ALJDEC decisions subject to certification as final

2021A-03716-CPA-ROC · Registrar of Contractors · 2021-11-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT

Steve Ignacio Sanchez III,

RESPONDENT

No. 2021A-03716-CPA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: November 4, 2021

APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General Sarah A. Asta. Respondent Steve Ignacio Sanchez III did not appear.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

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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 $2500.00. 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 $2500.00 civil penalty.

FINDINGS OF FACT

Background

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

On or about August 4, 2021, Investigator Sheldon White was on patrol in the Kachina Village area of Flagstaff and observed glulam beams in the front yard of a private residence. Investigator White did not see any Arizona Registrar of Contractors license number displayed.

Investigator White stopped and investigated. At that time, he heard construction sounds coming from the back of the house, but did not see any workers.

Investigator White made contact with the homeowner, Bea Tharp. Ms. Tharp stated she was having construction work done on her home, but there was only one worker present at the time. Ms. Tharp did not know the name of the construction company.

The worker, later identified as Carl, came out to talk to Investigator White. At that time, Carl stated he had just moved to the area a few days earlier and have been offered a job by “Steve Sanchez”, whom he met at a biking event the prior weekend. When asked if he was a W-2 employee, Carl said he assumed so, but he had only been on the job for two days. Carl did not know the name of the company, but looked up the phone number for Respondent and provided it to Investigator White.

Investigator White then called Respondent at the number provided. Investigator White advised Respondent that he was at the jobsite in question and was unable to find a ROC license number for Respondent. Respondent admitted he did not have a ROC license number.

During the conversation, Respondent stated that he had not purchased any materials for the project and believed he did not have to be licensed if he was working for a homeowner. Investigator White informed Respondent that if the total cost of the project including labor and materials was in excess of $1000.0, Respondent had to have a license. Investigator White believed the two glulam beams he observed in the front yard were likely $1000.00 given the lumber prices at the time. Respondent admitted that he had been already been paid approximately $8000.00 in labor at that point.

Investigator White notified Respondent that he was going to issue a Cease and Desist order and asked Respondent to come to the jobsite to receive it. Respondent stated he was working on a separate jobsite and asked if they could meet some other time. Investigator White agreed to meet Respondent where he was located.

Investigator White informed Ms. Tharp of the Cease and Desist and that Respondent would have to stop work on the project.

When Investigator White met Respondent at the other jobsite, Investigator White educated Respondent on the appeal process, the need to have a license, the process to get a license, and the license that would most fit the work being done by Respondent.

During the course of the discussion, Respondent admitted that he was “clearly” contracting without a license. Respondent also estimated that the cost of the materials for the Tharp project to be $50,000.00. Respondent admitted that the total cost for materials and labor on the Tharp project was $58,000.00 at that point.

At the end of the interview, Investigator White 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 August 4, 2021, for violating the provisions of A.R.S. § 32-1151. A total of $2500.00 in civil penalties was assessed.

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

The Registrar issued a Notice of Hearing, setting a hearing at 9:00 a.m. on November 4, 2021, via Google Meet. The Registrar issued copies of the Notice of Hearing to Respondent at his address and email address of record.

On or about October 20, 2021, the Office of Administrative Hearings issued an order including the information necessary to connect to the Google Meet hearing, which was sent to Respondent at his address of record.

A hearing was held on November 4, 2021. The Registrar presented the testimony of Investigator White and submitted five exhibits.

Respondent did not request that the hearing be continued. Although the start of the hearing was delayed 15 minutes, Respondent did not appear personally or through an attorney. Consequently, Respondent did not present any evidence.

Investigator White testified that Arizona contracting law allows an exemption from licensure, with certain limitations, for a “handyman.” Investigator White stated that Respondent’s work did not fit within the handyman exemption because it exceeded the $1000.00 limit and required a permit.

Investigator White testified that Respondent had a prior contact with the Registrar for contracting without a license in 2014.

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. 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.

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. § 32-1166.01(C) authorizes the Registrar to assess “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.” With respect to the appropriate amount of civil penalties for violations of A.R.S. § 32-1151, A.R.S. § 32-1166.01(G) authorizes the Registrar to “adopt rules relating to the 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.

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 was in violation of building codes in that Respondent failed to obtain a permit. Thus, the assessed civil penalty of $2500.00. Based on the specific and unique circumstances in this matter, the Tribunal concludes that a civil penalty of $2500.00 was 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 $2500.00 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.

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-137160-45720000Done this day, November 22, 2021.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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