ALJDEC decisions subject to certification as final

2022A-01589-CPA-ROC · Registrar of Contractors · 2023-03-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT,

Danny Nicholas

DBA: America’s Roofing Seal Coating LLC,

RESPONDENT.T

No. 2022A-01589-CPA-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: February 22, 2023. 9:00 A.M.

APPEARANCES: Seth T. Hargraves appeared on behalf of the Arizona Registrar of Contractors; no appearance was made on behalf of Respondent

ADMINISTRATIVE LAW JUDGE: Roger Geddes

_____________________________________________________________________

Based on the evidence in this matter, the undersigned Administrative Law Judge hereby recommends that the Registrar of Contractors (“Registrar”) affirm the Cease and Desist Order issued and civil penalty assessed to Respondent on April 8, 2022.

FINDINGS OF FACT

Background and Procedure

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

2. On or about April 8, 2022, the Registrar issued Respondent a Cease and Desist Order and Civil Citation against Respondent for failing to comply with A.R.S. § 32-1151 (contracting without a license) with a proposed civil penalty of $1,500.00 for a violation thereof and for failing to comply with A.R.S. § 32-1165 (advertising without a license) with no proposed civil penalty. (Registrar’s Exhibit 1).

3. Respondent requested an administrative hearing and the Registrar forwarded the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing.

4. The Registrar issued a Notice of Hearing setting a hearing, after continuances, for February 22, 2023, at 9:00 A.M. The Notice of Hearing was sent to Respondent on December 13, 2022, at his email reflected on his business card. (Registrar’s Exhibit 1 (ROC - 004)). At the hearing, the Registrar presented the testimony of Investigator Miles Crosby. Respondent, who did not appear, presented no witnesses. The Tribunal received and admitted the Registrar’s exhibit numbers 1 - 6.

5. Although the commencement of the hearing was delayed approximately 20 minutes, Respondent did not appear at any time during the hearing through an authorized officer, employee, attorney, or any other person. Respondent further did not request at any time that the hearing be continued.

6. Investigator Miles Crosby testified on behalf of the Registrar that he took over this case from Investigator Daniel Rhodes who had recently retired from his employment with the Registrar. Mr. Crosby testified that in reviewing the file, that an Unlicensed Complaint Form was filed by a homeowner against Respondent on February 23, 2022, relating to work performed by Respondent consisting of roof tile and stucco work and the replacement of gutters for the proposal amount of $4,080.00 from Respondent. (Registrar’s Exhibit 1 (ROC - 005)). He testified that the records reflect that the homeowner paid Respondent $3,020.00 for the work performed by Respondent. (Registrar’s Exhibit 1 (ROC - 006, 008)). He testified further the records reflect that the homeowner was dissatisfied with the quality of Respondent’s work, that Respondent did not complete the work, and that the homeowner had to hire a new contractor.

7. The homeowner provided a copy of a business card from Respondent, (Registrar’s Exhibit 1 (ROC - 004)), as well as a copy of a posting on the Yelp web site referencing Respondent’s company. (Registrar’s Exhibit 1 (ROC - 010 - 011)),

8. The Investigator further testified that the records reflect that Investigator Rhodes spoke with Respondent by telephone and that although Respondent said he could not recall this specific work in question, he never at any time denied that he performed the work. (Registrar’s Exhibit 1 (ROC - 025)),

9 After an investigation by Investigator Rhodes, on April 8, 2002, he sent a Cease and Desist and Civil Penalty by certified mail to Respondent at his residential address of record. (Registrar’s Exhibit 5). Respondent acknowledged receipt of it and asked about the procedure for appealing it, (Registrar’s Exhibit 1 (ROC - 025), which he ultimately did. (Registrar’s Exhibit 6).

CONCLUSIONS OF LAW

1. This matter lies within the Registrar’s jurisdiction.

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

3. The copy of the Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable and Respondent is deemed to have received notice of the hearing.

4. A.R.S. § 32-1151 regarding engaging in contracting without a required license provides in pertinent part 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....

(emphasis added).

5. A.R.S. § 32-1165 regarding advertising contracting services without a required license provides as follows:

Except as authorized by section 32-1121, subsection A, paragraph 14, subdivision (c), it 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 under the terms of this chapter unless the person first obtains a license under the terms of this chapter.

(emphasis added).

6. A.R.S. § 32-1101(A)(3) in defining “Contractor” in relevant part states it:

(a) Is synonymous with the term "builder" and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to:

(i) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or any other structure or work in connection with the construction.

(emphasis added).

7. A.R.S. § 32-1166 regarding the Registrar’s authority to impose civil penalties and to issue cease and desist orders provides as follows:

A. The registrar may issue a cease and desist order to any person who is required to be licensed by this chapter but who is not licensed and who engaged in an act of contracting, a practice or a transaction that violates this chapter, a rule adopted by the registrar or an order issued by the registrar.

B. The cease and desist order may require the person to immediately cease and desist from engaging in an act, practice or transaction on receipt of the order.

C. Service of the cease and desist order is fully effected by personal service or by mailing a true copy of the cease and desist order by certified mail in a sealed envelope, with postage prepaid, addressed to either: 1. The person's last known business address. 2. The person's residential address.

8. A.R.S. § 32-1166.01 regarding the Registrar’s authority to impose civil penalties in connection with the issuance of cease and desist orders provides in relevant part as follows:

A. In conjunction with the registrar's authority to issue a cease and desist order under section 32-1166, subsection A, the registrar may issue a citation for contracting practicing or transacting that constitutes a violation of any of the following: 1. This chapter. 2. A rule adopted by the registrar. 3. An order issued by the registrar.

B. A citation issued pursuant to this section shall: 1. Be in writing. 2. Clearly describe the violation for which the citation was issued. 3. Contain an order to cease and desist. 4. Contain a civil penalty of at least $200 for each violation but not more than $2,500 for multiple violations committed on the same day.

C. Each violation of this chapter or a rule or order of the registrar by a person who is required to be licensed by this chapter and who does not possess the required license constitutes a separate offense and the registrar may 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.

D. The registrar shall issue a citation under this section within one hundred and eighty days after actual discovery of the offense by this state or the political subdivision having jurisdiction. Service of the citation is fully effected by personal service or by mailing a true copy of the citation by certified mail in a sealed envelope with postage prepaid and addressed to either: 1. The person's last known business address. 2. The person's residential address.

E. The registrar may issue citations containing orders to cease and desist and civil penalties against persons who have never been licensed under this chapter who are acting in the capacity of or engaging in the business of a contractor in this state.

9. Arizona Administrative Code Rule 4-9-131 regarding permissible aggravating and mitigating factors to be considered when assessing a civil penalty provides in relevant part as follows:

In assessing a civil penalty as provided for under A.R.S. § 32-1166(A), the Registrar shall give due consideration to whether the person cited or any individual acting on that person’s behalf has committed one or more of the following acts in determining the gravity of the cited violation:

1. Falsely represented to be a licensed contractor.

2. Failed to perform any work for which money was received.

3. Executed or used any false or misleading documents for the purpose of inducing a person to enter into a contract or to pay money for work to be performed.

4. Made false or misleading statements for the purpose of inducing a person to enter into a contract or to pay money for work to be performed.

5. Failed or neglected to apply funds which were received for the purpose of obtaining or paying for services, labor, materials, or equipment.

6. Performed work that was or had the potential to become hazardous to the health, safety, or general welfare of the public.

7. Performed work that deliberately was in violation of building codes, safety laws, labor laws, workers’ compensation laws, or unemployment insurance laws.

8. Performed work that failed to meet minimum acceptable trade or industry standards or practices or was not performed in a good and workmanlike manner.

9. Has committed any other act which would otherwise be cause for disciplinary action if the person cited had been properly licensed pursuant to A.R.S. Title 32, Chapter 10.

10. Has committed two or more prior violations.

11. Performed work that has caused loss or damage to the structure, its appurtenances, or property being worked upon or has caused loss or injury to any person.

10. A.R.S. § 32-1151. The Registrar has met its burden to show that Respondent has engaged in construction services as a contractor for a contract price that exceeded $1,000.00 without an appropriate license in violation of A.R.S. § 32-1151. There was no contradictory evidence presented.

11. A.R.S. § 32-1165. The Registrar has met its burden to show that Respondent advertised for services for which a contractor’s license was required in violation of A.R.S. § 32-1165. The Tribunal finds that the evidence of Respondent’s business card constituted an advertisement from Respondent. The exemption provided under A.R.S § 32-1121(A)(14) (persons not required to be licensed) does not apply because Respondent advertised for contracting services in the form of a business card without disclosing that he was not a licensed contractor.

12. In assessing the civil penalty and determining the gravity of Respondent’s violation, the Tribunal considered the additional act of Respondent performing work that had caused loss or damage to the structure, its appurtenances, or property being worked upon or had caused loss or injury to any person to be a factor to warrant a civil penalty in the amount of $1,500.00. (Arizona Administrative Code Rule 4-9-131(11)).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the Registrar affirm the finding that Respondent violated A.R.S. § 32-1151 and A.R.S. § 32-1165 and affirm the decision to assess a civil penalty under A.R.S. § 32-1166 of $1,500.00 for the violation of A.R.S. § 32-1151, 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 will be forty (40) days from the date of that certification.

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001

-137160-45720000Done this day, March 14, 2023.

/s/ Roger Geddes

Administrative Law Judge

Transmitted electronically or by mail to:

Martín Quezada, Director

Registrar of Contractors

Danny Nicholas, Respondent

dba America’s Roofing Seal Coating LLC

4419 N. 29th Ave.

Phoenix, AZ 85017

[email redacted]

Office of the Attorney General, Counsel for the Arizona Registrar of Contractors

Licensing and Enforcement Section

2005 N. Central Ave.

Phoenix, AZ 85004

[email redacted]

By: OAH Staff

-54864001

001

-137160-45720000