ALJDEC decisions subject to certification as final

SSC-2017A-3800-ROC · Registrar of Contractors · 2017-10-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Registrar of Contractors,

COMPLAINANT,

-v-

Restore 1 Inc.

License No. KB-1.282399-D,

RESPONDENT.

No. SSC-2017A-3800-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 26, 2017, at 8:30 a.m.

APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Thomas C. Raine, Esq., Assistant Attorney General; Restore 1 Inc. (“Respondent”) failed to appear.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

On or about January 10, 2013, the Registrar issued License No. KB-1.282399-D for dual building contracting to Respondent..

On or about July 28, 2017, the Registrar issued an Order of Summary Suspension & Case Consolidation against Respondent after the Registrar received ten complaints against Respondent and its owner and officer, Christopher Ray Derr, submitted an Ownership/Personnel Change form to be removed from the license and its qualifying party, Christopher M. Colbourn. filed a Notice of Qualifying Party Disassociation. Under the circumstances, the Registrar found that the public health, safety or welfare imperatively required emergency action under A.R.S. § 41-1092.11(B).

The Registrar’s July 28, 2017 order set an expedited evidentiary hearing on August 2, 2018, before the Office of Administrative Hearings, an independent state agency. The Registrar mailed the July 28, 2017 Order of Summary Suspension and notice of hearing to Respondent at its address of record.

On July 28, 2017, the Registrar issued a Supplemental Notice that set forth additional facts that supported the summary suspension.

On or about July 31, 2017, Jack Hanks on behalf of Respondent filed a motion to continue the hearing because he would not be available to attend a hearing until after the end of August 2017. The Registrar did not oppose the motion to continue.

On August 1, 2017, the Administrative Law Judge (“ALJ”) issued an order granting Mr. Hanks’ request to continue and setting a continued hearing on September 26, 2017, at 8:30 a.m. OAH staff sent a copy of the order to Respondent at its address of record.

On August 29, 2017, the Registrar filed an amended order that removed one of the cases from the record because the consumer complaint upon which the case was based had proceeded to hearing and an ALJ had issued a recommendation based on the evidence presented at the hearing.

An evidentiary hearing was held on the matters set forth in Order of Summary Suspension and Supplemental Notice on September 26, 2017. The Registrar was represented by its attorney, who submitted 25 exhibits and presented the testimony of Joseph Citelli, one of the staff attorneys in the Registrar’s Legal Department.

Respondent did not request to appear telephonically at the continued hearing and did not request that the hearing be continued a second time. Although the start of the duly noticed continued hearing was delayed eighteen minutes to allow Respondent additional travel time, Respondent did not appear, through an authorized officer, employee, or attorney, and did not contact OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend its license.

Hearing Evidence

Mr. Citelli testified that he drafted the July 28, 2017 order summarily suspending Respondent’s contractor’s license. When the Registrar received the notice of Respondent’s qualifying party disassociation, it started to dig more into Respondent’s license history.

Mr. Citelli testified that Christopher Ray Derr was removed as Respondent’s qualifying party in 2015 and, previously, was removed from the Arizona Corporation Commission’s (“the ACC’s”) records for Respondent corporation.

Mr. Citelli testified that Mr. Hanks was trying to get on Respondent’s license. Mr. Hanks had been added to the ACC’s records on August 25, 2015. Mr. Hanks filed an Ownership/Personnel Change to be added to Respondent’s license with the Registrar on or about July 17, 2017.

On or about July 27, 2017, the Registrar issued an order denying the requested personnel change because Mr. Hanks had been named as an officer and 75% owner on Squaw Peak Restoration Services, Inc.’s (“Squaw Peak’s”) License Nos. 109780 and 109944. Twenty-two unresolved complaints were pending against Squaw Peak’s licenses and $105,000.00 in payouts had been made from the Registrar’s Residential Contractors’ Recovery Fund to compensate homeowners who had been injured by Squaw Peak’s violations of A.R.S. § 32-1154(A) that had not been reimbursed.

Mr. Citelli testified that because Mr. Derr and Mr. Colbourn had been removed from Respondent’s license and Mr. Hanks could not be added to Respondent’s license, there was no one on the license who was responsible for Respondent’s contracting activities.

The Respondent submitted evidence of three complaints that were currently pending against Respondent’s license, including two complaints for abandonment under A.R.S. § 32-1154(A)(1) and one complaint for nonpayment under A.R.S. § 32-1154(A)(10). The Registrar submitted evidence of a second complaint for non-payment that had proceeded to hearing and resulted in a final order by the Registrar revoking Respondent’s license because it had not paid a subcontractor.

CONCLUSIONS OF LAW

The Notice of Hearing that the Registrar mailed to Respondent at its address of record and the order continuing the hearing at Mr. Hanks’ request that OAH mailed to Respondent at its address of record were reasonable. Respondent is deemed to have received notice of the continued hearing.

The Registrar bears the burden of proof to establish grounds for suspension or revocation of Respondent’s contractor’s license by a preponderance of the evidence.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

The Registrar established that Respondent currently has no one listed on its license who is responsible for its contracting operations. The Registrar also established that there are at least three unresolved complaints that are pending against Respondent’s license and that at least one complaint has been adjudicated and resulted in revocation of Respondent’s license. The Registrar thereby established under A.R.S. § 41-1092.11(B) that the public health, safety or welfare imperatively required that Respondent’s license be summarily suspended.

The facts that no one is responsible for Respondent’s contracting operations and that no one appeared at the duly noticed continued hearing to defend Respondent’s license shows that, at this time, Respondent cannot be regulated. Under the circumstances, revocation of the license is appropriate.

RECOMMENDED ORDER

In light of the foregoing, it is ordered affirming the July 28, 2017 order summarily suspending of Respondent’s Restore 1, Inc.’s License No. KB-1.282399-D.

It is further ordered that, on the effective date of the final order in this matter, Respondent’s License No. KB-1.282399-D shall be revoked.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification.

Done this day, October 4, 2017.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors