ALJDEC decisions subject to certification as final

2018A-05247-ROC · Registrar of Contractors · 2019-05-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 30, 2019 at 1:00 PM. APPEARANCES: Assistant Attorney General Thomas Raine, Esq., appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with Ruben Perez as a witness. Humberto Ruiz Valenzuela (“Respondent”) appeared on his own behalf with Omar Ruiz as a witness. Maday Santos served as a Spanish language interpreter for Respondent. ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Arizona Registrar of Contractors (“ROC”). FINDINGS OF FACT Background and Procedure On November 05, 2018, the ROC received an unlicensed contractor complaint from Frank Guerrero and Mary Hutchinson (“Homeowners”), whereby Homeowners alleged that they had entered into a $3,240.00 contract with Respondent on October 20, 2017, regarding a residential shutter project located at 2516 W 21st Lane, Yuma, AZ 85364.[1] Per Complaint No. 2018-05247, work on the project started December 01, 2017, and stopped on February 19, 2018.[2] Homeowners accused Respondent of incomplete work, poor work, and property damage.[3] On December 11, 2018, the ROC issued a Cease & Desist Order, a civil citation for violating of Ariz. Rev. Stat. § 32-1151, with a civil penalty in the amount of $2,500.00 for the violation, and a civil citation for violating Ariz. Rev. Stat. § 32-1165, with a civil penalty of $1,500.00 for the violation.[4] Respondent requested a hearing on the charged violations.[5] The ROC referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on April 30, 2019.[6] The ROC presented the testimony of investigator Ruben Perez and submitted five exhibits. Respondent testified on his own behalf and called his son Omar Ruiz as a witness. Hearing Evidence Investigator Ruben Perez’s testimony Investigator Perez testified that he was assigned to investigate Complaint No. 2018-05247 by the ROC. Investigator Perez conducted a recorded interview with Respondent in Spanish and obtained an admission regarding the ROC’s unlicensed contracting allegation. Specifically, Respondent told Investigator Perez that he had fabricated the shutters for Homeowners, delivered and installed them, and later removed them after having a falling-out with Homeowners.[7] Respondent confirmed that he had been paid $2,490.00 via three checks issued by Homeowners for the materials and services.[8] Investigator Perez testified that Homeowners filed an action against Respondent in justice court regarding this shutter project, and that Homeowners were ultimately awarded a $2,600.00 judgment.[9] However, when Respondents arrived at Homeowner’s residence to drop off payment and retrieve the shutters, the parties began to argue and the police were called.[10] Homeowners alleged that Respondent collected his shutters and placed a stop payment on the check he had provided Homeowner’s afterward.[11] Hence, why Homeowners filed their complaint with the ROC. Regarding the ROC’s advertisement allegation, Investigator Perez testified that Respondent did not have the ROC’s required disclaimer printed clearly on his business cards or contract.[12] Per Investigator Perez, Respondent’s penalties were assessed on the high end because Respondent had prior infractions with the ROC for the same prohibited conduct. Specifically, Investigator Perez testified that in 2017 the ROC disciplined Respondent for advertising without a license.[13] Respondent’s testimony Respondent testified that he is the owner of Hurva’s Cabinets. Respondent contradictorily testified that he relented and agreed to install Homeowner’s shutters after their repeated requests, but that he neither installed nor removed said shutters. Respondent argued that he did not violate the ROC’s advertising requirements because he had not performed any contracting work for Homeowner’s. Omar Ruiz’s testimony Omar Ruiz testified that he is part owner of Respondent’s business. Per Mr. Ruiz, on October 29, 2018, police arrives shortly after he and Respondent arrived at Homeowner’s residence. Homeowners brought out the shutters and he and Respondent noticed that they were damaged. Mr. Ruiz admits that after they gave Homeowners the check, Respondent placed a stop payment on it. However, after they went to court again and were ordered by the judge to release the funds they did so. Mr. Ruiz denied that Respondent installed Homeowner’s shutters. CONCLUSIONS OF LAW This matter lies within the ROC’s jurisdiction.[14] The ROC bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[15] Respondent bears the burden to establish affirmative defenses and factors in mitigation of the penalty by the same evidentiary standard.[16] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[17] 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.”[18] Ariz. Rev. Stat. § 32-1151 prohibits contracting without a license, providing in relevant part that, “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. Ariz. Rev. Stat. § 32-1121(A)(14) sets forth a “handyman’s exemption” to licensure requirements and provides in relevant part that, “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. Ariz. Rev. Stat. § 32-1165 provides that “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.” Ariz. Rev. Stat. § 32-1166(A) authorizes the ROC to assess a civil penalty against a person who has been found to have contracted without a license in violation of Ariz. Rev. Stat. § 32-1151 or to have advertised that he is able to perform a service for which a contractor’s license is required in violation of Ariz. Rev. Stat. § 32-1165, in relevant part, “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.” The material facts in this case are clear. Here, the ROC presented credible audio evidence of Respondent’s admission that he did in fact install Homeowners’ shutters after they repeatedly demanded that he do so. Moreover, the ROC provided evidence of Respondent’s advertising that plainly lacks the ROC’s required contracting disclaimer. Therefore, because the ROC established violations of Ariz. Rev. Stat. §§ 32- 1151 and 32-1165 by a preponderance of the evidence the ROC has also established grounds to discipline Respondent. RECOMMENDED ORDER Based on the foregoing, it is recommended that the ROC affirm the finding that Respondent Humberto Ruiz Valenzuela (dba Hurva’s Cabinets) violated Ariz. Rev. Stat. §§ 32-1151 and 32-1165. IT IS FURTHER RECOMMENDED that the civil penalties imposed for the above-captioned violations be reduced to $1,500.00 for the unlicensed contracting and $1,000.00 for the unlicensed advertising to comply with statutory limitations on penalties. it is FURTHER recommended the aggregate total of $2,500.00 in civil penalties be paid by Respondent in certified funds to the ROC on or before the effective date of the 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, May 15, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See ROC Exhibit 1. [2] Id. [3] Id. [4] See ROC Exhibit 1. [5] See ROC Exhibit 5. [6] A hearing was originally set for March 11, 2019, but was continued that day because Respondent requested a Spanish language interpreter. [7] See ROC Exhibit 4. [8] See Hearing File at pages 35-37. [9] See Hearing File at pages 15-16. [10] See ROC Exhibit 3; see also Hearing File at page 17. [11] Id. S See Hearing File at page 42. [12] See ROC Exhibit 2; see also Hearing File at pages 39-40. [13] See Ariz. Rev. Stat. § 32-1101 et seq. [14] See Ariz. Rev. Stat. § 41-1092.07(G)(3); Ariz. Admin. Code R2-19- 119(A) and Ariz. Admin. Code R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [15] See Ariz. Admin. Code R2-19-119(B)(2). [16] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [17] Black’s Law Dictionary at page 1220 (8th ed. 1999).

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