ALJDEC decisions subject to certification as final

2016A-422-ROC · Registrar of Contractors · 2016-06-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 26, 2016 and May 24, 2016. A Spanish interpreter was provided for the reconvened hearing to ensure that Jose Antonio Quintero could fully participate in and understand the proceedings. APPEARANCES: Jose Antonio Quintero (hereinafter “Mr. Quintero” or “Respondent”) appeared in person on April 26, 2016 and telephonically on May 24, 2016. The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General John Tellier. Daniel Rhodes, the Registrar’s investigator, appeared and began giving testimony on April 24, 2016, but did not appear on May 24, 2016 to complete his testimony with the interpreter present. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________

Mr. Quintero appealed two civil citations issued by the Registrar for contracting without a license. Each 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 $5,000.00 in civil penalties. FINDINGS OF FACT Background and Procedure Mr. Quintero is not a licensed contractor in the State of Arizona.[1] Mr. Quintero admitted to having previously been cited for unlicensed contracting by the Registrar, resulting in two misdemeanor convictions before the incidents at issue in these matters. On February 2, 2016, the Registrar’s Investigator, Daniel Rhodes (hereinafter “Investigator Rhodes”), drove by a roof replacement project in progress at 3572 East Cruadrilla Lane in Yuma, Arizona. At the time, no workers were present so Investigator Rhodes returned to the location on February 4, 2016, and made contact with Richard McKee who lived in the home with his partner. According to Investigator Rhodes’ report (Exhibit 4), Mr. McKee told him that he saw Mr. Quintero in the neighborhood one day passing out business cards if anyone needed any type of work done. The report reflects that Mr. McKee agreed to pay Mr. Quintero $6,000.00 to replace his roof, $4,600.00 for materials and the rest for labor. At hearing, Mr. Quintero agreed he made an arrangement with Mr. McKee to work on his roof, but said he was only paid $1,000.00 for labor. He acknowledged that Mr. McKee wrote a check in Mr. Quintero’s name for $4,000.00 for materials, but argued that he never charged Mr. McKee for materials. On February 15, 2016, Investigator Rhodes positively identified and interviewed Mr. Quintero. Exhibit 4. During that interview, Mr. Quintero acknowledged that he had received $1,000.00 from Mr. McKee for hourly work and that he still had a fourth of the roof to complete. He also agreed he had received an additional $4,000.00 from Mr. McKee for materials needed for the project. Investigator Rhodes determined that Mr. Quintero had violated the provisions of A.R.S. § 32-1151 (Engaging in contracting without a license). On February 15, 2016, a Cease & Desist Order was issued to Mr. Quintero for violating the provisions of A.R.S. § 32-1151. Exhibit 3. A total of $2,500.00 in civil penalties was assessed for one count of contracting without a license. Mr. Quintero testified that he received the Cease and Desist Order but believed that Inspector Rhodes gave him permission to finish the job because the roof was open and it was a cloudy day. On February 24, 2016, Investigator Rhodes issued Mr. Quintero a second Cease & Desist Order for violating the provisions of A.R.S. § 32-1151 by continuing to work on the same roofing project. Exhibit 1. He assessed an additional $2,500.00 in civil penalties for another count of contracting without a license. Mr. Quintero admitted he continued to work on the job in question. He said he has no choice but to work because he is old and sick. Mr. Quintero indicated that his health issues prevent him from working a regular schedule for a company and that working in the manner he does is the only way he can support his family. CONCLUSIONS OF LAW The Registrar bears the burden of proof to establish Mr. Quintero’s violations 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.[2] 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.[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. § 32-1121(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.

After review of all the evidence, the Tribunal concludes that the Registrar has proven that Respondent engaged in contracting without a license when he agreed to do a roofing job that, in the aggregate, exceeded $5,000.00 for labor and materials. Mr. Quintero admitted a check was written in his name for $4,000.00 of materials and that he received $1,000.00 for his labor. He cannot therefore claim that he did not charge Mr. McKee for these materials that were plainly required for the work he performed on the roof. 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.” Mr. Quintero’s violations occurred over at least two days that Investigator Rhodes observed as evidenced by the personal service of each Cease and Desist Order. 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.[5] Respondent’s prior instances of unlicensed contracting support the imposition of two $2,500.00 penalties for a total of $5,000.00 pursuant to A.A.C. R4-9-131(10). RECOMMENDED ORDER Based upon the foregoing, it is recommended that the Registrar affirm the finding that Mr. Quintero violated A.R.S. § 32-1151 and affirm the decision to assess civil penalties in the amount of $5,000.00 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, June 6, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] See Exhibit 4 (Investigation Report with Attachments) and Mr. Quintero’s own testimony admitting that he had tried to pass the licensing test four times without success because he lacked schooling. [2] A.R.S. § 32-1164(A)(2). [3] A.R.S. § 32-1121(A)(14). [4] A.R.S. § 32-1166(A). [5] 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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