Arizona Court of Appeals | Ariz. Const. art. III | No. 1 CA-CIV 5870
The Court of Appeals adopted the four-factor separation-of-powers test that Arizona courts still use, then applied it to hold that the Registrar of Contractors could construe a disputed contract as an ancillary part of regulating licensed contractors.
Last updated September 8, 2026. Case: J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, Arizona Court of Appeals, Division One, No. 1 CA-CIV 5870; 142 Ariz. 400, 690 P.2d 119 (App. 1984); statutory-appeal judgment affirmed and declaratory-judgment action affirmed as modified; mandate issued November 7, 1984.
Scope note: This page provides an educational summary of the Arizona Court of Appeals’ decision in J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, the precedential ruling in which Arizona adopted the four-factor test for separation-of-powers challenges to agency adjudication. It is included here because that test is the foundation Arizona courts later used to decide whether an executive agency may adjudicate private disputes, including in the homeowners-association context. This page is educational and is not legal advice.
The takeaway
The Registrar of Contractors may constitutionally resolve a bona fide contractual dispute involving a licensed contractor – construing disputed contract terms ancillary to its regulatory function – to determine whether the contractor violated A.R.S. section 32-1154(3), without violating the separation-of-powers provision of Article III. To decide the question, the court adopted the four-factor test from State ex rel. Schneider v. Bennett.
Case Participants
Petitioner Side
- J.W. Hancock Enterprises, Inc. (dba Camelot Homes) (Plaintiff-Appellant)
Licensed contractor / homebuilder
The licensed contractor found in violation of the contractor-discipline statute; argued the Registrar could not constitutionally construe a disputed contract.
- Lars O. Lagerman (Counsel)
Pavilack, Spack & Mulcahy, P.C.
Counsel for plaintiff-appellant J.W. Hancock Enterprises.
- Lawrence L. Pavilack (Counsel)
Pavilack, Spack & Mulcahy, P.C.
Counsel for plaintiff-appellant J.W. Hancock Enterprises.
Respondent Side
- Arizona State Registrar of Contractors (Defendant-Appellee)
State agency
The agency that adjudicated the buyers' complaint and found the builder violated A.R.S. section 32-1154(3).
- Aaron Kizer (Defendant-Appellee)
Arizona State Registrar of Contractors
Named in his official capacity as State Registrar of Contractors.
- Stephen Hancock and Mary Hancock (Defendants-Appellees)
Homebuyers
The buyers who complained to the Registrar that the builder failed to install the insulation required by their supplemental agreement.
- Patrick M. Murphy (Counsel)
Arizona Attorney General's Office
Chief Counsel, Financial Fraud Division (office of Robert K. Corbin), for the Registrar and Kizer.
- David M. Talamante (Counsel)
Arizona Attorney General's Office
Assistant Attorney General for the Registrar and Kizer.
- Lee Montgomery (Counsel)
Arizona Attorney General's Office
Assistant Attorney General for the Registrar and Kizer.
- John A. Shannon, Jr. (Counsel)
Kunz & Waugh, Ltd.
Counsel for the appellee homebuyers, Stephen and Mary Hancock.
- Donald R. Kunz (Counsel)
Kunz & Waugh, Ltd.
Counsel for the appellee homebuyers, Stephen and Mary Hancock.
Neutral Parties
- David G. Derickson (Judge)
Maricopa County Superior Court
Superior Court trial judge whose consolidated judgment (causes C-397843 and C-397842) affirming the Registrar was the subject of this appeal.
- Judge Grant (Judge)
Arizona Court of Appeals, Division One
Authored the opinion of the court; on the panel that heard oral argument (Department A) on January 31, 1984.
- Presiding Judge Brooks (Presiding Judge)
Arizona Court of Appeals, Division One
Concurred; on the Department A panel.
- Judge Contreras (Judge)
Arizona Court of Appeals, Division One
Concurred; on the Department A panel.
What happened
In 1977, J.W. Hancock Enterprises (doing business as Camelot Homes), a licensed contractor, agreed to build a house for buyers Stephen and Mary Hancock, and the parties signed a supplemental agreement for an additional insulation package.
After moving in, the buyers disputed whether the supplemental agreement required zonolite wall insulation, and in 1978 they filed a complaint with the Arizona State Registrar of Contractors.
Following a 1979 hearing, the Registrar found the parties had contracted for the insulation, that the builder had departed from the agreed specifications, and that this violated A.R.S. section 32-1154(3); it ordered the builder to install the insulation or have its license suspended, and denied rehearing.
The builder filed a statutory appeal of the Registrar’s decision and a declaratory judgment action in Maricopa County Superior Court (consolidated causes C-397843 and C-397842). Before Judge David G. Derickson, the superior court affirmed the Registrar and then gave that decision preclusive effect in the declaratory judgment action. The builder appealed, and the two matters were consolidated on appeal to Division One.
The Court of Appeals recognized that Arizona had not articulated a method for deciding separation-of-powers claims and adopted the four-factor test from the Kansas decision State ex rel. Schneider v. Bennett.
Applying the test, the court held that the Registrar’s limited, ancillary power to construe a contract was tied to its legitimate regulatory authority over licensed contractors and did not violate Article III; it affirmed the Registrar’s decision and the judgment, modifying only the attorneys’ fees award.
The official appellate record shows the consolidated appeal was argued before Division One, Department A, on January 31, 1984, before Judges Brooks, Grant, and Contreras; the court issued its opinion on August 21, 1984, and its mandate – making the decision final – followed on November 7, 1984. The complete record and docket are posted with this page as a source document.
Procedural timeline
1977-02-02
J.W. Hancock Enterprises (Camelot Homes) and buyers Stephen and Mary Hancock sign a supplemental agreement for an additional insulation package, later disputed as to whether it required zonolite wall insulation.
1979-08-20
The Arizona State Registrar of Contractors holds a hearing on the buyers' complaint.
1979-09-11
The Registrar issues a Decision and Order finding the builder violated A.R.S. section 32-1154(3) and ordering it to install the insulation or face license suspension.
1980-11-25
Maricopa County Superior Court (Judge David G. Derickson) affirms the Registrar's decision on statutory appeal and later gives it preclusive effect in the builder's declaratory judgment action.
1981-04-27
The statutory-appeal (C-397843) and declaratory-judgment (C-397842) causes are consolidated on appeal in the Court of Appeals, Division One.
1984-01-31
The consolidated appeal is argued before Division One, Department A (Judges Brooks, Grant, and Contreras).
1984-08-21
The Arizona Court of Appeals adopts the four-factor separation-of-powers test, upholds the Registrar's authority, and affirms as modified.
1984-11-07
The Court of Appeals issues its mandate, making the decision final.
View all 2 source documents for this case ↓
Complete source-document index
This index contains 1 PDF, 1 other source file from the reviewed public source packet. Byte-identical copies are listed once. Files are ordered by the date and sequence in the public filename, and party filings or research materials are labeled separately from court rulings.
Source 1
1984-08-21
Cap Opinion
Type: Decision or judgment
The published Arizona Court of Appeals opinion in J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, hosted as a downloadable public-record source used to build this case-file page and to supply a substantive source document.
Source 2
1984-11-07
Court Of Appeals Record And Mandate
Type: Decision or judgment
The official Arizona Court of Appeals case file for No. 1 CA-CIV 5870 – the docket sheet and chronological record of proceedings (record on appeal, briefing, the January 31, 1984 oral argument, the August 21, 1984 opinion, and the November 7, 1984 mandate). Posted as the authoritative primary-source court record.
FAQ
What was J.W. Hancock Enterprises v. Arizona State Registrar of Contractors about?
A homebuilder, J.W. Hancock Enterprises (doing business as Camelot Homes), disputed with buyers Stephen and Mary Hancock whether a supplemental agreement required it to install a particular wall insulation. The buyers complained to the Arizona State Registrar of Contractors, which found the builder had departed from the agreed plans and violated the contractor-licensing statute. The builder appealed, arguing that only a court, not the Registrar, could constitutionally construe a disputed contract.
What did the court decide?
The Court of Appeals held that the Registrar of Contractors could constitutionally resolve a bona fide contractual dispute involving a licensed contractor, because construing the contract was ancillary to the Registrar’s regulatory function and the courts retained ultimate review. To reach that conclusion, the court adopted a four-factor test for separation-of-powers challenges. It affirmed the Registrar’s decision and the judgment, modifying only the amount of attorneys’ fees.
Why is this case important?
J.W. Hancock is where Arizona adopted the four-factor test for deciding whether a statute lets one branch of government usurp the powers of another. The court took the test from the Kansas decision State ex rel. Schneider v. Bennett. That test – later adopted by the Arizona Supreme Court in State ex rel. Woods v. Block – became the standard framework Arizona courts use for separation-of-powers challenges to agency adjudication.
How does this connect to Arizona HOA disputes?
The four-factor test from J.W. Hancock is the same test the Court of Appeals applied in Gelb v. Department of Fire, Building & Life Safety to decide whether Arizona’s administrative-hearing process for homeowner-versus-association disputes was constitutional. J.W. Hancock upheld agency adjudication because it was tied to a genuine regulatory purpose; Gelb struck it in the HOA setting because, there, the agency had no such regulatory nexus. Understanding J.W. Hancock explains the rule Gelb applied.
What was the procedural path of the case?
The dispute began before the Arizona State Registrar of Contractors (hearing in 1979). The builder then pursued two consolidated actions in Maricopa County Superior Court before Judge David G. Derickson – a statutory appeal (cause C-397843) and a declaratory judgment action (cause C-397842) – and the court affirmed the Registrar and gave that decision preclusive effect. On the consolidated appeal to the Court of Appeals, Division One, the case was argued on January 31, 1984 before Judges Brooks, Grant, and Contreras; the court issued its opinion on August 21, 1984 (affirmed as modified), and its mandate followed on November 7, 1984. The complete official court record and docket are posted with this page.
Is J.W. Hancock still good law, and is this legal advice?
J.W. Hancock is a published, precedential Arizona Court of Appeals decision and remains a leading authority on when an administrative agency may adjudicate private disputes. This page is a neutral educational summary, not legal advice; anyone dealing with a specific dispute should confirm the current law and consult a qualified Arizona attorney.
Case Dossier
This dossier combines the case metadata, linked court sources, and the explanatory sections below. It distinguishes court rulings from party filings, allegations, and requested relief.
Case Summary
| Case ID / citation | 142 Ariz. 400, 690 P.2d 119 (App. 1984) |
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| Court / tribunal | Court of Appeals |
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| Decision / key date | August 21, 1984 |
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| Judge / panel | Grant (Judge, author), Brooks (Presiding Judge), Contreras (Judge) |
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| Parties | J.W. Hancock Enterprises, Inc., dba Camelot Homes (Plaintiff-Appellant) v. Arizona State Registrar of Contractors and homebuyers Stephen and Mary Hancock (Defendants-Appellees) |
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| Governing law | - Ariz. Const. art. III (separation of powers)
- A.R.S. section 32-1154 (contractor discipline; departure from plans or specifications)
- A.R.S. section 12-341.01 (attorneys' fees in contract actions)
- A.R.S. section 12-910 (evidence on administrative review)
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| Topics | Procedure |
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| Outcome / holding | The Registrar of Contractors may constitutionally resolve a bona fide contractual dispute involving a licensed contractor – construing disputed contract terms ancillary to its regulatory function – to determine whether the contractor violated A.R.S. section 32-1154(3), without violating the separation-of-powers provision of Article III. To decide the question, the court adopted the four-factor test from State ex rel. Schneider v. Bennett. |
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| Primary public source | View hosted source opinion/order |
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Parties, Court, and Research Coverage
| Reviewed source package | 1 PDF, 1 other source file |
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| Step-by-step docket roadmap | 8 roadmap entries |
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| Video overview | No video embed currently configured |
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| Study / briefing material | 1 section |
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| FAQ / homeowner questions | 6 questions |
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| Featured download links | 2 download links |
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Key Issues & Findings
Case SummaryA homebuilder, J.W. Hancock Enterprises (doing business as Camelot Homes), and homebuyers Stephen and Mary Hancock disputed whether a supplemental agreement required the builder to install zonolite wall insulation. The buyers complained to the Arizona State Registrar of Contractors, which found the parties had contracted for the insulation, that the builder had departed from the agreed specifications, and that this violated the contractor-licensing statute, A.R.S. section 32-1154(3). The builder pursued a statutory appeal and a declaratory judgment action, arguing that resolving a bona fide contract dispute is a purely judicial function that an executive agency may not perform. The superior court affirmed the Registrar and gave its decision preclusive effect. On appeal, the Court of Appeals rejected the constitutional challenge. Recognizing that Arizona had never articulated a method for deciding separation-of-powers claims, the court adopted the four-factor test the Kansas Supreme Court set out in State ex rel. Schneider v. Bennett. Applying it, the court held that although resolving a private dispute is judicial in nature, the Registrar's power to construe a contract was limited, ancillary to its legitimate regulatory authority over licensed contractors, and subject to judicial review, so it did not threaten the core functions of the courts or violate Article III. The court affirmed the Registrar's decision and the judgment, modifying only the attorneys' fees award.
Key Issues & FindingsThe court began with Article III, noting that Arizona courts have never required an absolute separation of powers; some blending is unavoidable in modern government, and the doctrine is preserved not by mechanistic formulas but by ad hoc determinations that keep one branch from exercising the whole power of another. Because Arizona had not articulated a reasoned method for making those determinations, the court adopted the test the Kansas Supreme Court set out in State ex rel. Schneider v. Bennett: courts weigh (1) the essential nature of the power exercised, (2) the degree of control by one branch, (3) the objective of the Legislature, and (4) the practical result of the blending of powers.
Applying the test, the court found that adjudicating a dispute between two private parties is generally judicial in nature; that there was no coercive influence on the judiciary, because the courts retained ultimate review and the Registrar's power was limited to license discipline (no money damages); that A.R.S. section 32-1154 is the enforcement mechanism in a legitimate contractor-licensing scheme; and that, in practice, the Registrar construes contracts only as an ancillary part of its regulatory mission, with dissatisfied contractors free to seek court review. The court concluded that this limited, ancillary power to construe contracts does not threaten the core functions of the courts.
The court reconciled its holding with earlier decisions – distinguishing Trico Electric and General Cable (where the Corporation Commission would have exercised direct, not ancillary, adjudicatory power) and aligning the case with Batty v. Arizona State Dental Board (upholding quasi-judicial agency fact-finding). It then affirmed that the Registrar's decision was supported by substantial evidence, that refusing additional evidence was not an abuse of discretion, and that giving the Registrar's decision preclusive effect was proper, while modifying the attorneys' fees award to reflect only the declaratory-judgment work.
Why It MattersJ.W. Hancock is the foundation case: it is where Arizona adopted the four-factor test that courts still use to decide whether a statute impermissibly lets one branch of government exercise the powers of another. The Arizona Supreme Court later adopted the same test in State ex rel. Woods v. Block, and the Court of Appeals applied it in Cactus Wren Partners and again in Gelb v. Department of Fire, Building & Life Safety.
For homeowners-association law, J.W. Hancock supplies the rule that decides whether an executive agency may adjudicate a private dispute: the agency may do so when the power is auxiliary to and dependent upon a legitimate regulatory function and the courts keep the final say. That is exactly the standard the Court of Appeals used when it struck Arizona's first administrative-hearing process for homeowner-versus-association disputes in Gelb – because, in that context, the agency had no regulatory authority over planned communities. Reading J.W. Hancock explains where the test came from and why the regulatory nexus is decisive. This summary is educational and neutral; it is not legal advice.
