ALJDEC

99F-UP0205-ROC-res · Registrar of Contractors · 1999-07-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 6, 1999.

APPEARANCES: The Registrar of Contractors was represented by Assistant Attorney General, Victoria M. Mangiapani, Esq.

The Defendant appeared through its owner, Robert F. Ralston.

ADMINISTRATIVE LAW JUDGE: Robert. I. Worth _____________________________________________________________________

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

FINDINGS OF FACT

1. On December 30, 1998, a civil citation was issued to Robert Fred Ralston, doing business as Ralston Landscaping, for asserted violations of the statutory provisions contained both in A.R.S. §32-1151 for contracting without a license and in A.R.S. §32-1165 for advertising without a license. The issued citation assessed civil penalties against Mr. Ralston $500.00 for each charged violation, or a total penalty amount of $1,000.00.

2. At all times material herein, Mr. Robert Fred Ralston had been and still is acting and serving as the sole owner and principal employee of Ralston Landscaping.

He did not possess any contracting license until March 4, 1999, at which time he and his proprietorship entity was issued a Residential Class C-21 specialty license covering landscaping and irrigation or sprinkler work.

3. The undisputed evidence revealed that, in mid-November, 1998, Mr. Ralston had bid and performed landscaping work, including the furnishing of all labor and materials, on a residential project in Pinetop, Arizona. The total agreed cost price for the contemplated work plus applicable taxes was $2,409.00, and a subsequent adjustment gave credit for certain undelivered materials in the amount of $300.00.

4. At the time of the above-described project, and admittedly during the time periods preceding and following such work, Mr. Ralston was using business cards on which appeared his company name and the statement that he was “licensed, bonded and insured.” In point of fact, he was neither licensed nor bonded. The use by Defendant of these business cards is found to constitute a form of advertising.

5. In addition to business cards, Defendant also regularly operated a pick-up truck in his business activities, which included a significant amount of gardening and yard maintenance work for which no contracting license is required. The truck so utilized was observed to have contained printing or signage on a door panel that set forth Mr. Ralston’s company name together with a printed statement that he and/or the company was licensed, bonded and insured. The latter statement was not true. By way of a matter in mitigation, credible testimony tended to indicate that, while the license application was pending, Defendant affixed a piece of material in front of the printing on the truck door’s surface so as to add the letters “UN” immediately before the word “licensed.”

6. The above-described civil citation with proposed monetary penalties, coupled with a Cease and Desist Order, was served personally upon Mr. Ralston on the issued date of December 30, 1998. The documents included a written provision that the “Defendant (Mr. Ralston) will secure proper contracting licenses prior to 2-15-98.” The year in the deadline date was admittedly erroneous, it being understood by the Defendant and the Registrar’s Investigator that a 45-day time period was believed to be adequate for enabling the successful completion or compliance with of all application, testing and bonding requirements, thereby intending the inserted date to be in 1999. It was similarly understood by these individuals that, although no firm commitments were being made, the imposed civil penalties would be either wholly eliminated or at least substantially reduced if a contractor’s license was obtained by the stated deadline date.

7. Notice is taken of the Registrar’s license records which reveal that by February 9, 1999, Mr. Ralston had completed all requirements for licensure, which included his prior arrangements for the taking and passing of the necessary examination given in Phoenix, Arizona. His completed application was delivered by Defendant to the Registrar’s Show Low offices on February 12, 1999, three days before the previously given deadline date.

8. Following a short delay occasioned by the necessity to cause a correction to the bond instrument so as to have it conform to the exact classification of license to be issued, which was promptly complied with by Defendant, the Registrar issued the applied-for license. The actual date of issuance was March 4, 1999, only seventeen days after the stated deadline date set forth in the citation. No extensions of time were requested or granted. Similarly, No requirement or condition for Defendant to pay or tender the amount of the civil penalty was imposed with respect to the granting of the license application.

9. After the date on which the license application was formally filed but prior to the date of issuance, Defendant was shown to have been distributing reprinted business cards that once again described his business as being licensed, bonded and insured, which information is found to have been untruthful and misleading at that point in time.

10. The $500.00 civil penalty that was imposed for each charged violation by Defendant as part of the within citation is at the lower end of the spectrum of allowable monetary penalties. The statutory range for each day that a violation exists or continues is fixed administratively in accordance with A.R.S. §32-1166(A) from a minimum amount of $200.00[1] to a maximum amount of $2,500.00. Another separate provision of the statute, A.R.S. §32-1166.07, grants express authority to the Registrar, in his discretion, to waive or forgive all or part of the imposed penalty if the unlicensed offender applies for and is issued a proper license. No statutory time parameters are set forth for the completion of the application and issuance process.

11. The testimony established that Mr. Ralston was, at all times, extremely cooperative during all interviews and in correspondence with the Registrar’s Investigator. In further mitigation, he caused his company to apply for a new specialty contractor’s license which was issued by the Registrar on March 4, 1999, a date that was exactly nine weeks, but only 42 business days, after his being formally cited for the instant contracting and advertising improprieties, and such license issuance was four months prior to this hearing.

CONCLUSIONS OF LAW

1. The testimonial and documentary evidence of record adequately established that Defendant had violated the provisions contained both in A.R.S.§32-1151 prohibiting unlicensed contracting activities and in A.R.S.§32-1165 restricting advertising without a license.

2. The Registrar is empowered pursuant to A.R.S. §32-1166(A) to impose civil penalties against individuals or entities proven to be in violation of the statutory prohibitions against unlicensed contracting and/or advertising in amounts ranging from $200.00 to $2,500.00 for each violation and for each day such violation continues.

3. The quantum of penalties assessed in this case against Defendant were shown after an evidentiary hearing not to be fully appropriate hereunder. The favorable exercise of discretion by the Registrar in recognition of all the facts and circumstances of this matter, some of which are mitigating while other may be somewhat aggravating, should prompt the elimination of some portion, but not all, of the previously assessed civil penalties. Stated alternatively, the failure to achieve licensure prior to a stated deadline date, when such time limits are not mandated by statute or rule and were only slightly exceeded in this case, should not result in a total forfeiture of the potential benefit of avoiding all or part of a civil penalty amount.

4. A full consideration and evaluation of all credible evidence of record is deemed to sufficiently support a modification of the previously imposed penalties so as to reduce the civil penalty amount for unlicensed contracting from $500.00 to $250.00, a reduction of one-half, and also to reduce the civil penalty for unlicensed or misleading advertising from $500.00 to $400.00, a sum which is double the statutory minimum.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that the Registrar of Contractors enter an Order confirming the violations by Robert Fred Ralston, doing business as Ralston Landscaping, of the unlicensed contracting and advertising provisions charged in the citation as having been violated, but that the prior assessment of civil penalties totaling $1,000.00 be reduced in part so as to impose a penalty in the aggregate amount of $650.00, consisting of $250.00 for the unlicensed contracting activity plus $400.00 for the improper advertising violation.

Dated: July 14, 1999. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert. I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

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

ATTN: Joyce Armijo ----------------------- [1] The minimum fine after a successful criminal prosecution for unlicensed contracting, a class 1 misdemeanor, is set forth in A.R.S. §32- 1164(B) to be not less than $500.00 for a first offense and not less than $750.00 for a second or subsequent offense. These minimum fine amounts are inapplicable when seeking to administratively impose civil penalties pursuant to the authority contained in A.R.S. §32-1166(A).

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