ALJDEC - Licensing
2022A-11294-LDA-LS-ROC · Registrar of Contractors · 2023-02-27
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Arizona Registrar of Contractors,
COMPLAINANT
v.
Ideal Home Improvement LLC
Application No. [number redacted]
RESPONDENT
No. 2022A-11294-LDA-LS-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: February 7, 2023
APPEARANCES: The Arizona Registrar of Contractors (Registrar) was represented by Assistant Attorney General Seth T. Hargraves. Stephen Deubel appeared on behalf of Ideal Home Improvement LLC (Respondent).
ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer
_____________________________________________________________________
FINDINGS OF FACT
Stephen Deubel was named as a 100 percent owner and qualifying party on License No. 313587 and as the 100 percent owner and qualifying party on License No. 182234, which were both licenses issued to Image Home Improvement Inc. (Image).
Mr. Deubel was named on License No. 182234 from 2003 until its revocation in August 2020.
Mr. Deubel was named on License No. 313587 from 2003 until its revocation in August 2020.
From June 2019 to December 2019, the Registrar received eight complaints from different homeowners against Image. The Registrar consolidated that complaints into a single matter brought by the Registrar.
On or about January 7, 2020, the Registrar issued an Order of Summary Suspension, Order Consolidating Cases, and Notice of Promptly Instituted Proceeding setting the matter for a hearing on January 24, 2020.
Taken together, the Registrar alleged that Image had committed two violations of A.R.S. § 32-1154(A)(1); four violation of A.R.S. § 32-1154(A)(3); seven violations of A.R.S. § 32-1154(A)(9); two violations of A.R.S. § 32-1154(A)(12); and four violations of A.R.S. § 32-1154(A)(22).
The hearing was ultimately held on April 20, 2020, and April 30, 2020.
Following the hearing, the Administrative Law Judge found substantial evidence to support the charge of aiding and abetting. Specifically, Mr. Deubel, Elijah Crabtree, and Linda Brazeale all testified that Mr. Deubel’s attorney told them in 2019 that the relationship that existed between Image and Ms. Brazeale and Mr. Crabtree would not be acceptable to the Registrar and Ms. Brazaele and Mr. Crabtree would need to become employees of Image.
Ms. Brazeale and Mr. Crabtree both testified that Mr. Deubel knew they were bidding contracts and performing work on Image’s behalf and that Mr. Deubel received money on those jobs.
Further, Mr. Deubel and his attorney had Mr. Crabtree and Ms. Brazeale sign “employment agreements” in 2019, but backdated them to 2018, to avoid the appearance that Mr. Deubel was aiding and abetting unlicensed individuals. Mr. Deubel acknowledged that after signing the employment agreements, Mr. Deubel did not establish an hourly wage and did not issue paychecks or W-2s to either of them.
In Image’s answer to a complaint, Mr. Deubel stated that a homeowner and Image signed a contract and the homeowner paid Image $10,000.00 a deposit. At the hearing, Mr. Deubel testified that those statements were false.
In her decision, the Administrative Law Judge recommended that the Registrar revoke Image’s licenses.
On or about May 22, 2020, the Registrar issued a Final Administrative Decision and Order accepting the Administrative Law Judge’s decision to revoke Image’s license numbers 313587 and 182234.
On or about September 21, 2022, the Registrar received an application for licensure from Respondent, which the Registrar designated as Application No. APP-[number redacted] (Application).
Mr. Deubel was a signatory to the Application and was listed as the 100 percent owner and qualifying party.
The Application had a disclosure section including the question of whether the qualifying party or any person named on the license had ever been named on a license that had been revoked or was currently suspended. The question on the Application was answered “No.”
Mr. Deubel also provided documentation that evidenced a discharge of the person debts of Mr. Deubel in bankruptcy case 2:22-bk-03222-PS, on or about August 30, 2022.
In addition to the bankruptcy discharge, Mr. Deubel also entered into settlement agreements with several of the complainants who had filed complaints against Image’s licenses.
While the bankruptcy discharge order provided by Mr. Deubel stated that most debts were discharged, it did note that some debts which the debtors did not properly list may not be discharged, and Mr. Deubel did not show that the debt to each homeowner was discharged.
For purposes of the Application decision, the Registrar presumed that all of the debts of the homeowners and to the Residential Recovery Fund had been discharged.
The Registrar denied the Application pursuant to A.R.S. § 32-1154(A)(20), A.R.S. § 32-1154(A)(5), and A.R.S. § 32-1122(C).
Respondent appealed the denial.
At hearing, Mr. Deubel testified that he waited a year after Image’s licenses had been revoked to submit a new application. Mr. Deubel stated that he made sure all the complaints from Image’s license were resolved so he could move forward. Mr. Deubel testified that when he was completing the Application, the program would not allow him to answer “Yes” to the question at issue and proceed with the application. Mr. Deubel asked for assistance from a Registrar employee who advised him to answer “No” and then include an explanation in the dropdown box. Mr. Deubel asserted that, after everything he had been through, he would not knowingly give a false answer on the Application. Mr. Deubel also provided letters of reference from people who knew him personally and professionally to support the Application.
Mr. Deubel wanted to challenge the underlying charge of aiding and abetting, but was advised that those charges had been determined by the Registrar and had not been appealed by Image.
At hearing, Robert Stirling, Attorney with the Registrar, testified that being named on a license that had been revoked was not a permanent bar to being granted a new license. Mr. Stirling stated that given the number and nature of the prior complaints against Image, the Registrar determined the Application should be denied. Further, Mr. Stirling indicated that, even if the false answer on the Application was not considered, the Registrar would still deny the Application.
CONCLUSIONS OF LAW
The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119.
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).
A.R.S. § 32-1122 provides, in pertinent part, as follows:
C. To obtain, renew or maintain a license under this chapter, each person who is named on a license must not have 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 be named on a license that was suspended or revoked in this state or another state.
A.R.S. § 32-1154(A) provides, in pertinent part, as follows:
A. 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:
. . . .
5. Misrepresentation of a material fact by the applicant in obtaining a license.
. . . .
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.
Given the number and nature of the violations found against Image, the Registrar’s concerns in this case were legitimate and well-founded. Mr. Deubel’s willingness to provide false information in Image’s answer to the complaint demonstrated he was not able to be regulated by the Registrar.
The fact that Mr. Deubel was named on a license that was revoked was not a permanent bar to being licensed. However, Mr. Deubel did not offer any evidence that he had taken measures to address any of the issues that led to the revocation. In fact, Mr. Deubel was attempting to re-litigate the underlying complaints at the instant hearing.
Mr. Deubel had the burden of proving by the preponderance of the evidence that he had met the requirements to be granted a license.
“[T]he Registrar is charged with the overall responsibility of protecting the welfare of the public dealing with persons engaged in the building contracting vocations and afford the public protection against incompetent, inexperienced, unlawful and fraudulent acts of building contractors.”
Grounds exist under A.R.S. §§ 32-1122(C) and 32-1154(A)(20) to deny Respondent a license. At this time, Mr. Deubel did not establish that the Registrar abused its discretion when it denied the Application.
RECOMMENDED ORDER
Based on the foregoing, it is recommended that on the effective date of the Registrar’s order, the Registrar affirm the decision to deny Respondent’s Application.
Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.
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.
Done this day, February 27, 2023.
/s/ Tammy L. Eigenheer
Administrative Law Judge
Transmitted electronically to:
Martín Quezada, Director
Registrar of Contractors
Ideal Home Improvement LLC
19940 N. 23rd Ave. C2022
Phoenix, AZ 85027
Justin Larson
Office of the Attorney General
2005 N. Central Avenue
Phoenix, AZ 85004
[email redacted]
By: OAH Staff