ALJDEC decisions subject to certification as final
2018A-955-CPA-ROC · Registrar of Contractors · 2018-05-29
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
IN THE MATTER OF THE CIVIL PENALTY CITATION ISSUED TO:
John R Lopez,
No. 2018A-955-CPA-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: May 9, 2018, 9:00 A.M.
APPEARANCES: Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine; Respondent John Lopez appeared on his own behalf
ADMINISTRATIVE LAW JUDGE: Roger A. Geddes
____________________________________________________________________
Based on the evidence in this matter, the undersigned Administrative Law Judge hereby recommends that the Registrar of Contractors affirm the Cease and Desist Order and civil penalty issued to Respondent on February 26, 2018.
FINDINGS OF FACT
Background and Procedure
Respondent is not a licensed contractor in the State of Arizona.
2. On or about February 26, 2018, the Registrar of Contractors (“Registrar”) received a complaint against Respondent regarding alleged unlicensed contracting activities.
3. After investigating the complaint, the Registrar issued Respondent a Cease and Desist Order and Civil Citation dated February 26, 2018, for failing to comply with A.R.S. § 32-1151 (contracting without a license) with a proposed civil penalty of $1,500.00 for a violation thereof. (Register’s Exhibit 1).
4. Respondent requested an administrative hearing and the Registrar forwarded the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing.
5. The Registrar issued a Notice of Hearing setting a hearing for May 9, 2018, at 9:00 A.M. At the hearing, the Register presented the testimony of Investigator Joy Dalesio (Investigator). Respondent testified on his own behalf and presented the testimony of Marge Elliot.
6. The Investigator testified that the Registrar received a Complaint on or about February 26, 2018, from a Tombstone city building official that Respondent was doing stuccoing and painting at the Tombstone Heritage Museum without a license. Upon visiting the site that day, the Investigator stated she observed two men on scaffolding working on the building. She stated she observed the men painting and she observed a cement mixer which led her to believe that stucco work had been done. She further stated the entire back of the building had been freshly painted.
7. The Investigator further testified that she spoke with one man, later identified to be Respondent, who stated he was not licensed and had been working on the project for three weeks and had two days of work remaining. She stated that Respondent refused to provide identification but did so after the Tombstone Marshall became involved. She further stated that Respondent stated he was familiar with the handyman exception to the license requirement, but declined to disclose what he was being paid for the project. (Register’s Exhibit 2). She estimated the cost of the job to exceed $1,000.00.
8. Marge Elliott, the owner of the building on which Respondent was working, testified she called Respondent in January to fix water damage and then asked him later to paint portions of the building. She stated that only side of the building was painted and that it took only one day.
9. Ms. Elliot testified the project including repair of water damage and painting cost $500 for stuccoing and $500 for painting. She also stated she paid $200 for paint and approximately $10 for the material to fix the crack. She stated she paid each worker $15 per hour and stated further she could not recall how much she paid Respondent but estimated it to be $180 per day. She estimated they worked three days over a three month period. She indicated she wrote herself receipts for the job, but did not present such receipts into evidence. She also stated Respondent painted part of the building that did not have a crack in January, which she considered a separate phase of the project.
10. Respondent testified that the project entailed three phases which included painting one side of the building, fixing of the crack, and then the painting of the wall with the crack. He stated he did not stucco the entire building but only fixed a crack with mortar and cement of about one inch running about 12 feet before painting the wall. He estimates he and his brother together were paid $400.00 in total but he also testified as to a “first $500” for stuccoing. He stated it took less than 20 hours for painting.
CONCLUSIONS OF LAW
1. This matter lies within the Registrar’s jurisdiction.
2. The Registrar bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”
3. A.R.S. § 32-1101(A)(3) defines “Contractor” in relevant part as follows:
"Contractor" is synonymous with the term "builder" and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to:
(a) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or any other structure or work in connection with the construction.
4. A.R.S. § 32-1151 regarding engaging in contracting without a required license provides in pertinent part 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.
5. A.R.S. § 32-1166 regarding the Registrar’s authority to impose civil penalties and to issue cease and desist orders provides in relevant part as follows:
A. 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....
B. Each violation of this chapter or a rule or order of the registrar by a person who is required to be licensed by this chapter and who does not possess the required license shall constitute a separate offense, and the registrar may impose a civil penalty of not to exceed two thousand five hundred dollars for each violation except that for multiple violations committed on the same day the civil penalty shall not exceed two thousand five hundred dollars for all such violations. Monies collected from civil penalties shall be deposited in the state general fund.
C. The registrar of contractors may issue citations containing orders to cease and desist and of civil penalties against persons who have never been licensed under this chapter who are acting in the capacity of or engaging in the business of a contractor in this state.
6. In this case, the Registrar has established that Respondent was a contractor and contracting without a required license. Respondent undertook a project that involved fixing a wall crack with mortar using a cement mixer and then painting using scaffolding. These activities support a finding that Respondent is a “contractor” as defined under A.R.S. § 32-1101(A)(3) and acting in the capacity of a contractor without a license in violation of A.R.S. § 32-1151.
7. Even though Respondent is a contractor performing work for which a license is typically required, Respondent has argued that the so-called “handyman’s exception” applies under A.R.S § 32-1121(A)(14) (persons not required to be licensed because the aggregate contract price for the construction services provided were less than $1,000.00). Section 32-1121(A)(14) provides:
A. This chapter shall not be construed to apply to:
...
14. 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, but excluding any electrical fixture or appliance that was designed by the manufacturer, that is unaltered, unchanged or unmodified by any person, that can be plugged into a common household electrical outlet utilizing a two-pronged or three-pronged electrical connector and that does not use any other form of energy, including natural gas, propane or other petroleum or gaseous fuel, to operate or is attached by a nail, screw or other fastening device to the frame or foundation of any residential structure, is less than one thousand dollars. The work or operations that are exempt under this paragraph shall be of a casual or minor nature. (Emphasis added).
8. The Investigator testified that she estimated the contract price for the job performed by Respondent to exceed $1,000.00. Respondent failed to adequately refute that the contract price was less than $1,000.00. Notably, when the Investigator asked Respondent at the job site if he was familiar with the handyman’s exception and asked what he was being paid, he declined to disclose the amount.
9. Respondent’s evidence regarding the aggregate contract price for the project was inconsistent, relegated to estimates, and unverifiable in that he was paid in cash. Although Respondent stated there were three phases to the project over a period of three months, the phases as described by Respondent were all related and constitute a project by one or more contracts. Ms. Elliot testified as to $500 for stuccoing and $500 for painting and even though Respondent alluded to the payment of $500 for stucco work, he also testified that he believed he received only $400 for the entire job. Ms. Elliott stated she had receipts for the work, but such receipts were not presented into evidence.
10. Even if the aggregate contract price for Respondent’s work was under $1,000.00, the statute also requires that the work being performed be “of a casual or minor nature” to qualify under the handyman’s exception. Therefore, even if the work totals less than $1,000.00, unless it is “of a casual or minor nature,” it must be performed by a licensed contractor. While the type of work must obviously be considered in determining if it is casual or minor, additional factors that can be considered include the duration of the contract. See Arizona Commercial Diving Services, Inc. v. Applied Diving Services, Inc., 212 Ariz. 208, 212-13 (2006). The evidence supports a finding that the work performed by Respondent was not of a casual or minor nature. It spanned over three months and included the use of scaffolding and a cement mixer.
11. Arizona Administrative Code Rule 4-9-131 regarding permissible aggravating and mitigating factors to be considered when assessing a civil penalty provides 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.
12. In assessing the civil penalty and the gravity of Respondent’s violation, the Registrar presented no aggravating factors.
RECOMMENDED ORDER
Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent violated A.R.S. § 32-1151 and affirm the decision to assess a civil penalty under A.R.S. § 32-1166 of $1,500.00 for the violation of A.R.S. § 32-1151 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 will be five days from the date of that certification.
Done this day, May 29, 2018.
/s/ Roger Geddes
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
Registrar of Contractors