ALJDEC decisions subject to certification as final

2021A-02341-CPA-ROC · Registrar of Contractors · 2021-10-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT,

v.

Dan Franklin Wolf,

dba Flashpoint Finish,

RESPONDENT,

No. 2021A-02341-CPA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 14, 2021 at 9:00 AM.

APPEARANCES: Assistant Attorney General John Tellier, Esq. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with Sheldon White, Jr. as a witness. Dan Wolf (“Respondent”) appeared on his own behalf.

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 Arizona Registrar of Contractors (“Registrar”).

FINDINGS OF FACT

Background and Procedure

Respondent is not a licensed contractor in the State of Arizona.

On May 25, 2021, at 65 Yuca St., Sedona, AZ 86351, Registrar investigator Sheldon White (“Investigator White”) observed a crew installing tile. No disclosure that Respondent was “not a licensed contractor” was visible”

Investigator White opened Case No. 2021-02341 and took two photographs of the project site.

Investigator White identified the project Foreman (“Foreman Lopez”), who provided additional information. Foreman Lopez informed Investigator White that he was employed by Respondent, Flashpoint Finish. Foreman Lopez was unable to provide Investigator White with a license number for Investigator White, but confirmed that Respondent owned the company.

Upon further investigation Investigator White discovered that the underlying bathroom remodeling project was for $6,000.00, of which the client had paid $3,000.00 to Respondent. Investigator White also discovered that Respondent was not licensed by the Registrar.

Investigator White telephoned Respondent and arranged a meeting for later that afternoon, whereby a copy of Respondent’s license was obtained.

Because Investigator White determined that the project required Respondent to possess a valid CR-61 Carpentry, Remodeling, and Repairs contracting license at the time he began the job, which he had not, that same day Investigator White issued a Cease & Desist Order from the Registrar to Respondent for an alleged violation of Arizona Revised Statutes (“Ariz. Rev. Stat.) § 32-1151. Respondent was assessed a $2,500.00 civil penalty for the unlicensed contracting infraction.

On June 22, 2021, the Registrar received an appeal request from Respondent.

On July 26, 2021, the Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an independent evidentiary hearing on September 14, 20201. The sole issue for hearing was to determine whether grounds exist for the Registrar to assess a Civil Penalty against Respondent based on an alleged violation(s) of Ariz. Rev. Stat. § 32-1166.01(C), as established by the evidence.

Hearing Evidence

The Registrar called Investigator White as a witness and submitted Exhibits 1-16 into the record. Dan Wolf testified on behalf of Respondent. The Notice of Hearing and Agency File were also admitted into the record as their own exhibits. The substantive evidence of record is as follows:

In Arizona, a homeowner may perform construction on their own residential property as long as they do not rent or sell the property for one year after the construction is complete. Conduct outside of this narrowly-tailored statutory exception is prima facie evidence of contracting without a license.

Per Sedona local governmental building authority, Respondent was issued four (4) building permits under the owner-builder/developer exception between May 01, 2018, and January 06, 2020.

Each application includes the following applicant certification:

The structure is not for sale or rent and is solely owner occupied.

(Emphasis in original.)

Each application also includes the following advisement:

VIOLATION OF ARIZONA CONTRACTORS LICENSING IS A CLASS ONE MISDEMEANOR UNDER ARS 32-1151 AND 32-1154.

(Emphasis in original.)

In three instances Respondent sold the properties less than a year after construction was complete, and in one instance Respondent had not actually owned the property at all.

Respondent “flips” homes and employs the use of “subcontractors” for construction projects.

Regarding the underlying Yuca St. project in Case No. 2021-02341, Respondent agreed to perform “a small bathroom tile project” for a friend that incrementally became larger over time; to include lights, paint, and flooring. The friend purchased the materials and Respondent, with the assistance of his “subcontractors,” performed the work.

Respondent admitted that the labor cost(s) associated with the project exceeded $1,000.00.

Per Respondent, the subcontractors he relies on are unlicensed friends, whom he pays an hourly rate for their assistance.

Respondent has not been previously issued a Warning Letter or Cease & Desist Order regarding an alleged violation of Ariz. Rev. Stat. §§ 32-1151, 1166, or 32-1166.01.

Closing Arguments

In closing, Respondent opined that the assessed civil penalty was too high, and argued the Yuca St. project had grown out of proportion over time. Respondent denied intentionally committing any statutory violations.

In closing, the Registrar argued that because Respondent admitted to contracting without a license in the Yuca St. project, as cited in the Cease & Desist Order issued May 25, 2021, that both the citation and the related civil penalty should be affirmed. The Registrar also argued that Respondent’s “pattern of flipping” houses, and incorrectly/impermissibly utilizing the Owner Exception, supported the Registrar’s civil penalty amount.

CONCLUSIONS OF LAW

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

The Registrar bears the burden of proof to establish Respondent’s statutory violation(s) 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.” 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.”

Arizona contracting law prohibits a person from acting as a contractor without a license.

Ariz. Rev. Stat. § 32-1165 provides, in pertinent part, as follows:

[I]t is a class 1 misdemeanor for any person to advertise that the person is able to perform any service or contract for compensation subject to regulation by the registrar ... unless the person first obtains a license.

Ariz. Rev. Stat. § 32-1166.01(C) authorizes the Registrar to “Impose a civil penalty not to exceed $2,500 for each violation except that the civil penalty may not exceed $2,500 for all violations committed on the same day.”

Here, the evidence of record clearly established that on May 25, 2021, Respondent violated Ariz. Rev. Stat. § 32-1151. Respondent had not been previously issued a related written warning by the Registrar. However, Respondent conceded that his conduct that day was in violation of Ariz. Rev. Stat. § 32-1151. Additionally, the record established that Respondent had previously engaged in repeated conduct that constituted violations of Ariz. Rev. Stat. § 32-1151.

As such, the undersigned concludes that grounds existed for the Registrar to issue a Cease & Desist Order against Respondent, and also assess a Civil Penalty against Respondent for his violation of Ariz. Rev. Stat. § 32-1151.

RECOMMENDED ORDER

Based upon the foregoing,

it is recommended that the Registrar affirm the Cease & Desist Order as issued on May 25, 2021.

IT IS FURTHER RECOMMENDED that the Registrar decrease the Civil Penalty assessed against Respondent in Case No. 2021-02341 from $2,500.00 to $1,500.00.

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 thirty (30) days from the date of certification.

Done this day, October 04, 2021.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors