33 DOS 95

Issued: February 24, 1995

STATE OF NEW YORK

DEPARTMENT OF STATE

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DIVISION OF LICENSING SERVICES,

Complainant,

-against- DECISION

ARNOLD L. SMITH, II,

Security and Fire Alarm Systems Installer,

Respondent.

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Administrative Law Tribunal

65 Court Street, Buffalo, NY 14202.

Held: February 16, 1995.

Before: Felix Neals, Administrative Law Judge.

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The respondent, Mr. Arnold L. Smith, II, 322 Eggert Road, Buffalo, NY 14215, was represented by Frank L. LoTempio, Jr., Esq., LoTempio & Brown, P.C., 181 Franklin Street, Buffalo, NY 14202.

The complainant, the Division of Licensing Services, was represented by Scott L. NeJame, Esq., 162 Washington Avenue, Albany, NY 12231.

A complaining witness, Mr. Jimmie Larke, was represented by Joy A. Kendrick, Esq., Statler Towers, Buffalo, NY 14202.

PROCEDURAL HISTORY

The tribunal took official notice of the records of the Division of Licensing Services which report that Mr. Arnold Smith's license as a security and fire alarm systems installer was renewed on December 1, 1994, and is valid until November 30, 1996.

At the conclusion of the presentation of the State's direct case, the respondent moved to dismiss the complaint for failure of proof. The tribunal reserved decision on the motion.

ISSUES

The State brought this action under the provisions of General Business Law, §69-t, State Administrative Procedure Act, Article 3, and 19 New York Codes, Rules and Regulations, Part 400. The complaint charges that the respondent, Mr. Arnold Smith, II, made a material false statement in his original application submitted to the Division of Licensing Services for a license as a security and fire alarm systems installer, a violation of the provisions of General Business Law, §69-s.

SUMMARY OF THE EVIDENCE

I. EXHIBITS. The exhibits offered into evidence included the following pertinent documents:

(A) a notice of hearing, a complaint, and a certified mail return receipt of the United States Postal Service;

(B) a certified statement of the Department of State which certified that Mr. Smith is licensed as a security and fire alarm installer for the term November 30, 1992 to November 30, 1994;

(C) a copy of Mr. Smith's application dated September 16, 1992, and submitted to the Division of Licensing Services on October 1, 1992, for a license as a security and fire alarm installer, wherein Mr. Smith listed and affirmed his qualifying experience as employment with J & J Special Services from February 1988 to present as an installer/technician;

(D) a letter dated and received on December 20, 1993, from Mr. Smith to Mr. Lewis Smith, Senior Investigator of the Division of Licensing Services, in which the respondent stated that he had been installing security systems for the past 10 years;

(E) a letter dated December 29, 1993 to Mr. Lewis Smith, Senior License Investigator of the Division of Licensing Services, from Michael Liszewski, Esq., on behalf of the respondent, that advised the Senior Investigator to contact Mr. Liszewski to discuss the respondent's case;

(F) a letter dated January 13, 1994 from the Senior Investigator to Mr. Smith which stated that the letter was the final request for documents to substantiate the qualifying experience claimed in the application dated September 26, 1992, for a license as a security and fire alarm installer, and which directed the respondent to appear at the Buffalo office of the Division of Licensing Services at 10:00 A.M. on January 26, 1994 and provide specific proof of the experience claimed with J & J Special Services, Inc.;

(G) a letter dated February 3, 1995 from Ms. Barbara Brow, addressed "To Whom it Concerns" which stated that Mr. Smith and Mr. Jimmie Larke installed a security alarm system in her home in August 1989;

(H) a handwritten list of 33 addresses of street numbers and streets; next to each address appeared initials that indicated a type of security system;

(I) a Corporation Tax Account Information form from the New York State Department of Taxation and Finance, addressed to Specialized Security Technologies, Inc., 332 Eggert Road, Buffalo, with a "Generation Date" of March 27, 1993;

(J) a certificate of completion of a Detection Systems, Inc. course on December 16, 1992, which named Mr. Smith as being of J & J Security;

(K) an unsigned and undated letter from Mr. Smith to the New York State Department of Taxation and Finance which states that Specialized Security Technologies, Inc. is not located any longer at 332 Eggert Road, Buffalo, and which referred the agency to Mr. Jimmie Larke for information concerning the corporation.

II. WITNESSES. Mr. Jimmie Larke and Mr. Lewis Smith, a Senior Investigator of the Division of Licensing Services, appeared as witnesses for the State. Mr. Arnold Smith, the respondent, testified in his own defense.

(A) Mr. Jimmie Larke stated the following:

He began J & J Special Services, Inc., a private investigator agency, in 1987; the corporation was dissolved in January 1994. The company's primary business was security guard services with about 20 people employed as security guards over the duration of time from June 1988 to December 1992.

Mr. Arnold Smith was never an employee of J & J Special Services Inc. From sometime in 1991 to July 1992, Mr. Smith was employed as a subcontractor on approximately eight occasions assisting in connecting home security systems into central systems through telephone lines and cables. Mr. Smith was paid at the conclusion of each; either by check (twice) or by cash. Each job, average pay was about $200 and the average time span to complete was approximately from four to twelve hours.

J & J Special Services, Inc., did not place Mr. Smith on its payroll; did not make deductions from the compensation paid to Mr. Smith; did not issue a tax form to Mr. Smith for money earned; and did not remember if Mr. Smith's total earnings exceeded $1,000.

When questioned about the 33 addresses listed by Mr. Smith as places where he assisted J & J Security Systems, Inc. in the installation of security systems, Mr. Larke testified that he did not recognize some of the addresses, denied having installed systems in some of the places listed, and admitted that Mr. Smith could have assisted J & J Security Systems to install security systems in eight of the places listed.

(B) Mr. Lewis Smith, a Senior Investigator for the Division of Licensing Services, testified as follows about his efforts, from December 2, 1993 to January 13, 1994, to obtain documents from the respondent to support the experience claimed in the respondent's application for licensure.

He wrote letters to the respondent and spoke with the respondent and his attorney both by telephone and in person, and in each communication the respondent was to submit requested documentary proof of the employment with J & J Special Services, Inc. claimed by the respondent in his application for a license as a security and fire alarm installer. The respondent did not comply with the requests.

For the past 27 years, he has been employed full-time by AT&T Communications. For over ten years, he has installed and serviced security and fire alarm systems.

He listed only J & J Special Services, Inc. on his application for a license as a security and fire alarm systems installer because he believed that experience was sufficient when the hours were totaled that he spent designing, procuring equipment, installing, servicing, and training customers of security systems.

He first worked for J & J Special Services, Inc. in 1989 to install telephone wiring in new construction. Later, he assisted the company to install security systems.

From memory about four months ago, he compiled a list of 33 addresses of places where he worked for J & J Special Services, Inc. to install security systems. He was unable to recall either the dates on which the work was performed or the duration of time that the jobs required to be completed. In addition to doing installations for the company, he also solicited jobs, planned and designed pending installations, service systems, and trained customers in the effective use of the systems installed.

Mr. Smith estimated the following durations of time: He spent 18 to 20 hours a week planning and designing systems and completed five to eight jobs a year from 1989 to 1992 that consisted of the installation and subsequent service of security systems and the training of customers; the average job of installation and the training of the customer took from four to ten days. He could not approximate the time spent in maintaining systems.

He received a percentage of the cost of a job when a job was completed; he was paid by two checks of J & J Special Services, Inc. and by an unknown amount of cash. The total amount of compensation paid was not revealed. J & J Special Services, Inc. did not make any deductions from and did not give him a tax form that reported total amount of money that he was paid for services rendered to the company. He did not submit tax returns or other documents asked for by the investigator.

He and Mr. Larke incorporated a company, Special Services Technologies, Inc., in 1992. The testimony did not disclose whether the company ever became operational.

FACTS

By the substantial evidence, I find the following facts:

Based on an application dated September 16, 1992 and submitted by Mr. Smith on October 1, 1992 to the Division of Licensing Services for a license as a security and fire alarm installer, the Division of Licensing Services issued a license to Mr. Smith on November 30, 1992, and renewed that license on December 1, 1994 until November 30, 1996. In his original application for licensure, Mr. Smith claimed employment only with J & J Special Services, Inc. for 40 hours a week as an installer/technician from February 1988 to present (to September 16, 1992, the date of the application).

From sometime in 1989 to July 1992, Mr. Smith worked intermittently for J & J Special Services, Inc. for undefined durations of time and designed, installed, and serviced an uncertain number of security systems as an independent contractor (or subcontractor).

Mr. Smith did not comply with the numerous requests of the Division of Licensing Services for proof of the claimed experience with

J & J Special Services, Inc.; at the hearing, he did not offer evidence that delineated when and for how long he actually performed services as a security and fire alarm systems installer for J & J Special Services, Inc.

The statement made by Mr. Smith in his application dated September 16, 1992, that he was employed by J & J Special Services, Inc. for 40 hours a week as an installer/technician from February 1988 to September 16, 1992, is factually erroneous. His statement is credible that his calculation of hours that he claimed in his application included the estimated time that he expended in the various functions from designing to maintaining the security systems that he installed. However, his statement of experience with J & J Special Services is incorrect.

OPINION

1. A material misstatement in an application presented to the Division of Licensing Services for licensure is a false or incorrect statement of information that, in part or in whole, is an essential factor in determining the fitness of the applicant for licensure. Division of Licensing Services v Gise, 48 DOS 88 (1988), confirmed Gise v Shaffer, 153 AD2d 688, 544 NYS2d 677 (2nd Dept. 1989).

2. A material misstatement in an application submitted to the Division of Licensing Services for a license as a security and fire alarm systems installer is any statement made in the application that, if the true facts were known:

(A) Would intrinsically prevent the license from being granted because of a failure of the applicant to qualify under the provisions of General Business Law, Article 6D, and 19 New York Codes, Rules and Regulations, Part 195; or

(B) would allow the Division of Licensing Services in its discretion to either grant or to propose to deny the application.

3. In deciding an applicant's competency for a license as a security and fire alarm systems installer, the experience criterion expressed in the provisions of General Business Law, §69-p, is an essential factor. Consequently, the exaggeration of employment by Mr. Smith in his application for a license as a security and fire alarm systems installer constitutes the making of a material misstatement in that application.

4. The making of any material misstatement in an application provided to the Division of Licensing Services for a license as a security and fire alarm systems installer is grounds for a fine or a suspension or a revocation of any license issued based on the information contained in that application. General Business Law, §69-s.

5. The evidence does not prove that Mr. Smith willfully made a false statement of his experience in his original application to the Division of Licensing Services for a license as a security and fire alarm systems installer. However, a material misstatement made inadvertently is a violation of the statute. General Business Law, §69-s.

CONCLUSIONS OF LAW

Based on the foregoing findings of fact and opinion and as a matter of law, I conclude the following:

1. Mr. Smith made a material misstatement in his application to the Division of Licensing Services for a license as a security and fire alarm systems installer.

2. The material misstatement of Mr. Smith in his application to the Division of Licensing Services for a license as a security and fire alarm systems installer was not fraudulently committed and therefore in the interest of justice, the severe penalty of revocation which prohibits the reinstatement or the reissuance of a license for five years shall not be imposed.

DETERMINATION

Based on the foregoing findings of fact, opinion, and conclusions of law, and under the provisions of General Business Law, §69-s:

I DETERMINE that the license of the respondent, Mr. Arnold Smith, II, as a security and fire alarm systems installer is indefinitely suspended effective immediately, and shall continue until Mr. Smith furnishes proof satisfactory to the Division of Licensing Services that he possesses the experience required by law to be licensed as a security and fire alarm systems installer.

I FURTHER DETERMINE that Mr. Arnold Smith, II, shall surrender immediately his license as a security and fire alarm systems installer to the Division of Licensing Services to be held until he fulfills the order to provide proof satisfactory to the Division of Licensing Services that he possesses the experience required by law to be licensed as a security and fire alarm systems installer.

I FURTHER DETERMINE that by virtue of this decision, the respondent's motion for a summary dismissal of the complaint has been decided.

I RECOMMEND that this decision be adopted.

Felix Neals

Administrative Law Judge

So Ordered on: ALEXANDER F. TREADWELL

2/24/95 Secretary of State

By:

Michael E. Stafford, Esq.

Chief Counsel