ALJDEC decisions subject to certification as final

2018A-3083-ROMC-ROC · Registrar of Contractors · 2019-02-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 7, 2019, 9:00 A.M. APPEARANCES: Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine; James Leonard, Member, and David Segal, Partner, appeared behalf of Respondent ADMINISTRATIVE LAW JUDGE: Roger A. Geddes _____________________________________________________________________ FINDINGS OF FACT Background and Procedure 1. Respondent COE RENOVATION, LLC, is the holder of license 317313 issued by the Registrar of Contractors (“Registrar”). 2. The Registrar seeks the suspension of Respondent’s license for the reasons set forth below and issued a Notice of Hearing that set a hearing for February 7, 2019, at 9:00 A.M. At the hearing, the Registrar presented the testimony of Bonnie Allan, Staff Attorney; Respondent presented the testimony of James Leonard, Member, and David Segal, Partner. The Tribunal received and admitted Registrar’s exhibit numbers 1 - 5 and Respondent’s exhibit numbers 1 - 4.[1] 3. James Leonard signed and was the qualifying party for Respondent in its License Application submitted on December 14, 2017, to the Registrar. (Registrar’s Exhibit 1). Respondent’s license was ultimately issued on January 24, 2018. (Registrar’s Exhibit 1). 4. James Leonard was the signer, the qualifying party, and sole member of JGL Consulting, LLC (“JGL”), as reflected in JGL’s License Application submitted to the Registrar on August 24, 2011. (Registrar’s Exhibit 2). 5. James Leonard submitted a Notice of Qualifying Party Disassociation, received by the Registrar on September 19, 2017, disassociating himself as the qualifying party for JGL. (Registrar’s Exhibit 3). 6. James Leonard submitted an Ownership/Personnel Change to the Registrar on December 14, 2017, reflecting his removal as a member of JGL. (Registrar’s Exhibit 4). 7. On December 18, 2017, Carl Jaber (“Jaber”) submitted a Licensed Complaint Form (Case No. 2017-6231), dated December 14, 2017, against JGL reflecting a contract date with JGL of August 17, 2017. This Complaint resulted in a Final Administrative Decision and Order, dated May 24, 2018 (effective July 3, 2018), revoking JGL’s license. Thereafter, Jabar submitted a Residential Contractors’ Recovery Fund on June 1, 2018. (Registrar’s Exhibit 5). 8. The Articles of Amendment of JGL, signed by Tammi Keckler and filed stamped April 24 and 26, 2017, removed James Leonard as a member of JGL. (Respondent’s Exhibit 1). 9. The Articles of Amendment of JGL signed by Tammi Keckler and filed stamped July 5, 2017, added James Leonard as a member of JGL. (Respondent’s Exhibit 2). 10. The Articles of Amendment of JGL signed by Tammi Keckler and file stamped November 29, 2017, removed James Leonard as a member of JGL. (Respondent’s Exhibit 4). 11. Bonnie Allan, staff attorney of the Registrar, testified on behalf of the Registrar as to the documents that support suspension of Respondent due to Mr. Leonard’s prior association with JGL at a time when an act or omission led to the revocation of JGL’s license. She further testified as to the cure necessary for Respondent to avoid suspension. 12. James Leonard testified on behalf of Respondent that he sold JGL in April 2017 to the Keckler family and said he was told by the Registrar that removing himself as a member of JGL would take care of everything . He further stated that he had nothing to do with the Jabar contract. He further testified that the Kecklers changed the address of JGL such that he would no longer see the mail, and that they added him back as a member without his consent. 13. David Segal testified on behalf of Respondent that Respondent received no funds from Jabar and that Mr. Leonard was a victim of the fraud by the Kecklers. 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. A.R.S. § 32-1154(a)(20) provides that a holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: 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. 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.

6. The Registrar has met its burden to establish a violation of A.R.S. § 32-1154(a)(20) to warrant a suspension of Respondent’s license. According to Registrar records, James Leonard was the qualifying party of JGL until September 19, 2017, and a member of JGL until December 14, 2017. The act or omission that caused a loss to Jabar resulted from a contract dated August 7, 2017, and occurred prior to December 14, 2017, the date Jabar signed the Complaint. JGL’s license was revoked on May 24, 2018, effective July 3, 2018. Therefore, Mr. Leonard was a person named on the license of JGL that was revoked for an act or omission that occurred while he was named on the license. Mr. Leonard’s attempt to remove himself from association with JGL by filing documents with the Arizona Corporation Commission did not affect his status with the Registrar as still being named on a contractor’s license of JGL at a time when loss caused by JGL resulted in the revocation of its license. RECOMMENDED ORDER In view of the foregoing, it is recommended that on the effective date of the final order in this matter, that Respondent’s License Number 317313 is suspended until the Registrar receives and accepts written verification that Respondent and/or James Leonard has established compliance with A.R.S. § 32-1161(C) by resolving any loss to Jabar caused by JGL relating to the Jabar Complaint against JGL, or by reimbursing the Recovery Fund for any funds paid from the Recovery Fund to Jabar relating to the Jabar Complaint against JGL. 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, February 27, 2018. /s/ Roger Geddes Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] The Tribunal also took administrative notice of the Registrar’s documents submitted to the Arizona Office of Administrative file.

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