ALJDEC decisions subject to certification as final

2020A-05545-LDA-LS-ROC · Registrar of Contractors · 2021-04-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT

Aquatic Construction LLC,

Application No. [number redacted],

RESPONDENT

No. 2020A-05545-LDA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 18, 2021

APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General John R. Tellier. Mike Merrigan appeared on behalf of Respondent Aquatic Construction LLC.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

On or about October 5, 2020, the Arizona Registrar of Contractors (Registrar) received Application No. [number redacted] (Application), an application for licensure for Respondent Aquatic Construction LLC.

Mike Merrigan signed the Application as a 33 percent owner of Respondent.

The Application included “Part 4: Disclosures” with questions under the heading of “Prior License Information”. On the form, Respondent marked “No” in response to the question of whether any individual listed in the Application had ever been named on a license that was revoked or was suspended at the time. The Prior License Information question advised that “Failure to accurately answer this question may be a material misrepresentation of fact and a violation of A.R.S. § 32-1154(A)(5).”

Mr. Merrigan was named as the sole member and qualifying party on License No. 225007, the license issued to Extreme Urethane LLC. Mr. Merrigan was named on License No. 225007 from the date the license was issued on October 19, 2006, and never disassociated from the license.

License No. 225007 had unpaid civil penalties in the following cases:

Case No. L09-0164 (renumbered as 2009-1647946) for $500.00.

Case No. H08-0129 (renumbered as 2008-1292253) for $500.00.

License No. 225007 had unpaid recovery fund debt in the following cases:

Case No. 2010-7100594

Unpaid principle of $2850.00

Unpaid interest to be determined according to A.R.S. § 32-1139(B)

Case No. 2009-7090654

Unpaid principle of $4250.00

Unpaid interest to be determined according to A.R.S. § 32-1139(B)

Case No. 2009-7100469

Unpaid principle of $2441.00

Unpaid interest to be determined according to A.R.S. § 32-1139(B)

Case No. 2009-7100231

Unpaid principle of $7850.25

Unpaid interest to be determined according to A.R.S. § 32-1139(B)

Extreme Urethane LLC’s license was revoked twice as a result of failing to pay the civil penalties and was suspended four times as a result of the Recovery Fund payouts.

On or about November 13, 2020, the Registrar issued a Notice of License Denial to Respondent because 1) Mr. Merrigan failed to establish good character and reputation under A.R.S. § 32-1122(C) because he made material misrepresentations in the license application in violation of A.R.S. § 32-1154(A)(5); 2) A.R.S. § 32-1154(E) precludes granting a license to a person named on a license when an act or omission occurs that results in a civil penalty until the entire civil penalty is paid; and 3) A.R.S. § 32-1139(B) precludes granting a license to a person who has been named on a license that has unpaid recovery fund debt.

Respondent appealed the license denial.

At hearing, the Registrar presented its records pertaining to the prior cases referenced supra.

The Registrar also provided the Arizona Corporation Commission’s records related to Extreme Urethane LLC showing Mr. Merrigan as the Statutory Agent and Member.

At hearing, Mr. Merrigan testified that he sold the assets of Extreme Urethane LLC in 2007 to Blake Wheeler. Mr. Merrigan stated that he had his office staff fill out the paperwork necessary to cancel the ROC license. Mr. Merrigan was unable to produce any documentation relating to the sale and/or to the ROC license. Mr. Merrigan maintained he could not be expected to retain documents that were over 13 years old to establish that he was not associated with Extreme Urethane LLC any longer. Mr. Merrigan denied any knowledge of the prior cases resulting in discipline, civil penalties, and Recovery Fund payouts. Mr. Merrigan alleged that Mr. Wheeler forged his signature on some of the documents to the Registrar. Mr. Merrigan also noted that Respondent’s existing license, No. 315014, was issued by the Registrar in 2017 without issue even though he was listed as a member on the license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

An applicant bears the burden of proof by a preponderance of the evidence to establish it is eligible for a license to be issued by the Registrar.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

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.”

A.R.S. § 32-1122(C) provides as follows:

To obtain, renew or maintain a license under this chapter, each person who is named on a license must be of good character and reputation. Lack of good character and reputation may be established by showing that a person engaged in contracting without a license or committed any act that, if committed or done by any licensed contractor, would be grounds for suspension or revocation of a contractor's license or by showing that the person was named on a license that was suspended or revoked in this state or another state.

A.R.S. § 32-1154(A)(5) provides that a holder of a license or any person named on a license may not commit “[m]isrepresentation of a material fact by the applicant in obtaining a license.”

A.R.S. § 32-1154(E) provides, in pertinent part, that “[a] person who is or was named on a license of a contractor when an act or omission occurs that results in a civil penalty may not receive a new license under this chapter until the entire civil penalty is paid.”

A.R.S. § 32-1139(B) provides, in pertinent part, as follows:

Any person who is or was, at the time of the act or omission, named on a license that has been suspended because of a payment from the recovery fund is not eligible to receive a new license or retain another existing license that also shall be suspended by operation of law, nor shall any suspended license be reactivated, until the amount paid from the fund is repaid as provided in this subsection.

It was uncontested that Mr. Merrigan was, at all times relevant to this matter, named on Extreme Urethane LLC’s license. Indeed, Mr. Merrigan maintained that he sold the assets to Mr. Wheeler, rather than the company. As such, it was Mr. Merrigan’s responsibility to voluntarily surrender the ROC license, which he failed to do.

It was uncontested that Extreme Urethane LLC’s license was revoked for the failure to pay civil penalties and was suspended because it had not repaid payouts made from the Recovery Fund.

Pursuant to Arizona statute, Respondent was not eligible to obtain a new license or retain another existing license until the amount paid from the Recovery Fund is repaid with interest.

Further, Respondent failed to establish Mr. Merrigan was a person of good character and reputation based on his misrepresentation of a material fact on the Application.

The evidence of record supports the Registrar’s denial of Applicant’s pending license application.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the denial of Applicant’s pending license application be affirmed.

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.

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-137160-45720000Done this day, April 7, 2021.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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