ALJDEC

99F-1272-ROC · Registrar of Contractors · 1999-02-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 24, 1999 APPEARANCES: Pat Overson, Complainant, in his own behalf Ron Adams, Attorney at Law, on behalf of the Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________

FINDINGS OF FACT Sometime about the middle of March 1998, Darwin Webb (Darwin) filled out a questionnaire as part of the application process to be licensed by the Registrar of Contractors (Registrar) as the Qualifying Party for the Respondent, Legacy Development, Corp. (Legacy). On the questionnaire, Darwin asserted that he was presently working for Legacy, doing home building reconstruction and remodeling under the supervision of his brother, Derrel Jere Webb (Derrel). He described his job positions as self employed- project manager. Darwin listed employment from 1988 to 1998, in general construction with Porter Brothers Construction, Inc. (Porter Brothers), a contractor in Gilbert, Arizona. His supervisor was listed as Gary Porter (Porter). Darwin lists himself as a superintendent from 1988 to 1998, and describes his job duties as: “Supervision-worked with tools-maintained Construction Yard-maintained equipment Operated heavy equipment” An attachment to the questionnaire with Darwin’s name and identified as “Commercial Experience Record” lists four multimillion dollar commercial projects built by Porter Brothers on Indian reservations during the 1988 to 1998 time period. The words “complete supervision,” is listed as part of the Fort Apache Shopping Center project. Additional experience, from 1980 to 1988, listed on the questionnaire by Darwin shows he was self employed and engaged in home building and general contracting during that period. According to the questionnaire, Darwin completed 50 residential and 10 commercial units. The Application for Arizona Residential Contractor’s License Examination (Examination Application) was signed by Darwin on April 15, 1998. Where it asks the applicant to certify that they have the required years of journeyman level experience under Arizona law to qualify for the license, the space for entry of the number of years is blacked out. The cause of this is unknown. Darwin signed the certification but acknowledged during his testimony at the hearing that he did not know how many years of experience were required. The evidence shows that between 1988 and 1994 or possibly 1995, Darwin worked as a log loading superintendent and heavy equipment operator for Jaggo Logging (Jaggo), which was owned by Porter Brothers. Jaggo is not a licensed contractor and is located in White River on the White Mountain Apache reservation. Gary Porter (Porter), though technically in charge of Jaggo was not the direct on site supervisor of Darwin or Jaggo. The daily operations of Jaggo appear to have been managed or overseen by Kayle McNeil (McNeil), who purchased Jaggo from Porter Brothers in 1994 or 1995. McNeil is a cousin of Darwin. The primary business of Jaggo is logging. However, during the off season which may run from December into May, Darwin was in charge of the shop, maintenance and repair of the equipment. During non-logging periods, Darwin also performed excavation, backhoe, leveling and other earth moving-heavy equipment type jobs for Arrowhead Porter, Inc. (Arrowhead), a licensed contractor owned by Porter Brothers and a Native American majority shareholder. According to Porter, the four multimillion dollar projects listed as an attachment to the Darwin’s questionnaire, occupied approximately six weeks of Darwin’s time. Darwin also did other construction related work, such as trenching to lay pipe. Other construction related projects with which Darwin was involved over the past ten years include the expanding of the office area at Jaggo from a 120 square feet to approximately 360 square feet. This involved the construction of walls on an existing slab, a ceiling, two doorways, two windows and a stairway. A sink and attendant plumbing were installed in the restroom. In 1997, Darwin supervised volunteers for the conversion of a carport to a livable apartment for a church member. The construction included the electrical and plumbing. At the beginning of March, 1998, Darwin began working for Legacy. The evidence did not disclose the ownership of Legacy at the time but it appeared that ownership was in the process of transferring to Darwin’s brother, Derrel. On the questionnaire, Darwin listed his experience with Legacy as five ongoing residential projects. This would amount to two weeks of experience.

Although not directly relevant to the case as an evidentiary matter but by way of providing some background, it is noted that the Complainant and Respondent are competitors for the same type of work (fire restoration). The Complainant and Derrel, a principal of Legacy, have known each other for over 20 years and had prior business dealings. There is some hostility between the parties. The above factors do not distort or otherwise taint the evidence in this case. Although the Complainant testified he was motivated by the desire to ensure that only qualified contractors are licensed, the above may have been additional motivation for the Complainant’s actions in bringing this complaint. The Respondent was issued a KB-02 license by the Registrar on July 24 1998. This is a general dual residence and small commercial license. CONCLUSIONS OF LAW The allegations of this Citation and Complaint concern A.R.S. §32- 1154(A)(6), misrepresentation of a material fact in obtaining a license, (A)(7) a wrongful or fraudulent act resulting in substantial injury to another, and (A)(20) subsequent discovery of facts which if known at the time of issuance would be grounds for denial of the license. A.R.S. §32-1122(F)(1) requires a Qualifying Party to have had a minimum of four years practical or management trade experience two years of which were in the past ten years and in the area of the type of construction or its equivalent as the license applied for. The issue of whether Darwin had a total of four or more years experience is not found to be relevant for the purpose of this hearing. This case is primarily concerned with the Darwin’s representations regarding his experience during the ten years prior to making application. The evidence clearly shows that Darwin was not even close to having two years practical or management trade experience in the type of construction engaged in by a Class KB-02 license. The evidence when viewed in the light most favorable to the Respondent, shows at best a month or two in the past ten years. The argument that earth moving and trenching type of labor should be considered as similar to practical or management trade experience for a general residential-small commercial license is not accepted. Even if such experience were considered, it would only bring the time to four months in the past ten years. Based on the evidence, there is a violation of A.R.S. §32-1154(A)(20). The information provided by Darwin in the questionnaire is misleading and inaccurate. Based on the evidence of record, it is concluded that the information presented on the questionnaire was for the specific purpose of creating an impression that Darwin had contracting experience which he did not have. This was a misrepresentation of a material fact and a violation of A.R.S. §32-1154(A)(6). It is also concluded that the misrepresentation was knowingly and intentionally made with the intent of having the Registrar rely on it to issue the license. This is to the detriment of the Registrar (licensing an unqualified person) with the attendant potential damage to the public. Although certain assumptions could be made regarding Derrel’s knowledge of Darwin’s misrepresentation (they are after all brothers), there was no direct evidence of knowing complicity on the part of Derrel. Assumptions are not necessarily competent evidence and inferences created by such assumptions cannot under the facts of this case constitute a basis for an unconditional revocation. However, this Recommended Order should serve to put Legacy and Derrel on notice to more closely scrutinize any future Qualifying Party. RECOMMENDED ORDER In view of the aforementioned, it is recommended that commencing sixty (60)days from the effective date of the Order entered in this case that the Class KB-02 of the Respondent be Revoked; It is further recommended that if the Respondent disassociates itself form Darwin Webb as Qualifying Party by the effective date of the Order entered in this matter and qualifies through another person within sixty (60) days of such Order, then the aforementioned revocation shall not take place and the Citation and Complaint upon which it is based shall be closed. Done this day, March 1, 1999.

______________________________________ ALLEN REED Administrative Law Judge

Original transmitted by mail this ____ day of March, 1999, to:

Michael P. Goldwater Registrar of Contractors ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By _______________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826