw was made. 40. On August 1, 2016, ROC issued to Harte’s the KB-1 license. Construction work began that day. 41. Justin Harte, Nick Harte, and Pastor Van Camp each provided credible testimony that no construction work was done at the Building site prior to August 1, 2016. The Contract with Mr. Vasquez Pastor Van Camp testified that the Church has full confidence in Harte’s and that the Church would like this matter resolved so that Harte’s can return to the job. RECEIVED 11.2.2016 ROC LEGAL

42. On September 15, 2016, Harte’s entered a subcontract with Teodulo Rafael Vasquez in which Mr. Vasquez was to provide framing, sheeting, and backing work at the Building.7 43. When he entered the contract, Mr. Vasquez represented to Harte’s that he was properly licensed, which was not true. Harte’s failed to verify Mr. Vasquez’s assertion and Mr. Vasquez began working on the Building. Harte’s presented evidence to show that this failure was atypical. 44. On October 3, 2016, Mr. Vasquez’s employees were installing large trusses over the Sanctuary. This portion of the roof collapsed and workers were injured. 45. In the both the ORDER and the SUPPLEMENTAL ORDER, ROC alleged that there were seven people injured and that two were hospitalized with life threatening injuries. 46. At the hearing, there was no substantial evidence adduced showing that any workers actually did suffer life-threatening injuries. 47. Mr. Citelli did not know whether the allegation of life-threatening injuries was true, and he acknowledged that he would not know one way or another whether any of the seven workers walked off the site.8 48. ROC did not obtain any medical records related to the workers’ injuries and it presented no evidence about the severity of those injuries. 49. Justin Harte testified that all of the workers were walking after the accident, but at least two workers were hospitalized (one for a day or two, and the other for four or five days) and that a third worker may have gone to the hospital, but if so, he was in and out. 50. Included in the exhibits is Harte’s check to a Mr. Corales, who was an employee of Mr. Vasquez’s. Justin Harte testified that Harte’s had provided the injured workers with food and gift cards and had paid wages that Mr. Vasquez had not paid.9 This was done because these workers have families to support. On cross-examination,

Harte’s signed on September 14, Mr. Vasquez on the 15th. Mr. Citelli testified that the information regarding injured workers was taken from news reports and he believed from a conversation ROC’s compliance department had with Harte’s. Harte’s did not know these workers personally. RECEIVED 11.2.2016 ROC LEGAL

Justin testified that “of course” Harte’s obtained waivers/statements of release from Mr. Vasquez’s employees, because “we have families too.” 51. The Arizona Division of Occupational Safety and Health (“ADOSH”) is investigating the matter, but as of the hearing dates, had not released any findings. ADOSH will not comment about on-going investigations. Charge 1 - ARIZ. REV. STAT. section 32-1154(A)(3) Violation of any rule adopted by the registrar; specifically, ARIZ. ADMIN. CODE section R4- 9-108: Minimum Construction Standards 52. In Charge 1, ROC alleges that: Harte’s is the general contractor at the Building. The Building’s roof collapsed and injured seven workers. Upon information and belief, Harte’s poor work caused the roof to collapse. SUPPLEMENTAL ORDER p.4 (citing SOFs 2, 15, 16). 53. No one from ROC had reviewed the plans or specifications for the Building. Justin Harte testified that ROC had not requested or reviewed the structural calculations or related truss and engineering plans. 54. The evidence presented at the hearing shows that there are at least three possible causes of the collapse: poor engineering, poor manufacturing of the trusses, and poor workmanship. 55. As of the hearing date, ROC had not made any finding as to whether the truss collapse was due to an engineering error, a manufacturing defect, or improper installation.10 And Mr. Citelli acknowledged that neither he nor anyone else at ROC knew what caused the truss collapse, no one from ROC had actually investigated the cause of the collapse, and no one from ROC had even been to the Building site. 56. Mr. Mechsner testified to the effect that one cannot tell whether there has been a workmanship violation without conducting an inspection of the work at issue. 57. Mr. Mechsner’s opinion was that the collapse could have been caused by a failure on the part of the truss manufacturer, but an inspection and comparison of the plans and specifications to the trusses themselves would be required to determine that. 58. Mr. Mechsner had not inspected the work at the Building. ROC does not regulate engineers and Mr. Citelli testified that ROC has no authority over the truss manufacturer. RECEIVED 11.2.2016 ROC LEGAL

59. Harte’s has retained a forensic engineer to determine the cause of the truss collapse, but that work will not commence unless Harte’s KB-1 license is reinstated. 60. The Church has hired an investigator to help determine the cause of the truss collapse, but as of the hearing date, the Church had not been allowed access, and so no conclusions have been made. Charge 4 - ARIZ. REV. STAT. section 32-1154(A)(11) Failure of a contractor to comply with any safety or labor laws or codes of the federal government, state or political subdivisions of the state 61. In Charge 4, ROC alleges that: upon information and belief, Harte’s violated OSHA safety regulations requiring fall protection for workers on a leading edge six feet or more above lower levels. The photographs in Exhibit 11 “clearly show[] that there is no fall protection system in place.” SUPPLEMENTAL ORDER p.5 (citing SOFs 15 - 17, 19). 62. At the hearing, in support of this allegation ROC presented the photograph and Mr. Citelli’s testimony. 63. Mr. Citelli acknowledged that he did not know whether the photograph shows a situation in which harnesses or fall protection are required, and that he did not know when harnesses or fall protection are required. 64. Mr. Citelli also acknowledged that he did not know specifically what ROC is alleging Harte’s did wrong (for example, whether the workers had harnesses that were not OSHA approved, or whether they had approved harnesses that were not attached to a secure spot). 65. Mr. Citelli testified that a ROC investigator had provided him with a citation related to the alleged safety violation, but that citation was not offered into evidence and there was no evidence adduced as to the actual substance of that citation.11 66. Mr. Citelli acknowledged that ADOSH is conducting an investigation of the incident, but he had not spoken with ADOSH and he had no knowledge of whether anyone from ROC had done so. Mr. Citelli did testify that he had listened to a recorded conversation between the investigator and Harte’s, but that conversation did not cover safety issues. RECEIVED 11.2.2016 ROC LEGAL

67. Justin Harte had discussed with Mr. Vasquez the need to follow the applicable safety and good housekeeping rules, including the OSHA requirements for fall protection. 68. Justin Harte was on the jobsite every day and although he was not babysitting the work crew, he testified that he never saw Mr. Vasquez’s crew working without proper harnesses. Justin Harte’s understanding is that the crew was using their harnesses at the time of the accident. 69. There was one day on which one of Mr. Vasquez’s crew did not have the required harness. That worker was required to stay on the ground while Justin Harte went and bought a kit for him. 70. Justin Harte and Nick Harte testified that Harte’s requires that all OSHA rules are followed. Harte’s had a safety policy in place before the accident, but it did not require subcontractors to sign copies of that policy. 71. Since the accident, Harte’s has revised its policy and requires all subcontractors to sign an acknowledgment. If the subcontractors have any questions, Harte’s job superintendent, who is OSHA certified, will provide training. 72. Harte’s has also discussed with ADOSH having it come to the site for a 100% review. Justin Harte explained that Harte’s wanted to insure that something like this would never occur again and that it was covering all the bases to make sure it had not missed anything prior to the accident. Charge 5 - ARIZ. REV. STAT. section 32-1154(A)(12) Failure in any material respect to comply with this chapter; specifically, ARIZ. REV. STAT. section 32-1169 (the filing of an application for a building permit containing false or incorrect information concerning an applicant's contractor's license with the intent to avoid the licensing requirements of this chapter is an unsworn falsification pursuant to section 13-2704) 73. In Charge 5, ROC alleges: Harte’s applied for the required building permit before it was licensed to perform commercial work. Harte’s affirmed that it was duly licensed on the application. Harte’s affirmation qualifies as an unsworn falsification. SUPPLEMENTAL ORDER p.6 (citing SOFs 3- 6).

RECEIVED 11.2.2016 ROC LEGAL

74. Mr. Citelli had not discussed with Queen Creek either Harte’s or the Church’s communications with the town and he had no knowledge of the communications between Harte’s and Queen Creek regarding the licensing requirements for the building permit. 75. The Church applied for the building permit on February 9, 2016. Although not explicit on the record, it is reasonable to conclude that the contractor section had been left blank. 76. Mr. Williams informed the Church that the permit application would require the name of a properly licensed contractor and the license number. Pastor Van Camp continued to communicate with Queen Creek regarding the permit. 77. On July 12, 2016, Nick Harte provided Mr. Williams with documentation from ROC showing that he (Nick) had passed the examination for the KB-1 license and that Harte’s was waiting for ROC to issue the license. 78. Nick Harte informed Mr. Williams that Harte’s would not start construction until ROC had issued the KB-1 license to Harte’s, but Harte’s needed the permit to obtain funding. 79. On July 12, 2016, Justin Harte signed the permit application as the contractor, using Harte’s CR61 license number. 80. Mr. Williams contacted ROC to determine the status of Harte’s KB-1 application. He confirmed that Nick Harte had passed the examination (i.e., that the technical part was done), that it would take about thirty days for ROC to issue the license, and that Harte’s had to provide bonding information to ROC, but because Harte’s already held a license, the bonding requirement would not be difficult. 81. Mr. Williams informed Nick Harte that he had informed the Church that the building permit could be picked up as soon as the Church paid the remainder of the required fees. On July, 18, 2016, Queen Creek issued the building permit in Harte’s name. 82. Mr. Williams was aware that ROC had not yet issued the KB-1 license to Harte’s when he approved issuance of the building permit. 83. Mr. Williams knew of no misrepresentations made by Nick Harte.

RECEIVED 11.2.2016 ROC LEGAL

84. Mr. Williams acknowledged that he did not know whether any work had occurred before ROC issued the KB-1 license. He was not aware that the contract had been signed before the permit was issued, and he was not aware of documents that on their faces purport to show work being completed before the KB-1 license was issued. 85. Queen Creek’s first inspection of the Building occurred on August 8, 2016, at which time the foundation was inspected. 86. The Building uses a footing and stem foundation. Mr. Williams’s testimony was to the effect that this work could readily have been completed between August 1st and August 8th. Charge 8 - ARIZ. REV. STAT. section 32-1154(A)(16) Knowingly contracting beyond the scope of the license or licenses of the licensee

87. In Charge 8, ROC alleges that: Harte’s entered the contract with the

Church on July 12, 2016. On that date, Harte’s was not duly licensed to perform the

work for which it contrated. When Harte’s applied for the building permit, it was not duly

licensed to perform the work. Harte’s did not get the KB-1 license until August 1, 2016.

SUPPLEMENTAL ORDER pp.6 – 7 (citing SOFs 1- 6).

88. Harte’s acknowledges that it signed the contract with the Church and

signed/applied for the building permit before it received its KB-1 license. 89. The contract was signed before the KB-1 license was issued to help the Church in getting its funding approved more quickly and so that construction work could begin as soon as Harte’s KB-1 license was issued. 90. As set out above under Charge 5, Nick Harte had passed the licensing examination before the permit application was signed and Queen Creek was aware of Harte’s status. 91. Justin Harte and Nick Harte each testified to the effect that they were not aware that entering the contract itself was a violation of law, and thought that a violation would occur only if construction work was actually done before Harte’s received the KB- license. 92. Justin Harte, Nicholas Harte, and Pastor Van Camp all provided credible testimony that there was no work done at the Building site until August 1, 2016, at which

RECEIVED 11.2.2016 ROC LEGAL

time Harte’s did have the KB-1 license. All three men knew that work could not proceed until the KB-1 license was issued. Ms. Vilhauer absolutely understood that there was to be no work completed at the Building until Harte’s was properly licensed. 93. Pastor Van Camp acknowledged that he, through Az Tech, had rented equipment prior to August 1, 2016, with the intention being to start work as soon as legally allowable. He also made clear that this equipment was for concrete work and that the Church had not hired Harte’s to do the concrete work, but rather the Church was doing that work itself. 94. Mr. Citelli testified that it was customary to invoice work only after it was completed. The contract between Harte’s and the Church calls for invoices to be submitted after work was completed. 95. ROC argues that the documentary evidence, including proposals, invoices, and lien waivers, shows that construction work was completed before August 1, 2016. 96. Of particular note are an Application and Certificate for Payment or pay- app, signed by Justin Harte on July 14, 2016, in which he certified that $304,000 of work had been completed; Harte’s Invoice number 4143, showing that as of August 1, 2016, Harte’s had been paid $304,000;12 and Harte’s conditional waiver and release dated July 14, 2016. Exhibit 4 at Bates pp. 8 to 11. 97. Ms. Sigrist testified about the typical billing process in construction contracting, and that this was not a typical matter because the Bank had funded money for work that was not yet done.13 98. Ms. Sigrist explained that as a practical reality, the certification language in the AIA pay-app form is not taken to be true and that it is common practice to include in these pay-apps work that has not yet been completed, despite the language certifying it has been completed. This results from time lags in invoicing. 99. In the typical matter, the owner will request that the contractor submit bills by a certain date, for example by the 25th of the month. The contractor will then prepare

The invoice has handwritten notes showing paid on August 23, 2016, which is referring to the sales tax that was due on the $304,000. Pastor Van Camp would explain that the Bank was willing to do so because it is a partner in building the Wall of Witness. RECEIVED 11.2.2016 ROC LEGAL

an AIA pay-app showing all work that has completed and all the work she anticipates will be completed by the end of the month. 100. The owner will require back-up documentation to show that the job is being billed to meet the schedule of values (or budget). 101. The contractor will include invoices from the subcontractors showing the work projected to be completed by the end of the month, along with conditional and progress waivers. The owner goes to the site to verify the work is complete and then approves the payment. The contractor gets the draw and pays the subcontractors, who then sign unconditional waivers that are submitted to owner before the next draw. This process protects the owner by assuring that the contractor has received and properly applied the funds. 102. Every contractor that Ms. Sigrist has worked with has done it this way and 95% of all billing is done this way. 103. On July 12, 2016, Harte’s received a check for $304,000 from the Church. There were not yet any billings, so Ms. Sigrist had to put together an AIA pay-app form and invoice to match the check, and a conditional waiver showing receipt of funds on that date.14 104. Ms. Sigrist prepared the July 14th pay-app that Justin Harte signed.15 105. Pastor Van Camp testified that the Bank required the pay-app to be submitted in order for the Church to receive its initial draw when the loan closed16 and that the Bank was aware that no work had actually been completed by the date Justin Harte signed the application. Representatives from the Bank were at the Building site shortly before the loan closed. 106. Pastor Van Camp was asked whether a pay-app submitted to the Bank falsely showed that $95,000 worth of work had been completed. He responded that it was the Church telling the Bank that it required money to do certain work, not that the work had been completed. Again, the Pastor explained that the Bank was on board as a

14 Ms. Sigrist was under the impression that no work had been done at that time. Ms. Sigrist was of the belief that this pay-app was not prepared at the request of the Bank but rather was an internal document because the Bank had already received from the Church the distribution-of- funds information. Based on other evidence, it appears that she may have been mistaken. Evidence suggests that the first draw may have been issued before the loan closed. RECEIVED 11.2.2016 ROC LEGAL

partner in the Kingdom-building mission, which is why it was willing to make payments for which work had not been completed. 107. Soon after Harte’s received the $304,000, Ms. Vilhauer informed Ms. Sigrist that the Bank would not accept an unconditional waiver that had been prepared. While looking into that, Ms. Sigrist saw that the distribution of the scheduled values for the first draw (the $304,000) was not correct. 108. Ms. Sigrist sat down with Ms. Vilhauer and Pastor Van Camp (who was on the phone) to get the information as to what the actual distribution of funds should be. This was required to show the Bank that the funds are being distributed correctly, which means that the funds are allocated as shown on the budget or schedule of values. 109. Invoice 4143 shows the actual distribution of funds from the first draw. Ms. Sigrist’s recollection was that she prepared the invoice on August 1, 2016. Pastor Van Camp testified that the Bank requires a line item in the budget for all work to be completed; the invoices represent the values that are assigned to line items. 110. Invoice 4143 shows that funds were allocated for concrete work. Ms. Sigrist testified that Az Tech did the concrete work, not Harte’s. 111. When asked if Harte’s had hired Az Tech, Ms. Sigrist replied, no, that she had prepared a contract but never got a signed copy back. Charge 3 - ARIZ. REV. STAT. section 32-1154(A)(9) Aiding or abetting a licensed or unlicensed person to evade this chapter and Charge 7 - ARIZ. REV. STAT. section 32-1154(A)(13) Knowingly entering into a contract with a contractor for work to be performed for which a license is required with a person not duly licensed in the required classification

112. In both Charges 3 and 7, ROC alleges: Harte’s entered a subcontract with Az Tech for work at the Building, which does not qualify as a residential structure. Az Tech’s residential B- license is limited to residential structures. SUPPLEMENTAL ORDER p. 5 and p. 6 (citing SOFs 11, 12). 113. In Charge 3, ROC also alleges: By entering the subcontract with Az Tech, Harte’s aided or abetted Az Tech to evade Title 32, Chapter 10. SUPPLEMENTAL ORDER p. 5 (citing SOF 14). RECEIVED 11.2.2016 ROC LEGAL

114. In Charge 7, ROC also alleges that: By entering the subcontract with Az Tech, Harte’s knowingly entered into a contract with Az Tech for work that Az Tech was not duly licensed to perform. SUPPLEMENTAL ORDER p. 6 (citing SOF 13). 115. The Church did not hire Harte’s to complete any concrete work (i.e., the July 2016 contract between the Church and Harte’s did not include concrete work, which Pastor Van Camp intended to have the Church do itself).17 116. Harte’s did not ask Az Tech to submit a bid for the concrete work. 117. Although, Harte’s prepared a subcontract identifying Az Tech as a subcontractor with the scope of work identified as concrete work, that subcontract was not signed by either the Church or Harte’s. 118. The concrete work was completed by Pastor Van Camp, volunteers, and some paid (skilled) labor. Pastor Van Camp characterized this as the Church “self- performing” through Az Tech. 119. The Church went through Az Tech because it has established accounts and the ability to get a lower price on material and rental costs. 120. Az Tech had prepared proposals for the concrete and related work, and they submitted invoices to Harte’s for materials and labor. 121. The labor category included actual payments to the skilled workers and payments for rented equipment (e.g., water trucks, graders, finishing machines, hoses, fencing) for which any taxes due had already been paid. 122. Pastor Van Camp testified that the proposals were necessary to show the Bank that it had firm bids for the work. He explained that the Bank requires a line item in the budget for all work to be completed; the invoices represent the values that are assigned to line items in the budget. 123. Justin Harte and Nick Harte each testified as to his understanding that the Church, as the Building’s owner, could perform the concrete work without a commercial license. Charge 2 - ARIZ. REV. STAT. section 32-1154(A)(9): Aiding or abetting a licensed or unlicensed person to evade this chapter Pastor Van Camp’s testimony indicates that he considered AZ Tech and the Church to be one and the same for purposes of the Building’s construction. RECEIVED 11.2.2016 ROC LEGAL

and Charge 6- ARIZ. REV. STAT. section 32-1154(A)(13): Knowingly entering into a contract with a contractor for work to be performed for which a license is required with a person not duly licensed in the required classification 124. In both Charges 2 and 6, ROC alleges that: Harte’s entered into a subcontract with Mr. Vasquez who was not licensed and does not have a valid contractor’s license. SUPPLEMENTAL ORDER p. 4 and p.6 (citing SOFs 7, 8). 125. In Charge 2, ROC also alleges that: By entering the subcontract with Mr. Vasquez, Harte’s did aid and abet an unlicensed person in evading Title 32, Chapter 10. SUPPLEMENTAL ORDER p. 4 (citing SOF 9). 126. In Charge 6, ROC also alleges that: By entering the subcontract with Mr. Vasquez, Harte’s knowingly entered into a contract for work to be performed by Mr. Vasquez for which Mr. Vasquez was not duly licensed to perform. SUPPLEMENTAL ORDER p. 6 (citing SOF 10). 127. Mr. Vasquez had been recommended as a good framer18 and he told Justin Harte that he was licensed, which was not true. 128. Harte’s policy is that it does not allow unlicensed contractors on its jobs, but its position is that in this case its system failed. Justin Harte and Nick Harte each testified that any contractor known to be unlicensed would immediately be kicked off the job. 129. Ms. Sigrist’s duties include verifying that subcontractors are properly licensed and have the proper insurance. She also prepares contracts for Harte’s use with subcontractors. 130. Ms. Sigrist checks ROC’s website to verify subcontractors are licensed, but she only checks when she receives a signed contract. 131. Ms. Sigrist prepared the subcontract for Mr. Vasquez and gave it to Justin Harte. Because Mr. Vasquez was new, she would have requested proof of insurance and would have prepared a W-9 form for Mr. Vasquez.

At the time of the truss collapse, Mr. Vasquez had completed about 80% of the framing work, with all indications being that he was technically competent. RECEIVED 11.2.2016 ROC LEGAL

132. Justin Harte signed the subcontract and presented it to Mr. Vasquez. Mr. Vasquez took the contract home to review and returned a signed copy to Justin. Mr. Vasquez entered a false ROC license number on the contract.19 133. Justin Harte was not sure when the contract was returned to him, but he put it in his truck without looking at it. 134. Based on Ms. Sigrist’s testimony, it appears that Justin Harte returned the contract to her on Friday September 23rd, but she did not review it that day. She returned to work on Wednesday (her next regularly scheduled day), but because she was busy with payroll and billing she did not review Mr. Vasquez’s information. 135. Ms. Sigrist’s husband suffered a medical emergency and she did not look at the contract on either Thursday or Friday (September 29th and 30th). The truss collapse occurred on Tuesday, October 4, 2016, which was before she was scheduled to return to work that week. 136. Ms. Sigrist testified that Mr. Vasquez was the only unlicensed contractor she was aware of during her three years of service to Harte’s. If she learned that a contractor was unlicensed, she would alert Justin immediately and the unlicensed person would be terminated from the job. The Contract with Tils 137. Prior to the hearing, Harte’s attorney had spoken to Mr. Citelli about ROC’s policy that allows contractors with suspended licenses to enter contracts to have others complete work that is under warranty or that is required to address safety concerns. The suspended contactor may not accept any payment however. 138. Mr. Citelli testified that this could include repairing a leaky roof to prevent further damage, but it is not clear from his testimony whether property damage alone would be sufficient or if there would also need to be a health or safety hazard.

19 When Mr. Citelli was asked whether he knew if Mr. Vasquez had made misrepresentations to Harte’s about his having a license, Mr. Citelli replied that he knew an eight digit number was written on the contract, whereas ROC license numbers are six digits. Ms. Sigrist testified that she had no knowledge of the number of digits used in ROC licenses and that she checks the license status using the contractor’s name. Although ROC license numbers are six digits, ROC itself does not always use only six digits when referencing a license number. For example, in this matter it used the numbers CR61.289565-D and KB- 1.207223-D in its ORDER and the SUPPLEMENTAL NOTICE. RECEIVED 11.2.2016 ROC LEGAL

139. The Church’s Sanctuary is now open and exposed to the elements; Pastor Van Camp testified that there is a risk of property damage if it is not dried-in. 140. Currently, there is a wall at the Building that requires shoring and or bracing. 141. On October 21, 2016, Harte’s entered a subcontract with Tils Construction, Inc. under which Tils has been engaged to perform framing/structural work as required by the Church, which was intended to address the need for the wall to be safely shored- up. In addition, Tils would also finish framing if Harte’s license is reinstated. 142. Harte’s would not be paid for any work Tils performs. 143. Mr. Citelli was of the mistaken impression that Harte’s attorney was asking about a job other than the Building. Mr. Citelli’s testimony shows that ROC allows suspended contractors to engage others to perform warranty or safety related work. There was no evidence presented to show that the location, rather than the type of work is germane to this exception. Factors in Mitigation 144. Prior to this incident, Harte’s had not been the subject of any complaints through the Registrar’s office, it had not been found to have violated any OSHA rules, and there had been no workplace accidents or injuries. 145. Harte’s had a safety protocol consistent with the requirements of OSHA. 146. Harte’s has updated its safety policy in an effort to improve implementation of that policy and it intends to work with ADOSH to have a safety evaluation done if its licenses are reinstated. 147. Harte’s actions were not precipitated by any bad motive or by a desire for pecuniary gain. To the contrary, Harte’s was not making any money, but rather was acting as a result Justin and Nick Harte’s desire to help their Church. CONCLUSIONS OF LAW 1. “At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” ARIZ. REV. STAT. § 41-1092.07(G)(2). 2. Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the RECEIVED 11.2.2016 ROC LEGAL

burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. ARIZ. ADMIN. CODE § R2-19-119. 3. A preponderance of the evidence is: The 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. BLACK’S LAW DICTIONARY 1373 (10th ed. 2014). 4. In an ADMINISTRATIVE LAW JUDGE DECISION, “[f]indings of fact shall be based exclusively on the evidence and on matters officially noticed.” ARIZ. REV. STAT. § 41- 1092.07(F)(6). 5. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). 6. “Statutes shall be liberally construed to effect their objects and to promote justice.” ARIZ. REV. STAT. § 1-211(B). 7. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 8. The preponderance of the evidence does not show that Harte’s is unscrupulous, unqualified, or financially irresponsible. Charge 1 - ARIZ. REV. STAT. section 32-1154(A)(3) Violation of any rule adopted by the registrar; specifically, ARIZ. ADMIN. CODE section R4- 9-108: Minimum Construction Standards

9. ROC argues that “common sense” shows that the truss collapse was a result of Harte’s poor workmanship. Mr. Citelli acknowledged however that ROC does not know what caused the truss collapse, and the weight of the evidence shows that poor workmanship is not the only possible cause.

RECEIVED 11.2.2016 ROC LEGAL

10. ROC has not shown by a preponderance of the evidence that Harte’s violated the workmanship standards or ARIZ. REV. STAT section 32-1154(A)(3). Charge 4 - ARIZ. REV. STAT. section 32-1154(A)(11) Failure of a contractor to comply with any safety or labor laws or codes of the federal government, state or political subdivisions of the state 11. The only evidence presented by ROC was a photograph and Mr. Citelli’s testimony. But Mr. Citelli acknowledged that he did not know whether the photograph shows a situation in which harnesses or fall protection are required, that he did not know when harnesses or fall protection are required, and that he did not even know specifically what ROC is alleging Harte’s did wrong. 12. At the hearing, ROC argued to the effect that because ADOSH issued a stop work order, Harte’s must have violated the law. This argument was not presented in any of the Charges, and ROC did not provide facts or legal authority to support the assertion that a stop work order necessarily means that there has been a failure to comply a safety or labor law. 13. ROC has not shown by a preponderance of the evidence that Harte’s violated ARIZ. REV. STAT section 32-1154(A)(11). Charge 5 - ARIZ. REV. STAT. section 32-1154(A)(12) Failure in any material respect to comply with this chapter; specifically, ARIZ. REV. STAT. section 32-1169 (the filing of an application for a building permit containing false or incorrect information concerning an applicant's contractor's license with the intent to avoid the licensing requirements of this chapter is an unsworn falsification pursuant to section 13-2704)

14. Although Harte’s did not have its KB-1 license when it applied for the

building permit, the Town of Queen Creek was aware of that fact. There was no

substantial evidence adduced showing that Harte’s acted with the intent to avoid ROC’s

licensing requirements.

15. ROC has not shown by a preponderance of the evidence that Harte’s made an unsworn falsification or that it violated ARIZ. REV. STAT sections 32-1154(A)(12) or 32-1169. Charge 8 - ARIZ. REV. STAT. section 32-1154(A)(16)

RECEIVED 11.2.2016 ROC LEGAL

Knowingly contracting beyond the scope of the license or licenses of the licensee

16. Harte’s entered the contract with the Church before it received its KB-1 license. Although Justin Harte and Nick Harte provided credible testimony showing that they did not have actual knowledge that entering the contract was a violation of the statute, under the applicable law, actual knowledge was not required. See ARIZ. REV. STAT. § 1-215(17)(the term “knowingly” requires “[o]nly a knowledge that the facts exist that bring the act or omission within the provisions of the statute using such a word” and “[d]oes not require any knowledge of the unlawfulness of the act or omission.”). 17. ROC has shown by a preponderance of the evidence that Harte’s violated ARIZ. REV. STAT section 32-1154(A)(16). 18. ROC has not shown by a preponderance of the evidence that Harte’s engaged in construction work at the Building prior to its KB-1 license being issued or that the Harte’s acted with any improper motive, which are factors to be considered when assessing the appropriate penalty in this matter. Charge 3 - ARIZ. REV. STAT. section 32-1154(A)(9) Aiding or abetting a licensed or unlicensed person to evade this chapter and Charge 7 - ARIZ. REV. STAT. section 32-1154(A)(13) Knowingly entering into a contract with a contractor for work to be performed for which a license is required with a person not duly licensed in the required classification

19. ROC alleges that Harte’s entered a contract with Az Tech, which constitutes both aiding and abetting an unlicensed person to evade Title 32, Chapter 10 and knowingly entering into a contract with a contactor not duly licensed to perform the work. 20. The evidence of record does not show that Harte’s entered into a contract with Az Tech, consequently, ROC has proven Charges 2 and 7 by a preponderance of the evidence. 21. Charge 2 - ARIZ. REV. STAT. section 32-1154(A)(9): Aiding or abetting a licensed or unlicensed person to evade this chapter and RECEIVED 11.2.2016 ROC LEGAL

Charge 6- ARIZ. REV. STAT. section 32-1154(A)(13): Knowingly entering into a contract with a contractor for work to be performed for which a license is required with a person not duly licensed in the required classification 22. Harte’s acknowledges that it entered into a contract with Mr. Vasquez, who was not properly licensed. Harte’s argues that this is not a violation of ARIZ. REV. STAT. section 32-1154(A)(13) because Mr. Vasquez misrepresented that he was licensed. 23. Considering the definition of “knowingly,” the fact that Mr. Vasquez lied about his license does not provide a defense to this allegation. See ARIZ. REV. STAT. § 1-215(17). 24. ROC has shown by a preponderance of the evidence that Harte’s violated ARIZ. REV. STAT section 32-1154(A)(13) by entering the contract with Mr. Vasquez. 25. Harte’s argues that “aiding and abetting” requires intent or knowledge and that a contractor who unknowingly aids and unlicensed entity has not violated the statute. In support of its argument, Harte’s cited In re Mega Air, Inc., Docket No. 2014A- 114-ROC, a DECISION, which on this point, was accepted by ROC.20 At the hearing, ROC did not dispute or rebut Harte’s argument. 26. When Harte’s entered the contract with Mr. Vasquez, it did not have the intent or knowledge necessary to support a finding of “aiding and abetting.” 27. ROC has not shown by a preponderance of the evidence that Harte’s violated ARIZ. REV. STAT section 32-1154(A)(9) by entering the contract with Mr. Vasquez.21 Conclusion 28. ROC has shown by a preponderance of the evidence that Harte’s committed some, but not all of the alleged violations. Considering the nature of the allegations that were proven, and that Harte’s licenses have been suspended since October 14, 2016, no further discipline is appropriate and the suspension of Harte’s licenses should be ended and its licenses reinstated.

20 The Mega Air Decision found support for this position in Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 38 P.3d 12 (2002). See also, Dawson v. Withycombe, 216 Ariz. 84, 163 P.3d 1034 (App. 2007)(citing Wells Fargo). ROC argues that Harte’s acted “recklessly,” which if proven could form the basis of a violation of ARIZ. REV. STAT. section 32-1154(A)(9), but ROC did not allege Harte’s had violated this portion of the statute. RECEIVED 11.2.2016 ROC LEGAL

ORDER IT IS ORDERED that on the effective date of the final ORDER in this matter, the suspension of Harte’s Contracting Services LLC license number CR61.289565-D is ended and that license is reinstated; IT IS FURTHER ORDERED that on the effective date of the final ORDER in this matter, the suspension of Harte’s Contracting Services LLC license number KB- 1.207223-D is ended and that license is reinstated.

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 is the date of that certification.

Done this day, November 2, 2016. /s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

Courtesy copy provided to: John R. Tellier Esq. Office of the Attorney General 1275 W. Washington St. Phoenix, AZ 85007-2926 [email redacted] Nat Clarkson, Esq. Anderson Banta Clarkson PLLC N. MacDonald Mesa, Arizona 85201 [email redacted]