ALJDEC decisions subject to certification as final

2016A-4454-CHC-ROC-RHG · Registrar of Contractors · 2017-12-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

City of Somerton,

COMPLAINANT,

Stephen Elliott Henry,

DBA: Arizona Blue Line Construction,

License No: 242818, 242819

RESPONDENT.

No. 2016A-4454-CHC-ROC-RHG

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 5, 2017 and October 19, 2017 with the record held open until December 8, 2017 for the parties to file written briefing on the issues presented.

APPEARANCES: The City of Somerton (Complainant) was represented by Jorge Lozano, Esq. behalf. Steven Elliot Henry dba Arizona Blue Line Construction (Respondent) was represented by Michael W. Thal, Esq.

ADMINISTRATIVE LAW JUDGE: Suzanne Marwil

_____________________________________________________________________

Hearing was convened to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (Registrar). Evidence and testimony were presented, and based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

Complainant is the City of Somerton, which issued a stop work order to Respondent when it discovered that he was allegedly doing electrical work on the church for which he is a pastor.

Respondent holds Arizona Contractor’s License Nos: 242818, 242819. The first license is class CR 39 for Dual Air-conditioning and Repair and the second license is class CR 61 for Carpentry, Remodeling and Repair. Respondent claims those licenses are not at issue here because his contracting business had no contract with the church and he was just doing small projects for the church in his capacity as pastor that fall within the handyman exemption. Respondent argues that the Registrar’s exercise of jurisdiction in this matter violates his religious liberty.

In October 2016, Complainant’s building inspector spoke to Respondent‘s building inspector Salvador Lopez Aguilar (Aguilar) regarding the need for an inspection by Complainant to obtain clearance for Arizona Public Service to supply power to a building located at 118 Main Street, Suite C in Somerton. Aguilar went to the building in question and spoke to the building owner, Ramon Arias. Respondent was not involved with this inspection. Agular determined that the building was not in compliance because it had issues with grounding and a breaker before power could be provided to the building.

The breaker was replaced and a ground wire pulled. It is unknown if this work was done by a properly licensed contractor.

Aguilar returned to the property and saw Respondent. He testified that that was the first time he met Respondent, that he did not know who Respondent was and erroneously assumed Respondent was a properly licensed electrical contractor. As such, Aguilar issued a clearance based on the corrections having been made and the building was energized.

Because the building was just feet away from Complainant’s office at 110 Main Street to which Aguilar reported, he observed what he thought was more work being done. On October 27, 2016 Aguilar saw Respondent rewiring and removing lights in the building, installing Exit signs with new lighting and removing a corrective switch. As such, he went to his office to get a stop work order. When Aguilar returned to the church building, he found a female cleaning up debris and Respondent on a ladder, working on lights and putting in conduit and wiring.

At that point, Aguilar issued a stop work order because Respondent had no electrical permit and had never applied for one.

On November 7, 2016, Aguilar again observed what he considered continuing work at the church building. He noted that the lights were now operational and a wall had been finished with drywall. Aguilar took pictures of this work from outside since Respondent no longer allowed Complainant to enter the building.

On November 7, 2016, Complainant filed a complaint with the Registrar alleging that Respondent had continued its unpermitted work in violation of Complainant’s stop work order which was outside the scope of Respondent’s licenses.

The Registrar assigned senior investigator Steven Lawton to investigate the complaint. Lawton testified that he arranged to perform an inspection on November 29, 2016 and notified Complainant and Respondent of the time and place of the inspection.

On November 22, 2016, Aguilar took pictures of the fact that the church building now had benches (pews) in it.

On November 29, 2016, both Respondent and Complainant arrived at the church building, but Respondent refused to allow Aguilar to enter the church building. Lawton indicated that at the time of an inspection, he observed that Respondent had no permit for the electrical work he was doing inside the church. Lawton also verified that the work done by Respondent was outside the scope of his licenses and that he continued working in violation of Complainant’s stop work order.

On December 14, 2016, Lawton sent Respondent a Directive from the Registrar. The Directive stated in pertinent part as follows:

After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in discipline of your license and a civil penalty pursuant to A.R.S. § 32-1154(4) of up to $500.00. Failure to comply with this Directive may also be treated as an aggravating factor should the Registrar pursue discipline of your license. You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on December 28, 2016.

You are hereby directed to remedy the following violations by appropriate means:

Contractor not complying with local jurisdiction.

Contractor working without a special use permit and building permit.

When permit is pulled by the owner or owner’s agent and inspected, if the local jurisdiction determines that there are corrective issues during the inspection the Respondent will have to Correct by Appropriate Means and by appropriately licensed contractor.

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

On December 19, 2016, Lawton received a letter from Respondent indicating that he did not intend to comply with the Directive. The letter stated in pertinent part as follows:

Iglesia Bautista de Somerton is a startup Spanish-speaking church located at 118 #CW. Main Street in Somerton, Arizona. The City of Somerton, the complainant in this investigation, is illegally trying to prevent the church from operating. The City of Somerton Zoning Ordinance #2.4-1 requires the church to apply for a Conditional Use Permit to operate at this location. This is a violation of A.R.S. § 41-1493.03 "Free exercise of religion: Land use regulation. “Section B, equal treatment. It is also a violation of religious rights under federal law found in RLUIPA Section 2(b)(1) "equal terms." A previous court ruling, United States Court of Appeals for the Ninth Circuit No. 09-15422, supports the church's position in this matter. The City of Somerton was notified of this by both an email and a certified letter on October 28, 2016.

* * *

As I have previously written, Arizona Blue Line Construction, has no construction contract with or nexus to Iglesia Bautista de Somerton other than incidentally I am both the owner of same and the pastor. As such, I was not a "contractor" for any work performed at the building. As the tenant of the building, what little repair work done, the light repair, wall texturing, painting, without a permit, was allowed per 2003 IBC (City of Somerton adopted building Code) Section 105 [A] permit exemptions. All was done without any remuneration.

Lawton waited for the time period specified in the Directive to expire and then forwarded the matter to the Registrar’s legal department.

On January 4, 2017, the Registrar issued Respondent a Citation. That Citation contained three charges. Charge 1 referenced “[a] violation of A.R.S. § 32-1154(A)(2)” stemming from the lack of building permit on the project. Charge 2 alleged “[a] violation of Rule 4-9-108, titled ‘Minimum Construction Standards,’ in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3).” Charge 3 specified a “violation of A.R.S. § 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.”). Charge 4 found a violation of A.R.S. § 32-1154(A)(16) for knowingly contracting outside the scope of a license. Charge 5 alleged a violation of A.R.S. § 32-1154(A)(22), namely “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.”

Hearing was convened at the Office of Administrative Hearings (OAH) on July 5, 2017. Further hearing was convened on October 19, 2017 to permit the completion of the testimony in this matter.

Lawton testified consistently with the facts detailed above as did Aguilar. Lawton noted that Respondent admitted that he did maintenance and electrical work on the church building but denied that Arizona Blue Line Construction was involved with the work. See Exhibit 27 p. 14 (“I put the exit sign over the door. I’m trying to make it as compliant as possible. I put the occupancy, fixed seating. . . “); id p. 22 (“I took out the wires from the ballast. I admit it. I had all the wire on the ground.”); Id,, p. 29 (“Q: “You did the electrical work here? A; Yeah. If you want to hang your hat on that. It’s not much to hang.”).

.Lawton maintained that Respondent failed to comply with the stop work order and did work without a permit. He said that he recommended a violation of A.R.S. § 32-155(A)(3) based on the lack of permit and not because of any specific workmanship problem with the work in question. Lawton took issue that Respondent could pick and choose when he was acting as a contractor because in his view, “once a contractor, always a contractor.” Lawton agreed that he had seen no evidence that Respondent was compensated for his maintenance and electrical work by the church. He emphasized that the fact that Respondent’s claim that Arizona Blue Line Construction was not involved with the church building had no bearing on the Registrar’s exercise of jurisdiction in this matter.

Ramon Arias, the owner of the building in which the church is located, testified that he entered into a lease with the church in which the church paid him rent and was responsible for all repairs. See Exhibit 25. Arias noted that in order to get power to the church suite, he requested and electrical clearance permit. He recalled Lopez informing him that before such a clearance could be issued, Arias needed to install a ground wire and light switch and repair a breaker. Arias indicated that Respondent did this work, which he was comfortable with because he knew Respondent’s background as a contractor, and a couple of days later the suite got power. Arias emphasized that he had no contract with Respondent to perform the work aside from the lease and that Respondent received no compensation for his work.

Arias acknowledged that Respondent did other electrical work in the church suite, including, fixing the fluorescent lights before Lopez stopped him from doing so. Arias stated that he gave Respondent “free reign to do whatever he needed to make the church successful.”

Bernardo Marquez, owner of BIM Drywall, testified that BIM performed work on the church as shown in Exhibit F. He indicated that there was no written contract for this work but the church via Respondent paid him $800.00 or $850.00 to apply texture to a wall. He denied hanging any drywall in the church suite. On cross-examination, Marquez acknowledged that while he was not a member of the church at the time the work in question was done, he had recently become a member of the church.

CONCLUSIONS OF LAW

To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (Rev. 6th ed. 1990).

Credible testimony established that Respondent performed work requiring a permit from the City without the necessary building permit in violation of A.R.S. § 32-1154(A)(2) and A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, that this work was outside the scope of Respondent’s contractor’s license in violation of A.R.S. § 32-1154(A)(16) and that this work was performed in violation of Complainant’s stop work order in violation of A.R.S. § 32-1154(A)(11) if the Registrar had jurisdiction over Respondent.

The fact that Respondent engaged in these unfortunate actions, does not come within the jurisdiction of the Registrar however, because when he undertook those actions, Respondent was not acting as a contractor. A.R.S. § 32-1101(A)(3) provides that the term

“Contractor" is synonymous with the term "builder" and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to :[perform certain work].

In this case, the parties agree that the church paid Respondent no money to perform the work at issue in the Complainant. Complainant argues that the Administrative Law Judge should find that the lease agreement between the church and Arias provided Respondent enough benefit to be considered a form of compensation. This argument fails, however, because the Court of Appeals already rejected a similar argument in a declaratory judgment action where it declined to find that a landlord who received rent from his tenant acts as their contractor when undertaking repairs. See Levitan v. State, 291 A.R.S. 225, 226, 33 P.3d 796 , 797 (Ct. App. 2001) In addition, A.R.S. § 32-1101(D) explicitly states that "only contractors as defined in this section (A.R.S. § 32-1101(A)(3)) are licensed and regulated by this chapter." The Registrar accordingly cannot exercise jurisdiction over Respondent on these facts. Complainant’s remedies lie elsewhere.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall dismiss Complainant’s complaint for lack of jurisdiction.

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 will be 40 days from the date of that certification.

Done this day, December 20, 2017.

/s/ Suzanne Marwil

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile December 20, 2017 to:

Jeffrey Fleetham, Director

Registrar of Contractors

c/o Legal Department

1700 W. Washington Street, Suite 105

Phoenix, AZ 85007