ALJDEC decisions subject to certification as final

2018A-04854-ROC · Registrar of Contractors · 2019-02-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 4, 2019 APPEARANCES: Respondent Sean Christopher Sornberger 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 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 $200.00 civil penalty. FINDINGS OF FACT Respondent is not a licensed contractor in the State of Arizona. On or about October 12, 2018, the Registrar received a complaint from Paul Raymond Hartman regarding Sean Sornberger (Respondent). The complaint alleged that Respondent entered into a contract to repair a leaking patio view deck for $1750.00 and included a narrative. On or about October 19, 2018, Mr. Hartman also submitted additional documentation including a copy of a check for $1750.00 he wrote to Respondent on June 19, 2013, and a copy of a receipt/invoice stamped with Respondent’s name and indicating a total cost of $1750.00. On or about October 24, 2018, Investigator Daniel Rhodes contacted Mr. Hartman regarding the complaint. Mr. Hartman stated that Respondent had attempted to repair a leaking patio view deck, but the repair was never effective and resulted in additional leaking almost immediately. Mr. Hartman reported that he had contacted Respondent on multiple occasions to repair the leaking, but the leaking continued. Mr. Hartman stated he did not report the unlicensed activity for over five years because he hoped Respondent would honor the warranty and repair the issues. Investigator Rhodes testified that Arizona contracting law allows an exemption from licensure, with certain limitations, for a “handyman.”[1] Investigator Rhodes stated that Respondent’s work did not fit within the handyman exemption because it exceeded the $1,000.00 limit. Investigator Rhodes 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, 2018, for violating the provisions of A.R.S. § 32-1151. A total of $1500.00 in civil penalties was assessed. Respondent testified that he made a poor decision in how he handled the situation, but Mr. Hartman was not truthful in his account of the events. Respondent asserted that he had done small jobs for Mr. Hartman in the past, so when Mr. Hartman needed the work done on the patio, Respondent referred him to Ryan Crow, who at the time was working for Red Mountain Roofing LLC. Ryan Crow sent a quote for the project to Respondent on April 17, 2013; Respondent then forwarded it to Mr. Hartman. Mr. Hartman agreed to the project, but Mr. Crow did not perform the work until June 2013. At the time the work was done, Mr. Crow was no longer working for Red Mountain Roofing LLC. Respondent agreed to accept the payment for the project and then paid the entire amount to Mr. Crow. Respondent did not make any money on the project and acted solely as a conduit for the payment to be made to Mr. Crow. Respondent stated that Mr. Hartman was trying to get a completely new deck five years after the installation even though the warranty was never represented to include labor, just materials. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. 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). 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] 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.

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 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] The evidence of record established a violation of Arizona contracting laws in that Respondent acted, in a manner, as a general contractor by accepting payment for work performed by another. As to the aggravating factors identified in A.A.C. R4-9-131, none of the aggravating factors were present. While there was a workmanship issue, Respondent did not perform the work at issue; Mr. Crow did. Further, Mr. Hartman was aware that Respondent was not a licensed contractor and that Respondent was acting as a conduit to get his payment to Mr. Crow. It is also notable that Mr. Hartman waited over five years to file his complaint. Based on the evidence presented, the assessed civil penalty of $1500.00 was excessive. Based on the specific and unique circumstances in this matter, the Tribunal concludes that a civil penalty of $200.00 is appropriate and warranted in this case. / / / / / / / / / / RECOMMENDED ORDER Based upon the foregoing, it is recommended that the Registrar affirm the finding that Respondent violated A.R.S. § 32-1151, reverse the decision to assess a civil penalty in the amount of $1500.00, and assess a civil penalty of $200.00 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 shall be forty (40) days from the date of certification. Done this day, February 12, 2019.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1121(A)(14). [2] A.R.S. § 32-1164(A)(2). [3] A.R.S. § 32-1166(A). [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.

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