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DIVISION OF OCCUPATIONAL AND PROFESSIONAL LICENSING


Heber M. Wells Building
160 East 300 South
POBox 146741
Salt Lake City UT 84114-6741
Telephone: (801) 530-6628

BEFORE THE CONSTRUCTION SERVICES COMMISSION


OF THE DEPARTMENT OF COMMERCE
OF THE STATE OF UTAH

IN THE MATTER OF THE LICENSE OF


N.G.F. LLC FINDINGS OF FACT,
LICENSE NO. 10077200-5501 CONCLUSIONS OF LAW,
TO PRACTICE AS A AND ORDER
CONTRACTOR
IN THE STATE OF UTAH Case No. DOPL-20I9-193

1. This matter is designated as an informal proceeding before the Construction


Services Commission under Utah Admin. Code R156-46b-202 in accordance with Utah Code
Ann. § 630-4-202(1) of the Utah Administrative Procedures Act (UAPA).

2. The Division of Occupational and Professional Licensing (“the Division”) filed


a Notice of Agency Action against the Respondent N.G.F. LLC (“Respondent”) in this matter
on the May 9, 2019.

3. This action is based upon Division records which show that Respondent,
I engaged in unlawful conduct by: hiring at least 225 unlicensed individuals and/or entities to
perform work which requires a license in violation of Utah Code § 58-55-501(3).

4. In particular, the evidence in the Division's file indicates that Respondent has
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engaged in the following conduct:

5. Respondent is, and at all times relevant to this proceeding, licensed to practice
as a contractor. Respondent initially became so licensed on or about September 16, 2016
with the following license classifications: General Drywall and Plastering Contractor (S270);
Carpentry Contractor (S220); and Steel Erection Contractor (S320). Francisco Marquez Jr is
Respondent’s qualifier.

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15. None of the 225 individuals and/or entities paid as reported on the 1099 Forms
for 2017 as noted above have a contractor license in the State of Utah.

16. Pursuant to Utah Code §§58-55-503(4) and (6), Respondent should be


assessed a fine up to the amount of $1,000 for each count of hiring an unlicensed
contractor.

17. On May 9,2019, the Division issued Notice of Agency Action with respect to
the above allegations.

18. On or about June 5,2019, Respondent, through counsel, submitted a response


to the Notice of Agency Action. 1

19. In the response. Respondent admits that it hired the unlicensed workers but
alleges that Respondent’s owners are “young,” thought they hired employees and not
independent contractors, and alleges there was no intent to violate Utah law.

20. Respondent alleges that “Respondent believed in fact that the individuals that it
had hired to perform work were employees who received wages under Utah Code.
Respondent fiilly believed that he was operating correctly. Unbeknownst to Respondent, the
accountant paid the employees as independent contractors instead of employees....Based on
these facts. Respondent did not have any intent to violate the law; nor did he act recklessly.”

21. Respondent’s entire response is based on the allegation that Respondent did
hire unlicensed workers but did not have the intent to violate Utah law and acted in good
faith. Respondent alleges that “DOPL must prove that the contractor intended to engage in
unlawful conduct, knowingly engaged in unlawful conduct, or reckless engaged in unlawful
conduct” unless it involves strict liability^ and alleges “[tjhere is no basis in law for fact to
hold Respondent strictly liable” and cites to the tqcqxA Muddy Boys v. DOPL, 2019 UT App
33 case as similar.^

' Respondent’s response to the Notice of Agency Action was styled Requestfor Review ofAgency Action to
Revoke Contractor’s License and Impose Fine. However, it was unclear whether this was a response to the
Notice of Agency Action or a Request for Agency Review pursuant to the Utah Administrative Procedures Act.
On June 13,2019, Respondent communicated to the Division that this was a response to the Notice of Agency
Action and not a request for agency review.

^ Utah criminal law provides an exception to the general rule requiring proof of a necessary mental state. See
Utah Code § 76-2-101. Certain offenses have been defined under Utah criminal law as requiring only proof of
the prohibited conduct, without regard to the defendanfs intent or state of mind. Such offenses are referred to
as "strict liability" offenses.

^ DOPL V. Muddy Boys, Case No DOPL-2015-605, is an unrelated matter where allegations of unlicensed
hiring were alleged against Muddy Boys. During the proceeding, the matter was dismissed with prejudice as

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22. However, Respondent fails to cite to one important historical point. After the
Muddy Boys case was dismissed at the administrative level, the Utah Legislature changed the
statute and clearly articulated its intent that violations of any unlawful or unprofessional
conduct provisions are strict liability violations. To wit:

“Unless otherwise specified by statute or administrative rule, in a civil or


administrative proceeding commenced by the division under this title, a person
subject to any of the unlawful and unprofessional conduct provisions of this title
is strictly liable for each violation.”

Utah Code § 5 8-1 -501 (3) (emphasis added). This instant matter concerning Respondent is an
administrative proceeding commenced by the Division under Title 58 as constituted by the
Notice of Agency Action and alleges unlawful conduct violations under Title 58 for hiring
unlicensed workers. As a result. Respondent is “strictly liable for each violation” of Utah
Code § 58-55-501(3) and no proof of intent is required by the Division.

23. In its response. Respondent does not request a hearing and does not provide
any other defense or argument to contest the allegations as set forth in the Notice of Agency
Action. Additionally, Respondent does not challenge any of the factual allegations set forth
in the Notice of Agency Action and merely argues as a matter of law.

24. Based on the above. Respondent’s Response is insufficient to challenge the


factual basis alleged in the Notice of Agency Action and the allegations in the Notice of
Agency Action constitutes a sufficient basis for entry of order against Respondent.

25. The Notice of Agency Action provides a basis to conclude that Respondent has
hired 225 unlicensed individuals and/or entities in violation of Utah Code § 58-55-501(3), for
engaging in unprofessional conduct.

26. The Division is authorized to revoke Respondents contractor license as


provided by Utah Code § 58-l-401(2)(b), for engaging in unlawful conduct, and as provided
by Utah Code § 58-55-501(3).

stipulated by the parties at the formal administrative level and the only matter on appeal in Muddy Boys v.
DOPL, 2019 UT App 33 was whether Muddy Boys was entitled to attorney fees, which the appellate court
rejected and denied. As a result, there is no controlling authority that can be asserted from the underlying
administrative case other than parties before the Division that obtain a dismissal on an agency action are not
entitled to an award of attorney fees. To read otherwise is misreading the actual holdings.

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ORDER

WHEREFORE, IT IS ORDERED that Respondent’s license to practice as a contractor


in the State of Utah is hereby revoked, as of the date this order is signed; and

WHEREFORE, IT IS ORDERED that Respondent shall be assessed a fine in the


amount of $225,000.00 (two-hundred and twenty-five thousand dollars), which must be paid
to the Division within 30 days of the date this order is signed.

NOTICE: Agency review of this order may be obtained by filing a written request for agency
review with the Executive Director of the Department of Commerce within thirty (30) days
after the issuance of this order. Any such request must comply with the requirements of Utah
Code § 63G-4-301 and Utah Admin. Code R151-4-902.

On behalf of the Construction Services Commission and the Division of Occupational and
Professional Licensing, I hereby certify that the foregoing Findings of Fact, Conclusions of
Law, and Order were submitted to the Construction Services Commission and the Division
on the 26th day of JUNE 2019, for their review and action.

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ORDER

THE ABOVE FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER

in the matter of N.G.F. LLC., are hereby adopted by the Construction Services

Commission of the State of Utah.

DATED this 26th day of JUNE , 2019.

Representative

I concur with the above Order, which the Construction Services Commission has

approved.

DATED this -ZX day of , 2019.

DIVISION OF OCCUPATIONAL AND


PROFESSIONAL LICENSING

MARKB. STEINAGEL
Director or
DEBORAH BLACKBURN
Director’s Designee