Bozrah Builders Inc. v. Ariz. Registrar Contractors
| Decision Date | 30 July 2015 |
| Docket Number | No. 1 CA-CV 13-0442,1 CA-CV 13-0442 |
| Parties | BOZRAH BUILDERS INCORPORATED, an Arizona corporation, Plaintiff/Appellant, v. ARIZONA REGISTRAR OF CONTRACTORS, an Arizona Agency; TAMARA PETERSON, an unmarried woman, Respondents/Appellees. |
| Court | Arizona Court of Appeals |
NOTICE: NOT FOR PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Yuma County
The Honorable Lawrence C. Kenworthy, Judge
VACATED AND REMANDED WITH INSTRUCTIONS
S. Alan Cook, P.C., Phoenix
By S. Alan Cook
Arizona Attorney General's Office, Phoenix
By Michael Raine
Chernoff Law Firm, P.C., Scottsdale
By Patricia A. Premeau
Judge John C. Gemmill delivered the decision of the Court, in which Presiding Judge Patricia K. Norris and Judge Lawrence F. Winthrop joined.
¶1 In an administrative proceeding, the Arizona Registrar of Contractors ("AROC") revoked the contractor's license of Bozrah Builders Incorporated ("Bozrah"). Bozrah appealed to superior court, seeking judicial review of the administrative decision. In superior court, AROC filed a motion to dismiss, in which Tamara Peterson joined. The superior court granted the motion and Bozrah now appeals to this court. We conclude that Bozrah has not waived its due process and lack of notice arguments, and we remand for further proceedings.
¶2 On an appeal from a motion to dismiss, we accept the well-pled facts in the complaint as true. Fidelity Sec. Life Ins. Co. v. Ariz. Dept. of Ins., 191 Ariz. 222, 224, ¶ 4 (1998). We construe the reasonable inferences from the well-pled facts in the light most favorable to the non-moving party. See Coleman v. City of Mesa, 230 Ariz. 352, 356, ¶ 9 (2012). We also consider the entire record on review, which consists of all evidence properly received from the agency and before the superior court. See Schmitz v. Ariz. Bd. of Dental Exam'rs, 141 Ariz. 37, 40 (App. 1984); Ariz. Rev. Stat. ("A.R.S.") § 12-904(B) (); see also A.R.S. § 12-909; ARPJRAD 5(a) (). We review de novo questions of law decided by the superior court. Aldabbagh v. Ariz. Dep't of Liquor Licenses & Control, 162 Ariz. 415, 417-18 (App. 1989).
¶3 Pktimus Maximus L.L.C. ("Pktimus") and Tamara Peterson entered into an agreement to acquire, renovate, and sell a single family residence located on Gardenia Street in Somerton, Arizona ("Gardenia home"). Jimmy Riley was the signing member for Pktimus in the agreement and he is also the sole shareholder of Bozrah.
¶4 Peterson filed a complaint with AROC against Bozrah - also listing Riley - regarding the Gardenia home. AROC issued a letter dated April 7, 2011, notifying Bozrah about the complaint. On April 22, 2011, Riley was present for AROC's jobsite inspection at the Gardenia home. At the inspection, Riley informed the AROC inspector that Bozrah Builders did not have a contract with Peterson and that the contract was between Pktimus and Peterson. The inspector asked Riley whether his "construction company did any work on this property" to which Riley reportedly responded that "his construction company was there to supervise the job." The inspector informed both parties that there was a "contract dispute and possible abandonment on beha[lf] of the respondent" and that any party could request a citation after ten days.
¶5 On May 2, 2011, Peterson requested a formal citation. The next day AROC issued a letter to Bozrah stating that a formal citation was requested and that Bozrah had a final opportunity to resolve the complaint before it would be sent to the AROC legal department for issuance of a formal citation and complaint.
¶6 A formal citation and complaint was issued on June 28, 2011, directing Bozrah to file a written answer in not more than 15 days. The citation and complaint also notified Bozrah that "failure to answer within 15 days shall be deemed an admission by you of the charges made by the complainant" and that AROC could "revoke or suspend" the contractor license "without any further proceedings."
¶7 The citation and complaint was sent by certified mail to Bozrah at the address listed on file with AROC. It appears the letter went "unclaimed" after three attempted deliveries. Riley, on behalf of Bozrah, claims the company was "in the office on all three of these days [and that] there was never an attempt to deliver any certified mail nor was there ever any notice of any kind left in Bozrah's USPS mailbox."
¶8 On August 31, 2011, AROC issued a decision and order ("Order") revoking Bozrah's contractor license. The Order found that the "Citation and Complaint herein were served on Respondent by certified mail, with postage prepaid, directed to the last address of record for Respondent [Bozrah] as shown in the license files of the Registrar, in accordance with A.R.S. § 32-1155." The Order also stated that Bozrah had not filed a written answer to the citation and complaint. In accordance withA.R.S. § 32-1155(B),1 AROC considered Bozrah's failure to answer as an admission to the charges contained in the citation and complaint. The Order by AROC also found that Bozrah had violated A.R.S. § 32-1154. Finally, the Order stated that the revocation of Bozrah's license would become final on October 10, 2011, and that Bozrah could file a request for a rehearing on or before October 5, 2011. Attached to the Order was a notice explaining that a party could request a rehearing on several grounds, including "[i]rregularity in the administrative proceedings . . . whereby the moving party was deprived of a fair hearing" or that "the decision is not justified by the evidence or is contrary to law."
¶9 On October 4, 2011, Bozrah, through Riley, filed a request for rehearing. Bozrah argued that "the decision is not justified by the evidence or is contrary to law." Bozrah denied it was the contractor of record on the Gardenia home project and therefore it was "impossible for Bozrah Builders Incorporated to be guilty of any of the allegations made in the Citation and Complaint." In the last paragraph, Bozrah stated it was having difficulty receiving mail in its complex and requested AROC to make contact by email, telephone, or fax.
¶10 AROC denied the request for rehearing on December 18, 2012, explaining that "there is no sufficient showing of any compelling legal or factual basis for the granting of any rehearing and for the further reason that the findings, conclusions and recommendations contained in the Registrar's August 31, 2011 Default Decision and Order are fully supported by the record."
¶11 In January 2013, Bozrah filed in superior court a "motion for stay; appeal of registrar of contractors denial of request for rehearing; and request for a hearing with the superior court," seeking judicial relief from AROC's administrative action. AROC filed a motion to dismiss and Peterson joined in the motion. Bozrah opposed the motion, arguing that it had been deprived of due process because it had not received the AROC citation and complaint and had not had the opportunity to defend against the allegations. After oral argument on the motion, the superior court decided that Bozrah had waived its due process and constitutional arguments by not asserting them before the administrative agency. The court also concluded that the efforts made by AROC to serve Bozrah weresufficient under A.R.S. § 32-1155(A). The court therefore granted the motion to dismiss.
¶12 Bozrah argues that AROC's revocation of its contractor license violated its due process rights because it did not receive the citation and complaint and did not have notice of the formal administrative proceeding against its license.2 Before addressing the merits of these arguments, we must first consider AROC's argument that Bozrah waived appellate review of these issues by not asserting them in its request for rehearing before the administrative agency.
¶13 We initially note that "[a] valid waiver of constitutional rights must be voluntary, knowing, and intelligent." Webb v. State ex rel. Ariz. Bd. of Med. Exam'rs, 202 Ariz. 555, 558, ¶ 10 (App. 2002). Due process is a right secured under the Arizona and federal constitutions, and the "touchstone of due process under both . . . constitutions is fundamental fairness." Ariz. Const. art. 2, § 4; U.S. Const. amend. V; State v. Melendez, 172 Ariz. 68, 71 (1992). The key components of due process are notice and an opportunity to be heard. See Huck v. Haralambie, 122 Ariz. 63, 65 (1979).
¶14 Although Bozrah did not specifically use the words "due process" or "notice" in its rehearing request, its statements cannot fairly be construed as a voluntary relinquishment of the right to notice. In the request Bozrah said: These statements, coupled with the return of the unclaimed certified letter to AROC, should have alerted the agency to a notice issue. Additionally, the fact that Bozrah, through Riley, had previously participated by attending the inspection, may support aninference the Bozrah was not ignoring AROC. These facts support the conclusion that Bozrah did not voluntarily and knowingly waive the right to defend its license.
¶15 AROC contends that under DeGroot v. Arizona Racing Commission, 141 Ariz. 331, 340 (App. 1984), Bozrah is barred from raising the due process issue because Bozrah does not raise a valid jurisdictional argument. In DeGroot, this court explained that, generally, "failure to raise...
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