ALJDEC

99F-UA0254-ROC · Registrar of Contractors · 1999-06-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 2, 1999 APPEARANCES: Mary DeLaat Williams, Assistant Attorney General, on behalf of the State Robert Franquist, Managing Member, Mountain View Development of Scottsdale LLC, Defendant ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact The Articles of Organization for Mountain View Development of Scottsdale LLC (Mountain View) were accepted by the Arizona Corporation Commission on December 9, 1998. Robert Franquist (Franquist) and Daniel Vasili (Vasili) are the managing members of Mountain View. In December, 1998, Vasili held a Class B license from the Registrar of Contractors (Registrar). Prior to coming to Arizona, Franquist was a firefighter for 23 years as well as a licensed contractor for 20 years in Michigan. After the Articles of Organization were accepted by the Corporation Commission, Mountain View contracted with a company identified as Contractor’s Services to submit and otherwise process the paperwork necessary to apply for and obtain a contractor’s license from the Registrar. Glen Tenniswood (Tenniswood) is also a former firefighter from Michigan, and an associate and friend of Franquist’s. Tenniswood had a home built in Camp Verde. He filed a complaint against the builder with the Registrar and established eligibility for an award from the Residential Contractors’ Recovery Fund (Fund). Tenniswood needed three estimates to be submitted to the Fund for certain corrective work which needed to be done. He obtained two estimates from licensed contractors but could not get a third estimate from a licensed contractor. Tenniswood contacted Franquist and asked for an estimate. Franquist submitted a proposal in the name of Mountain View to Tenniswood in the amount of $835.00. The proposal was for the removal and replacement of two bathroom marble tops, re-stain deck posts and re-caulk and repaint holes in siding at the front entry door. The parties believed the license would be issued prior to any work being performed under the proposal. Franquist was not aware of the statute (A.R.S.§32-1101(A)(3)) which includes a person (with exceptions not applicable to this case), who submits a proposal (bid) to repair or alter any structure, as one of the definitions of a “contractor“. Tenniswood submitted the estimates to the Fund which determined that neither Franquist or Mountain View were licensed. The case was submitted to Investigator James Garner (Garner) of the Registrar’s Office. No work was done under the proposal. The Mountain View application has not been processed because Vasili was apparently getting a divorce and upon advice of counsel was told to hold the application in abeyance. In late February, 1999, Garner issued the Citation for contracting without a license to Franquist. A civil penalty in the amount of $850.00 was assessed leading to the instant a hearing. Conclusions of Law A.R.S. §32-1151 makes it unlawful to engage in the business of contracting without a license or qualifying under an exemption. A.R.S. §32-1164 classifies acting in the capacity of a contractor without a license as a class 1 misdemeanor. A.R.S. §32-1166 provides that the Registrar may issue orders to cease and desist a citation, and impose a civil penalty of no less than $200.00 but not more than $2,500.00, to persons engaging in acts of contracting in violation of the applicable statutes. A.R.S. §32-101(A)(3) provides in pertinent part that a ”contractor” is a person who purports to have the capacity to undertake to or submit a bid to alter any building. The Citation issued by Garner alleges violation of A.R.S. §§32-1151 and 1164. The proposal submitted by Franquist is a bid to alter or repair a building as set forth in the statute and under the statutory definition, Franquist was acting as a contractor when submitting the proposal. Franquist was not licensed at the time of the proposal and knew he was not licensed. Franquist did not fall within any applicable exemption to the licensing requirement under A.R.S. §32-1121. The violation as charged in the Citation is established but it is concluded that the violation was due to ignorance and not willful and knowing. A.A.C. R4-9-131, sets forth certain factors to be considered when imposing a civil penalty as provided in A.R.S. §32-1166(A). The penalty may range from $200.00 to $2,500.00. Garner testified that he normally assesses a penalty of $1,500.00 for the instant violation but reduced it to $850.00 in this case because no work was done. Garner testified that had any aggravating factors set forth in the rule been present, he would have issued a criminal citation. Recommended Order In view of the foregoing it is recommended that a civil penalty of $400.00 be assessed pursuant to the authority of A.R.S. §32-1166(A) which penalty shall be payable by the effective date of the Order entered in this matter.

. . . . . . Done this day, June 4, 1999.

______________________________________ ALLEN REED Administrative Law Judge

Original transmitted by mail this ____ day of June, 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 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826