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Representation in ROC Disciplinary Proceedings
By Daniel G. Martin, Administrative Law Judge
Vol. 35 April 2005
One of the first questions that confronts a contractor facing a Registrar of Contractors (“ROC”) disciplinary proceeding is the question of representation. Contractors often choose to retain legal counsel in such proceedings, but many contractors choose to represent themselves. The following article provides a brief overview of who may represent a contractor in a disciplinary proceeding, and under what circumstances.
When a complaint is filed with the ROC against a licensed contractor, the ROC initiates an investigation. If, after completion of its investigation, the ROC believes that grounds exist that may support the imposition of discipline against the contractor, the ROC will issue a Citation and Complaint against the contractor’s license. The ROC may also issue a Citation and Complaint at the request of the complaining party. Generally, the Citation and Complaint will allege one or more violations of Arizona Revised Statutes ("A.R.S.") § 32-1154(A), which sets forth the grounds upon which a contractor’s license may be suspended or revoked.
If the ROC issues a Citation and Complaint against a contractor’s license, the contractor is required to file a written answer within ten (10) days (an additional five (5) days are permitted if the answer is sent by mail). If the contractor fails to answer within the required time period, the ROC deems such failure an admission of the charges set forth in the complaint, and may take disciplinary action against the contractor’s license without any further proceedings. Typically, however, a contractor against whom a Citation and Complaint has been issued files a written answer, and the case is thereafter referred for hearing to the Office of Administrative Hearings (“OAH”).
ROC hearings are conducted before OAH Administrative Law Judges. ROC hearings are adversarial, and are conducted in a manner similar to judicial proceedings. Attendance is required, and all parties must be prepared to present evidence in support of their position.
If after hearing a contractor is found to have violated one or more provisions of A.R.S. § 32-1154(A) (or other statutory provisions, as applicable), the ROC may impose one or more disciplinary penalties against the contractor, up to and including revocation of the contractor’s license. Therefore, the manner in which a contractor chooses to represent himself, herself or itself at hearing can have significant ramifications, and is not a decision to be lightly or hastily made.
Although the general rule is that only an attorney may represent a contractor in an ROC disciplinary proceeding before the OAH, there are a number of exceptions to this rule. The scope and extent of these exceptions depend on whether the licensee is an individual (sole proprietor) or a legal entity (corporation, limited liability company, general partnership, limited partnership or limited liability partnership); therefore, this article addresses each different type in turn.
If the licensee is an individual person (i.e., a sole proprietor or sole owner), then the only person who can represent the licensee at an ROC disciplinary hearing, other than an attorney, is the licensee himself. No other person may represent the licensee, including the licensee’s qualifying party or an employee of the licensee. The only time that a qualifying party will be permitted to represent a sole proprietor is when the qualifying party and the sole proprietor are the same person.
If the licensee is a corporation, it may be represented at an ROC disciplinary hearing by a full-time officer or an employee (including the qualifying party), provided that: (1) the corporation has specifically authorized such person to represent it in the particular matter; (2) such representation is not the person’s primary duty to the corporation, but is secondary or incidental to other duties relating to the management or operation of the corporation; and (3) the person is not receiving separate or additional compensation from the corporation (other than reimbursement for costs) for such representation.
A director of a corporation may not represent the corporation solely by virtue of his or her position as a director. The only time that a director may represent a corporation is when such director is also a full-time officer or an employee of the corporation.
If the licensee is a limited liability company (LLC), it may be represented at an ROC disciplinary hearing by a member, manager, full-time officer or employee (including the qualifying party), subject to the rule described above for corporations, i.e., the member, manager, full-time officer or employee must be specifically authorized, the representation must be a secondary or incidental duty, and the member, manager, full-time officer or employee must not receive additional compensation from the limited liability company other than reimbursement for costs.
The terms “member” and “manager”, when used in reference to limited liability companies, are specialized terms defined by Arizona’s Limited Liability Company Act (the “Act”). A “member” is a person who has been admitted as a member in a limited liability company pursuant to the Act. A “manager” is a person in whom authority for management of the limited liability company is specifically vested by the limited liability company’s articles of organization.
If the licensee is a general partnership (including a limited liability general partnership), it may be represented at an ROC disciplinary hearing by a partner or an employee (including the qualifying party), subject to the rule described above for corporations, i.e., the partner or employee must be specifically authorized, the representation must be a secondary or incidental duty, and the partner or employee must not receive additional compensation from the partnership other than reimbursement for costs.
If the licensee is a limited partnership (including a limited liability limited partnership), it may be represented at an ROC disciplinary hearing by a general partner or an employee (including the qualifying party), subject to the rule described above for corporations, i.e., the general partner or employee must be specifically authorized, the representation must be a secondary or incidental duty, and the general partner or employee must not receive additional compensation from the partnership other than reimbursement for costs.
The OAH does not ordinarily require representatives of legal entities to produce written proof of their authority to represent the entity at hearing. However, a person claiming to be so authorized may be required to swear to such authorization under oath.
One common question that arises in ROC disciplinary proceedings is that of the non-lawyer who asks how he or she can be expected to comply with the statutes, rules and procedures that govern hearings before the OAH. Although the OAH strives to make the hearing process as easy and straightforward as possible, certain rules do apply, and all participants in the hearing are expected to be familiar with and to follow those rules.
Parties to an ROC disciplinary proceeding should prepare themselves by thoroughly reviewing the ROC Citation and Complaint and other correspondence or documentation issued by the ROC, by gathering evidence that supports their claim or defense, by arranging for the attendance of witnesses, either voluntarily or by subpoena, and by familiarizing themselves with the OAH’s statutes and procedural rules by visiting the OAH personally or logging on to the OAH’s website (www.azoah.com). Parties may also view streaming videos from the website designed to assist parties in preparing for hearing, or obtain a copy of the CD, “Preparing for Hearing,” by contacting the OAH. Because ROC proceedings before the OAH are open to the public, parties may also attend and view hearings in separate cases in front of their assigned Administrative Law Judge in order to see firsthand how the hearing process works.
As can be seen from the above discussion, the question of who may represent a contractor at an ROC disciplinary proceeding depends on a number of factors. Contractors who are facing a disciplinary proceeding should give careful consideration to who they choose to represent them, and pay close attention to the legal requirements for representation to ensure that the person they choose to represent them at hearing will be able to do so.