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8-1902-17514-2 |
STATE
OF
OFFICE
OF ADMINISTRATIVE HEARINGS
FOR THE DEPARTMENT OF LABOR AND INDUSTRY
|
In the Matter of the Residential Building
Contractor’s License of Daniel Ivan Petrie, doing business as Top Notch
Builders |
FINDINGS OF FACT, CONCLUSIONS, AND RECOMMENDATION |
The above-entitled matter came on for a
hearing before Administrative Law Judge Eric L. Lipman on October 23, 2006, at
9:30 a.m. at the Office of Administrative Hearings in
Michael J. Tostengard, Assistant Attorney
General,
NOTICE
This report is a recommendation, not a final
decision. The Commissioner of Labor and
Industry will make the final decision after a review of the record. The Commissioner may adopt, reject or modify
the Findings of Fact, Conclusions, and Recommended Decision. Under Minn. Stat. § 14.61, the final decision
of the Commissioner shall not be made until this Report has been made available
to the parties to the proceeding for at least ten days. An opportunity must be afforded to each party
adversely affected by this Report to file exceptions and present argument to
the Commissioner. Parties should contact
Nancy Leppink,
If the Commissioner fails to issue a final decision
within 90 days of the close of the record, this report will constitute the
final agency decision under Minn. Stat. § 14.62, subd. 2a. In order to comply with this statute, the
Commissioner must then return the record to the Administrative Law Judge within
10 working days to allow the Judge to determine the discipline to be
imposed. The record closes upon the
filing of exceptions to the report and the presentation of argument to the
Commissioner, or upon the expiration of the deadline for doing so. The Commissioner must notify the parties and
the Administrative Law Judge of the date on which the record closes.
Under Minn. Stat. § 14.62, subd. 1, the
agency is required to serve its final decision upon each party and the
Administrative Law Judge by first class mail or as otherwise provided by law.
1. Was Respondent’s April 4, 2006 application for a Residential Building
Contractor’s license materially incomplete, false or misleading such that it
constitutes a violation of Minn. Stat. § 326.91, subd. 1(1)?
2. Does the Respondent’s 2002 guilty plea to three counts of 3rd Degree Burglary show that he is untrustworthy, financially irresponsible, otherwise incompetent or unqualified to act under a residential building contractor license?
Based upon all of the proceedings
herein, the Administrative Law Judge makes the following:
1.
On June 13,
2002, in return for the Hubbard County Attorney’s Office agreement to dismiss
other pending charges, Respondent Daniel Ivan Petrie agreed to plead guilty to
three counts of burglary in the third degree.[1]
2.
On July 11,
2002, the Honorable John P. Smith of the District Court for
3.
Today, Mr.
Petrie is self-employed and is doing business as Top Notch Builders. He
has undertaken renovation, deck and siding work and wishes to become a licensed
residential building contractor.[3]
4.
Mr. Petrie has
passed the residential building contractor test and paid the required
application fee.[4]
5.
Through the
spring and summer of 2006, Respondent assembled and filed the various materials
that he needed in order to apply for a “Residential Building Contractor or
Remodeler License.” Notwithstanding his
efforts to submit a conforming application, Respondent completed and filed an
outdated version of the application form,[5] as
it had been developed by a predecessor agency, the Department of Commerce.[6]
6.
Applicants for a
Residential Building Contractor or Remodeler License are required to provide
background information as part of the application. The form inquires whether
the applicant or the applicant’s qualifying person has “[b]een charged,
indicted, pleaded to, or convicted of any criminal offense in any State or
Federal Court in the last 10 years,” instructs the applicant to include
“felonies, gross misdemeanors or misdemeanors” other than traffic violations,
and directs applicants responding “yes” to this question to attach “a written
statement, signed and dated by the applicant, explaining the circumstances of
each incident.”[7]
Respondent signified that he had been the subject of such a conviction when
answering this question – albeit in reply to an earlier version of the question,
with a slightly different wording, on the old form.[8]
7.
Respondent
submitted with his application materials a handwritten note on a lined piece of
paper that read “felony – 3rd degree burglary in 2001.”[9]
8.
Thomas Sendecky,
a senior investigator for the Department, reviewed the application submitted by
Respondent. As with all such
applications, Mr. Sendecky undertook a criminal background check on the
applicant.[10]
9.
The Department evaluated
the criminal complaint and accompanying materials underlying Mr. Petrie’s 2002
conviction to determine if the allegations would affect the application for a
residential contractor’s license. The
Department considered the three incidents of misconduct by Mr. Petrie, found
that the underlying conduct directly related to the occupation of residential
contractor, and determined that the guilty plea to felony burglary charges brought
into question the Respondent’s fitness to be a residential contractor.[11] The Department ultimately concluded that it
would not be in the public’s interest to issue a license to Mr. Petrie.[12]
10.
On September 25,
2006, the Department served by first class mail a combined Order Denying
License, Statement of Charges and Notice of Hearing upon Mr. Petrie, thereby
initiating this contested case proceeding.[13]
Based upon the foregoing Findings of Fact, the Administrative Law Judge makes the following:
1.
The
Administrative Law Judge and the Commissioner of Labor and Industry are
authorized to consider the charges against Respondent under Minn. Stat.
§§ 14.50, 45.027, 326.91 and 364.06.
2.
Respondent
received due, proper and timely notice of the charges against him, and of the
time and place of the hearing. This matter is, therefore, properly before
the Commissioner and the Administrative Law Judge.
3.
The Department
has complied with all relevant procedural legal requirements.[14]
4.
The burden of
proof in this proceeding is on the Respondent to show by a preponderance of the
evidence that he should be granted a residential contractor license.
5.
The Commissioner
of Labor and Industry may deny a license application if the Commissioner finds
that it is in the public interest to do so and the applicant either has
“violated any law, rule, or order related to the duties and responsibilities
entrusted to the commissioner,”[15] or the applicant has “engaged in an act
or practice, whether or not the act or practice directly involves the business
for which the person is licensed or authorized, which demonstrates that the
applicant or licensee is untrustworthy, financially irresponsible, or otherwise
incompetent or unqualified to act under the authority or license granted by the
Commissioner.”[16] In addition, the Commissioner may
deny an application for a residential contractor’s license if the applicant
“has been shown to be incompetent, untrustworthy, or financially
irresponsible.”[17]
6.
Under Minn.
Stat. § 364.03, subd. 1,
notwithstanding any other statutory provision to the contrary, “no person shall
be . . . disqualified from pursuing, practicing, or engaging in any occupation
for which a license is required solely or in part because of a prior conviction
of a crime or crimes, unless the crime or crimes for which convicted directly
relate to the . . . occupation for which the license is sought.”[18]
7.
In determining
whether a conviction directly relates to the occupation for which the license
is sought, Minn. Stat. § 364.03, subd. 2, specifies that the
licensing authority must consider the following factors:
(a) the
nature and seriousness of the crime or crimes for which the individual was
convicted;
(b) the relationship of the crime or crimes to the purposes of regulating . . . the occupation for which the license is sought;
(c) the
relationship of the crime or crimes to the ability, capacity, and fitness
required to perform the duties and discharge the responsibilities of the . . .
occupation.
8.
The crime of felony
burglary for which the Respondent has been convicted directly relates to
licensure as a residential building contractor. This conduct is grounds
for denial of a license under the relevant statutes in that it constitutes deceptive
and dishonest practices and further demonstrates that the Respondent is not
sufficiently trustworthy.
9.
The Respondent
has failed to demonstrate by a preponderance of the evidence that it is
appropriate, and in the public’s interest, to grant him a residential building
contractor license.
10.
These
Conclusions are reached for the reasons discussed in the Memorandum below,
which is hereby incorporated in these Conclusions.
Based upon the foregoing Conclusions, the
Administrative Law Judge makes the following:
IT IS HEREBY RECOMMENDED: that the
Commissioner of the Minnesota Department of Labor and Industry deny
Respondent’s application for a residential contractor’s license.
Dated: November 20, 2006
|
s/Eric L.
Lipman |
|
ERIC L. LIPMAN |
|
Administrative Law Judge |
Reported:
Tape Recorded (not transcribed); 1 tape
NOTICE
Pursuant to Minn. Stat. § 14.62, subd. 1, the Agency is required to serve its final decision upon each party and the Administrative Law Judge by first-class mail or as otherwise provided by law.
MEMORANDUM
In its Statement of Charges and Order for
Hearing, the Department asserts that Respondent is not entitled to a
residential contractor’s license because: (1) Mr. Petrie “provided an
incomplete and false application to the Department” and (2) “has demonstrated
untrustworthiness and a lack of qualification.”
Mr. Petrie does not dispute that he was
charged and convicted of felony burglary, but argues that the passage of time
since his guilty plea, his payment of restitution, and the fact that he has
remained law-abiding since the conviction, make it appropriate to now issue him
a residential contractor’s license. The Respondent also emphasizes that
he truthfully disclosed the conviction on his application and has taken full
responsibility for the mistakes he made.
Count I - Claim of Incomplete and False Application:
As to Count I of its Statement of
Charges, the Department asserts that because the Respondent did not submit
copies of court documents relating to his conviction, as is required by the
current version of the Department of Labor and Industry’s application form, the
application submitted by Mr. Petrie is “incomplete and false.”
The claim goes too far. While the Administrative Law Judge agrees
that the current application form requires such documentation, and the
Department is fully entitled to receive these items before it must pass upon a
request for licensure,[19] the
record does not provide a basis for concluding that Mr. Petrie’s submissions
were deliberately false or misleading.
It is significant that the application
form completed by Mr. Petrie did not call for the documents that are now
requested under the current application form;[20]
there is no evidence that Mr. Petrie deliberately used the earlier form so as
to avoid these disclosures; and Respondent, in his own hand-writing, called the
Department’s attention to his felony burglary convictions.[21] Likewise, important, the Department’s
investigator, Mr. Sendecky, testified persuasively that as a matter of routine
he undertakes criminal background checks on license applicants, such that the
lack of specific documentation from Mr. Petrie would not have resulted in the
conviction history eluding Sendecky or his team.[22]
If there were prejudice to the Department
from receipt of an application made on the old forms, which did not include a
demand for the documents that are now required, the appropriate course of
action would have been for the agency to “refuse” the application under Minn.
Stat. § 326.89, subd. 1. Under
that statute, the Commissioner is authorized to “refuse to issue a license if
the application is not complete or contains unsatisfactory information.”
The difference between “refusing” an unsatisfactory
application that “is not complete,” and “denying” an application that is
“incomplete and false,” may seem slight, but the distinction is important: The sanction for failing to meet the
completeness standard of section 329.89 is a polite refusal from government
officials to continue further review of the application. The sanction for failing to meet the
completeness standard of section 329.91 can be a hefty monetary penalty.[23]
Polite refusals to process the license
application should follow from inadvertent and unintentional omissions by
applicants – as is the case here. Outright
denials and civil penalties, based upon the claims made in the application,
should be reserved for those cases where there is evidence that the applicant
affirmatively acted to mislead the Department.[24] Maintaining this distinction is in the best,
long-term interest of would-be applicants and the Department. Count I of the Statement of Charges should be
denied.
Count II – Claim of Demonstrated Untrustworthiness
and Lack of Qualification:
The Commissioner’s authority to deny a
license based upon fraudulent or dishonest behavior is not limited to the
criminal conviction record. In its investigation of a license
application, the Department may look at the underlying facts that gave rise to
the conviction and determine if the actions taken by the Respondent meet the
statutory criteria for denial of the license. In this case, the
Respondent admitted to the burglaries of three business establishments. The facts are sufficient to support the
conclusion that the Respondent engaged in a practice that was deceptive,
dishonest, and demonstrated untrustworthiness.
The facts are likewise sufficient to
support the conclusion that the underlying conduct in which Mr. Petrie engaged
directly relates to the occupation of a residential contractor. As detailed
in the testimony of the Department’s investigator, Mr. Sendecky, licensed
residential building contractors have unfettered access to the homes of consumer
clients and many opportunities to misappropriate property.
With that said, Minn. Stat. § 364.03,
subd. 3, specifies that even if a person has been convicted of a crime
that directly relates to the occupation for which a license is sought, the
person shall not be disqualified if he or she can show competent evidence of
sufficient rehabilitation and present fitness to perform the duties of the
occupation. The Department argues that Chapter 364 is inapplicable here
because Minn. Stat. § 45.027, subd. 10, does not apply to an
applicant where the underlying conduct on which the conviction is based would
be grounds for denial of the license.
While it is true that more than four
years has elapsed since Mr. Petrie was convicted, and that he wishes to move in
a different and more productive direction, the Administrative Law Judge agrees with
the Department that Mr. Petrie’s earlier misconduct relates to his fitness
for a residential building contractor license.
The nature and seriousness of the crimes for which he was convicted, the
circumstances relating to those crimes, and the fact that he continues to be
under court supervision for his earlier misconduct,[25]
all provide reasonable support for denial of the license application.[26] Respondent has not provided sufficient
evidence of his present fitness to justify full and unrestricted licensure.
E.L.L.
[1] Compare,
Exhibit 3 at 9 (Exhibit to Rule 15 Petition) with
[2] See, Exhibit 4 at 2-3; accord, Testimony of D. Petrie.
[3] See, Exhibit A, B and D.
[4] See, Exhibit 1 at 1, 5 and 6.
[5] See, Exhibit 1 at 1; Testimony of D. Petrie; Testimony of T. Sendecky.
[6] See
also, State of Minnesota Department of Administration Reorganization Order
No. 193 (April 4, 2005) (“The responsibilities of the Department of
Commerce as set forth in Minnesota Statutes 2004, sections 326.83 through
326.992, and Chapter 327A in relation to Residential Contractors and Remodelers
are transferred to the Department of Labor and Industry").
[7] See, Residential Building Contractor or Remodeler License Application (2006) (Question Number 4) (http://www.doli.state.mn.us/pdf/rbc_buildcontr-remodapplic.pdf).
[8] See, Exhibit 1 at 2 (Residential Building Contractor or Remodeler License Application - Question Number 4) (“Have you ever been charged with, or convicted of, or been indicted for, or entered a plea to any criminal offense (felony, gross misdemeanor or misdemeanor) other than traffic violations, in any State or Federal Court in the last 10 years?”) (emphasis in original).
[9] Exhibit 1 at 4.
[10] Testimony of T. Sendecky.
[11]
[12]
[13] Order Denying License, Statement of Charges and Notice of Hearing.
[14] See,
[15] See,
[16] See,
[17] See,
[18] See also, Minn. Stat. § 364.07 (2004) (the provisions of Minn. Stat. §§ 364.01 to 364.10 “shall prevail over any other laws and rules which purport to govern the … denial … of a license … on the grounds of conviction of a crime or crimes. In deciding to … deny … a license … the … licensing authority may consider evidence of conviction of a crime or crimes but only in the same manner and to the same effect as provided for in sections 364.01 to 364.10”).
[19] See, Minn. Stat. § 326.89 (1) (2004) ("An applicant for a license under sections 326.83 to 326.98 must submit an application to the commissioner, under oath, on a form prescribed by the commissioner") (emphasis added).
[20] Compare, Exhibit 1 at 2, with Residential Building Contractor or Remodeler License Application (2006) (Question Number 4) (http://www.doli.state.mn.us/pdf/rbc_buildcontr-remodapplic.pdf).
[21] See, Exhibit 1 at 2 and 4.
[22] Testimony of T. Sendecky.
[23] Compare
[24] Compare
[25] Compare Minn. Stat. § 364.03 (3)(c) (2004) (among the minimum elements for a showing of “sufficient rehabilitation” under the statute is a discharge from probation).
[26] Following the introduction of letters of reference in support of Respondent’s trustworthiness and capabilities as a contractor (see, Exhibits A through D), the Department asserted an additional ground for relief – namely that Mr. Petrie was unlawfully working as a contractor in two or more “special skill” trades, and presumably, not entitled to a license under Minn. Stat. § 326.91, subd. 5 (2004). Compare also, Minn. Stat. §§ 326.83, subds. 15 and 19 (2004). While Mr. Petrie’s admissions seem particularly damning, the Administrative Law Judge concludes that the hearing record is simply insufficient to make findings of fact as to the nature of the completed work or the claimed violation. Further, because the agency is otherwise entitled to deny the application on the basis of the charges in Count II, the ALJ did not reach the merits of the agency’s alternate claim for relief.