ALJDEC decisions subject to certification as final

2018A-4073-LDA-ROC · Registrar of Contractors · 2018-12-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 30, 2018 APPEARANCES: Thomas Raine, Esq. for the Registrar of Contractors; Glenn Richard Davis for Respondent ADMINISTRATIVE LAW JUDGE: Thomas Shedden FINDINGS OF FACT 1. On September 6, 2018, the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on October 26, 2018 at the Office of Administrative Hearings in Phoenix, Arizona. The matter was continued and the hearing was conducted on November 30, 2018. 2. The Notice of Hearing shows that the matter was scheduled to consider Azcad Construction Inc.’s appeal of ROC’s denial of Azcad’s request for licensure. 3. Azcad holds license number B133996 issued by ROC. Glenn Richard Davis is Azcad’s president and qualifying party. 4. Azcad’s license has been on inactive status since May 14, 2015. 5. On June 21, 2018, Azcad applied to have its license reinstated. 6. In a Notice of Reinstatement Denial issued by ROC on August 9, 2018, ROC informed Azcad that its application had been denied. 7. ROC denied Azcad’s application because it found that Mr. Davis failed to establish good character and reputation by virtue of his being named on a revoked license for which the underlying violations had not been cured. 8. ROC’s records show that from May 22, 2015 through April 25, 2016, Mr. Davis was the qualifying party for Sky High Energy Inc. license number CR11.298739. 9. Mr. Davis presented credible evidence showing that he and Sky High considered the disassociation date to be March 3, 2016. 10. At issue are two cases that resulted in discipline against Sky High’s license: case number 2017-3063 and case number 2017-2714. ROC considers Mr. Davis to be a responsible person in those two cases because he was the qualifying party when the contracts at issue were signed. 11. Mr. Davis argues that the acts or omissions that resulted in discipline against Sky High occurred after April 25, 2016, which is the date ROC shows as his disassociation date, and therefore that he was not, and should not be held, responsible for those acts or omissions. Case 2017-3063 12. On February 4, 2016, Sky High entered a contract with Jeffrey Bland, which was before ROC received Mr. Davis’s notice of disassociation. 13. Sky High started work on Mr. Bland’s project on August 5, 2016, which was after Mr. Davis had disassociated and was no longer the qualifying party for Sky High. 14. Mr. Bland filed with ROC a complaint against Sky High on June 14, 2017. 15. On August 9, 2017, ROC issued to Sky High a Citation alleging that it had violated provisions of Ariz. Rev. Stat. section 32- 1154. 16. The Citation was mailed to Sky High’s address of record with ROC. 17. Mr. Davis did not receive actual notice that the Citation had been issued. 18. Sky High did not file an answer to the Citation. 19. On August 31, 2017, ROC issued a Final Administrative Decision and Order finding that Sky High had violated Ariz. Rev. Stat. sections 32-1154(A)(3)(poor workmanship) and (A)(22)(failure to comply with a Directive). Based on these violations, ROC revoked Sky High’s license on August 31, 2017. 20. The physical acts and omissions (poor workmanship and failure to comply with a directive) that gave rise to the discipline against Sky High in Case 2017-3063 occurred after Mr. Davis had disassociated as Sky High’s qualifying party. 21. ROC has not received any notification that Mr. Bland has been made whole (i.e., that Sky High’s poor work has been corrected).

Case 2017-2714 22. On April 20, 2016, Sky High entered a contract with Joseph Skinner, which was before ROC received Mr. Davis’s notice of disassociation. 23. Mr. Skinner paid Sky High $11,920 on April 20, 2016. 24. Mr. Skinner filed with ROC a complaint against Sky High on May 24, 2017, which was after Mr. Davis had disassociated and was no longer the qualifying party for Sky High. 25. Mr. Skinner alleged that Sky High had abandoned the project. 26. On June 9, 2017, ROC issued to Sky High a Citation alleging that it had violated provisions of Ariz. Rev. Stat. section 32-1154. 27. The Citation was mailed to Sky High’s address of record with ROC. 28. Mr. Davis did not receive actual notice that the Citation had been issued. 29. Sky High did not file an answer to the Citation and, on July 5, 2017, ROC issued a Final Administrative Decision and Order finding that Sky High had violated Ariz. Rev. Stat. sections 32- 1154(A)(1)(abandonment) and (A)(12)(violation of a statute). 30. Mr. Skinner applied for a payout from the Residential Contractors’ Recovery Fund. 31. Through a Default Decision, Order and Award dated October 11, 2017 ROC ordered that a payment of $11,920 be made to Mr. Skinner from the Fund. ROC made that payment through a warrant to Mr. Skinner issued on October 18, 2017. 32. As of the hearing date in this matter, the Recovery Fund had not been reimbursed for the payment it made to Mr. Skinner. 33. Mr. Skinner’s project required that CAD drawings be prepared and approved by Yavapai County. Exhibit 11 is email correspondence between Sky High and Yavapai County showing that design and permitting work was on-going as of July 18, 2016, which was after Mr. Davis had disassociated and was no longer the qualifying party for Sky High. 34. The physical acts and omissions (abandonment) that resulted in the Recovery Fund payout to Mr. Skinner occurred after Mr. Davis had disassociated as Sky High’s qualifying party. Additional Evidence 35. Mr. Davis had admitted into evidence a March 4, 2016 email to Sky High showing that his qualifying-party disassociation form was attached and that he was mailing a copy to ROC. 36. Mr. Davis testified that he mailed the disassociation form to ROC, but after not hearing back from ROC after about seven weeks he checked and found that ROC had not receive his notice. Mr. Davis then submitted to ROC the disassociation form that became effective on April 26, 2016. 37. Mr. Davis did no work for Sky High after March 3, 2016. 38. Mr. Davis had entered into evidence excerpts from documents Sky High filed in a lawsuit between itself and Mr. Davis. Those exhibits show that Sky High considered Mr. Davis to have disassociated as the qualifying party in March 2016. 39. ROC acknowledges that there is conflicting evidence in the administrative record that could lead the Administrative Law Judge to conclude that Mr. Davis should not be considered responsible for the acts or omissions that led to discipline against Sky High’s license. CONCLUSIONS OF LAW 1. Azcad bears the burden of persuasion. Ariz. Rev. Stat. § 41- 1092.07(G)(1). 2. A party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119. 3. A preponderance of the evidence is: The 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 1373 (10th ed. 2014). 4. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). 5. “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B). 6. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 7. ROC denied Azcad’s application for reinstatement it found that Mr. Davis failed to establish good character and reputation by virtue of his being named on Sky High’s revoked license. See Ariz. Rev. Stat. § 32-1122(C). 8. ROC based its decision on the fact that its records show that Mr. Davis had not disassociated from Sky High at the time the contracts at issue were signed. The discipline against Sky High’s license was not a result of its entering contracts with Messrs. Bland and Skinner, but rather was the result of poor workmanship in the Bland matter and abandonment in the Skinner matter. The evidence shows that when these acts and omissions occurred, Mr. Davis was no longer Sky High’s qualifying party. 9. Azcad has presented sufficient evidence to show that ROC’s decision should be reversed. RECOMMENDED ORDER IT IS RECOMMENDED that ROC’s Notice of Reinstatement Denial issued to Azcad Construction Inc. be rescinded. 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 is forty days after the date of that certification.

Done this day, December 17, 2018. /s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

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