ALJDEC decisions subject to certification as final

2017A-5681-LDA-ROC · Registrar of Contractors · 2018-05-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

IN THE MATTER OF THE APPLICATION OF:

Affordable Renovations and Design LLC,

PENDING LICENSE NO: 315865

No. 2017A-5681-LDA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 8, 2018, 8:30 A.M.

APPEARANCES: Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine; Robert Wolkin, Esq., appeared on behalf of Applicant

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

1. On September 12, 2017, Applicant submitted a License Application (Application) with the Registrar for a B3 home remodeling license. (Registrar’s Exhibit 2).

2. On October 23, 2017, the Registrar issued a Notice of License Denial. (Registrar’s Exhibit 1).

3. Among the reasons for denial listed by the Registrar in the Notice of License Denial were:

David Karmel, the qualifying party for Applicant, was named on a revoked license for which there was a civil penalty assessed in the amount of $500.00 in connection with Case No. 2010A-[number redacted]-ROC which remains unpaid; (Registrar’s Exhibit 4).

Mr. Karmel had been cited for unlicensed contracting violation in Case No. 2001-[number redacted] for which a cease and desist order was issued; (Registrar’s Exhibit 5).

Mr. Karmel had been convicted on October 6, 2017, of unlicensed contracting in Case No. 2014-2807. (Registrar’s Exhibit 6).

4. The Registrar ultimately denied the Application because Applicant failed to establish that a person named on the application, Mr. Karmel, had the requisite good character and reputation.

5. On November 13, 2017, Applicant submitted a timely Request for Administrative Hearing.

6. The Registrar issued a Notice of Hearing, dated November 22, 2017, that set a hearing for January 17, 2018. The matter was continued to March 21, 2018, then to April 26, 2018, and then again to May 8, 2018.

7. A hearing was held on May 8, 2018, at 1:00 P.M. The Registrar presented the testimony of Bonnie Allan, Staff Attorney of Registrar’s Legal Department. Applicant presented the testimony of David Karmel, qualifying party. The Tribunal received and admitted the Registrar’s exhibit numbers 1 - 6 and Applicant’s exhibit numbers 1 - 11.

8. Bonnie Allan testified on behalf of the Registrar as to the denial of the application on the three grounds as set forth in the Notice of License Denial. She further testified that David Karmel had not paid the $500.00 civil penalty relating to Case No. 2010A-[number redacted]-ROC. She further stated that the lack of a showing of good character and reputation on the part of David Karmel was based on the contracting without a license underlying the conviction against Mr. Karmel in 2017.

9. David Karmel testified on behalf of Applicant that he filed a bankruptcy proceeding in 2014. He further testified as to his experience as a contractor over the years. Lastly, he testified that he could not recall whether he had paid the $500.00 civil penalty but was willing to pay it if he had not.

CONCLUSIONS OF LAW

1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

2. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119.

3. “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 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.” BLACK’S LAW DICTIONARY at p. 1220 (8th ed. 1999).

4. The Tribunal finds that the Registrar properly denied the Application under A.R.S. § 32-1161(C) due to the failure to establish that a loss caused by an act or omission for which a license was revoked had been fully satisfied. A.R.S. § 32-1161(C) provides:

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.

Under A.R.S. § 32-1154(A)(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.

5. The evidence established that a civil penalty assessed against Mr. Karmel in the amount of $500.00 in connection with Case No. 2010A-[number redacted]-ROC remained unpaid. This amount constituted a loss that had not been fully satisfied caused by an act or omission for which a license was revoked.

6. The Tribunal finds that the Registrar also properly denied the Application under A.R.S. § 32-1122(D) due to Mr. Karmel’s conviction for contracting without a license. A.R.S. § 32-1122(D) provides:

D. To obtain a license under this chapter, a person shall not have had a license refused or revoked, within one year before the person's application, or shall not have engaged in the contracting business, nor shall the person have submitted a bid without first having been licensed within one year before the person's application, nor shall a person act as a contractor between the filing of the application and actual issuance of the license. The registrar may find any of those actions or circumstances to be excusable if there was reasonable doubt as to the need for licensure or the actions of the applicant did not result in an unremedied hardship or danger or loss to the public. A person who has been convicted of contracting without a license is not eligible to obtain a license under this chapter for one year after the date of the last conviction. (Emphasis added).

7. There is no dispute as to Mr. Karmel’s conviction for contracting without a license. However, the parties differ on the interpretation of A.R.S. § 32-1122(D) concerning whether the Registrar has the discretion to excuse a conviction for contracting without a license and waive the one year bar to eligibility for a license. The Tribunal finds that there is no ambiguity in the statute. The discretion afforded the Registrar with respect to a finding of excusability involves any of “those actions or circumstances.” Such actions or circumstances refers to actions or circumstances in the preceding sentence of the statute, namely, the refusal or revocation of a license within one year before an application, the engaging in the contracting business or submitting a bid without first having been licensed within one year before an application, or acting as a contractor between the filing of the application and actual issuance of the license. A conviction for contracting without a license referred to in the statute, as contrasted with merely contracting without a license, is not included in those actions or circumstances for which the Registrar has discretion to waive the one year bar to a license.

8. Applicant has argued that the long delay between the Misdemeanor Criminal Complaint, dated December 3, 2014 (Respondent’s Exhibit 3), and the Plea Agreement and Order, dated October 6, 2017 (Respondent’s Exhibit 4) due to the bankruptcy filing of Mr. Karmel should not prejudice the Application. However, while the Tribunal can appreciate the unintended consequences resulting from the bankruptcy proceeding, there was no authority presented to support the notion that any date other than the date of conviction for contracting without a license has any relevance with regard to the Application.

9. The Tribunal also finds that the Registrar properly denied the Application under A.R.S. § 32-1122(C) due to the lack of a showing of good character and reputation on the part of Mr. Karmel. A.R.S. § 32-1122(C) provides:

C. 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. (Emphasis added).

10. The lack of good character and reputation may be established by showing that a person has engaged in contracting without a license. That Mr. Karmel engaged in contracting without a license is not in dispute. Applicant argued that he should not be penalized twice for both the conviction for contracting without a license and the act of contracting without a license, the same act for which he was convicted. The Tribunal agrees with the Registrar that Applicant is not being penalized twice for the same act, but is instead being denied an application on alternative grounds for essentially the same act.

11. Accordingly, the Registrar did not err in denying Applicant’s Application for Exemption from Qualifying Party Requirements.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that on the effective date of the final order in this matter, that Applicant’s License Application be denied.

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, May 29, 2018.

/s/ Roger Geddes

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors