ALJDEC decisions subject to certification as final

2025A-04316-LDA-LS-ROC · Registrar of Contractors · 2025-07-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors

COMPLAINANT,

ACC LLC

License Application No. APP-[number redacted],

RESPONDENT.

No. 2025A-04316-LDA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 26, 2025

APPEARANCES: John Soukup appeared on behalf of ACC LLC (Respondent). Assistant Attorney General Charles Hover, III appeared on behalf of the Arizona Registrar of Contractors (Registrar).

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

EXHIBITS ADMITTED INTO EVIDENCE: The Registrar’s Exhibits 1 through 11.

_____________________________________________________________________

FINDINGS OF FACT

1. On May 15, 2025, the Arizona Registrar of Contractors (Registrar or ROC) issued a Notice of Hearing setting the above-entitled matter for hearing on June 26, 2025 at 9:00 a.m.

2. The Notice of Hearing provided that the issue set for determination was the Registrar’s denial of Respondent’s application for a contractor’s license.

3. A hearing was held on June 26, 2025.

4. At hearing, the ROC presented the testimony of Assistant General Counsel, Michael LaClare. Mr. Soukup testified on behalf of himself.

5. On January 7, 2021, a hearing was conducted through the Office of Administrative Hearings. See Exhibit 6. The hearing was set to determine the merits of a complaint filed by a homeowner (W.S.) against Vallarta Construction Inc. (Vallarta). Vallerta holds ROC license number 186933. At the time, John Soukup was the qualifying party for Vallarta. Mr. Soukup appeared at the hearing and represented Vallarta. The presiding Administrative Law Judge (ALJ) issued a decision recommending that the Registrar suspend Vallarta’s license for one day. The ALJ also recommended that Vallarta be ordered to pay a civil penalty in the amount of $250.00. The Registrar adopted the recommended decision and imposed a one day suspension on Vallarta’s license. The Registrar ordered Vallarta to pay a $240 civil penalty. See Exhibit 7.

6. On October 24, 2021, the Registrar mailed an order to Vallarta notifiying Vallarta that W.S. was entitled to a payout from the recovery fund in the amount of $30,000.00, based upon Vallarta’s actions that served the basis for the one day suspension. See Exhibit 7. Through the order, the Registrar ordered an automatic suspension of Vallarta’s license by operation of law until the award amount of $30,000 is paid plus interest. The order also provided, “Any person who is or was named on the license at the time of the act or omission giving rise to this claim may not receive a new license, and any existing license listing that person is also suspended by operation of law, until the full amount is repaid as provided above. A.R.S. § 32-1139(B).” See id.

7. On February 26, 2025, the Registrar received Application No. APP-[number redacted] for licensure that was submitted on behalf of Respondent. See Exhibit 1.

8. Mr. Soukup signed the application as a qualifying party. The application included a Prior License Information disclosure form, which form was marked “No” for whether the qualifying party had ever been named on a license that was revoked or currently suspended.

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

10. Mr. Soukup reported on the application that he was not active as a Qualifying Party on another entity in AZ. See Exhibit 2, Bates ROC-005. Mr. Soukup reported that license number 186933 was inactive. Vallarta held license 186933. See id and Exhibit 3.

11. Mr. Soukup is named as an officer/president and 51% owner on License No. 186933, which license was issued to Vallarta Construction Inc. on August 26, 2003 and never disassociated or was removed from the license. See Exhibits 2-4.

12. Mr. Soukup was named on License No. 186933 as a qualifying party from August 26, 2003, until September 1, 20201. See Exhibit 5.

13. Mr. Soukup has unpaid recovery fund debt in the amount of $30,000.00 on

behalf of License No. 186933. The amount paid from the Fund remains outstanding. See Exhibit 9.

14. On March 24, 2025, the ROC issued a notice to Respondent denying its application for licensure. See Exhibit 10. The reason for the denial provided in the notice was:

1. Mr. Soukup fails to qualify for a license under A.R.S. § 32-1122(C) by having made a material misrepresentation upon the license application in violation of § 32-1154(A) (5).

[See id.]

15. Mr. Soukup requested an appeal regarding the denial.

16. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.

17. A hearing was held on June 26, 2025.

18. At hearing, Mr. LaClare explained that he reviews applications for licensure and prepares denials. Mr. LaClare has worked closely in the past with Margaret Lindsey who issued the denial of Mr. Soukup’s application. Mr. LaClare testified consistently with the reasons for denial that were provided in the March 24, 2025 denial notice.

19. Mr. LaClare reviewed the Registrar’s file in this matter and did not find that the orders issued to Vallarta imposing a one day suspension and a second suspension for failing to pay a $30,000 recovery fund award, were returned as undeliverable.

20. At hearing, Mr. Soukup stated that he was aware of the complaint and the $250.00 fine. Mr. Soukup stated that he paid the fine and did not hear anything else.

Mr. Soukup stated that he searched on the Registrar’s website to find out if anything occurred later and could not find anything about his license.

21. Upon consideration of the evidence presented at hearing, the Administrative Law Judge finds that Mr. Soukup’s testimony that he was unaware that Vallarta’s license was suspended for failure to pay a recovery fund award is unpersuasive. The evidence presented shows that the order of suspension based on the recovery fund award was not returned as undeliverable. Mr. Soukup received notice of the $250 fine that included a suspension of Vallarta’s license for only one day in February of 2021. However, Mr. Soukup stated on his application in the current matter that his license was “inactive.” There is no reason to believe that Vallarta’s would be inactive based upon a one day suspension in 2021. It is more likely that not that Mr. Soukup was aware that his license was suspended for non-payment of the recovery fund award.

CONCLUSIONS OF LAW

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

2. Applicant bears the burden of proof to establish that it meets statutory qualifications for a contractor’s license by a preponderance of the evidence. See Ariz. Rev. Stat. section 41-1092.07(G)(1); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952).

3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

4. 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.

5. Ariz. Rev. Stat. § 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.

6. Ariz. Rev. Stat. § 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:

***

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

***

7. The preponderance of the evidence shows that Mr. Soukup misrepresented a material fact when he replied “no” to the question of whether he had ever been named on a license that is currently suspended. Therefore, the Registrar has established by a preponderance of the evidence that Mr. Soukup violated Ariz. Rev. Stat. § 32-1154(A)(5).

8. The preponderance of the evidence shows that Mr. Soukup was named on a license that is suspended because of a payment from the recovery fund.

9. The ROC has established that Mr. Soukup lacks good character and reputation as required under Ariz. Rev. Stat. § 32-1122(C).

10. The evidence of record supports the ROC’s denial of Respondent’s application for a contractor’s license pursuant to Ariz. Rev. Stat. § 32-1154(A) (5), Ariz. Rev. Stat. § 32-1139(B), and Ariz. Rev. Stat. § 32-1122(C).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the March 24, 2025 denial of ACC LLC’s application for a contractor’s license be affirmed.

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.

-54864001

001

-137160-45720000Done this day, July 12, 2025.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

Registrar of Contractors

Arizona Registrar of Contractors

[email redacted]

ACC LLC

[email redacted]

By: OAH Staff