ALJDEC decisions subject to certification as final

2018A-05822-ROC · Registrar of Contractors · 2019-06-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 29, 2019 APPEARANCES: Respondent Benny Olmos Duron doing business as AC Plus Services did not appear. 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 $1500.00 civil penalty. FINDINGS OF FACT Background Respondent is not a licensed contractor in the State of Arizona. On or about December 7, 2018, the Registrar received a complaint from Kierra M. Inman with Rocket Aire LLC regarding Benny Olmos Duron doing business as AC Plus Services (Respondent). The complaint alleged that Respondent “made several mistakes, resulting in my client hiring another company” and that the client back charged Rocket Aire LLC $6600.00. Ms. Inman indicated that Rocket Aire LLC had hired Respondent as a subcontractor for her company and provided an Independent Contractor Agreement. Ms. Inman also provided a copy of a check issued to Respondent made payable to Benny Duron on November 9, 2018, in the amount of $1900.00. On or about January 17, 2019, Investigator Laurie Swanson attempted to contact Respondent at the telephone number provided regarding the complaint. Investigator Swanson received the message, “We are sorry your call can not be completed at this time. Please hang up and try your call again later.” Investigator Swanson received the same message again on January 24, 2019. Investigator Swanson 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 February 1, 2019, for violating the provisions of A.R.S. § 32-1151. A total of $1500.00 in civil penalties was assessed. Respondent requested an appeal hearing of the Cease & Desist Order in which he argued that he was an employee The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. The Registrar issued a Notice of Hearing, setting a hearing at 9:00 a.m. on May 3, 2019. The Registrar mailed a copy of the Notice of Hearing to Respondent at his last known address. The Notice of Hearing informed Respondent that “[f]ailure to attend the scheduled hearing is likely to result in an adverse determination against your interests.” The hearing was continued to May 29, 2019. A notice of the new hearing date was also mailed to Respondent at his last known address. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the hearing was delayed 15 minutes, Respondent did not appear. Consequently, Respondent did not present any evidence on his own behalf. Investigator Swanson testified that she confirmed with Ms. Inman that Respondent was not an employee. Investigator Inman also noted that Respondent was previously licensed by the Registrar and, therefore, should have been aware of the Registrar’s licensing requirements. CONCLUSIONS OF LAW The copy of the Notice of Hearing that the Registrar mailed to Respondent and the Minute Entry Continuance that the Office of Administrative Hearings mailed to Respondent were reasonable and Respondent is deemed to have received notice of the hearing. A.R.S. §§ 41-1092.04 and 41-1092.05(D). 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.[1] 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.[2] 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.

A.R.S. § 32-1166(A) authorizes the Registrar to assess “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.” 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.[3] The evidence established a violation of Arizona contracting laws. As to the aggravating factors identified in A.A.C. R4-9-131, Respondent falsely represented to be a licensed contractor, failed to perform work for which money was received, and performed work that was not performed in a good and workmanlike manner. Thus, the assessed civil penalty of $1500.00. Based on the specific and unique circumstances in this matter, the Tribunal concludes that a civil penalty of $1500.00 total is 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 and the assessment of a civil penalty of $1500.00. The civil penalty is 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, June 18, 2019.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

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