ALJDEC decisions subject to certification as final

2017A-1275-CPA-ROC · Registrar of Contractors · 2017-09-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

IN THE MATTER OF THE CIVIL PENALTY CITATION ISSUED TO:

Richard Rada,

Respondent.

No. 2017A-1275-CPA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 8, 2017; at 1:00 p.m.; the record was held open until September 15, 2017, to allow Respondent to submit written evidence that he had resolved the homeowner’s complaint and to obtain a contractor’s license.

APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Thomas C. Raine, Esq., Assistant Attorney General; Richard Rada (“Respondent”) appeared on his own behalf at the June 8, 2017 hearing.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

On or about March 3, 2017, Geraldine R. Woodyatt filed an unlicensed complaint form with the Registrar alleging that Respondent had installed an air conditioner on her house at 3681 W. Thundercloud Loop, Tucson, Arizona 85742 for a contract price of $5,185.00. Ms. Woodyatt stated that Respondent had failed to obtain a permit and that the air conditioner was deficient in numerous respects.

Ms. Woodyatt attached to her complaint copies of Respondent’s bid in the amount of $5,185.00, her check to Respondent in the same amount, and Respondent’s advertisements for his business, 911 Appliance Repair & Services. The bid and advertisements did not show the disclaimer, “Not a licensed contractor.”

The complaint was assigned to the Registrar’s Investigator, Johnnie Rodney Hamilton, for investigation. On or about March 23, 2017, Investigator Hamilton issued a Cease & Desist Order, a civil citation for violating of A.R.S. § 32-1151, and a civil citation for violating A.R.S. § 32-1165 based on Respondent’s activities at Ms. Woodyatt’s project. Investigator Hamilton also assessed civil penalties in the amounts of $1,500.00 for the violation of A.R.S. § 32-1151 and $1,000.00 for the violation of A.R.S. § 32-1165.

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

A hearing was held on June 8, 2017. The Registrar submitted six exhibits and presented Investigator Hamilton’s testimony. Respondent testified on his own behalf.

Additional Hearing Evidence

Investigator Hamilton interviewed Ms. Woodyatt to verify the allegations in her complaint and prepared a report of his investigation. Investigator Hamilton testified that Ms. Woodyatt said that Respondent was a family friend and that she purchased a new air conditioning unit from him. Ms. Woodyatt stated that after the air conditioning unit started having problems, she discovered that Respondent was not licensed.

Investigator Hamilton also interviewed Respondent. Investigator Hamilton testified that Respondent acknowledged that he was not licensed as a contractor in Arizona, although he had a business license through the City of Tucson.

The Registrar submitted records from the Arizona Secretary of State that showed that Respondent had registered the business name, 911 Appliance Repair & Services.

Investigator Hamilton testified that under the so-called “handyman’s exemption,” construction projects that do not cost more than $1,000.00, including labor and materials, did not require a contractor’s license to perform if the projects also did not require a permit. Because installing a new air conditioning unit on Ms. Woodyatt’s house required a permit and Respondent was paid $5,185.00 for the job, the handyman exemption did not apply.

Respondent stated that he agreed with the Registrar’s evidence, but requested that he be allowed time to resolve Ms. Woodyatt’s complaint and to obtain a contractor’s license.

On June 8, 2017, the Administrative Law Judge (“ALJ”) issued an order setting a status conference on July 28, 2017, to allow Respondent time to resolve Ms. Woodyatt’s complaint and to obtain a contractor’s license. On July 27, 2017, Respondent requested a continuance of the status conference because he was out of town. The Registrar’s attorney did not object to the continuance and the ALJ continued the status conference to August 31, 2017. The order continuing the status conference at Respondent’s request was mailed to Respondent at his address of record.

A status conference was held on August 31, 2017. The Registrar’s attorney appeared at the status conference, but Respondent did not. Respondent did not request to appear telephonically or that the status conference again be continued.

On August 31, 2017, the ALJ issued an order holding the record open until September 15, 2017, to allow Respondent one last chance to submit documentary evidence that he had resolved Ms. Woodyatt’s complaint and obtained a contractor’s license. To date, no such evidence has been received.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

The Registrar bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses and factors in mitigation of the penalty by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he 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.”

A.R.S. § 32-1151 prohibits contracting without a license, providing in relevant part 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.

Respondent acknowledged that he contracted to perform and that he actually performed contracting work at Ms. Woodyatt’s residence for an cost of more than $1,000.00.

A.R.S. § 32-1121(A)(14) sets forth the so-called “handyman’s exemption” to licensure requirements and provides in relevant part 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 . . . 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.

Because the amount of Respondent’s contract with Ms. Woodyatt exceeded $999.99 and required a permit, the Registrar established that Respondent violated A.R.S. § 32-1151.

The Registrar established that Respondent advertised to solicit contracting jobs in print and through his bid forms without including the disclaimer, “Not a licensed contractor.” 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 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 contracted without a license in violation of A.R.S. § 32-1151 or 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. . . .

Ms. Woodyatt in her complaint indicated that she initially thought that Respondent was a licensed contractor, that she was dissatisfied with his work, and that she did not feel that the work complied with applicable building codes because Respondent did not obtain the required permit. These are factors in aggravation of the penalty under A.A.C. R4-9-131.

Respondent did not establish that he has resolved Ms. Woodyatt’s complaint or obtained a contractor’s license.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent Richard Rada violated A.R.S. §§ 32-1151 and 32-1165 affirm its decision to impose civil penalty for unlicensed contracting in the amount of $1,500.00, and affirm the civil penalty in the amount of $1,000.00 for unlicensed advertising. The aggregate total of $2,500.00 in civil penalties 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, September 26, 2017.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors