IN THE OFFICE OF ADMINISTRATIVE HEARINGS

IN THE OFFICE OF ADMINISTRATIVE HEARINGS IN THE MATTER OF THE RENEWAL APPLICATION OF: Arizona Valley Roofing Inc. License No. K-.01-D. No. 01A-1-ROC ADMINISTRATIVE LAW JUDGE DECISION 1 1 1 1 1 0 1 0 HEARING: November, 01 APPEARANCES: Arizona Valley Roofing, Inc. was represented by attorney Greg Eagleburger, Esq., accompanied by its President and Qualifying Party Scott Lund; the State of Arizona, Registrar of Contractors, was represented by Assistant Attorney General Michael Raine and ROC Chief of Licensing Lawrence Matthews. WITNESSES: For Appellant: For the ROC: Scott Lund Lawrence Matthews ADMINISTRATIVE LAW JUDGE: Eric A. Bryant Arizona Valley Roofing, Inc. ( Appellant ) appeals the Arizona Registrar of Contractors ( ROC or Registrar ) denial of a renewal application for License No. K-.01-D. The ROC based the denial upon finding that Appellant has committed three statutory violations, specified below, that are grounds for denial of renewal. Appellant denies that there are grounds to deny renewal of the license. This tribunal entered into the record Exhibits 1 through submitted by the ROC and Exhibits A through F submitted by Appellant. The parties presented evidence and testimony from the witnesses listed above at the hearing. Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommend Order finding that grounds exist to deny renewal of the license. Procedural Background In February 01, Appellant timely filed for renewal of its Class K- dual specialty contracting license with the ROC. The license had been initially issued in Office of Administrative Hearings 0 West Washington, Suite 1 Phoenix, Arizona 00 (0) -

1 1 1 1 1 0 1 February 0. On August, 01, the ROC issued a letter denying the renewal application for three listed reasons: 1. Scott Duane Lund misrepresented a material fact in his application to obtain a contractor s license in violation of A.R.S. -.A. and -.D.. Scott Duane Lund is named on a license in another state which [sic] is revoked in contravention of A.R.S. -1 and -.D.. Subsequent discovery of facts which [sic] would have been grounds to deny the issuance of a license pursuant to A.R.S. -.A.0. After discussion at the start of the hearing on November, it was clarified that the grounds for denial of renewal of Appellant s license are: (1) misrepresentation of a material fact on Appellant s initial license application submitted in December 0 in two instances (a) failure to disclose discipline of a California license and (b) failure to disclose the existence of and discipline of a license in Colorado; () Scott Duane Lund (hereinafter Lund ) is also named on a Colorado license that has been revoked; and () subsequent discovery of the facts alleged in (1) that, had they been know at the time, would have been grounds to deny the initial application for licensure. FINDINGS OF FACT 1. The evidence submitted at hearing shows the following facts:. Lund is the sole owner of Southwest Coast Roofing, an entity that received a roofing contractor license in the State of California in. 1 inactive. That license is currently Exhibit B is a printed copy of website information from the California Contractors State License Board, the state licensing agency, regarding the license of Southwest Coast Roofing. That information shows a history of two complaints against Southwest Coast Roofing, one from and one from 0. The information in Exhibit B does not show any violations in connection with the complaint. With regard to the 0 complaint, the information shows four violations of the California Business & Professions Code as of May, 0. 0 1 Exhibit B. Id.

1 1 1 1 1 0 1. The Exhibit B website information shows that on June, 0, for a period of one year, Southwest Coast Roofing posted a disciplinary bond in the amount of $,000.00. While not explicitly stated, there is a strong inference that the disciplinary bond arose out of the complaint that found four violations in May 0. That inference is strong enough to meet the preponderance of evidence standard. Thus, the evidence shows that Lund is associated with a California contracting license that was disciplined in May/June of 0.. In 001, Lund, operating as Rocky Mountain Roofing, obtained a contracting license from the Pikes Peak Regional Building Department ( PPRBD ), which is a governing agency that regulates contracting in a region of the State of Colorado. The history of that license shows that Lund received several letters of reprimand over several years and then, in October 0, the license was revoked due to work history with [PPRBD]. Notice of the revocation was mailed to Lund by certified mail on October, 0. There is no evidence showing when it was received by Lund.. Shortly after the revocation, Lund filed a court action in Colorado against PPRBD to appeal the revocation. That matter was dismissed from the court with prejudice on September, 0.. A letter from PPRBD s counsel states that none of the actions taken by PPRBD were due to workmanship, but were in regard to the timeliness of pulling the necessary permits for roofing work within PPRBD s jurisdiction. Another letter from PPRBD states that Lund may apply for another license from PPRBD.. On December, 0, Appellant filled out and signed an initial application for licensure with the ROC. In response to question 1a on the application, which asks Has any person [associated with the entity seeking licensure] been on a contractor s license issued by Arizona or any other state?, Lund answered yes and disclosed the 0 Exhibit E. Id. Id. Exhibit C. Exhibit F. Exhibit D.

1 1 1 1 1 0 1 California license for Southwest Coast Roofing. He did not disclose the PPRBD license.. In response to question 1b, which asks Has any person listed in question 1a ever been on a contractor s license that have [sic] been disciplined?, Lund answered no. CONCLUSIONS OF LAW 1. The Registrar may refuse to renew a license if a contractor has violated A.R.S. -(A), which sets grounds for suspending, revoking, or otherwise disciplining a contractor s license. Because a refusal to renew a license is essentially disciplinary in nature, the ROC bears the burden of proof when denying renewal. Further, the standard of proof at hearing is by preponderance of the evidence. Therefore, the ROC bears the burden of showing, by a preponderance of the evidence, that Appellant has violated one or more of the provisions of A.R.S. -(A) and, thus, that the ROC has grounds to refuse renewal. 1 The ROC has met that burden.. First, the ROC alleges that Appellant misrepresented material facts on Appellant s initial license application completed in December 0 in two instances (a) failure to disclose discipline of the California license and (b) failure to disclose the existence and discipline of the PPRBD Colorado license. The evidence shows that Southwest Coast Roofing was disciplined by the California licensing board in May/June 0 and that Lund did not disclose it on the December 0 application. Thus, Lund misrepresented a material fact in obtaining a license. A.R.S. -(A)() prohibits [m]isrepresentation of a material fact by the applicant in obtaining a license. Lund violated that provision.. Furthermore, Lund failed to disclose both the existence of the Colorado license and the fact that it had been revoked in October 0. It is possible that Lund was unaware of the revocation in December of 0, but because notification was sent 0 A.R.S. -(A). Grounds for denial of renewal are also stated in A.R.S. -(D), but they are essentially the same grounds for renewal. Utah Construction Company v. Berg et al, Ariz., 0 P.d (). Smith v. Arizona Dept. of Transportation, 1 Ariz. 0, 0 P.d (App. ). 1 Culpepper v. State, Ariz. 1,, 0 P.d 0, 1 (Ct. App. ).

1 1 1 1 1 0 1 to him by certified mail in October 0, the burden was on him to show he had no knowledge of the revocation when he completed the application in December 0. He did not prove that. Additionally, Appellant argues that because the PPRBD license was not issued by the State of Colorado, it was not within the question Has any person [associated with the entity seeking licensure] been on a contractor s license issued by Arizona or any other state? The Administrative Law Judge finds that argument to be meritless. No reasonable person could read that question and think that the PPRBD license was not required to be disclosed.. The Administrative Law Judge concludes that Lund committed multiple misrepresentations of material facts on the December 0 application.. Next, the ROC alleges that Lund was named on a license that was revoked and that this is a violation of A.R.S. -(A)(1). The evidence supports the ROC. Lund was named on the PPRBD license and it was revoked in October 0. The Colorado court action did not reverse that revocation; the revocation stands after a dismissal of the court action challenging it. Therefore, the ROC has grounds to deny renewal for the second reason in its denial letter.. Finally, the ROC alleges that, had it known about the California and Colorado licenses and the discipline they received, it would not have issued the license initially. The Administrative Law Judge finds that the ROC has subsequently discovered facts that, if known at the time of initial licensure, would have been grounds to deny that licensure, as stated in A.R.S. -(A)(1). RECOMMENDED ORDER IT IS RECOMMENDED that the Registrar of Contractors deny renewal of License No. K-.01-D. 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 days from the date of that certification. 0 Done this day, December, 01.

/s/ Eric A. Bryant Administrative Law Judge Transmitted electronically to: William A. Mundell, Director Registrar of Contractors 1 1 1 1 1 0 1 0