FINACT2018A-3499-LDA-ROC.pdf

2018A-3499-LDA-ROC · Registrar of Contractors · 2019-02-07

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Arizona Registrar of Contractors, Case No. 2018-3499 v. Docket No. 2018A-3499-LDA-ROC Gold-Standard Technology, LLC, License Application No. 320888 FINAL ADMINISTRATIVE DECISION AND ORDER APPLICANT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the Registrar must provide written justification setting forth the reasons for the modification or rejection. REGISTRAR’S ACCEPTANCE In this case, a hearing was held, and the administrative law judge issued a written decision. See Administrative Law Judge Decision, attached. The Registrar reviewed that decision and hereby accepts it. CONCLUSION Because the Registrar has accepted the administrative law judge’s decision, that decision is the final administrative decision in this case and becomes effective on the date of this Order. Dated February 5, 2019. Registrar of Contractors /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Copy mailed via USPS First Class mail February 5, 2019 to: Applicant Gold-Standard Technology LLC 11201 N Tatum Blvd Ste 300 #24018 Phoenix, AZ 85028 Gold-Standard Technology LLC c/o Kyle Shippee 26135 W Runion Dr Buckeye AZ 85396 AND copy electronically mailed this same date to: Applicant’s email address on record with the Registrar Registrar’s Counsel Thomas Raine, Assistant Attorney General

Office of Administrative Hearings Roger A. Geddes, Administrative Law Judge Case No. 2018-3499 / AN

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 1.17.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

No. 2018A-3499-LDA-ROC Arizona Registrar of Contractors, ADMINISTRATIVE LAW JUDGE IN THE MATTER OF THE DECISION APPLICATION OF:

Gold-Standard Technology LLC, PENDING LICENSE NO: 320888

HEARING: December 19, 2018, 9:00 A.M.

APPEARANCES: Arizona Registrar of Contractors was represented by

Assistant Attorney General Thomas Raine; Kyle Shippee appeared on behalf of

Applicant

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

1. On June 27, 2018, Applicant submitted a License Application (Application) with the Registrar for a C-14 contractor’s license. (Registrar’s Exhibit 2). 2. On July 31, 2018, the Registrar issued a Notice of License Denial. (Registrar’s Exhibit 1). 3. The reason for denial stated by the Registrar in the Notice of License Denial was that Applicant failed to establish the requisite good character and reputation of its member and qualifying party, Kyle Shippee, due to a prior felony conviction. 4. According to the Presentence Investigation, filed July 24, 2015, Mr. Shippee was involved in an incident on May 17, 2015, with his ex-girlfriend who was the mother of one of his children. During an argument, Mr. Shippee allegedly poured

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 1.17.2019 ROC LEGAL

barbeque sauce on her head, struck her head with an open hand and a handgun belonging to his ex-girlfriend, and held the handgun to her head. (Register’s Exhibit 4). 5. On June 25, 2015, Mr. Shippee entered into a plea agreement pleading guilty to one count of disorderly conduct, a class 6 non-dangerous, designated felony, and domestic violence offense, in violation of A.R.S. §§ 13-3601, 13-2904, 13-3105, 13-901.03, 13-701, 13-702, 13-801, 13-610, 12-269, 12-116.04, and 12-116.09, committed on May 17, 2015. (Registrar’s Exhibit 5). 6. On June 27, 2015, the Superior Court of Arizona, Maricopa County, found Mr. Shippee guilty of one count of disorderly conduct, a class 6 non-dangerous, designated felony, and a domestic violence offense, in violation of A.R.S. §§ 13-3601, 13-2904, 13-3105, 13-901.03, 13-701, 13-702, 13-801, 13-610, 12-269, 12-116.04, and 12-116.09, The Court further suspended the execution of the sentence and placed Mr. Shippee on probation for three years beginning July 24, 2015, under certain prescribed

conditions. (Registrar’s Exhibit 6).

7. On December 26, 2017, the Superior Court of Arizona, Maricopa County,

discharged Mr. Shippee from probation as of January 22, 2018. (Registrar’s Exhibit 7). 8. On October 29, 2018, the Superior Court of Arizona, Maricopa County, granted Mr. Shippee’s application setting aside his judgment of guilt, dismissing the complaint, information, or indictment, and releasing Mr. Shippee from all penalties and disabilities resulting from the conviction, except as specified therein and not herein relevant. (Registrar’s Exhibit 8). Mr. Shippee’s civil rights were restored with the exception of rights regarding the possession and carrying of a firearm. 9. Applicant submitted a timely Request for Administrative Hearing. A hearing was held on December 19, 2018, at 9:00 A.M. The Registrar presented the testimony of Brian Kirby, Chief of Licensing. Applicant presented the testimony of Kyle Shippee, member and qualifying party. The Tribunal received and admitted the Registrar’s exhibit numbers 1 - 9 and Applicant’s exhibit letters A - H. 1

The Tribunal also took administrative notice of the Registrar’s file.

RECEIVED 1.17.2019 ROC LEGAL

10. Brian Kirby testified on behalf of the Registrar that he reviews contractor license applications and that this Application involving a felony-related conviction was submitted to a Good Character Committee of the Registrar’s office for decision. He stated the committee reviewed all Application materials and interviewed Mr. Shippee and denied the Application due to the failure to establish good character and reputation of Mr. Shippee who had a felony conviction. 11. Mr. Kirby testified that the factors underlying the conviction that were considered were the level of violence and the extent of the injury inflicted, the presence of a firearm, the presence of children during the incident, and the use of alcohol. He stated further that the relative recency of the crime, just over three years, and the recent discharge of Mr. Shippee’s probation last year constituted too short of a period of time for Applicant to establish a pattern of good character. He further testified that there was a concern that Mr. Shippee’s propensity for violence could spill over to a

disagreement in a contracting situation and thus a concern of the potential risk to the

public.

12. Mr. Shippee testified on behalf of Applicant that he is 30 years old and has been in the fence and gate industry for 15 years. He stated that he has worked at his present employment, Phoenix Fence Company, for over 2 years in commercial fencing and gate automation and has performed jobs at such locations as the Department of Defense, Sky Harbor Airport, U.S. Marshalls Office, police and fire stations, the FBI building, Luke Air Force base, the Salvation Army, the Forestry Service, and women’s shelters. He testified that he has never had a violent incident in his work life. 13. Mr. Shippee explained that the basis of the felony conviction was a conflict that escalated when his ex-girlfriend threatened to move his daughter out of state away from him. He stated that this was an isolated incident, that he had been drinking alcohol, that it was a mistake that he regrets, and that it did not reflect upon his work ethic. He stated he had had no prior felonies and has had none since.

RECEIVED 1.17.2019 ROC LEGAL

14. Mr. Shippee further testified that he had satisfied all of his probation requirements early, that he had taken an 8 hour substance abuse class and that he no longer consumed alcohol. He also stated he completed a 26 week domestic violence course. He presented letters of reference (Applicant’s Exhibit A), photographs of jobs he performed (Applicant’s Exhibit B), and a report from a licensed substance abuse counselor, dated September 25, 2018, (Applicant’s Exhibit D), apparently obtained in connection with a child custody issue unrelated to the circumstances underlying the conviction. The report indicated that the counselor spent 30 hours with Mr. Shippee and concluded that he did not have a substance abuse disorder and that there were no psychological or medical issues or concerns. 15. Mr. Shippee’s Probation Report indicated that the use of the Offender Screening Tool resulted in Mr. Shippee being assessed as a medium-low risk to reoffend (rating of 7 out of a maximum of 42). (Register’s Exhibit 4). The report further

indicated that he owned a home, had three children he indicated that he supported but

reside with their respective mothers, had an AA degree in Criminal Justice, and was

enrolled in a part-time online business degree program through Northern Arizona University. 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

RECEIVED 1.17.2019 ROC LEGAL

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. The timing of Applicant’s Application (June 27, 2018) and the Registrar’s denial of the application (July 31, 2018) is particularly important to a determination whether Applicant has made an adequate showing of good character and reputation and what factors may be considered in that regard. The Tribunal finds that the Registrar properly denied the Application on July 31, 2018, due to the lack of a showing of good character and reputation on the part of Mr. Shippee. A.R.S. § 32-1122(C) provides that “[t]o obtain or renew a license under this chapter, each person shall be of good character and reputation.” 5. Mr. Shippee’s conviction and the acts underlying that conviction support

the Registrar’s finding in denying the Application that Applicant did not establish good

character and reputation. The Tribunal finds that the Registrar’s consideration of such

factors underlying the conviction such as the level of violence, the extent of the injury inflicted, the presence of a firearm, the presence of children during the incident, and the involvement of the consumption of alcohol were appropriate in assessing Mr. Shippee’s character. Further, the relative recency of the crime committed in 2015 and Mr. Shippee’s recent discharge from probation in 2018 were legitimate considerations in the Registrar’s determination that sufficient time had not elapsed to show a pattern of good character. 6. The Tribunal’s analysis could end at this point but for the fact that after the license denial on July 31, 2018, Mr. Shippee on October 29, 2018, obtained a setting aside of his judgment of guilt, a release from all penalties and disabilities resulting from the conviction, and a restoration of his civil rights. Nothing was presented to suggest that the Register was required to consider or precluded from considering this post- denial evidence. The Register indicated it became aware of the evidence of restoration

RECEIVED 1.17.2019 ROC LEGAL

of civil rights only recently, but it was not clear to the Tribunal whether the Registrar formally considered the evidence as part of the Application process. 2 Regardless, no argument was made that the Tribunal should not consider this post-denial evidence. Rather, the Registrar argued that the evidence of restoration of civil rights would not change its finding that Applicant failed to establish good character and reputation because it contended that the conviction had a reasonable relationship to the occupation for which the license was sought. 7. Prior to August 3, 2018, an agency could deny a license to engage in an occupation based on felony conviction even when civil rights had been restored if the conviction had a reasonable relationship to the occupation for which the license was sought:

A person shall not be disqualified from employment by this state or any of its agencies or political subdivisions, nor shall a person whose civil rights have been restored be disqualified to engage in any occupation for which a license, permit or certificate is required to be issued by this state solely because of a prior conviction for a felony or misdemeanor within or without this state. A person may be denied employment by this state or any of its agencies or political subdivisions or a person who has had his civil rights restored may be denied a license, permit or certificate to engage in an occupation by reason of the prior conviction of a felony or misdemeanor if the offense has a reasonable relationship to the functions of the employment or occupation for which the license, permit or certificate is sought.

A.R.S § 13-904(E). 8. Of course, a restoration of civil rights in itself would not transform someone that was found to lack good character suddenly into someone that had good character. However, a restoration of civil rights could negate consideration of a

2 There was no evidence presented that the Registrar’s Good Character Committee had an opportunity to

consider Mr. Shippee’s restoration of civil rights. The Registrar did submit evidence of the restoration of civil rights as an exhibit. (Registrar’s Exhibit 8). RECEIVED 1.17.2019 ROC LEGAL

conviction that had prevented a finding of good character. Thus, the issue, if the Tribunal is to consider Mr. Shippee’s post-license denial restoration of civil rights as part of the Application, is whether Mr. Shippee’s felony conviction has a reasonable relationship to the occupation or work permitted by a C-14 (Fencing) contractor’s license. 9. The Registrar contended that Mr. Shippee’s potential propensity for violence could be a potential danger to the public and that his conviction was reasonably related to contracting. Specifically, the Registrar evaluated the nature of the offense in light of the risk posed to the public and determined that the risk to the public precluded licensure under A.R.S. 13-904(E). 10. The Tribunal is not persuaded that Mr. Shippee’s act of domestic violence has a reasonable relationship to the functions of the occupation for which the license was sought. While the Tribunal appreciates that one of the Register’s roles or

obligations is to protect the public, it does not follow in the Tribunal’s view that denial of

a license here would necessarily further that interest.

11. Indeed, perhaps if a license is granted, one could speculate that Mr. Shippee might have more direct contact with the public than he does now. The Registrar submitted that a difficult situation might arise with a customer or subcontractor and the granting of license might create more opportunity for Mr. Shippee to become violent. However, Mr. Shippee has been an employee for two years in the field for which he seeks a license, and 15 years total in the industry, and there was no evidence presented that Mr. Shippee would have any more exposure to the public if a license is granted than he now has or has ever had in his 15 years as an employee in the fence and gating field. Even had it been shown that Applicant would have more such direct exposure if granted a license, the Tribunal believes that whatever non-quantifiable increase in risk there may be does not make an act of domestic violence any more related to the functions of work involving fences and gates. Further, there was no evidence presented that granting Applicant the license could increase the risk of

RECEIVED 1.17.2019 ROC LEGAL

reoffending or provide more opportunity to reoffend. It was noted from the Probation Report that Mr. Shippee was assessed in 2015 as a medium-low risk to reoffend and there was no evidence that that risk has changed. 12. It bears emphasizing that the conviction involved an act of domestic violence as opposed to an act of workplace violence. Perhaps if the conviction had been related to workplace violence, such might arguably be more related to the functions of work involving fences and gates than would domestic violence. However, whatever nexus there may be between an act of domestic violence and the functions of work relating to fences and gates is just too attenuated and therefore the Tribunal finds that they are not reasonably related. 13. It bears noting that the Tribunal is aware of but has not considered Arizona Senate Bill 1436, Chapter 193, an act amending A.R.S. § 13-904 and adding A.R.S. § 41-1093.04, generally effective August 3, 2018. That act was not effective

until after the Registrar’s denial of the Application and there was no argument made to

support the retroactive application of the statute. “No statute is retroactive unless

expressly declared therein.” A.R.S. § 1-24. Further, there was no evidence that Applicant had proceeded under the petition process delineated in A.R.S. § 41- 1093.04. 3 14. In conclusion, the Tribunal finds that absent consideration of the subject conviction, Applicant has established good character and reputation. Accordingly, the evidence offered at the hearing does not support the Registrar’s determination that Mr. Shippee, as a qualifying party for Applicant, lacks good character and reputation necessary for licensure as required by A.R.S. § 32-1122(C) or the Registrar’s determination to deny Applicant’s Application. RECOMMENDED ORDER

3 It would appear that A.R.S. § 41-1093.04 curtails the Registrar’s ability to deny licenses based on convictions and that had Applicant petitioned the Registrar after its enactment or if Applicant hereafter petitions, the conviction could possibly be less of a factor in a license determination. RECEIVED 1.17.2019 ROC LEGAL

Based on the foregoing, it is recommended that the denial of Applicant’s pending Application be reversed.

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, January 17, 2019.

/s/ Roger Geddes Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors