ALJDEC decisions subject to certification as final

2021A-05165-LDA-LS-ROC · Registrar of Contractors · 2022-02-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT

Discount Window and Door LLC

Application Number [number redacted]

RESPONDENT

No. 2021A-05165-LDA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 10, 2021, and December 14, 2021

APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General John R. Tellier. Respondent Discount Window and Door LLC was represented by Nathan E. Carr and Sheldon Black

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

On or about August 11, 2021, the Registrar of Contractors (ROC) received Application No. [number redacted] (Application), an application for licensure from Respondent Discount Window and Door LLC.

Kristopher Brett Haynes-Daubs was a signatory on the Application and was identified as a 50 percent owner of Respondent.

Included in the Application was a Prior License Information disclosure form. Respondent answered “No” to a question of whether a prior license was revoked or was currently suspended.

The Prior License Information disclosure form stated: “Failure to accurately answer this question may be a material misrepresentation of fact and a violation of A.R.S. § 32-1154(A)(5).”

Thermo Expert Inc.

Mr. Haynes-Daubs was named as the vice-president, 25 percent owner, and qualifying party on License No. 258810, which was issued to Thermo Expert Inc., doing business as ABC Home Improvements. Mr. Haynes-Daubs was named on the license as a result of the application for licensure submitted for Thermo Expert Inc.

Mr. Haynes-Daubs was named on License No. 258810 from September 8, 2009, until November 3, 2010.

Thermo Expert Inc. was also issued License No. 199202. As an officer and 25 percent owner of Thermo Expert Inc., Mr. Haynes-Daubs was named on License No. 199202 as defined under A.R.S. § 32-1101(A)(6).

Mr. Haynes-Daubs was named on License No. 199202 beginning on August 3, 2009.

An October 3, 2010 Corporation Annual Report & Certificate of Disclosure for Thermo Expert Inc. identifies Mr. Haynes-Daubs as a Vice President since August 3, 2009.

On or about November 3, 2010, the Registrar received a Notice of Disassociation/Resignation in which Mr. Haynes-Daubs indicated his intention to resign as a corporate officer/member/partner of Thermo Expert Inc.

License No. 258810 had the following complaint against it which resulted in a Recovery Fund payout which had not been repaid and a civil penalty which remained unpaid:

Case No. 2010-[number redacted], Kolar v. Thermo Expert Inc.

License No. 199202 had the following complaints against it which resulted in a Recovery Fund payout which had not been repaid and a civil penalty which remained unpaid:

Case No. 2010-[number redacted], Santora v. Thermo Expert Inc.

Case No. 2010-[number redacted], Westmore v. Thermo Expert Inc.

Case No. 2011-1320, Pool v. Thermo Expert Inc.

License No. 199202 had the following complaints against it which remained unresolved and resulted in civil penalties which remained unpaid:

Case No. 2010-[number redacted], Benigo v. Thermo Expert Inc.

Case No. 2010-[number redacted], Anderson v. Thermo Expert Inc.

License No. 199202 had the following complaints against it which resulted in Recovery Fund payouts which had not been repaid and, in some cases, civil penalties which remained unpaid:

Case No. 2010-[number redacted]/2011-4837, Brockman v. Thermo Expert Inc.

Case No. 2010-[number redacted], Micetic v. Thermo Expert Inc.

Case no. 2010-[number redacted], Ketchner v. Thermo Expert Inc.

At the hearing in the instant matter, Respondent did not challenge the validity of the complaints, recovery fund payouts, or civil penalties attributed to Thermo Expert Inc.

KBH Construction

On or about October 4, 2017, the Registrar issued a Notice of License Reinstatement Denial to KBH Construction, License No. 246688, of which Mr. Haynes-Daubs was a member and qualifying party.

That denial was based on the ten complaints listed above.

KBH Construction appealed the Notice of License Reinstatement Denial.

KBH Construction’s counsel advised that Mr. Haynes-Daubs should not argue that he was not rightly on the Thermo Expert Inc. license at the time of the prior complaints, civil penalties, and recovery fund payouts attributed to Thermo Expert Inc. Rather, during the hearing on the appeal, KBH Construction argued that Mr. Haynes-Daubs had never received proper notice of those issues while Mr. Haynes-Daubs was a person named on the license.

On or about April 11, 2018, the Registrar issued a Final Administrative Decision and Order, accepting the Administrative Law Judge Decision recommending that the Notice of License Reinstatement Denial be affirmed.

Application Denial

On or about September 2, 2021, the ROC issued a Notice of License Denial in which it denied Respondent’s Application for the following reasons:

Mr. Haynes-Daubs failed to establish good character and reputation under A.R.S. § 32-1122(C) by making material misrepresentations on the license application in violation of A.R.S. § 32-1154(A)(5), and by being named on a revoked license in violation of A.R.S. § 32-1154(A)(20).

A.R.S. § 32-1154(E) precluded granting a license to a person named on a license when an act or omission occurred that resulted in a civil penalty until the entire civil penalty was paid.

A.R.S. § 32-1139(B) precluded granting a license to a person who had been named on a license that had an unpaid recovery fund debt.

Respondent appealed the license denial.

On or about November 10, 2021, the ROC issued a Notice of Hearing on Appealable Agency Action setting the above-captioned matter for hearing on December 10, 2021, via Google Meet with the Office of Administrative Hearings in Phoenix, Arizona.

The issue for hearing was Respondent’s appeal of the ROC’s denial of Respondent’s application for licensure.

Hearing Evidence

David Kammer testified that he sold Thermo Expert to Jeff Mininger about 20 years prior. Mr. Kammer stated that Mr. Mininger only paid half the agreed upon purchase price, but Mr. Kammer did not pursue the matter. Mr. Kammer admitted that he allowed Mr. Mininger to keep using his license “out of the kindness of [his] heart,” but he monitored the status of the license through the Registrar’s website. Mr. Kammer indicated that when he noted complaints starting to appear, he notified the Registrar that he wished to cancel the license. Mr. Kammer stated that Mr. Haynes-Daubs was a sub-contractor who performed work for him, but was never an employee, owner, member, or qualifying party of Thermo Expert Inc. when he owned it.

Mr. Haynes-Daubs testified that he never agreed to be named on the license for Thermo Expert Inc. Mr. Haynes-Daubs asserted that Mr. Mininger falsified the Application for Licensure to include Mr. Haynes-Daubs as the Qualifying Party and Officer. Mr. Haynes-Daubs maintained that he had no income from Thermo Expert Inc.

Mr. Haynes-Daubs indicated that he did know he was on the Thermo Expert Inc. license until 2015 when he attempted to reinstate his license upon his return to Arizona only to be denied because of the complaints, civil penalties, and recovery fund payouts attributed to Thermo Expert Inc. Mr. Haynes-Daubs stated that he followed his attorney’s advice during the appeal of the Notice of License Reinstatement Denial to argue the lack of notice rather than asserting he was wrongfully named on the license.

Mr. Haynes-Daubs testified that based on legal advice he received, in 2016, he reached out to Mr. Mininger, who was hospitalized at the time, to receive authorization to file a bankruptcy action on behalf of Thermo Expert Inc. Mr. Haynes-Daubs acknowledged he was made an officer of Thermo Expert Inc. for the limited purpose of handling the bankruptcy action.

Respondent provided the testimony of Laurie Hoeltzel, Forensic Document examiner, who had analyzed Mr. Haynes-Daubs’ signature on the Application for Licensure submitted by Thermo Expert Inc. as compared to his known signature on ten different known samples. Ms. Hoeltzel testified credibly as to her methodology and conclusions regarding her examination of the documents.

Ms. Hoeltzel concluded that it was highly probable that the alleged signature of Mr. Haynes-Daubs on the Application for Licensure was performed by someone other than Mr. Haynes-Daubs.

CONCLUSIONS OF LAW

Respondent bears the burden of persuasion. Ariz. Rev. Stat. § 41-1092.07(G)(1).

A party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

Ariz. Rev. Stat. § 32-1122(C) provides that:

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.

Ariz. Rev. Stat. section 32-1139(B) provides that:

If any amount is paid from the [recovery] fund in settlement of a claim arising from the act, representation, transaction or conduct of a residential contractor, the license of the contractor shall be automatically suspended by operation of law until the amount paid from the fund is repaid in full, plus interest at the rate of ten per cent a year. 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.

Ariz. Rev. Stat. section 32-1154(A) provides that:

The holder of a license or any person named on a license pursuant to this chapter may not commit any of the following acts or omissions:

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5. Misrepresentation of a material fact by the applicant in obtaining a license.

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20. Having a person named on the license who is or was named on any other license in this state or in another state that is under suspension or revocation for any act or omission that occurs while the person is or was named on the license unless the prior revocation was based solely on a violation of this paragraph.

Ariz. Admin. Code section R4-9-117, “Prior Record,” provides: “In determining the appropriate discipline for a licensed contractor, the Administrative Law Judge and the Registrar may consider not only facts in the current case, but also facts in prior cases and any documents regarding the contractor on file with the Registrar.”

Although the Registrar’s records indicated that Mr. Haynes-Daubs was an officer and qualifying party of Thermo Expert Inc., there was no evidence adduced showing that Mr. Haynes-Daubs consented to Mr. Miniger’s including Mr. Haynes-Daubs as such on the Application for Licensure. There was also no evidence adduced showing that Mr. Haynes-Daubs consented to Mr. Mininger’s filing with the Arizona Corporation Commission naming Mr. Haynes-Daubs as a Vice President of the company.

Mr. Haynes-Daubs provided credible testimony that he were unaware that Mr. Mininger had filed paperwork with the Registrar or the Corporation Commission showing that Mr. Haynes-Daubs was a member of the Thermo Expert Inc.

Ms. Hoeltzel credibly testified that the signature on the Application for Licensure purporting to be that of Mr. Haynes-Daubs was not done by him.

The preponderance of the evidence showed that Mr. Haynes-Daubs was not aware at the time that Mr. Mininger had named him as a member of Thermo Expert Inc. Based on his prior appeal and the bankruptcy proceeding, Mr. Haynes-Daubs knew he was named on the Thermo Expert Inc. license at the time of the instant Application for Licensure for Respondent. However, because Mr. Haynes-Daubs never consented to being named on the Thermo Expert Inc. license at any point, it was reasonable for him to answer that he had not been named on the license as he was not legitimately on the license. Consequently, there was insufficient evidence to show that Mr. Haynes-Daubs violated Ariz. Rev. Stat. section 32-1154(A)(5).

Considering these facts, particularly that it had not been shown that Mr. Haynes-Daubs ever consented to being named on the Thermo Expert Inc. license numbers 258810 or 199202, it would be an unfair and unreasonable interpretation of the statutes to conclude that Mr. Haynes-Daubs was a person named on a license that had been suspended or revoked. Consequently, there was insufficient evidence to show that Mr. Haynes-Daubs violated Ariz. Rev. Stat. section 32-1154(A)(20) and insufficient evidence to show that section 32-1139(B) is a bar to Respondent being licensed.

Applicant presented sufficient evidence to show that the Registrar’s decision to deny its application for licensure should be reversed.

RECOMMENDED ORDER

IT IS RECOMMENDED that the Registrar’s Notice of License Denial issued to Discount Window and Door LLC be rescinded.

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 is forty days after the date of that certification.

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-137160-45720000Done this day, February 2, 2022.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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