ALJDEC

99F-UH0073-ROC · Registrar of Contractors · 1999-08-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 6, 1999 APPEARANCES: The Registrar of Contractors was represented by Assistant Attorney General, Montgomery Lee and Vern Marshall Drywall Inc. (“Defendant”) appeared through its president, Vern Marshall. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. The instant matter involved a citation issued against Defendant for alleged unlicensed contracting activity.

2. The following salient facts were adduced at the hearing and are important to note:

a. Defendant is the owner of three units in a condominium complex (“complex”) of 40-50 total units located in the Bullhead City area.

b. Defendant is a licensed drywall contractor in the State of California. Defendant is not licensed in the State of Arizona. c. On or about April 8, 1999 the Registrar of Contractors received a complaint from an Arizona contractor, indicating that Defendant’s employees were painting the exterior of the entire complex without possessing an Arizona contractor’s license. d. An investigator for the Registrar of Contractors was assigned to look into the allegations. The assigned investigator determined that Defendant’s employees were, in fact, engaged in painting the exterior of the complex. Further investigation, including conversations with Defendant’s employees and Defendant, revealed that Defendant had entered into an agreement with the complex homeowner’s association (‘association”) to send his employees to paint the exterior of the complex and that the only cost to the association would be for the materials. The cost of the materials was shown to be approximately $13,000.00. e. The assigned investigator determined that Defendant’s activity constituted unlicensed activity in violation of applicable Arizona law and issued Defendant a Cease and Desist Order and a Civil Citation which provided for a fine of $2,000.00. Upon receipt of the Civil Citation, Defendant requested the instant hearing.

3. Defendant was apparently under the mistaken impression that since he owned several of the units in the complex that it would be permissible for him to utilize his employees to paint the entire complex and supply the materials for said job at his cost (with no provision for any profit), in order to save the complex substantial sums of money over the bids that it had received from licensed Arizona contractors to perform the paint work in question.

4. Notwithstanding Defendant’s mistaken belief that it was not a violation of Arizona law for it to be involved in painting the entire exterior of the complex, it is determined and held that Defendant’s activity constituted unlicensed contracting, in violation of applicable Arizona laws.

5. By way of mitigation, the instant record failed to show that any of the work performed by Defendant was substandard or caused any harm to the other owners of units in the complex. Moreover, it was shown that Defendant has been a licensed contractor in California for twenty-two (22) years and has never had his California license disciplined by the licensing authority in that State. It is also important to emphasize that Defendant was not performing the painting work for any personal profit or gain. In fact, there was testimony that he was donating several thousand dollars of the paint to the complex at no charge since he had a number of gallons in his warehouse from prior jobs that he had performed in California.

6. Under all of the salient facts and circumstances presented herein some modification of the civil penalty would appear to be warranted.

CONCLUSIONS OF LAW

1. Defendant’s activity does not fall within any of the exemptions for licensure as set forth in A.R.S. § 32-1121. Therefore, Defendant’s activity in agreeing to paint the exterior of the entire complex, at a cost to the association of approximately $13,000.00 for materials only, constitutes unlicensed contracting in violation of A.R.S. § 32-1151.

2. Pursuant to the provisions of A.R.S. § 32-1166, the citation issued to Defendant should be affirmed, thereby properly subjecting Defendant to the imposition of a civil penalty for the violation proven herein.

3. A.R.S. § 32-1166 provides for imposition of a civil penalty ranging from a minimum of $250.00 to a maximum of $2,500.00. Based on all of the salient facts and circumstances presented herein including, but not limited to, the fact that Defendant is a contractor in good standing in California and was operating in Arizona under an apparent, albeit mistaken, good faith belief that he could paint the exterior of the complex, where he owned three of the units, without having an Arizona contractor’s license, it appears that imposition of a civil penalty somewhat greater than the minimum, but significantly less than $2,000.00, is appropriate.

RECOMMENDED ORDER

In view of the foregoing, it is recommended, based upon the entire case record, that the citation issued in this matter be affirmed so as to provide for the imposition of a civil penalty against Defendant in the total amount of $750.00. This civil penalty shall be paid to the Registrar of Contractors on or before thirty (30) days subsequent to the effective date of the Order entered in this matter.

Done this day, August 11, 1999

______________________________________ Mark A. Silver Administrative Law Judge

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

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

By ___________________________ -----------------------

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