ALJDEC decisions subject to certification as final

2017A-1726-CPA-ROC · Registrar of Contractors · 2017-09-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

IN THE MATTER OF THE CIVIL PENALTY CITATION ISSUED TO:

Arash Hoss

No. 2017A-1726-CPA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 24, 2017

APPEARANCES: Assistant Attorney General Thomas C. Raine appeared on behalf of the Registrar of Contractors. Respondent Arash Hoss did not appear.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

Arash Hoss is not a licensed contractor in the State of Arizona.

Two Hawks Designs, LLC is not a licensed contractor in the State of Arizona.

Arash Hoss is a manager of 2 Hawks Designs, LLC.

On or about March 1, 2016, Two Hawks Designs, LLC (“Two Hawks”) entered into a contract with Ryan Blay wherein Two Hawks agreed to perform new construction at a residential property located at 4714 E. Calle Del Medio Phoenix, AZ. The amount due under the contract was $700,000.

Under the agreement, Two Hawks and Ashton Builders were partners. See Exhibit 3.

At all times relevant to this matter, Two Hawks represented to Mr. Blay that it would perform the new construction work. However, Two Hawks did not perform the construction work. Ashton Builders performed the construction work.

On or about March 24, 2017, the Registrar of Contractors (“Registrar”) received a complaint Mr. Blay against Two Hawks. The complaint states that Arash Hoss and Dan Wilhoit represented the license. Mr. Blay alleged that Arash Hoss and Two Hawks were unlicensed contractors.

The Registrar’s Investigator, Laurie Swanson (hereinafter “Investigator Swanson”), initiated an investigation of the complaint.

Investigator Swanson testified that during the course of the investigation she spoke to Mr. Blay via telephone. Mr. Blay told Investigator Swanson that he dealt with Arash Hoss for the majority of the project. Mr. Blay told the Investigator Swanson that the only time that they dealt with Ashton Builders was when they encountered problems with the work that was performed.

Investigator Swanson testified that all of the invoices for the appliances related to the project were billed to Two Hawks and not Ashton Builders. See Exhibit 4.

Investigator Swanson testified that Arash Hoss obtained all of the permits for the project. See Exhibit 5.

Investigator Swanson testified that she spoke to Arash Hoss by telephone. Mr. Hoss told Investigator Swanson that he was part owner of Two Hawks. Mr. Hoss told Investigator Swanson that he has never worked for Ashton Builders. When Investigator Swanson asked Mr. Hoss about his agreement with Ashton Builders, Mr. Hoss told Investigator Swanson that Ashton Builders was responsible for the construction and that Two Hawks was doing the design work. Investigator Swanson testified that Mr. Hoss told her that Two Hawks paid invoices for Ashton Builders because Ashton Builders was having problems completing the work in a timely manner. Mr. Hoss told Investigator Swanson that he was concerned that the work would not be completed if Two Hawks did not pay the invoices.

Investigator Swanson testified that during the course of her investigation, she discovered Two Hawks and Arash Hoss were not licensed. See Exhibit 6.

Investigator Swanson testified that she discovered that Arash Hoss is the statutory agent for Two Hawks and the manager for Two Hawks. See Exhibit 8.

Investigator Swanson determined that Arash Hoss had violated the provisions of A.R.S. § 32-1151 (Engaging in contracting without a license). A Cease & Desist Order was issued to Mr. Hoss for violating the provisions of A.R.S. § 32-1151. A civil penalty in the amount of $2,500.00 was assessed for one count of contracting without a license.

Respondent failed to appear at the time scheduled for hearing (August 24, 2017) and did not request to appear telephonically. After the expiration of a 20 minute grace period, the Administrative Law Judge conducted the hearing in Respondent’s absence.

CONCLUSIONS OF LAW

The Registrar bears the burden of proof to establish Mr. Hoss’s violation of A.R.S. § 32-1151 by a preponderance of the evidence.

The Order Granting Continuance that the Administrative Law Judge mailed to Respondent at its addresses of record was reasonable and he is deemed to have received notice of the hearing.

Arizona contracting law prohibits a person from acting as a contractor without a license. 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. 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.

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.

Emphasis added.

5. 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.

6. After review of all the evidence, the Tribunal concludes that the Registrar has proven that Respondent engaged in contracting without a license.

7. 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.” With respect to the appropriate amount of the civil penalty for Respondent’s violation 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. Evidence received in this matter supports the imposition of a $2,500.00 penalty 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 Arash Hoss violated A.R.S. § 32-1151 and affirm the decision to assess a civil penalty in the amount of $2,500.00 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, September 13, 2017

Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors