FINACT2017A-5182-CPA-ROC.pdf

2017A-5182-CPA-ROC · Registrar of Contractors · 2018-10-09

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

IN THE MATTER OF THE CIVIL PENALTY Case No. 2017-5182 CITATION ISSUED TO: Docket No. 2017A-5182-ROC

Scott Beau Setter, FINAL ADMINISTRATIVE DECISION RESPONDENT. 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.

REGISTRAR’S ACCEPTANCE

In this case, a hearing was held, and the administrative law judge issued a written decision. See

Administrative Law Judge Decision, attached. The Registrar reviewed that decision and hereby accepts

it.

CONCLUSION

Because the Registrar has accepted the administrative law judge’s decision, that decision is the

final administrative decision in this case and becomes effective on November 10, 2018.

IT IS FURTHER ORDERED that Respondent pay a civil penalty in the amount of $1,500.00

payable to the Registrar on or before the effective date of this Order. Payment may be hand-delivered to

the Registrar’s physical address or mailed to:

Registrar of Contractors P.O. Box 6748 Phoenix, Arizona 85505-6748

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Dated October 1, 2018.

Registrar of Contractors /s/ Nicole Sornsin Nicole Sornsin, Assistant Director, Legal and Recovery Fund Copy mailed via USPS First Class mail October 1, 2018 to: Respondent Scott Beau Setter 950 S Tomahawk Trl Dewey, AZ 86327-6606 And copy electronically mailed this same date to: Registrar’s Counsel Thomas Raine, Assistant Attorney General Office of Administrative Hearings Tammy L. Eigenheer, Administrative Law Judge Case No. 2017-5182/AN

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 9.10.2018 ROC LEGAL IN THE OFFICE OF ADMINISTRATIVE HEARINGS

IN THE MATTER OF THE CIVIL PENALTY No. 2017A-5182-CPA-ROC CITATION ISSUED TO: ADMINISTRATIVE LAW JUDGE Scott Beau Setter, DECISION Respondent

HEARING: August 9, 2018, with the record held open until August 20, 2018

APPEARANCES: Scott Beau Setter appeared on his own behalf. The Arizona

Registrar of Contractors was represented by Assistant Attorney General Thomas Raine. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ Respondent Scott Beau Setter appealed a Civil Citation issued by the Registrar of Contractors (Registrar) for contracting without a license. The Civil Citation imposed aggregate civil penalties in the amount of $1500.00. Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law, and Recommend Order are made, finding a violation and recommending assessment of a $1500.00 civil penalty. FINDINGS OF FACT Background 1. Respondent is not a licensed contractor in the State of Arizona. 2. On or about September 11, 2017, the Registrar received a complaint from Leah Ruth Walters regarding Burning Bush. The complaint alleged that Burning Bush entered into a contract to perform landscaping working for $8,000.00 to $10,000.00 and identified Respondent as the individual representing the licensee Burning Bush. 3. Initially, Investigator Jim Dimond was assigned the complaint as it was made against a licensed entity. On or about October 10, 2017, Investigator Dimond and Investigator Daniel Oen attended a jobsite inspection. From the information provided by the parties, the investigators determined that Burning Bush had not contracted with Ms. Walters for the project. Respondent’s father owned Burning Bush, which had bid the project for Ms. Walters, but Ms. Walters had decided not to contract with Burning Bush because the bid was more than she wanted to pay for the project. Respondent acknowledged he used Burning Bush’s accounts with various retailers to obtain better

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 9.10.2018 ROC LEGAL

prices on materials for the project, but asserted he was hired as a laborer on the project. Checks and bank records established that Ms. Walters paid Respondent $6250.00 in total. The information provided also indicated an outstanding civil issue of $3000.00. 4. Investigators Dimond and Oen testified that Arizona contracting law allows an exemption from licensure, with certain limitations, for a “handyman.”1 Investigators Dimond and Oen stated that Respondent’s work did not fit within the handyman exemption because it exceeded the $1,000.00 limit and required electrical and gas permits. 5. Investigator Oen determined that Respondent had violated the provisions of A.R.S. § 32-1151 (Engaging in contracting without a license). A Cease & Desist Order was issued to Respondent on October 24, 2017, for violating the provisions of A.R.S. § 32-1151. A total of $1500.00 in civil penalties was assessed. 6. Investigator Oen testified that Respondent was previously licensed by the Registrar as the Qualifying Party for Landscapes by Sonscapes LLC, but that the license had been revoked in 2007 due to a payout from the Residential Contractors’ Recovery Fund. 7. Respondent testified that he believed he should have been considered an employee of Ms. Walters rather than as an independent contractor. Respondent stated that Ms. Walters could not afford the $30,000.00 bid Burning Bush had provided for the project, so he offered to help because he knew the family from when he coached football. Respondent testified that he had recently reached out to Ms. Walters who wished to let the matter go and agreed to write a letter indicating she was no longer concerned with the work performed on the project and was satisfied with the outcome. The record was left open to allow Respondent time to obtain and submit the letter to the Registrar and to the Office of Administrative Hearings, but Respondent failed to do so. Respondent also testified that he was hoping to obtain a license from the Registrar to reduce the civil penalty imposed. CONCLUSIONS OF LAW

See A.R.S. § 32-1121(A)(14). RECEIVED 9.10.2018 ROC LEGAL

1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. 2. The Registrar bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2- 19-119(A); and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 3. Arizona contracting law prohibits a person from acting as a contractor without a license.2 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.3 4. 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.

5. 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 civil penalties for violations of A.R.S. § 32-1151, A.R.S. § 32-1166(A) required the Registrar to “adopt rules covering the assessment of a civil

A.R.S. § 32-1164(A)(2). A.R.S. § 32-1166(A). RECEIVED 9.10.2018 ROC LEGAL

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. R4-9-131.4 6. The evidence established a violation of Arizona contracting laws. As to the aggravating factors identified in A.A.C. R4-9-131, it was unclear if Respondent purported to be working for Burning Bush, a licensed entity, while working on Ms. Walters’ project. It is noteworthy, however, that Respondent was previously licensed by the Registrar and also worked for his father, a licensee. 7. Based on the specific and unique circumstances in this matter, the Tribunal concludes that the assessed civil penalty of $1500.00 was appropriate. RECOMMENDED ORDER Based upon the foregoing, it is recommended that the Registrar affirm the finding that Respondent violated A.R.S. § 32-1151 and the assessed civil penalty of $1500.00 to be paid in certified funds to the Registrar on or before the effective date of the Registrar’s final Order in this matter.

4 A.A.C. R4-9-131 sets forth permissible aggravating factors to be considered, in relevant part as follows: In assessing a civil penalty as provided for under A.R.S. § 32-1166(A), the Registrar shall give due consideration to whether the person cited or any individual acting on that person’s behalf has committed one or more of the following acts in determining the gravity of the cited violation: 1. Falsely represented to be a licensed contractor. 2. Failed to perform any work for which money was received. 3. Executed or used any false or misleading documents for the purpose of inducing a person to enter into a contract or to pay money for work to be performed. 4. Made false or misleading statements for the purpose of inducing a person to enter into a contract or to pay money for work to be performed. 5. Failed or neglected to apply funds which were received for the purpose of obtaining or paying for services, labor, materials, or equipment. 6. Performed work that was or had the potential to become hazardous to the health, safety, or general welfare of the public. 7. Performed work that deliberately was in violation of building codes, safety laws, labor laws, workers’ compensation laws, or unemployment insurance laws. 8. Performed work that failed to meet minimum acceptable trade or industry standards or practices or was not performed in a good and workmanlike manner. 9. Has committed any other act which would otherwise be cause for disciplinary action if the person cited had been properly licensed pursuant to A.R.S. Title 32, Chapter 10. 10. Has committed two or more prior violations. 11. Performed work that has caused loss or damage to the structure, its appurtenances, or property being worked upon or has caused loss or injury to any person. RECEIVED 9.10.2018 ROC LEGAL

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 10, 2018

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors