ALJDEC decisions subject to certification as final
2017A-1029-CPA-ROC · Registrar of Contractors · 2017-12-11
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
IN THE MATTER OF THE CIVIL PENALTY CITATION ISSUED TO:
Edward Allen Van Dyken,
Respondent.
No. 2017A-1029-CPA-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: May 9, 2017, at 1:00 p.m.; December 4, 2017, at 8:30 a.m.
APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Thomas C. Raine, Esq., Assistant Attorney General, on both hearing dates; Edward Allen Van Dyken (“Respondent”) appeared at the May 9, 2017 hearing date, but failed to appear at the December 4, 2017 hearing date.
ADMINISTRATIVE LAW JUDGE: Diane Mihalsky
_____________________________________________________________________
FINDINGS OF FACT
On or about February 22, 2017, the Registrar’s Investigator, Martha Watson, was on an active patrol of the Sunrise Vista neighborhood and located on a community bulletin board a laminated advertisement for 1st Call Restoration, LLC, offering to provide various services, including board-ups. The advertisement did not provide a contractor’s license number or the disclaimer, “not a licensed contractor.”
On or about February 24, 2017, Investigator Watson conducted an internet search for 1st Call Restoration, LLC, and located the company’s website, which offered to provide the same services as the laminated advertisement. The website did not include a contractor’s license number or the disclaimer, “not a licensed contractor.” The website also provided links to “preferred vendors,” whom Investigator Watson recognized as licensed contractors.
When Investigator Watson contacted the licensed contractors, they told her that they did not work with 1st Call Restoration LLC and had not given it permission to use their names on its website. One of the contractors told Investigator Watson that “Ed” owned 1st Call Restoration LLC and had worked for the contractor in the past, but that he was now out on his own.
On February 24, 2017, Investigator Watson conducted a search for 1st Call Restoration LLC on the Arizona Corporation Commission’s website. She discovered that the website listed Respondent as 1st Call Restoration LLC’s only member and provided Respondent’s residential address.
On February 24, 2017, Investigator Watson searched the Registrar’s database, which revealed no active, inactive, suspended, or revoked licenses for 1st Call Restoration LLC or Respondent.
On February 27, 2017, Investigator Watson contacted Respondent at the telephone number on the laminated advertisement. Respondent identified himself and stated that he did not need a license because he did not do any “put backs,” referring to reinstallation of materials removed from water- or fire-damaged properties. Respondent also said that he had just submitted an application for a C-57 license to the Registrar. Respondent admitted that he did board-ups to secure fire- and water-damaged properties.
Investigator Watson testified that because board-ups constituted contracting, Respondent was required to have a license or to include the disclaimer, “not a licensed contractors,” to advertise to the public that he was able to provide this service.
On February 27, 2017, Investigator Watson contacted the Registrar’s Licensing Department to see if it had received an application packet from Respondent. She was told that the Licensing Department was unable to locate any application package from Respondent.
On February 28, 2017, Investigator Watson issued a Cease & Desist Order and issued a Civil Penalty in the amount of $1,500.00 against Respondent for advertising without a license, in violation of A.R.S. § 32-1165. Although Investigator Watson also found that Respondent had committed contracting without a license, in violation of A.R.S. § 32-1151, she did not assess a civil penalty for the violation.
Investigator Watson served the Cease & Desist Order and Notice of Civil Penalty on Respondent personally at his residential address, 1292 River Front Drive, Bullhead City, Arizona 86442.
Respondent requested a formal hearing. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing.
On March 23, 2017, the Registrar issued a Notice of Hearing, setting a hearing on May 9, 2017, at 1:00 p.m. at OAH. The Registrar mailed a copy of the Notice of Hearing to Respondent at the same residential address where the Cease & Desist Order and Notice of Civil Penalty had been served on Respondent.
On May 4, 2017, the Administrative Law Judge granted the Registrar’s attorney’s request to present telephonically the testimony of Investigator Watson and issued an order allowing Investigator Watson to appear telephonically.
Respondent and the Registrar’s attorney appeared personally at the May 9, 2017 hearing. Respondent stated that he had applied for a contractor’s license and requested a settlement conference. To allow the Registrar more time to process Respondent’s contractor’s license application and the parties to hold a settlement conference, on May 9, 2017, the Administrative Law Judge issued an order continuing the hearing on the merits until July 10, 2017, at 8:30 a.m. OAH staff sent the order to Respondent at his residential address of record or email address.
Respondent and the Registrar’s attorney appeared personally at the hearing scheduled for July 10, 2017. The Registrar’s attorney stated that the parties had agreed that, if Respondent obtained a contractor’s license, the Registrar would reduce the amount of the civil penalty. The Registrar’s attorney explained that although Respondent had submitted an application for a contractor’s license and had made a good faith effort to obtain the license, he had failed the license examination. To allow Respondent additional time to pass the examination, the Registrar’s attorney requested that a status conference be scheduled 45 days out.
On July 10, 2017, the Administrative Law Judge issued an order setting a status conference on August 25, 2017, at 4:00 p.m. OAH staff sent the order to Respondent at his residential address of record or email address.
On August 24, 2017, the Registrar’s attorney filed a written status update, stating that Respondent had contacted the Registrar’s attorney and requested more time to pass the license examination, which was scheduled on August 28, 2017, and that the Registrar did not oppose another 30-day continuance.
On August 24, 2017, the Administrative Law Judge issued an order continuing the status conference to September 29, 2017, at 4:00 p.m. OAH staff sent the order to Respondent at his residential address of record or email address.
The Registrar’s attorney appeared telephonically at the September 29, 2017 status conference. Respondent did not appear. The Registrar’s attorney stated that the matter might require a hearing because Respondent had not passed the license examination, but that the Registrar did not object to giving Respondent another 30 days to pass the examination.
On October 2, 2017, the Administrative Law Judge issued an order setting a continued hearing on the merits on December 4, 2017, at 8:30 a.m. The order cautioned that, “[a]bsent extraordinary circumstances, no further continuances will be granted.” OAH staff sent the order to Respondent at his residential address of record or email address.
A hearing on the merits was held on December 4, 2017. Respondent’s attorney appeared.
Respondent did not request to appear telephonically and did not request that the hearing again be continued. Although the start of the duly noticed continued hearing was delayed sixteen minutes to allow Respondent additional travel time, Respondent did not appear, personally or through an attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to controvert the evidence that the Registrar presented.
At the December 4, 2017 hearing, the Registrar submitted four exhibits and presented Investigator Watson’s telephonic testimony to establish the facts set forth above. Investigator Watson also testified that Respondent continued to advertise ib 1st Call Restoration LLC’s website that it could perform board-up services to prevent vandalism to properties that had been damaged by fire or water.
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CONCLUSIONS OF LAW
The order setting a continued hearing that OAH mailed to Respondent at his residential address of record, where Respondent was served with the Cease & Desist Order and Notice of Civil Penalty, the original Notice of Hearing, or email address, where OAH sent all subsequent orders, was reasonable and Respondent is deemed to have received notice of the continued hearing.
This matter lies within the Registrar’s jurisdiction.
The Registrar bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.
“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”
A.R.S. § 32-1101(3) defines contractor in relevant part as follows:
"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:
(a) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or any other structure or work in connection with the construction.
(Emphasis added.) By advertising that his company 1st Call Restoration LLC performed board-up services to prevent vandalism to fire- and water-damaged structures, Respondent engaged in contracting as defined by A.R.S § 32-1101(3).
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. § 32-1121(A)(14)(c) provides that the handyman exemption does not apply “[t]o 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.”
The Registrar established that Respondent advertised the board-up services of his company, 1st Call Restoration LLC, on the laminated advertisement that Investigator Watson photographed on the Sunrise Vista community bulletin board and at its website without including the disclaimer, “not a licensed contractor.” Therefore, the Registrar established that Respondent violated A.R.S. § 32-1165 by advertising without a license.
A.R.S. § 32-1166(A) authorizes the Registrar to assess a civil penalty against a person who has been found to have advertised that he is able to perform a service for which a contractor’s license is required in violation of A.R.S. § 32-1165, in relevant part as follows:
In addition to all other remedies, when it appears to the registrar, either upon complaint or otherwise, that any person, firm, partnership, corporation, association or other organization, or a combination of any of them, has engaged in or is engaging in any act of contracting, practice or transaction which constitutes a violation of this chapter, or any rule or order of the registrar, the registrar may serve upon such person, firm, partnership, corporation, association or other organization not currently licensed under this chapter, by certified mail or by personal service, a cease and desist order requiring the person, firm, partnership, corporation, association or other organization to cease and desist immediately, upon receipt of the notice, from engaging in such act, practice or transaction. In conjunction with the cease and desist order, the registrar may issue a citation for a violation. Each citation shall be in writing and shall clearly describe the violation for which the citation was issued. Each citation shall contain an order to cease and desist and an assessment of 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. . . .
Respondent continues to advertise that he can perform board-up services, even after Investigator Watson issued the Cease & Desist order. Under the circumstances, a civil penalty in the amount of $1,500.00 for Respondent’s violation of A.R.S. § 32-1165 is not excessive.
RECOMMENDED ORDER
Based on the foregoing, it is ordered that the Registrar affirm the finding that Respondent Edward Allen Van Dyken violated 32-1165 and affirm the assessment of a civil penalty in the amount of $1,500.00. The $1,500.00 civil penalty shall be paid in certified funds to the Registrar on or before the effective date of the 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 will be five days from the date of that certification.
Done this day, December 11, 2017.
/s/ Diane Mihalsky
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
Registrar of Contractors