Opinion
C. A. PC-2016-5687
05-22-2020
SASA BROTHERS, INC. and BACHAR SASA v. STATE OF RHODE ISLAND CONTRACTORS' REGISTRATION AND LICENSING BOARD and GEORGE W. WHALEN, in his capacity as Executive Director of the CONTRACTORS' REGISTRATION AND LICENSING BOARD
For Plaintiff: Stacy K. Hurley, Esq. For Defendant: Mariana Ormonde, Esq.
For Plaintiff: Stacy K. Hurley, Esq.
For Defendant: Mariana Ormonde, Esq.
DECISION
K. RODGERS, J.
Sasa Brothers, Inc. (Sasa Brothers) and Bachar Sasa (Sasa and collectively, Appellants) appeal from a Final Order of the State of Rhode Island Contractors' Registration and Licensing Board (the CRLB or the Board) ordering the suspension of Appellants' contractors' license until certain amounts owed pursuant to a Rhode Island Department of Labor and Training (RIDLT) decision are satisfied. Appellants challenge the Final Order based upon receiving insufficient notice of the hearing, the election of remedies doctrine, and improper individual liability imposed upon Sasa.
This entity has been referred to in the proceedings below and in a separate legal action filed in this Court as "Sasa Brothers Corp." This Court relies upon the Complaint filed by Appellants' counsel in the instant action for the proper name of this contracting business.
Jurisdiction is pursuant to G.L. 1956 § 42-35-15. For the reasons set forth herein, the Board's Final Order is affirmed.
I
Facts and Travel
The facts that precipitated the penalties imposed by RIDLT are uncontested. In January 2012, E. Patrick Luther (Luther), an investigator with RIDLT, conducted an investigation into a jobsite at Matunuck State Beach. Sasa Brothers was a subcontractor at that jobsite. Luther learned that an employee of Sasa Brothers was performing plumbing services without a license. Additionally, Luther spoke to other employees of Sasa Brothers and had reason to believe that they were not being paid the prevailing wage, which is required for services performed on a public works project such as that taking place at Matunuck State Beach. Thereafter, on February 7, 2012, Luther filed a prevailing wage complaint in the RIDLT against Sasa Brothers.
Sasa Brothers was fined $500 for this violation. That fine, however, is not at issue in the instant administrative appeal.
A hearing pursuant to G.L. 1956 § 37-13-14.1 was scheduled for May 22, 2013 before a hearing officer for the Division of Professional Regulations within the RIDLT. Sasa, the president of Sasa Brothers, appeared at that hearing and requested a continuance in order to engage counsel. The continuance was granted, and the matter was rescheduled to June 26, 2013, with notice issued on May 24, 2013. No one appeared on behalf of Sasa Brothers on June 26, 2013, notwithstanding the notice provided. The hearing took place in the absence of any agent or representative of Sasa Brothers.
Following the testimony of Luther and Mark Ryan (Ryan), an investigator in the Prevailing Wage Unit, the hearing officer found that Sasa Brothers provided plumbing services at the Matunuck State Beach Pavilion pursuant to a contract agreement valued over $1000.00; that the work project required the payment of prevailing wages to employees; and that Sasa Brothers willfully failed to pay its employees prevailing wages in violation of Title 37, Chapter 13 of the Rhode Island General Laws. Certified R., at 40. Based upon these findings of fact, and in a Decision and Order dated July 1, 2013 (the RIDLT Decision and Order), Sasa Brothers was ordered as follows: (1) to pay prevailing wages plus interest to six employees totaling $13, 564.28; (2) to pay a civil penalty three times the wage due penalty, or $40, 692.84; and (3) to be ineligible to bid on or perform work on any public projects for three years. Id.
On January 12, 2017, the CRLB and George W. Whalen (Whalen) submitted two certified records in this matter, one of which is noted in this Court's electronic filing system as "CORRECTED" certified record, constituting fifty-two unnumbered pages, but which is not otherwise entitled the same. In any event, all exhibits referred to throughout this Decision will be to this "CORRECTED" certified record.
The July 1, 2013 RIDLT Decision and Order was mailed on that same day to Sasa Brothers at 36 Hopkins Avenue in Johnston, along with notice of the appeal process pursuant to § 37-13-15. Certified R., at 41. No appeal was taken. On February 13, 2015, Joseph R. Degnan (Degnan), the Assistant Director of RIDLT, sent a "Final Notice" to Sasa Brothers by certified mail at 36 Hopkins Avenue, Johnston, advising that if the penalty of $40, 692.84 and the back wages of $13, 564.28 were not paid within fifteen days, the matter would be referred to a collection agency and to the CRLB, which may revoke, suspend, or refuse to issue, reinstate or reissue a certificate of registration. Certified R., at 43. When no response or payment was forthcoming, on March 20, 2015, Degnan forwarded notice to the CRLB, in accordance with G.L. 1956 §§ 5-65-10(a)(19) and 28-14-19(g), of Sasa Brothers' prevailing wage violation and its failure to remit monies owed pursuant to the RIDLT Decision and Order. Certified R., at 44. The information provided to the CRLB listed two Johnston addresses for Sasa Brothers: 36 Hopkins Avenue as the "Owner HOME Address" and 20 Scituate Avenue as the "BUSINESS Address." Certified R., at 45.
On March 26, 2015, CRLB Executive Director Whelan, mailed written notice to Sasa Brothers and its representative, Sasa, at 36 Hopkins Avenue, Johnston. Certified R., at 52. That notice provided as follows:
"There is a violation against the contractor's registration.
"Failure to respond will result in the imposition of a Civil Penalty not to exceed $10, 000.00.
"This action may be contested by requesting a hearing in writing before the Contractors' Registration and Licensing Board or its representative under the authority of Rhode Island General Law Chapter 65, Title 5, within 20 days of this order. If no hearing request is received, the Contractors' Board will issue a Default Final Order in the amount proposed above." Id.
On April 1, 2015, Sasa appeared in person at the CRLB office to discuss the violation and request a hearing. Certified R., at 15. An undated document entitled "History Sheet -Enforcement" contains handwritten notes that reflect that the 36 Hopkins Avenue address "came from the violations screen" and that 20 Scituate Avenue is the "new address per Master Green." Certified R., at 16. That document also includes the handwritten name and telephone number of Appellants' counsel herein. Id.
By way of written notice dated and mailed on April 2, 2015, the hearing Sasa requested was scheduled for April 9, 2015 to determine if the registrant, or those required to be registered, violated §§ 5-65-10(a)(19) and 28-14-19(g). Certified R., at 51. That notice was mailed to Sasa, d/b/a Sasa Brothers Inc. at 20 Scituate Avenue, Johnston. Id. The notice stated that failure to appear at the hearing could result in a ruling against that party and that, pursuant to § 5-65-10, one's registration may also be revoked or suspended, and fines may be imposed. Id.
No one appeared at the April 9, 2015 hearing on behalf of Sasa or Sasa Brothers. Like the June 26, 2013 hearing before the RIDLT Division of Professional Regulations, the April 9, 2015 hearing proceeded in the absence of Appellants. After hearing from Ryan, his superior Lisa Toricchi, and Degnan, the hearing officer issued a Proposed Default Order on May 5, 2015, which was mailed to Sasa on that same day at 36 Hopkins Avenue, Johnston. Certified R., at 31. In addition to reciting the travel of the case before the RIDLT, the CRLB hearing officer found that the parties were properly notified of the April 9, 2015 hearing as notice was sent to the contractor at the last known address on the CRLB's record in accordance with § 5-65-6, and that the respondent is a contractor who is registered or is required to be registered with the CRLB pursuant to § 5-65-3. Certified R., at 34. The hearing officer then found that Sasa Brothers was found to have violated § 37-13-1 and was ordered to pay back wages and a penalty in the RIDLT Decision and Order, which monetary amounts have not been paid, thus triggering § 5-65-10(a)(19) which allows the contractor's registration to be revoked or suspended for failing to comply with the RIDLT Decision and Order. Id. The Proposed Order provides:
"The RESPONDENT, Sasa Brothers, Inc., DBA Sasa Brothers, Registration #18416 was found to have violated the following Rhode Island General Laws, RIGL 5-65-10(a)(19) & RIGL 28-14-19(g) and as a result the Rhode Island Contractors' Registration and Licensing Board has SUSPENDED Registration #18416 effective immediately and shall continue to SUSPEND until all wages, benefits, or other sums owed have been paid or the contractor has entered into a written, binding agreement to pay the same acceptable to the Rhode Island Department of Labor and Training and is not in default in payment under such agreement. . . . Failure to comply to this ORDER may result in a Final Order, additional fines, action on registration such as suspension or revocation, and possibly criminal offenses charged pursuant to RIGL Section 5-65-19." Certified R., at 35.
The Proposed Default Order advised that a party adversely affected by the Order may file written exceptions to the Director of the CRLB within twenty days from the date of mailing. Certified R., at 36. No such written exceptions were filed.
Before further action was taken by the CRLB, the RIDLT filed a complaint against Sasa Brothers in Providence County Superior Court pursuant to § 37-13-15, seeking to enforce the back wages and penalties assessed in the July 1, 2013 Decision and Order. See Complaint, Scott Jensen v. Sasa Brothers Corporation, PC-2015-5530 (Dec. 18, 2015). Sasa Brothers, Inc. filed an Answer on January 14, 2016. That case remains pending with no further activity thereon since Sasa Brothers' Answer was filed.
On January 12, 2016, a Final Order was mailed to Sasa and Sasa Brothers at 20 Scituate Avenue, Johnston, which Final Order included the same findings of fact and order of suspension of Registration #18416. See generally Certified R., at 20-25. The Final Order also provided notice of the right to judicial review in accordance with Chapter 35 of Title 42 of the Rhode Island General Laws. Certified R., at 25. Although dated and mailed on January 12, 2016, the Final Order was not served upon Sasa until November 14, 2016. Certified R., at 18. Appellants timely appealed the Board's Final Order to this Court on December 9, 2016.
II
Standard of Review
This Court's review of a CRLB decision is governed by § 42-35-15(g), which provides for judicial review of a contested agency decision:
"(g) The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
"(1) In violation of constitutional or statutory provisions;
"(2) In excess of the statutory authority of the agency;
"(3) Made upon unlawful procedure;
"(4) Affected by other error of law;
"(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
"(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion." Id.
When reviewing an order of an agency, this Court may not assess witness credibility or substitute its judgment for that of the agency concerning the weight of the evidence on questions of fact. Costa v. Registrar of Motor Vehicles, 543 A.2d 1307, 1309 (R.I. 1988). This Court's review is limited to determining whether substantial evidence exists in the record to support the board's decision. See Newport Shipyard, Inc. v. Rhode Island Commission for Human Rights, 484 A.2d 893, 897 (R.I. 1984). Rhode Island law defines "[s]ubstantial evidence" as "'such relevant evidence that a reasonable mind might accept as adequate to support a conclusion, and means an amount more than a scintilla but less than a preponderance.'" Id. (quoting Caswell v. George Sherman Sand & Gravel Co., Inc., 424 A.2d 646, 647 (R.I. 1981)). This Court will "reverse factual conclusions of administrative agencies only when they are totally devoid of competent evidentiary support in the record." Milardo v. Coastal Resources Management Council of Rhode Island, 434 A.2d 266, 272 (R.I. 1981).
The Rhode Island Supreme Court has similarly defined "legally competent evidence." Arnold v. Rhode Island Department of Labor & Training Board of Review, 822 A.2d 164, 167 (R.I. 2003) (defining legally competent evidence as "'relevant evidence that a reasonable mind might accept as adequate to support a conclusion, and means an amount more than a scintilla but less than a preponderance'") (quoting Rhode Island Temps. Inc. v. Department of Labor & Training, Board of Review, 749 A.2d 1121, 1125 (R.I. 2000)).
III
Analysis
Appellants challenge the entry of the Final Order by the CRLB on three grounds: failing to provide reasonable notice of the April 9, 2015 hearing scheduled before the CRLB; a corresponding lawsuit filed by RIDLT bars the CRLB from pursuing a remedy; and Sasa is improperly named as a respondent before the CRLB. Appellants also challenge the amount of back wages and penalties assessed by the RIDLT in the instant appeal from the CRLB decision suspending the contractor's registration.
A
Notice of Hearing Before the CRLB
All boards, commissions and departments authorized by statute to make rules or determine contested cases, including the CRLB and the RIDLT, are governed by Chapter 35 of Title 42 of the Rhode Island General Laws. Section 42-35-1.1 (P.L. 1994, ch. 70, art. 2, § 8 (eff. July 1, 1994)). Section 42-35-9, entitled "Contested cases-Notice- Hearing-Records," provides: "In any contested case, all parties shall be afforded an opportunity for a hearing after reasonable notice." Section 42-35-9(a). "Reasonable notice" is not further defined by statute, but our Supreme Court has stated that "[a]t a minimum, due process requires that notice be 'reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'" Flynn v. Al-Amir, 811 A.2d 1146, 1151 (R.I. 2002) (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)) (discussing notice of divorce complaint in context of challenge to validity of service of process).
Some sections of the Administrative Procedures Act (APA) were amended in 2016, prior to the Final Order being served on Appellants. All references herein to any sections of the Administrative Procedures Act will be as they existed prior to the 2016 amendments.
Here, Appellants challenge the timing of the notice rather than the content of the notice. In doing so, Appellants rely upon § 42-14-2(b) for their contention that the CRLB was required to provide at least ten days written notice to Appellants before a hearing could be conducted. Chapter 14 of Title 42 governs the Department of Business Regulation, and § 42-14-2(b) provides in pertinent part:
"Whenever any hearing is required or permitted to be held pursuant to law or regulation of the department of business regulation, and whenever no statutory provision exists providing that notice be given to interested parties prior to the hearing, no such hearing shall be held without notice in writing being given at least ten (10) days prior to such hearing. . . ." Section 42-14-2(b).
Although § 42-14-2(a) was amended in 2016, the text of § 42-14-2(b) remained unchanged. See P.L. 2016, ch. 142, art. 14, § 4 (eff. July 1, 2016).
Appellants' reliance on § 42-14-2(b) is entirely misplaced. Section 42-14-2(b) clearly governs matters before the Rhode Island Department of Business Regulation (RIDBR). If the General Assembly intended to extend the RIDBR's minimum ten-day notice period to matters before the CRLB or any other particular board, commission or agency, it could have done so specifically within Chapter 65 of Title 5, entitled "Contractors' Registration and Licensing Board," or more generally in § 42-35-9. Absent such legislation, § 42-14-2(b) remains wholly inapplicable to the instant case.
Appellants next argue that the written notice was deficient because it was sent to 20 Scituate Avenue in Johnston, rather than 36 Hopkins Avenue, Johnston, where prior correspondence and notices had been sent by the RIDLT as well as the CRLB. The undated record evidence in this case indicates that the "new address" for Sasa and Sasa Brothers is 20 Scituate Avenue, Johnston. See Certified R., at 16. Moreover, according to the CRLB, the 20 Scituate Avenue address is the business address for Sasa Brothers that was registered with the Office of the Secretary of State and provided to the CRLB pursuant to § 5-65-5(a)(5)(i). See Appellees' Mem., at 10. Section 5-65-5 requires that all contractors register with the CRLB and provide the individual(s) name, business address and residential address of each partner or venturer, if the applicant is a partnership or joint venture; the owner, if the applicant is an individual proprietorship; or the corporation officers and a copy of corporate papers filed with the Rhode Island secretary of state's office, if the applicant is a corporation. Section 5-65-5(a)(5). The contractor is required to notify the CRLB within ten days of any change of address. Section 5-65-6. Additionally, the last known address of record of the contractor may be used to notify the contractor of any proposed or final order or notice of hearing directed by the CRLB, and said order or notice is considered to be delivered to the contractor when it is deposited in the United States mail and/or sent registered or certified mail. Id.
There is substantial evidence in the record that 20 Scituate Avenue, Johnston was the last known business address that Sasa had registered with the CRLB. See Certified R., at 16. Additionally, there is no evidence that the April 2, 2015 Notice of Hearing was not, in fact, delivered to the registered business address of the contractor or that the contractor did not actually receive that Notice of Hearing. Appellants' argument that the Notice of Hearing was improperly sent to the last known business address of the contractor is unavailing.
To the extent Appellants argue that it was improper for the CRLB to even send written notice of the April 9, 2015 hearing is equally unpersuasive. See Appellants' Mem. at 5. The fact that Sasa responded to the March 26, 2015 violation notice by appearing in person at the CRLB office did not dispense with the need to schedule a contested hearing in accordance with the APA. See § 5-65-20 (P.L. 1996, ch. 322, § 2 (eff. Aug. 7, 1996)). Nor did the March 26, 2015 Notice of Violation mandate that a hearing could not take place within a twenty-day period from the time the Notice of Violation was sent when the contractor appeared in person well before the expiration of that twenty days in which a hearing could be requested. See Appellants' Mem. at 6. To the contrary, Sasa's appearance in person at the office of the CRLB, just six days after the Notice of Violation was mailed, suggests the urgency with which Sasa wished to have the hearing to which he was entitled under the APA inasmuch as he had an additional fourteen days in which he could submit a written request for a hearing. Appellants cannot now be permitted to challenge the reasonableness of the notice of the very hearing Sasa had requested in person.
While there is no evidence of record of what precisely was discussed by Sasa at the time he appeared in person at the CRLB office on April 2, 2015, Appellants concede that it was "to discuss the correspondence dated March 26, 2015." Appellants' Mem. at 5. The March 26, 2015 correspondence identified the manner in which a hearing could be requested: in writing within twenty days. Certified R., at 52. It is reasonable to infer that the hearing was the subject of the discussion between Sasa and the representative of the CRLB with whom Sasa spoke in person on April 1, 2015.
Finally, returning to the reasonable notice that is required under § 42-35-9 and under due process principles, see Flynn, 811 A.2d at 1151, Appellants fail to demonstrate that they were not apprised of the pendency of the action or how or to what extent they were deprived the opportunity to present their objections at the requested hearing. This Court is required to uphold the CRLB's conclusions if substantial evidence exists on the record as a whole. Newport Shipyard, 484 A.2d at 897. Appellants' unsupported and unpersuasive arguments to the contrary, there remains substantial evidence that Sasa Brothers was provided notice of a violation before the CRLB, was given an opportunity to request a hearing, did request a hearing by way of Sasa's in-person communication, was sent written notice of that hearing, and failed to attend that hearing. For all these reasons, the decision of the CRLB is affirmed.
B
The CRLB Is not Barred from Enforcing its Decision
Appellants next argue that the election of remedies doctrine bars the CRLB from enforcing the Final Order because the RIDLT has filed a lawsuit seeking the same relief. More specifically, Appellants maintain that the RIDLT's lawsuit and the CRLB's Final Order both seek back wages in the amount of $13, 564.28 and a penalty in the amount of $40, 692.84. Appellants' Mem. at 6. This argument fails as Appellants misapprehend the sanction imposed by the CRLB in the Final Order.
The statutory interplay between the RIDLT and the CRLB can be found in §§ 28-14-19 and 5-65-10. Section 28-14-19 provides in pertinent part:
"(g) The director shall notify the contractors' registration board of any order issued or any determination hereunder that an employer has violated chapters 28-12, 28-14 and/or 37-13. The director shall notify the tax administrator of any determination hereunder that may affect liability for an employer's payment of wages and/or payroll taxes." Section 28-14-19(g).
Section 5-65-10, in turn, provides in pertinent part:
"(a) The board or office may revoke, suspend, or refuse to issue, reinstate, or reissue a certificate of registration if the board or office determines, after notice and opportunity for a hearing: . . . .
"(19) That the registrant has violated any of the provisions of chapter 3 of title 25; 3, 12, 14, 36, or 50 of title 28; or 13 of title 37. A finding that the registrant has violated any of those chapters shall not be grounds for imposition of a monetary penalty under subsection (c) below. . . . .
"(m) Upon receipt of notice of a final determination, after the exhaustion of all appeals, by the department of labor and training . . . that a registered contractor violated any of the provisions of chapter[s 25-3, 28-3, 28-12, 28-36, 28-50 and/or 37-13] and owes any wages, benefits, or other sums arising out of the violation, the board shall immediately suspend the contractor's registration of the contractor in accordance with this subsection. The suspension shall continue until all wages, benefits, or other sums owed have been paid or the contractor has entered into a written, binding agreement to pay the same acceptable to the department of labor and training and is not in default in payment under the agreement. If the contractor fails to remain current in payment under the agreement, the department of labor and training shall notify the contractors' registration board and the suspension shall be imposed or reinstated as the case may be. The foregoing sanction is mandatory, but shall not be grounds for imposition of a monetary penalty under subsection (c) above." Id. (P.L. 2012, ch. 348, § 1 (eff. June 12, 2012)).
As referenced in § 5-65-10(a)(1) and (m), a monetary penalty as otherwise provided for in § 5-65-10(c) when a contractor violates any section of Title 5, Chapter 65 or any rule or regulation promulgated by the CRLB, may not be imposed by the CRLB. Rather, the only action that the CRLB can take is to suspend the contractor's registration (or reinstate as the case may be) when the RIDLT notifies the CRLB that a registered contractor has been found to be in violation of certain enumerated laws, has exhausted all appeals within the RIDLT, and has failed to pay wages, benefits or other sums arising from the violation. Sections 5-65-10(a)(19) and (m).
Here, the original violation before the RIDLT alleged that Sasa Brothers violated Title 37, Chapter 13, governing prevailing wages. The July 1, 2013 Decision and Order issued by a hearing officer of the RIDLT was mailed to Sasa Brothers on that same day and included notice of the twenty-day appeal period from the date of the mailing. Certified R., at 41. A Final Notice of the July 1, 2013 Decision and Order was mailed to Sasa Brothers almost nineteen months after the expiration of the twenty-day appeal period. Certified R., at 43. That Final Notice advised Sasa Brothers that failure to pay the back wages and penalty within fifteen days of the date of the Final Notice would result in a "referr[al] to the [RIDLT's] Collection Agency and the Contractors' Registration and Licensing Board, who may revoke, suspend or refuse to issue, reinstate or reissue a certificate of registration." Id. Upon the expiration of the fifteen days as set forth in the Final Notice, on March 12, 2015, the RIDLT referred the violation to the CRLB. Certified R., at 44. Thus, the matter was properly referred to the CRLB, as permitted by law, following the exhaustion of all appeals within the RIDLT. See §§ 28-14-19 and 5-65-10(a)(19) and (m).
The Final Notice also advised Sasa Brothers that the matter could be referred to the Office of Attorney General for criminal prosecution. Certified R., at 43. No such criminal prosecution against Sasa or Sasa Brothers has been initiated based upon the prevailing wage violation and Appellants' failure to pay the back wages and penalty.
Importantly, the Proposed Default Order issued and mailed by the CRLB on May 5, 2015, following the CRLB hearing at which Appellants failed to appear, and the Final Order issued and mailed on January 12, 2016 suspended registration #18416, the contractor registration of Sasa Brothers. Certified R., at 24, 35. Neither order issued a monetary sanction against Appellants-based on the back wages or penalties assessed by the RIDLT or otherwise. Id. Contrary to Appellants' suggestion that the CRLB was required to make separate findings of fact on the propriety of the penalty assessed by the RIDLT, see Appellants' Mem. at 7, the CRLB has no such legal obligation under Chapter 65 of Title 5. All that was required in this matter for the CRLB to suspend registration #18416 was the CRLB's receipt of notice of a final determination by RIDLT, after the exhaustion of all appeals, that the registered contractor violated § 37-13 and owes any wages, benefits or other sums arising out of such violation. Section 5-65-10(m) (P.L. 2012, ch. 348, § 1 (eff. June 12, 2012)).
By comparison, the civil action filed by RIDLT sought to enforce the July 1, 2013 Decision and Order pursuant to § 37-13-15(d) and requests judgment against Sasa Brothers in the total amount of $54, 257.12, the sum of the $13, 564.28 back wages due and the $40, 692.84 penalty assessed. See Complaint, Scott Jensen v. Sasa Brothers Corporation, PC-2015-5530 (Dec. 18, 2015).
Appellants wrongly assert that the CRLB and the RIDLT are seeking the same relief. Accordingly, their election of remedies argument fails as a matter of law.
C
Liability of Sasa
Finally, Appellants take issue with the individual liability of Sasa. The statutory framework governing contractors not only permits liability to attach to a principal of a registered business entity, but also prohibits future contractor registrations to be issued to a sole proprietorship, joint venture or corporation that involves a principal of an entity whose registration has been suspended.
Rhode Island law requires that a person or business entity offering to perform contracting services must hold a valid registration with the CRLB. Section 5-65-3(a). Where it is a business entity that holds the registration, an individual responsible for the business's actions must also be named on the CRLB registration. Id. Section 5-65-3(a) further states:
"The corporation or partnership and its designee shall be jointly and severally liable for the payment of the registration fee, as required in this chapter, and for violations of any provisions of this chapter. Disciplinary action taken on a registration held by a corporation, partnership, or sole proprietor may affect other registrations held by the same corporation, partnership, or sole proprietorship, and may preclude future registration by the principal of that business entity." Id. (emphasis added).
Further, § 5-65-10(n) states:
"When the registration of a contractor has been revoked or suspended, neither the contractor nor any successor entity or sole proprietorship that: (1) Has one or more of the same principals or officers as the partnership, limited partnership, limited-liability partnership, joint venture, limited-liability company, corporation, or sole proprietorship as the subject contractor; and (2) Is engaged in the same or equivalent trade or activity shall be qualified to register or retain a registration as a contractor under this chapter, unless and until the board shall determine that the basis of the revocation or suspension has been satisfied or removed and that the registrant or applicant otherwise satisfies the requirements for registration under this chapter. Notwithstanding the foregoing, a natural person may obtain relief from the application and enforcement of this subsection as to him or her if he or she can establish that he or she was not responsible for, and did not acquiesce to, the misconduct that is the basis of the revocation, suspension, or denial of registration." Id.
While Appellants correctly state that Sasa was not named individually by the RIDLT in its administrative proceedings, and indeed was not named individually in the civil action filed by the Director of the RIDLT, see Complaint, Scott Jensen v. Sasa Brothers Corporation, PC-2015-5530 (Dec. 18, 2015), Appellants once again misapprehend the narrow issue before this Court in this administrative appeal from the CRLB Final Order. The sanction imposed by the CRLB is the suspension of registration #18416; Sasa is a principal of the corporate entity that holds registration #18416, and Rhode Island law clearly and unequivocally extends such disciplinary action taken against the corporate registration to the principals of the corporate entity. Sections 5-65-3(a), 5-65-10(n). It is of no moment that there were no separate findings of fact directed at Sasa individually as the registration suspension sanction against the principal is applied as a matter of law when the registration of the corporate contractor is suspended.
IV
Conclusion
For all these reasons, this Court finds that the CRLB's suspension of Appellants' contractor registration #18416 is supported by substantial evidence in the record and was not arbitrary, capricious, or affected by other error of law. Accordingly, this Court affirms the CRLB's decision in its entirety.