ALJDEC

99F-UP0073-ROC · Registrar of Contractors · 1999-06-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 24, 1999 APPEARANCES: Mary Williams, Assistant Attorney General, on behalf of the State Paul Charles Rife, Defendant, in his own behalf ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________

Findings of Fact On September 9, 1998, Investigator-Inspector Bernard St. John (St. John) of the Registrar of Contractors (Registrar) received a written complaint that the Respondent, Paul Rife (Rife), was contracting without a license. St. John investigated the complaint. The evidence which is essentially uncontested, shows that in June and July 1998, Rife with the assistance of others, built a garage for a person identified as Jack Cartwright (Cartwright), in Forest Lakes, Arizona. Rife organized the work crew and applied for and obtained the building permit from Coconino County. Rife assisted with the roofing, block and painting. Others did the footing, framing and presumably the electrical. Rife received payment from Cartwright for approximately $20.000.00 and used the money to pay the workers as well as the related construction costs. Rife also did work for a person identified as Ed Ideker (Ideker) of Forest Lakes. This work consisted of pulling out trees, digging around the perimeter of a manufactured home site with a backhoe and laying re-bar. Subsequently, Rife assisted with the pouring of concrete for the footing. Although Rife essentially built the footing and stem wall, it was not intended as such or used as such. Rather it was used to build a wall consisting of three courses of block above the ground. The manufactured home rests inside the perimeter of the wall which does not support the home or anything else of significant weight except itself. Rife was paid $375.00 by Ideker. Rife then paid Larry Ricard (Ricard), a person assisting on the job, $150.00. Cost of the materials was not established and the guess of $700.00 to $900.00 which was submitted by Rife cannot be given any weight because it appears to be pure speculation. Rife also used various modes of advertising to solicit business. He did not disclose his unlicensed status in the advertisements which included business cards, community newsletter and phone directory ads. Rife claimed the phone directory ad was placed without his permission but no evidence was presented as to his efforts to repudiate the ad. The advertisements cover a number of areas which are construction related including backhoe service, driveway culverts, granite cinders, rock, sand and landscaping. Earlier advertising which ceased in 1997, included home repair and improvements, plumbing and electrical. On October 20, 1998, St. John interviewed the Defendant and after completing his investigation, St. John issued the Defendant a citation for violation of A.R.S. §§32-1151 and 1165, and assessed $500.00 for each violation. St. John asked Rife if he wanted to become licensed and Rife said he did. St. John then gave Rife until mid- December, 1998, to obtain his license. Rife did not obtain his license for reasons which are neither mitigating or aggravating and merit no additional discussion. The Registrar issued his Final Order Imposing a Civil Penalty in the amount of $1,000.00, on January 8, 1999. 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. §32-1165, with a specific exception under A.R.S.32- 1121(A)(14), makes it unlawful to advertise that a person has the ability to perform any service or contract for compensation subject to regulation by the Registrar unless the person is licensed regardless of whether the operations as a contractor are otherwise exempt. Although this is classified as a Class 1 misdemeanor, such conduct is also a violation of the administrative provisions of Chapter 10, Title 32. A.R.S. §32-1121(A)(14) provides an exemption from the licensing requirement if the aggregate contract price for the project is under $750.00 for labor and materials. This exemption applies only if the project does not require a local building permit, where the project is not part of a larger project, or where the advertising specifically sets forth the unlicensed status of the person. 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 synonymous with “builder” and includes a person who purports to have the capacity to undertake or submits a bid to construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building or other structure. The Citation issued by St. John alleges violation of A.R.S. §§32-1151 and 1165. The facts clearly show a violation of A.R.S. §32-1151 with regard to the Cartwright job. The fact that a permit was needed, the Defendant applied for the permit, the project cost $20,000.00, the Defendant organized the work and paid the other workers, show that the Defendant was acting as a contractor and did not qualify under the exemption and that this was not an owner-builder project. The Ideker job is a little more problematical. Although St. John testified Dennis Street, Building Inspector for Coconino County, told him a permit was needed, it is questionable if this was the case if the footing was only for a three block high perimeter fence which was not intended for or used to support the home. Additionally, the cost of the project was $375.00 for labor. Material cost was not established and any guess by Rife is too speculative. Rife could have guessed $300.00 as easily as $900.00. Since the evidence on the Ideker job is insufficiently substantial, no violation is found on that project. The violation of A.R.S. §32-1165 is established by the evidence which shows the Defendant’s advertising identifying numerous contracting related activities without specifically stating that the Defendant is not licensed.

Recommended Order In view of the foregoing, it is recommended that a civil penalty of $1,000.00 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 30, 1999.

______________________________________ ALLEN REED Administrative Law Judge

Copies mailed 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