ALJDEC decisions subject to certification as final

2018A-04707-ROC · Registrar of Contractors · 2019-06-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 3, 2019, 1:00 P.M. APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine; no appearance was made on behalf of Respondent ADMINISTRATIVE LAW JUDGE: Roger A. Geddes _____________________________________________________________________ Based on the evidence in this matter, the undersigned Administrative Law Judge hereby recommends that the Registrar of Contractors (“Registrar”) affirm the Cease and Desist Order and civil penalty issued to Randy Lee Furse (“Respondent”) on October 9, 2018. FINDINGS OF FACT 1. Respondent is not a licensed contractor in the State of Arizona. 2. The Registrar’s assigned investigator, Mike Nation (Investigator), issued Respondent a Cease and Desist Order and Civil Citation dated October 9, 2018, for failing to comply with A.R.S. § 32-1165 (advertising contracting services without a license). (Registrar’s Exhibit 1). The proposed civil penalty was $5,000.00 for five violations. 3. Respondent requested an administrative hearing and the Registrar forwarded the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 4. The Registrar issued a Notice of Hearing that set a hearing for January 3, 2019, at 9:00 A.M. The Registrar mailed a copy of the Notice of Hearing to Respondent on or about November 27, 2018, at his address of record. The matter was continued to April 2, 2019, at the request of Respondent in order to allow time to effectuate a resolution. 5. On March 11, 2019, the matter was again continued to June 3, 2019, at 1:00 P.M. at the request of Respondent. A Minute Entry - Granting Continuance was emailed to Respondent on March 11, 2019, at his email address of record. 6. Although the commencement of the June 3, 2019, hearing was delayed approximately 20 minutes, Respondent did not appear at any time during the hearing or through an attorney or any other person. Respondent further did not request to appear telephonically and did not in advance request that the June 3, 2019, hearing be continued. 7. At the hearing, the Investigator testified on behalf of the Registrar that on October 3, 2018, he observed a Craigslist posting by “Lee Furse Painting” quoting prices for painting services for a price as high as $2,800.00. He stated that the advertisement did not include a disclaimer that Respondent was “not a licensed contractor.” (Registrar’s Exhibit 3). He further indicated that he recognized the telephone number listed of (480) 500-1188 to be that of the telephone number of Lee Furse. 8. He further testified that he conducted an internet search on October 4, 2018, and uncovered the web site www.leefurse.com in which painting services were offered by “Lee Furse painting” for a price as high as $1,400.00. He stated the web site did not include a disclaimer that Respondent was “not a licensed contractor.” (Registrar’s Exhibit 5). 9. The Investigator further testified that on October 4, 2019, and October 5, 2019, he observed two yard type/jobsite signs staked in the ground near two different Home Depot stores advertising for painting services with the telephone number of (480) 500-1188. He stated that neither sign included a disclaimer that Respondent was “not a licensed contractor.” (Registrar’s Exhibit 4). 10. The Investigator further testified that on October 9, 2018, he observed a Craigslist posting by “Lee Furse Painting and Texture” advertising services for a price as high as $1,400.00. He stated the advertisement did not include a disclaimer that Respondent was “not a licensed contractor,” and in fact bears a reference suggesting that Respondent was “licensed.” (Registrar’s Exhibit 6). 11. The Investigator also testified as to a previous warning to Respondent on August 29, 2018, with regard to advertising violations, ROC 2018-3917. 12. Respondent admitted in his Answer that he in fact placed the above-referenced Craigslist, web site, and sign advertising. (Registrar’s Exhibit 10). CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[1] 2. The Registrar bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] 3. A.R.S. § 32-1101(A)(3) defines “Contractor” in relevant part as follows:

"Contractor" is synonymous with the term "builder" and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to:

(a) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or any other structure or work in connection with the construction.

4. A.R.S. § 32-1165 regarding advertising contracting services without a required license provides as follows: Except as authorized by section 32-1121, subsection A, paragraph 14, subdivision (c), it is a class 1 misdemeanor for any person to advertise that he is able to perform any service or contract for compensation subject to regulation by the registrar under the terms of this chapter unless a license under the terms of this chapter is first obtained regardless of whether his operations as a contractor are otherwise exempt. 5. A.R.S. § 32-1166 regarding the Registrar’s authority to impose civil penalties and to issue cease and desist orders provides in relevant part as follows:

A. In addition to all other remedies, when it appears to the registrar, either upon complaint or otherwise, that any person, firm, partnership, corporation, association or other organization, or a combination of any of them, has engaged in or is engaging in any act of contracting, practice or transaction which constitutes a violation of this chapter, or any rule or order of the registrar, the registrar may serve upon such person, firm, partnership, corporation, association or other organization not currently licensed under this chapter, by certified mail or by personal service, a cease and desist order requiring the person, firm, partnership, corporation, association or other organization to cease and desist immediately, upon receipt of the notice, from engaging in such act, practice or transaction. In conjunction with the cease and desist order, the registrar may issue a citation for a violation. Each citation shall be in writing and shall clearly describe the violation for which the citation was issued. Each citation shall contain an order to cease and desist and an assessment of 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. If after the issuance of a citation by the registrar, the person or organization receiving the citation fails to cease and desist in the violation or violations described in the citation, the registrar may assess an additional civil penalty of up to two thousand five hundred dollars for each day the violation or violations continue….

B. Each violation of this chapter or a rule or order of the registrar by a person who is required to be licensed by this chapter and who does not possess the required license shall constitute a separate offense, and the registrar may impose a civil penalty of not to exceed two thousand five hundred dollars for each violation except that for multiple violations committed on the same day the civil penalty shall not exceed two thousand five hundred dollars for all such violations. Monies collected from civil penalties shall be deposited in the state general fund.

C. The registrar of contractors may issue citations containing orders to cease and desist and of civil penalties against persons who have never been licensed under this chapter who are acting in the capacity of or engaging in the business of a contractor in this state.

6. Arizona Administrative Code Rule 4-9-131 regarding permissible aggravating and mitigating factors to be considered when assessing a civil penalty provides 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. 7. In this case, the Registrar has established that Respondent was advertising for construction services for which a contractor’s license was required. These activities support a finding that Respondent is a “contractor” as defined under A.R.S. § 32-1101(A)(3) advertising for services for which a contractor’s license is required in violation of A.R.S. § 32-1165. 8. The exemption provided under A.R.S § 32-1121(A)(14) (persons not required to be licensed) does not apply because Respondent advertised for contracting services in excess of $1,000.00 without disclosing that he was not a licensed contractor. Section 32-1121(A)(14) provides: A. This chapter shall not be construed to apply to: … 14. 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,…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: … (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. 9. In assessing the civil penalty and the gravity of Respondent’s violation, aggravating factors that were present include previous violations committed by Respondent and the creation of the false impression in one Craigslist posting that Respondent was licensed. These factors were sufficient to warrant a civil penalty in this current matter in the aggregate amount of $5,000.00. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent violated A.R.S. § 32-1165 and affirm the decision to assess a civil penalty under A.R.S. § 32-1166 of $5,000.00 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 will be five days from the date of that certification. Done this day, June 24, 2019.

/s/ Roger Geddes Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] See A.R.S. § 32-1101 et seq. [2] See A.R.S. § 41-1092.07(G)(3); 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). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

-----------------------

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