ALJDEC decisions subject to certification as final

2017A-5342-CPA-ROC · Registrar of Contractors · 2018-01-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Registrar of Contractors,

COMPLAINANT,

v.

Jett Floors LLC dba,

Totally Floored,

License No: 315227

RESPONDENT.

No. 2017A-5342-CPA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 27, 2017, at 1:00 p.m.

APPEARANCES: Julie Hussey (“Mrs. Hussey” representative for Jett Floor LLC, dba Totally Floored (“Respondent” or “Applicant”)); Daniel Hussey (“Mr. Hussey” witness for Respondent); Thomas Raine (“Mr. Raine” attorney for the Registrar of Contractors “ROC” or “Registrar”); and Brian Kirby (“Mr. Kirby” witness for the Registrar).

ADMINISTRATIVE LAW JUDGE: Linda Marie Brown

_____________________________________________________________________

FINDINGS OF FACT

On or about August 2, 2017, Applicant Jett Floors, LLC, DBA Totally Floored (“Respondent”) submitted a license application to the Registrar of Contractors for a CR-08 Dual Specialty classification license approval.

Julie Irene Hussey (“Mrs. Hussey”) was named as the Qualifying Party on Pending License Application No. 315227.

Mrs. Hussey is 50 percent owner/member of the Limited Liability Company (“LLC”), File No. L20472545, named Jett Floors, LLC, and her husband, Daniel Hussey is listed as the other 50 percent owner/member of the LLC.

Upon review of Respondent’s License Application, Bonny Allan, Staff Attorney for the Registrar issued a Notice of License Denial on September 22, 2017, citing two (2) grounds for license denial: 1. Failure to establish good character and reputation by being named to revoked Contractor’s Licenses in violation of A.R.S. §§ 32-1122(D); 32-1154(A)(20) and A.R.S. § 32-1161(C); and

2. Failure to establish a minimum of four (4) years of practical or management trade experience pursuant to A.R.S. § 32-1122(F)(1).

The Notice of Denial specifically set forth under its Factual Allegations that Mr. and Mrs. Hussey are named officers on License Nos. 110373 and 110374 issued to B and L Carpet Stores, Inc. and that both licenses are revoked).

Under Factual Allegations, No. 5, the Notice of Denial explained the reasons both licenses were revoked, to include 22 unresolved complaints against the licenses which precludes licensure of anyone named on either of those licenses.

Under Factual Allegations, No. 6, the Notice set forth nine (9) complaints that received payouts from the Registrar’s Recovery Fund. The Notice stated that under the statutory scheme, an applicant is precluded issuance of a license until anyone named on those licenses repays the Recovery Fund with interest. The total amount on the nine (9) payouts without interest is $28,613.67.

On or about October 20, 2017, Respondent sent an email with a letter attachment requesting an administrative hearing and an informal settlement conference was received to the Registrar.

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

Hearing Evidence

At opening, Respondent testified that they are the prior owners of B and L Carpet and held the license for approximately 20 years until they sold the business to Adam Campbell sometime in December 2012. Respondent testified the new owner failed to remove Applicants as the qualifying party/members/officers.

Brian Kirby (“Mr. Kirby”), Chief of Licensing for the Registrar credibly testified as to his involvement in the licensing application process. Mr. Kirby testified he is familiar with Respondent’s licensing application.

Mr. Kirby stepped through various State’s exhibits to include the underlying discipline hearing leading up to revocation of license nos. CR8-110373-D and CR8.110374-D issued to B and L Carpet Stores, Inc. wherein Mr. and Mrs. Hussey were named officers.

Mr. Kirby testified that the statutes leave little to no discretion when denials involve matters involving Recovery Fund Payouts and unresolved complaints.

Mr. Kirby stated that the Respondent would need to provide proof that all 22 complaints have been satisfactorily resolved in addition to proof that the Recovery Fund was made whole. At this time, Mr. Kirby testified that the Recovery Fund has not instituted subrogation claims against Respondents/Applicants.

Mr. Hussey referenced the transcript from the Administrative Hearing held on July 2, 2015, at 8:15 AM. Specifically, he referenced page 3, lines 6-8 wherein Mr. Tellier stated, “the evidence is going to show that Mr. Campbell never informed the Registrar that he had acquired ownership of B and L in violation of statutory requirements to do so.”

Mr. Hussey argued that he was given assurances that the Registrar may or may not take the position that because they were named on the licenses that had been revoked, they would be disqualified for a new license.

Mr. Kirby reaffirmed that the Licensing Division has little to no discretion in matters of unresolved claims and no discretion in matters of payments made from the Registrar’s Recovery Fund as the Registrar has a fiduciary duty to protect those funds and seek recovery on funds payout to claimants.

In sum, the Registrar has no flexibility as the Respondent was listed as the qualifying party at the time the complaints were made, and in order to be reconsidered, Respondent is required to show that any and all complainants have been resolved, complainants made whole, as well as the Recovery Fund repaid with interest.

Respondent argued that this is an excessive demand, and almost an impossibility. Mr. Kirby responded that the Registrar would consider best efforts of certified letters and at least 3 attempts to contact the 22 complainants that are still reflected with the Registrar as unresolved complaints against the two (2) licenses held by B and L Carpet Stores, Inc., and that payment with interest is a different division of the Registrar’s office and reach beyond his oversight so Respondent/Applicants would need to resolve the Recovery Fund payment amounts with that division.

Respondent was questioned regarding the second issue of failure to establish a minimum of four years’ practical experience given they were in business for 20 years, to which they responded they overlooked this when competing the application form and that has been corrected. The only issues left unresolved remains the 22 unresolved complaints and nine (9) claimants who were paid from the Registrar’s Recovery Fund.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1122.

Applicant bears the burden of proof to establish that it meets statutory qualifications for a contractor’s license by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(1); A.A.C. R2-19-119; 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).

A.R.S. § 32-1122 provides, in relevant part, as follows:

D. To obtain or renew a license under this chapter, each person shall be of good character and reputation. Lack of good character and reputation may be established by showing that a person has engaged in contracting without a license or committed any act that, if committed or done by any licensed contractor, would be grounds for suspension or revocation of a contractor's license or by showing that the person was named on a contractor's license that was suspended or revoked in another state.

A.R.S. § 32-1154(A) provides, in relevant part, as follows:

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

. . . .

20. Having a person named on the license who is or was named on any other license in this state or in another state that is under suspension or revocation for any act or omission that occurs while the person is or was named on the license unless the prior revocation was based solely on a violation of this paragraph.

A.R.S. 32-1161 provides, in relevant parts, as follows:

C. After revocation of a license upon any of the grounds set forth in section 32-1154, the license shall not be renewed or reissued for one year after final determination of revocation and then only on proper showing that all loss caused by the act or omission for which the license was revoked has been fully satisfied.

The evidence of record supports the conclusion that Applicant failed to establish good character and reputation as required by A.R.S. § 32-1122(D) and A.R.S. 32-1154 (A) (20) in that Respondent/Applicants is a person named on a contractor's license that was suspended or revoked.

Additionally, Respondent/Applicant failed to properly show that all loss caused by the act or omission for which the license was revoked has been fully satisfied by all 22 unresolved complainants as well as the nine (9) payments made from the Registrar’s Recovery Fund to claimants.

The outstanding issues supports the Registrar’s determination that Mrs. Hussey, as a Qualifying Party for Applicant, lacks good character and reputation necessary for licensure as required by A.R.S. § 32-1122(D).

Under A.R.S. 32-1122(F)(1), this Tribunal finds that Applicant provided evidence as conceded by the Registrar that this was an error in the application process and the Applicant has corrected and does possess the minimum four years practical or management trade experience based on their owner/operation of B and L Carpet Stores, Inc.

The evidence of record supports the Registrar’s denial of Applicant’s Pending Application License No. 315227.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the denial of Jett Floors LLC dba Totally Floored Pending License Application No. 315227 be affirmed.

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 forty days from the date of that certification.

Done this day, January 16, 2018.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors