ALJDEC decisions subject to certification as final

2021A-01506-LDA-ROC · Registrar of Contractors · 2021-06-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT,

v.

E Garcia Granite LLC,

Jesus and Keyla Yenit Torres,

Application No. [number redacted],

RESPONDENT.

No. 2021A-01506-LDA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 28, 2021 at 9:00 AM.

APPEARANCES: Assistant Attorney General John Tellier, Esq. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with Chance Peterson as a witness. Kayla Torres appeared on behalf of E Garcia Granite LLC (“Respondent”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT

Background and Procedure

On or about March 01, 2021, the Registrar received an application for CR-61 Carpentry, Remodeling and Repairs contracting licensure from Respondent, Application No. [number redacted].

Keyla Yenit Torres (“Mrs. Torres”) was listed on the application as Respondent’s proposed Member/Manager.

Included in the application was an Unlicensed Disclosure form. Respondent answered “No” for Question #7 “Has any individual listed in Part 3: Persons of this application ever received a citation for, or been convicted of, contracting without a license in any state?” (Emphasis added.)

In the last section of the application, Part 6: Signatures, the following warning is issued as follows: By signing below, each person certified that the entire contents of this License Application Form, including all supplementary statements and materials attached, are true and correct, and that this application is not submitted with the intent to evade Chapter 10, Title 32 of the Arizona Revised Statutes. A.R.S. § 32-1154(A)(9). It is a violation of A.R.S. § 32-1154(A)(5) to make a misrepresentation of a material fact in obtaining a license. (Emphasis in original.)

On March 01, 2021, Mrs. Torres electronically signed the application.

Mrs. Torres has received the following citations for unlicensed contracting activity from the Registrar:

On May 10, 2017, a Warning Letter was issued in Case No. 2017-2428.

On June 22, 2017, a Cease & Desist Order and Civil Citation was issued in Case No. 2017-2428, whereby a $2,000.00 civil penalty was assessed pursuant to A.R.S. § 32-1166.01.

On August 01, 2017, a Final Order Requiring Payment of Civil Penalty was issued in Case No. 2017-2428.

Respondent never paid the civil penalty.

On October 10, 2018, a Cease & Desist Order and Civil Citation was issued in Case No. 2018-04484, whereby a $1,500.00 civil penalty was assessed pursuant to A.R.S. § 32-1166.01.

On December 04, 2018, a Final Order Requiring Payment of Civil Penalty was issued in Case No. 2018-04484.

Respondent never paid the civil penalty.

On February 04, 2021, a Cease & Desist Order and Civil Citation (“Order”) was issued in Case No. 2021-00168, whereby a $1,500.00 civil penalty was assessed pursuant to A.R.S. § 32-1166.01. The underlying complaint that lead to the Order alleged that Mrs. Torres, acting as Respondent’s agent, submitted a contracting bid on September 24, 2020, in the aggregate, worth $1,950.00 in violation of A.R.S. § 32-1123(A).

Respondent never paid the civil penalty.

Respondent did not request an administrative hearing to dispute the Order.

On March 11, 2021, the Registrar issued a Notice of License Denial (“Notice”) to Respondent for Application No. [number redacted] based on Mrs. Torres’ alleged violations of A.R.S. §§ 32-1122(C), 32-1123(A), and 32-1154(A)(5). An appeal of the Notice was due on or before April 15, 2021.

The Registrar received a timely appeal from Respondent.

On April 07, 2021, the Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an independent evidentiary hearing on May 28, 20201. The sole issue for hearing was to determine whether grounds exist for the Registrar to deny Respondent’s application for licensure based on alleged violation(s) of A.R.S. 32-1122, as established by the evidence.

Hearing Evidence

The Registrar called Chance Peterson – Assistant Chief Counsel, as a witness and submitted Exhibits 1-11. Respondent called Mrs. Torres as a witness. The Notice of Hearing was admitted as its own exhibit. The substantive evidence of record is as follows:

Mrs. Torres created a website to advertise her husband’s handyman business and did not know she needed to provide a disclaimer that he was not a licensed contractor. After she received the Registrar’s on or about May 10, 2017, she modified the advertisement to include a disclaimer.

Sometime in June 2017, unbeknownst to Mrs. Torres, an employee posted an advertisement online that did not include a disclaimer. After Mrs. Torres received the Cease & Desist Order, on or about June 22, 2017, she made the employee remove the advertisement.

Mrs. Torres denied receiving disciplinary correspondence issued by the Registrar that was signed as received in her name by the United States Postal Service certified mail.

Per Mrs. Torres, she misunderstood Question #7 on the application to relate to client complaints.

Mrs. Torres refunded $1,950.00 to the client who filed an unlicensed contracting complaint with the Registrar.

Respondent did not consult with the Registrar’s legal department or private counsel in preparation for the submission of Application No. [number redacted]. Instead, she sought assistance from the Arizona School of Contracting who informed her that they were “unable to provide legal advice.”

Respondent has not paid the civil penalties it owes, but plans on doing so.

Closing Arguments

Both parties declined to provide closing arguments and chose instead to rest on the record.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction and was properly brought before OAH for adjudication.

Respondent bears the burden to establish that it meets statutory qualifications for a contractor’s license 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.”39 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 as 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.”

In interpreting a statute, “[w]e first consider the language of the statute and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter, historical background, effects, consequences, spirit, and purpose.” “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”

The legislature did not intend for the Registrar to deny a license application based solely on a technicality and in the face of evidence that the applicant is otherwise qualified.

A.R.S. § 32-1121(A)(14) provides, in pertinent part, that “[A]n unlicensed contractor may engage in work on a project for which the aggregate contract price, including labor, materials and all other items, is less than $1,000.”

A.R.S. § 32-1122(C) provides, in pertinent part, that a lack of good character and reputation “may be established by showing that a person engaged in contracting without a license.”

A.R.S. § 32-1123(A) provides that it is a violation for any person named on a license to make a “[m]isrepresentation of a material fact ... in obtaining a license.”

A.R.S. § 32-1154(A)(5) precludes granting a license to an entity that has submitted a bid without a license within one year of the application.

Here, it is undisputed that Mrs. Torres engaged in unlicensed contracting on no less than three (3) occasions between May 2017 and September 2020, and knew or should have known of her infractions due to her receipt of numerous Warning Letters, Cease & Desist Orders, and Citations by the Registrar. Furthermore, Respondent has not paid, or made payment arrangements, for the $5,000.00 owed to the Registrar in civil penalties. Additionally, the instructions on the underlying application were exceptionally clear and Mrs. Torres’ answer(s) constitute material misrepresentation(s) to the Registrar. Notably, Mrs. Torres knew that her September 2020 bid fell outside the scope of the Registrar’s Handyman Exception because it exceeded the $1,000.00 maximum amount.

Respondent offered no satisfactory justification or excuse for Mrs. Torres’ volitional acts and omissions.

Therefore, based on the credible substantive evidence of record the Tribunal concludes that the Registrar soundly denied Respondent’s application for CR-61 contracting license based on Mrs. Torres’ violations of A.R.S. §§ 32-1122(C) and 32-1123(A). Moreover, the Registrar is precluded from issuing Respondent a license pursuant to A.R.S. § 32-1154(A)(5).

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that the Registrar deny Respondent’s appeal.

IT IS FURTHER RECOMMENDED that the Registrar affirm the denial of Application No. [number redacted].

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 forty (40) days from the date of that certification.

Done this day, June 16, 2021.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors