FINACT2017A-2148-CHC-ROC.pdf

2017A-2148-CHC-ROC · Registrar of Contractors · 2017-10-10

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Jason Lee Garrett, Case No. 2017-2148 COMPLAINANT,

v.

Chitwood's Country Oak Cabinets, Inc., License No. 143375, Docket No. 2017A-2148-CHC-ROC RESPONDENT. FINAL ADMINISTRATIVE DECISION AND ORDER

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an

administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the

Registrar must provide written justification setting forth the reasons for the modification or rejection.

MODIFICATION AND WRITTEN JUSTIFICATION

The Registrar’s citation of a contractor raises the central issue of whether a contractor’s license

should be suspended or revoked. See A.R.S. § 32-1155(A). If the holder of a contractor’s license commits

any of the acts or omissions listed under A.R.S. § 32-1154(A), then the Registrar is authorized to suspend

or revoke the license. See A.R.S. § 32-1154(B).

On August 28, 2017, the Administrative Law Judge issued his recommended decision dismissing

the Citation and Complaint based upon the Conclusion of Law that there was no evidence that Respondent’s qualifying party and owner, William Earl Chitwood, “had any business relationship with the individuals or entity that entered into and apparently abandoned the subject contract with Complainant.” ALJ Dec. 5:29-30. The decision concluded that therefore, “Complainant has not established that Respondent’s license should be disciplined for a violation of A.R.S. § 32-1154(A)(1) and (A)(22). ALJ Dec. 5:29-30.

1 of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 The decision’s conclusions of law are contrary to the findings of fact and the applicable law and thus must be modified. Finding of Fact No. 6 states that Mr. Chitwood “agreed to be the qualifying party for Deborah and Wayne Morris using Respondent’s contractor’s license number 143375 until they got their own license.” ALJ Dec. 3:20-22; See also Hearing Transcript Excerpts, attached as Exhibit 1. Respondent sold its assets, including its license, and allowed two unlicensed individuals to operate under that license for at least six years. See ALJ Dec. 3:14-16, 3:20-22; see also Exhibit 1. Respondent had actual knowledge that the unlicensed individuals were using his license and had not obtained their own. See ALJ Dec. 3:20-22;

see also Exhibit 1. In fact, Respondent continued to renew its license for the next six years, thus enabling

Wayne and Deborah Morris to continue operating under its license while repeatedly acknowledging that

Mr. Chitwood remained the qualifying party and owner. Id. Respondent remains responsible for the

activities performed under its license. Respondent cannot now claim ignorance to escape responsibility

after directly facilitating the use of its license by Wayne and Deborah Morris.

CONCLUSION AND ORDER

For the foregoing reasons, the Registrar removes the Administrative Law Judge’s Conclusions of

Law Nos. 5-8. The Registrar adds the following Conclusions of Law:

5. Under A.R.S. § 32-1127, “The terms ‘responsible managing employee’ and ‘qualifying party’ shall, for the purpose of administering this chapter, be synonymous, and shall mean an employee who is regularly employed by the licensee and is actively engaged in the classification of work for which such responsible managing employee qualifies in behalf of the licensee.”

6. Under A.R.S. § 32-1122(B), Respondent is required to identify its owners, officers, directors, and qualifying party, and advise the registrar of any change in that information within thirty days. Although Respondent sold its assets to Wayne and Deborah Morris, Respondent never sought to update its records with the Registrar to reflect Wayne and Deborah Morris as qualifying parties or owners. Instead the records continued to reflect Mr. Chitwood as the Respondent’s qualifying party and owner. Mr. Chitwood admits he remained the Respondent’s qualifying party and owner. Mr. Chitwood therefore remained responsible for the actions of Respondent, regardless of whether he had actual knowledge. 7. At no time did Respondent attempt to disassociate Mr. Chitwood from the license, nor did Mr. Chitwood ever attempt to disassociate. Rather, Respondent continued to renew its license and allowed Wayne and Deborah Morris to operate under its license under the contract for the sale of Respondent’s assets. Complainant visited Respondent’s showrooms several times to select cabinets and countertops, and ultimately entered into a written contract bearing Respondent’s license number.

8. Given Respondent’s affirmative actions in enabling Wayne and Deborah Morris’s to operate under its license for compensation, the evidence presented supports a finding that Respondent is responsible for Wayne and Deborah Morris’s conduct with regard to abandonment and refusal to perform corrective work. For the foregoing reasons, the Registrar modifies the recommended order to read as follows: Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Respondent’s License No. 143375 shall be revoked. The Registrar hereby accepts the remainder of the Administrative Law Judge Decision, which becomes effective on November 1, 2017.

Dated this 22nd day of September 2017 /s/ Nicole Sornsin Nicole Sornsin, Assistant Director Legal and Recovery Fund

Copy mailed via USPS First Class mail this 22nd day of September 2017 to: Respondent Chitwood's Country Oak Cabinets, Inc. 350 N. Chitwood Ln. Payson, AZ 85541-2648

Complainant Jason Lee Garrett 933 W. Wendy Way Gilbert, AZ 85233-3623 Case No. 2017-2148/jo

3 of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762