ALJDEC decisions subject to certification as final

2019A-01849-ROC · Registrar of Contractors · 2019-08-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 1, 2019 APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine. Respondent Lawrence Payan appeared on his own behalf. 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 April 12, 2019, the Registrar received a complaint from Robert Kovacs regarding Lawrence Payan (Respondent). The complaint alleged that Respondent entered into a contract to install linoleum flooring in Mr. Kovacs’ home for $2000.00. Mr. Kovacs stated that due to the poor work, he terminated the contract early due to the poor performance. On or about April 22, 2019, Investigator Bob McQuien contacted Mr. Kovacs regarding the complaint. Mr. Kovacs stated that when he purchased flooring at Pacific Flooring, he was given Respondent’s name as an individual who could install the flooring. Mr. Kovacs provided Investigator McQuien with a copy of the estimate Respondent provided him. On or about April 30, 2019, Investigator McQuien interviewed Respondent regarding the complaint. Respondent stated that Mr. Kovacs had been given his name from the, now defunct, Pacific Flooring. Respondent acknowledged that he had agreed to the installation of the flooring for $2000.00 in labor with Mr. Kovacs having purchased the material and written a quote to that effect. Respondent acknowledged that he only installed the bathroom, kitchen, and closet before Mr. Kovacs became dissatisfied and paid him $280.00 for the work performed. Respondent asserted that Mr. Kovacs had asked him to testify against Redmond Construction in a case that was before the Registrar of Contractors, but Respondent refused. At the end of the interview, Investigator McQuien 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 April 30, 2019, for violating the provisions of A.R.S. § 32- 1151. A total of $1500.00 in civil penalties was assessed. Investigator McQuien testified that Arizona contracting law allows an exemption from licensure, with certain limitations, for a “handyman.”[1] Investigator McQuien stated that Respondent’s work did not fit within the handyman exemption because it exceeded the $1,000.00 limit. Investigator McQuien testified that Respondent had a prior contract with the Registrar for contracting without a license in 2013. At that time, Respondent was issued a warning letter. Respondent testified that he wanted to obtain his license, but acknowledged that he had not taken any steps towards making that happen. Respondent argued he believed it was unfair for him to be punished for the workmanship issues when he was not given the opportunity to fix it. Respondent indicated that Mr. Kovacs had asked him to testify against another contractor and only became upset with the work performed when he refused to do so. Respondent asked that the civil penalty be reduced. CONCLUSIONS OF LAW 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.[2] 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.[3] 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.[4] The evidence established a violation of Arizona contracting laws. As to the aggravating factors identified in A.A.C. R4-9-131, the work performed by Respondent failed to meet minimum workmanship standards. 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 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 assess a civil penalty of $1500.00 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, August 21, 2019.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] See A.R.S. § 32-1121(A)(14). [2] A.R.S. § 32-1164(A)(2). [3] A.R.S. § 32-1166(A). [4] 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