ALJDEC decisions subject to certification as final

2013A-4047-ROC · Registrar of Contractors · 2014-01-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 6, 2014, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors was represented by Seth T. Hargraves, Esq., Assistant Attorney General; Respondent Shedmasters LLC appeared through its employee, Tommy Lujan. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On or about May 2, 2007, the Arizona Registrar of Contractors (“the Registrar”) issued License No. KB-2.231138-D to Shedmasters LLC (“Respondent”). Sharon Gale Lujan was listed as Respondent’s Qualifying Party and Member.[1] 2. On or about March 29, 2013, Respondent’s License No. KB-2.231138-D was suspended until it complied with the Registrar’s order in Case No. 2012-3040 by paying a subcontractor the amounts determined to be due. On or about June 1, 2013, Respondent’s license was administratively suspended for non-renewal. On or about June 10, 2013, Respondent’s license was again administratively suspended for lack of bond.[2] 3. On September 30, 2013, the Registrar on its own motion issued a Citation and Complaint against Respondent’s License No. KB-2.231138- D based on Respondent’s performance of contracting work on jobs for John and Susanne Verretto, Raymond and Marilyn Accola, and Leticia Chagolla. Based on Respondent’s alleged misconduct on the three jobs, the Citation and Complaint charged in eleven counts possible violations of A.R.S. § 32-1154(A)(1) (two counts), A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108 (two counts), A.R.S. § 32- 1154(A)(11), A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1158(B) (three counts), A.R.S. § 32-1154(A)(18), and A.R.S. § 32- 1154(A)(23) (two counts). 4. Respondent filed a timely written answer to the Citation and Complaint, generally denying any statutory violations involving workmanship and affirmatively alleging that Respondent’s supervisor, Mrs. Lujan’s husband, Tommy Lujan, had corrected all workmanship deficiencies on the Verrettos’ job, that Mr. Accola had denied reasonable access for Respondent to perform repairs by terminating the contract, and that Respondent did not have a contract with Ms. Chagolla. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent agency, for an evidentiary hearing. 5. An evidentiary hearing was held on January 6, 2014. The Registrar submitted seventeen exhibits and presented the testimony of five witnesses: (1) Mr. Verretto; (2) Mr. Accola; (3) Adam Stafford, Esq., Assistant Chief of the Registrar’s Legal Department; (4) Steve Klein, the Registrar’s investigator who was performed prehearing jobsite inspections of the Verrettos’ and Ms. Chagolla’s jobsites; and (5) Randy Cason, the Registrar’s investigator who reviewed Respondent’s license history. Although Mrs. and Mr. Lujan attended the hearing, they did not cross-examine any of the Registrar’s witnesses other that Mr. Verretto, did not testify, and did not submit any exhibits on Respondent’s behalf. Hearing Evidence Mr. and Mrs. Verretto’s Complaint (Case No. 2013-902) 6. On or about April 21, 2011, Respondent contracted with Mr. and Mrs. Verretto to build a new home for them in accordance with their architect’s plans and specifications for the sum of $145,000.00. Respondent’s contract did not apprise Mr. and Mrs. Verretto of their right to file a complaint with the Registrar for violations of A.R.S. § 32-1154(A) within the allowed by A.R.S. § 32-1155(B), did not provide contact information for the Registrar, and did not include a completion date.[3] 7. Mr. Verretto testified that although Respondent started the project, it did not finish the project. Therefore, on February 26, 2013, Mr. and Mrs. Verretto filed a complaint against Respondent with the Registrar that alleged nine specific workmanship deficiencies. The Registrar designated the complaint as Case No. 2013-902. 8. The Registrar assigned Case No. 2013-902 to its Inspector, Daryl McCloskey, for investigation. Inspector McCloskey has since retired and did not testify. 9. Inspector McCloskey performed a jobsite inspection on March 5, 2013. Mr. and Mrs. Verretto and Mr. Lujan on behalf of Respondent attended the jobsite inspection.[4] 10. On March 8, 2013, Inspector McCloskey issued a Corrective Work Order (“CWO”) in Case No. 2013-902 that required Respondent to correct by appropriate means all nine items on the Verrettos’ complaint within fifteen days.[5] 11. Mr. Verretto testified that Respondent repaired or completed some but not all of the items on the CWO in Case No. 2013-902. Mr. Verretto testified that after Respondent used cheap sealer to reseal the backyard walkways (CWO Item No. 9), Mr. Verretto applied sealer to the walkways. Mr. Verretto testified that he still is not satisfied with the condition of the walkways. Mr. Verretto testified that although Respondent had attempted to repair the stucco (CWO Item No. 7), it was still cracked. 12. Investigator Klein testified that he performed a prehearing inspection in Case No. 2013-902 of the Verrettos’ project on January 2, 2014. 13. Investigator Klein testified that the following items on the CWO in Case No. 2013-902 had been repaired to bring the items into compliance with the Registrar’s workmanship standards: (1) The leak on the rear porch had been repaired (CWO Item No. 3); (2) The northeast garage door had been sealed (CWO Item No. 4); (3) The garage door opener had lights (CWO Item No. 5); and (4) The rear kitchen patio door was painted on all sides (CWO Item No. 6). 14. Investigator Klein testified that the following five complaint items on the CWO had not been adequately completed or repaired sufficiently to comply with the Registrar’s workmanship standards: (1) The birdstop on the front and back porches was still too short (CWO Item No. 1); (2) The roof tiles on the rear porch were still different colors (CWO Item No. 2); (3) The stucco still had cracks that exceeded 1/16” (CWO Item No. 7); (4) The three rollup doors for the rear patio that the plans required were still missing (CWO Item No. 8); and (5) The walkways in the backyard still were not properly sealed (CWO Item No. 9). Mr. and Mrs. Accola’s Complaint (Case No. 2013-1786) 15. On or about January 3, 2012, Respondent contracted to construct a house and garage for Mr. and Mrs. Accola for a contract price of $84,000.00. Respondent’s initial contract did not apprise Mr. and Mrs. Accola of their right to file a complaint with the Registrar for violations of A.R.S. § 32-1154(A) within the allowed by A.R.S. § 32-1155(B), did not provide contact information for the Registrar, and did not include a completion date.[6] 16. Mr. Accola testified that he and his wife paid Respondent $45,000.00 for engineering before Respondent even started the project. Later, they paid another $5,100.00 to Respondent after it informed them that it needed more money to purchase materials from Lowe’s or Home Depot. Mr. Accola testified that although Respondent brought materials and started the project, shortly thereafter Respondent loaded all the materials onto a truck and left the project. 17. On or about April 24, 2012, after Mr. and Mrs. Accola complained to Mr. Lujan about Respondent’s failure to make any progress on the project, Mr. Lujan signed an addendum to the contract that required Respondent to complete the project by September 21, 2012.[7] 18. Mr. Stafford testified that A.R.S. § 32-1158 required certain terms to be included in contractors’ initial contracts with property owners and that subsequent change orders or amendments that included required terms that were not in the initial contract did not vitiate the initial violation. 19. Mr. Accola testified that not only was Respondent not working on the project, but Respondent’s subcontractors were complaining to him that Respondent was not paying them for their work on the project. Mr. Accola testified that when he complained to Mr. Lujan, Mr. Lujan said he would take care of the subcontractors. 20. After Respondent failed to make progress on the project, Mr. and Mrs. Accola hired attorney Ryan C. Hengl to help them work with Respondent to complete the project. On January 29, 2013, Mr. Hengl wrote a letter to Respondent demanding that on or before February 8, 2013, it provide copies of lien releases and notices and written assurance that it would complete the project by February 28, 2013.[8] 21. Respondent did not respond to Mr. Hengl’s January 29, 2013 letter. On February 13, 2013, Mr. Hengl sent another letter to Respondent, again demanding that it complete the project and that it pay its subcontractors and suppliers. Mr. Hengl’s February 13, 2013 letter also stated that if Respondent did not comply with Mr. and Mrs. Accola’s demands, they would file a complaint with the Registrar.[9] 22. Mr. Accola testified that Mr. Hengl advised him that he and his wife should pay subcontractors directly so that they would continue working on the project. 23. Mr. Accola testified that Respondent did not do anything to complete the project or to comply with Mr. Hengl’s other demands. Mr. Accola testified that, instead, Respondent contacted Mr. Hengl to demand that Mr. and Mrs. Accola pay more money to Respondent to complete the project. On March 5, 2013, Mr. Hengl sent a letter to Respondent terminating its contract with Mr. and Mrs. Accola.[10] 24. On April 18, 2013, Mr. Hengl filed a complaint against Respondent with the Registrar on behalf of Mr. and Mrs. Accola. Mr. Hengl attached to the complaint an accounting that showed that Mr. and Mrs. Accola had paid Respondent a total of $71,000.00 and that they had also paid various subcontractors and suppliers a total of $28,639.00 to complete the project.[11] The Registrar designated the complaint as Case No. 2013-1786. 25. Case No. 2013-1786 was assigned to Inspector McCloskey for investigation. In a letter dated April 18, 2013, Inspector McCloskey informed the parties that he had scheduled a jobsite inspection on April 24, 2013, at 8:30 a.m. and enclosed a copy of Mr. and Mrs. Accola’s complaint. Inspector McCloskey sent a copy of his April 18, 2013 letter to Respondent at its address of record.[12] 26. Mr. and Mrs. Accola attended Inspector McCloskey’s April 24, 2013 jobsite inspection in Case No. 2013-1786. No representative of Respondent appeared at the inspection. Inspector McCloskey confirmed that the project was incomplete and that cracking in the patio exceeded the Registrar’s standards.[13] 27. Mr. Stafford testified that the main substance of Mr. and Mrs. Accola’s complaint was that Respondent had abandoned the contract in violation of A.R.S. § 32-1154(A)(1) and that it had failed to pay subcontractors and suppliers in violation of A.R.S. § 32- 1154(A)(11). Mr. Stafford explained that because Respondent could only resolve the complaint by reimbursing Mr. and Mrs. Accola for monies that they had paid to subcontractors and suppliers to complete the project or for monies that they had paid to Respondent for work that it had not performed, the Registrar did not issue a CWO in Case No. 2013-1786. 28. Mr. Hengl later provided to the Registrar copies of documents to establish the amounts that Mr. and Mrs. Accola had paid to subcontractors and suppliers to complete the project.[14] The Registrar provided this information to Respondent. Mr. Accola testified that to date, Respondent has not reimbursed Mr. and Mrs. Accola for any of the monies that they spent on the project. Ms. Chagolla’s Complaint (Case No. 2013-2172) 29. On May 14, 2013, Ms. Chagolla filed a complaint against Respondent with the Registrar alleging that on March 14, 2013, it had contracted to build a patio at her house for the sum of $7,000.00, that she had paid Respondent $2,000.00, and that Respondent failed to complete the project.[15] According to the complaint, Respondent had last worked on the project on April 20, 2013, after its license had been suspended as discipline in an unrelated case on March 29, 2013. The Registrar designated Ms. Chagolla’s complaint as Case No. 2013-2172. 30. Ms. Chagolla attached to her complaint in Case No. 2013-2172 a copy of a receipt no. 63044 with the name, “Tommy Lujan,” written on it that described the general scope of the work on the project, price, and payment terms. Mr. Stafford pointed out that the signature on the receipt appeared the same as Mr. Lujan’s signature on the contract and change order that were attached to Mr. and Mrs. Accola’s complaint in Case No. 2013-1786.[16] 31. Receipt no. 63044 did not contain Respondent’s name, address, or license number, did not apprise Ms. Chagolla of her right to file a complaint with the Registrar for violations of A.R.S. § 32-1154(A) within the allowed by A.R.S. § 32-1155(B), did not provide contact information for the Registrar, did not provide the address where the work was to be performed, and did not include a completion date. 32. The Registrar assigned Ms. Chagolla’s complaint in Case No. 2013- 2172 to Inspector McCloskey for investigation. In a letter dated May 16, 2013, Inspector McCloskey informed Respondent that he had scheduled a jobsite inspection on May 23, 2013, at 9:00 a.m. and enclosed a copy of Ms. Chagolla’s complaint.[17] Inspector McCloskey sent a copy of the May 16, 2013 letter to Respondent’s address of record. 33. On May 16, 2013, Inspector McCloskey sent a second letter to Respondent in Case No. 2013-2172, informing Respondent that the Registrar had become aware that Respondent had continued to contract after its license had been suspended, in violation of A.R.S. § 32-1154(A)(18).[18] Mr. Stafford testified that Respondent did not respond to the warning letter. 34. Only Ms. Chagolla and Inspector McCloskey attended the May 23, 2013 jobsite inspection in Case No. 2013-2172. Inspector McCloskey noted that Respondent had removed the old patio and had partially framed the new patio, but had left the drywall for the ceiling inside exposed. Inspector McCloskey reported that Ms. Chagolla stated that after she paid Mr. Lujan $2,000.00, he had quit the job over a disagreement about funding and a building permit. Inspector McCloskey also reported that Mr. Lujan had called on May 24, 2013, and that Inspector McCloskey had instructed Mr. Lujan to submit his side of the dispute in written form.[19] 35. On May 29, 2013, Mr. Lujan submitted a written narrative to the Registrar that provided in relevant part as follows: [On the] Chagolla project we have done what we said we were going to do. At the first I told [Ms. Chagolla] I didn’t [know] how long Somerton Planning was going to take no control of them. [Ms. Chagolla] got a set of plans was explained that her patio was going to be built to their and Somerton codes. On the day of the first inspection I met Somerton Building on the job. He passed the footing inspection. I told [Ms. Chagolla] we passed the first inspection. She said no I didn’t I didn’t meet the inspector it’s not ready I’m a liar more footing needed to be in. I told her to look at the plans it’s just the way plans say we left the north form out to put the concrete in. She [said] we’re not finish with the forms explained we need that form off to put the concrete in. I had concrete termite [shield] to be done the next morning. She kept saying nothing is ready. There was no more [reasoning] with [Ms. Chagolla] at this point. I told her she [could] do it herself and she said that she would do it herself. So I said get my stuff out and she could finish it herself. She said that’s fine.

She has got her plans, permits, fill dirt, excavation, concrete set up, framing work, [which] adds up more than she paid. I don’t know what she wants to do and she [doesn’t] either.[20]

Mr. Lujan signed the May 29, 2013 written account on behalf of “Shedmasters.” 36. Mr. Stafford pointed out that the written account that Mr. Lujan submitted to the Registrar on May 29, 2013 in Case No. 2013-2172, which acknowledged that Respondent worked on Ms. Chagolla’s project, was not consistent with the written answer that Respondent filed in this matter, which asserted that it did not have a contract with Ms. Chagolla. 37. On June 6, 2013, Inspector McCloskey issued a CWO in Case No. 2013- 2172, requiring Respondent within fifteen days to “[c]omplete the patio and per the invoice number 630044 or come to agreement between both parties.”[21] Mr. Stafford explained that the disciplinary and administrative suspensions of Respondent’s license did not prevent it from performing warranty work. 38. On June 6, 2013, the Registrar received an accounting from Mr. Lujan in Case No. 2013-2172 that purported to show that Respondent had completed $2,450.00 worth of work for Ms. Chagolla before she cancelled the contract.[22] Mr. Stafford pointed out that this accounting also is inconsistent with Respondent’s written answer to the Citation and Complaint that alleged that it did not contract with Ms. Chagolla. 39. Investigator Klein testified that he went by Ms. Chagolla’s property to perform a prehearing inspection on January 2, 2014, and saw that the patio was framed but that it still needed stucco. 40. Investigator Klein testified that he inferred from Inspector McCloskey’s jobsite inspection notes and the CWO in Case No. 2013- 2172 that someone else had completed the framing for Ms. Chagolla’s patio. Inspector Klein testified that he knocked on Ms. Chagolla’s door, but she did not come out to talk to him. Respondent’s License History 41. The Registrar’s Notice of Hearing advised Respondent as follows: [I]n the event Respondent is found to have violated any of the statutory provisions charged in this case, then the assigned Administrative Law Judge, in accordance with a standing motion filed by the [Registrar] with [OAH], may properly consider the Respondent’s prior disciplinary record and current license status as a matter in mitigation or aggravation when formulating and submitting an appropriate recommended disposition of this matter.

42. Investigator Cason testified that 27 complaints had been filed against Respondent since the Registrar issued License No. KB- 2.231138-D. Twenty-four of the complaints had been closed and three complaints remained open at the time of his initial review. 43. Investigator Cason testified that he reviewed all the documents in the Registrar’s files concerning the 24 complaints that had been closed, including the inspectors’ notes, CWOs, and other correspondence, and had determined that Respondent at least initially had violated applicable statutes in the closed complaints by performing poor work, abandoning projects, and failing to include in its contracts the terms required by A.R.S. § 32-1158(B).

CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[23] 2. The Registrar bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[24] Respondent bears the burden of proof to establish affirmative defenses and factors in mitigation of any penalty by the same evidentiary standard.[25] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[26] 3. The suspended status of Respondent’s license does not deprive the Registrar of its right to prosecute this complaint against Respondent or prevent the Registrar from determining the merits of the Verrettos’, the Accolas’, and Ms. Chagolla’s complaints or the other statutory violations charged in the Citation and Complaint.[27] 4. The Registrar established that Respondent contracted to perform construction work for Mr. and Mrs. Verretto, for Mr. and Mrs. Accola, and for Ms. Chagolla. 5. Mr. and Mrs. Accola’s attorney Mr. Hengl terminated Respondent from the project on March 5, 2013, fourteen months after Respondent contracted to construct their house and garage, more than five months after it later promised to complete the project, and more than a month after Respondent failed to respond to Mr. Hengl’s request for assurances that it would continue working on and complete the project. By the time Mr. Hengl finally terminated Respondent’s contract with Mr. and Mrs. Accola, the project was still incomplete, even though they had paid Respondent $71,000.00 of the $84,000.00 contract price. Therefore, the Registrar established that Respondent abandoned its contract with Mr. and Mrs. Accola, in violation of A.R.S. § 32- 1154(A)(1),[28] before Mr. Hengl justifiably terminated the contract.

6. Respondent did not establish that it reimbursed Mr. and Mrs. Accola any monies that they paid to subcontractors, to suppliers, and to Respondent for work that it did not do or materials that it did not purchase, despite having received substantial monies from Mr. and Mrs. Accola, to remedy its abandonment of the contract. 7. The Registrar also established that Respondent violated A.R.S. § 32- 1154(A)(1) by abandoning and by failing to complete its contract with Ms. Chagolla without legal justification. 8. The Registrar established that Respondent’s workmanship on Mr. and Mrs. Verretto’s project and on Ms. Chagolla’s project was poor and did not comply with the Registrar’s standards, in violation of A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108.[29] 9. The Registrar established that Respondent failed to pay subcontractors and suppliers on Mr. and Mrs. Accola’s project after it received payment from them, in violation of A.R.S. § 32-1154(A)(11).[30] 10. The Registrar established that Respondent failed to comply with an applicable contracting statute that is contained in Title 32, Chapter 10, in violation of A.R.S. § 32-1154(A)(13),[31] because its contracts with Mr. and Mrs. Verretto, with Mr. and Mrs. Accola, and with Ms. Chagolla did not contain all of the elements that A.R.S. § 32-1158(B) required.[32] 11. The Registrar established that Respondent worked on Ms. Chagolla’s project after its license had been suspended, in violation of A.R.S. § 32-1154(A)(18).[33] 12. The Registrar established that Respondent failed to comply with the CWOs that were issued in Mr. and Mrs. Verretto’s complaint in Case No. 2013-902 and in Ms. Chagolla’s complaint in Case No. 2013-2172 without valid legal justification, in violation of A.R.S. § 32- 1154(A)(23).[34] 13. The Registrar established that Respondent’s license history is poor. Respondent’s poor license history is considered as a factor in aggravation of the penalty for the statutory violations established in this matter. RECOMMENDED ORDER Based on the foregoing, it is recommended that Respondent Shedmasters LLC’s License No. KB-2.231138-D shall be revoked. It is further recommended that Respondent be required to pay the sum of $1,000.00 as civil penalties for its two violations of A.R.S. § 32- 1154(A)(23) pursuant to A.R.S. § 32-1154(D). It is further recommended that Respondent be required to pay the sum of $1,000.00 as a civil penalty for its violation of A.R.S. § 32- 1154(A)(18) pursuant to A.R.S. § 32-1154(E). It is further recommended that if Respondent fails to pay the entire amount of the civil penalties on or before thirty days following the effective date of the final Order in this matter, that Respondent’s license shall be revoked, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of that certification. Done this day, January 24, 2014.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 1. [2] See id. (the Registrar’s webpage printout). The Assistant Chief of the Registrar’s Legal Department, Adam Stafford, testified as to the circumstances of the March 29, 2013 suspension.

[3] See the Registrar’s Exhibit 2 (attachment to complaint). [4] See the Registrar’s Exhibit 4 (Inspector McCloskey’s jobsite inspection notes). [5] See the Registrar’s Exhibit 5. [6] See the Registrar’s Exhibit 6 (attachment 1 to complaint). [7] See the Registrar’s Exhibit 6 (attachment 2 to complaint). [8] See the Registrar’s Exhibit 6 (attachment 3 to complaint). [9] See the Registrar’s Exhibit 6 (attachment 4 to complaint). [10] See the Registrar’s Exhibit 9. [11] See the Registrar’s Exhibit 6 (attachment 5, 6, and 7 to complaint). [12] See the Registrar’s Exhibit 7. [13] See the Registrar’s Exhibit 8. [14] See the Registrar’s Exhibit 10. [15] See the Registrar’s Exhibit 11. [16] Compare Exhibit 6 (attachment 1 and 2) with Exhibit 11 (attachment). [17] See the Registrar’s Exhibit 12. [18] See the Registrar’s Exhibit 13. [19] See the Registrar’s Exhibit 14. [20] See the Registrar’s Exhibit 15. The Administrative Law Judge inserted punctuation for readability, but did not correct or note all of Mr. Lujan’s grammatical errors. She includes most of his text to show the extent of Respondent’s involvement in the project. [21] The Registrar’s Exhibit 16. [22] See the Registrar’s Exhibit 17. [23] See A.R.S. § 32-1154(A). [24] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [25] See A.A.C. R2-19-119(B)(2). [26] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [27] See A.R.S. § 32-1154(C). That statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [28] A.R.S. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” [29] A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [30] A.R.S. § 32-1154(A)(11) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.” [31] A.R.S. § 32-1154(A)(13) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” [32] A.R.S. § 32-1158(B) provides that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 must be in writing and must include the following minimum terms: 1. The name of the contractor and the contractor’s business address and the license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . . [33] A.R.S. § 32-1154(A)(18) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[c]ontracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.” [34] A.R.S. § 32-1154(A)(23) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.”

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