ALJDEC

99F-R0023-ROC · Registrar of Contractors · 1999-01-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 26, 1999. APPEARANCES: Rory M. Dannenberg appeared as the owner representing R.M.D. Construction Company, Respondent. Montgomery Lee, Assistant Attorney General, appeared representing the Registrar of Contractors (“Registrar”).

ADMINISTRATIVE LAW JUDGE: Kip M. Micuda _____________________________________________________________________ The hearing in this matter was held for the purpose of determining whether the Registrar is justified in taking disciplinary action against Respondent. Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made:

FINDINGS OF FACT 1. On or about October 26, 1995, R.M.D. Construction Company, Respondent, applied to the Registrar for a Class B license. Rory Martin Dannenberg submitted the application as the company’s Qualifying party and sole owner. The application indicated that Mr. Dannenberg had no prior felony conviction. 2. On or about November 22, 1995, the Registrar issued license No. 110384 to Respondent. 3. On or about July 28, 1998, the Registrar received from Mr. Dannenberg a letter disclosing felony convictions not previously disclosed. Attached to Mr. Dannenberg’s letter was Respondent’s business card, which failed to disclose Respondent’s contractor’s license number. 4. The Registrar conducted an investigation into the felony convictions disclosed by Mr. Dannenberg. During the hearing in this matter, the Registrar offered evidence indicating that Mr. Dannenberg pled guilty to possession of a controlled substance and manufacture and delivery of LSD, a felony, on May 10, 1988, in Cook County, Illinois, and that he was sentenced to a four year term of probation. The Registrar also offered evidence indicating that Mr. Dannenberg entered a guilty plea to one count of burglary, another felony, on May 17, 1990, in Cook County, Illinois, and that he was sentenced to a four year term of incarceration. Finally, the Registrar offered evidence that Mr. Dannenberg was actually incarcerated in the Joliet, Illinois, Corrections Center from May 25, 1990, through February 26, 1992. 5. Mr. Dannenberg admitted during the hearing that he was convicted of the two foregoing offenses, but emphasized that he thought, at the time he submitted the application for licensure to the Registrar, the two convictions were expunged. Unfortunately, Mr. Dannenberg offered no credible evidence of his efforts, or his attorney’s efforts, to expunge the convictions; indeed, he offered no evidence whatsoever justifying his belief that the convictions were expunged. The preponderance of the evidence establishes that Mr. Dannenberg knowingly falsified the application in issue when he failed to disclose his prior felony convictions. These misrepresentations are found to be material. 6. Mr. Dannenberg also denied that he was ever incarcerated, attacking the court records from Cook County as being faulty. He offered only a credit report to support his denial of being incarcerated. The report fails, however, to reveal any credible information placing him somewhere other than in prison between May 25, 1990, through February 26, 1992. The preponderance of the evidence establishes that Mr. Dannenberg was incarcerated as the Registrar alleges. 7. The two prior convictions, the incarceration, and Mr. Dannenberg’s failure to disclose these matters earlier demonstrate a lack of good character and reputation, despite Respondent’s successful business and the lack of consumer complaints against the company. Had the convictions and incarceration been disclosed to the Registrar in the application, they would have been grounds to deny licensure. 8. As to those allegations of the Complaint not specifically addressed above, the record fails to sufficiently substantiate such allegations.

APPLICABLE LAW Arizona Revised Statutes (“A.R.S.”) §32-1122(D) states: To obtain or renew a license under this chapter, each person shall be of good character and reputation. Lack of good character and reputation may be established by showing that a person has committed any act which, 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 contractor’s license in another state that was suspended or revoked.

Section 32-1154(A) adds, in part, that a holder of a license or a person listed on a license shall not commit the following: 6. Misrepresentation of a material fact by the applicant in obtaining a license. xxx 8. Conviction of a felony. xxx 13. Failure in any material respect to comply with the provisions of this chapter. xxx 20. Subsequent discovery of facts which if known at the time of issuance of a license or the renewal of a license would have been grounds to deny the issuance or renewal of a license.

Finally, section 32-1124(B) adds that a contractor must ensure that his license number is placed on all advertising, which includes business cards.

CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter, pursuant to §32- 1104(A). 2. The Registrar has the burden of demonstrating by a preponderance of the evidence that it may take disciplinary action against Respondent. Cf. Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). Proof by “preponderance of the evidence” means that the evidence is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). It “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (rev. 6th ed. 1990). 3. With respect to Respondent’s alleged misrepresentation of material facts in obtaining its license, the Registrar sustains its burden of demonstrating that Respondent failed to disclose Mr. Dannenberg’s prior convictions; the Registrar demonstrates sufficient evidence that Respondent violated A.R.S. §32-1154(A)(6). 4. With respect to Mr. Dannenberg’s alleged felony convictions, the Registrar sustains its burden of demonstrating that he plead guilty to felony charges in 1988 and 1990; the Registrar demonstrates sufficient evidence that Respondent violated A.R.S. §32-1154(A)(8). 5. With respect to Respondent’s alleged failure to ensure that its license number is placed on all advertising, especially its business cards, the Registrar sustains its burden of demonstrating a violation; the Registrar demonstrates sufficient evidence that Respondent violated A.R.S. §32-1124(B). 6. In light of the foregoing, the Registrar also demonstrates Respondent’s lack of good character and reputation, as required by A.R.S. §32-1122(D); that Respondent failed in material respects to comply with the provisions of Title 32, Chapter 10, in violation of A.R.S. §32-1154(A)(13); and, finally, that subsequent discovery of the above facts, which if known at the time of issuance of a license Respondent, would have been grounds to deny the issuance of the license, pursuant to of A.R.S. §32-1154(A)(20).

RECOMMENDED DECISION In view of the foregoing, it is recommended to the Director that Respondent’s Class B license, No. 110384, be revoked. Mr. Dannenberg appropriately notes the success of the company and the lack of any consumer complaints against its license. However, his response to the Registrar’s Complaint lacks credible supports on some points and largely shifts blame to others on other points. While the record does not compel that the Director revoke in this matter, the record fails to reveal much upon which this Judge can reasonably justify urging the Director to invoke his discretion against revocation. Done this day, February 9, 1999.

_________________________________ Kip M. Micuda Administrative Law Judge

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

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

By _______________________________

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Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826