ALJDEC decisions subject to certification as final

2022A-06451-LDA-LS-ROC · Registrar of Contractors · 2022-10-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT,

v.

G-Squared Design LLC

dba Floor Coverings International

Chandler

ROC License No. 311656,

RESPONDENT.

No. 2022A-06451-LDA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 23, 2022 at 1:00 PM.

APPEARANCES: Assistant Attorney General Justin Larson, Esq. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with Robert Stirling, Esq. as a witness. Debra deFisser appeared on behalf of G-Squared Design 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

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. On February 13, 2017, the Registrar issued License No. 311656 General Residential B contracting to Respondent. There is no prior discipline noted for the license.

On March 01, 2021, License No. 311656 was suspended for non-renewal through March 11, 2021.

On or about May 05, 2022, the Registrar received an application for a Qualifying Party Exemption from Respondent, Application No. SRR-[number redacted].

In pertinent part, the application notes that a contractor may request exemption from the qualifying party requirement “IF during the preceding FIVE YEARS” the contractor “held a valid and active license” and could legally contract under Ariz. Rev. Stat. § 32-1125(C)(1) for the entire five-year period.

(All emphasis in original.)

Debra deFisser (“Mrs. deFisser”) was listed on the application as Respondent’s proposed Manager.

On July 27, 2022, the Registrar issued a Notice of Qualifying Party Exemption Denial letter to Respondent. The Registrar concluded, in pertinent part, that Respondent’s application could not be approved because License No. 311656 had not been “valid and active” during the preceding five year period as it had been suspended for ten (10) days during that time.

The Registrar received a timely appeal from Respondent.

On August 05, 2022, the Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an independent evidentiary hearing on September 23, 2022. The sole issue for hearing was to determine whether grounds exist for the Registrar to deny Respondent’s application for a qualifying party exemption for failing to meet the requirements of Ariz. Rev. Stat. § 32-1125(C), as established by the evidence.

Hearing Evidence

The Registrar called Robert Stirling – Assistant Chief Counsel, as a witness and submitted Exhibit A. Respondent called Mrs. deFisser as a witness. The Notice of Hearing was admitted as its own exhibit. The substantive evidence of record is as follows:

Respondent’s license was set for renewal every two (2) years, by or before the last date in February, beginning in 2019. Thus, in 2021 Respondent’s renewal was due on or before February 28, 2021.

Although Mrs. deFisser believed Respondent had a preexisting automatic payment arrangement with the Registrar for the fees associated with its license renewal, Respondent had no such agreement with the Registrar.

Although Respondent timely renewed its license in 2019, Respondent’s 2021 renewal application was received ten (10) days late by the Registrar.

In closing, the Registrar argued that there is no means by which the Registrar may waive or overlook a late license renewal application from a contractor, and that it had no other choice than to deny Respondent’s application for a qualifying party exemption. The Registrar asked that its denial be affirmed.

In closing, Mrs. deFisser argued that, per her understanding of Ariz. Rev. Stat. § 1125(B), the law provided sufficient “wiggle room” for the Registrar to grant Respondent an exception and issue a Respondent a qualifying party exemption. Thus, Respondent asked that the Registrar’s denial be overturned.

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 qualifying party exemption 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.”

Statutes shall be liberally construed to affect their objects and to promote justice. 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.”

Statutes should be interpreted to provide a fair and sensible result. “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.”

Ariz. Rev. Stat. § 32-1125(A) provides, in pertinent part, that “[A] license is suspended on the next business day following its renewal date by operation of law.”

Ariz. Rev. Stat. § 32-1125(B) provides, in pertinent part, that “A license that has been suspended by operation of law for failure to renew may be reactivated and renewed within one year of its suspension by filing the required application and paying the application fee.”

Ariz. Rev. Stat. § 32-1125(C)(1) provides that a licensee applying for a qualifying party exemption must show that it has held a valid and active license during that past five years that would permit it to legally enter into construction contracts during the entirety of that period.

Here, the Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.

In the case at bar it is undisputed that Respondent’s license renewal was due on or before February 28, 2021, and that the renewal application was not received by the Registrar until March 11, 2021, rendering the Registrar unable to grant Respondent’s qualifying party exemption application under Ariz. Rev. Stat. § 1125(C)(1).

Respondent’s affirmative defense regarding presumed automatic payments is not supported by the record and is unreasonable given a lack of an indicia of evidence to support the belief. Moreover, Mrs. deFisser’s Ariz. Rev. Stat. § 32-1125(B) argument is inapplicable to this matter as License No. 311656 was renewed and reactivated on March 11, 2021, after Respondent submitted its renewal application and related fees to the Registrar. Respondent’s post-suspension reactivation within a year has no bearing on the Registrar’s duty to uphold the requirements of Ariz. Rev. Stat. § 32-1125(C), specifically subsection 1, which statutorily prohibits the Registrar from granting qualifying party exemptions to licensees whose licenses have not been “valid and active” in the five years preceding the requested exemption. Unfortunately, due to Respondent’s ten (10) day licensure lapse, the Registrar is barred from granting its qualifying party exemption request.

Therefore, based on the credible substantive evidence of record the Tribunal concludes that the Registrar soundly denied Respondent’s application for qualifying party exemption under Ariz. Rev. Stat. § 1125(C)(1).

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that the Registrar affirm the denial of Application No. SRR-[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 Final Order will be five (5) days from the date of that certification.

Done this day, October 06, 2022.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

Office of the Attorney General

ATTN: Sarah Asta

2005 N. Central Ave.

Phoenix, AZ 85004-1592

[email redacted]

G-Squared Design LLC

DBA: Floor Coverings International Chndler

1926 E Bay Tree Ct

Gilbert, AZ 85234

[email redacted]

By Miranda Alvarez

Legal Secretary