ALJDEC decisions subject to certification as final

2016A-694-ROC · Registrar of Contractors · 2016-07-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 28, 2016 APPEARANCES: Kenon Kae Johnson (Complainant) appeared on her own behalf. Home Lift Now LLC (Respondent) did not appear. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ Hearing was convened to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (Registrar). Evidence and testimony were presented, and based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made: FINDINGS OF FACT 1. Complainant is the owner/occupant of a residence located at 6209 East Westland Drive, Scottsdale, Arizona 85266-8238. 2. Respondent holds Arizona Contractor’s License No. 302446, which is currently summarily suspended and is scheduled to be revoked on September 4, 2016, absent an appeal by Respondent. 3. On February 29, 2016, Complainant filed a complaint with the Registrar alleging that Respondent had performed poor work in remodeling Complainant’s home, including, but not limited to the kitchen and bathroom. All told, the Complaint alleged 57 different items of concern. 4. The Registrar assigned investigator Steve Klein to investigate the complaint. Klein testified that he arranged to perform an inspection on April 2, 2016, and notified Complainant and Respondent of the time and place of the inspection. Respondent attended that inspection and agreed to address certain additional items Complainant identified. Klein indicated that at the time of an inspection, he substantiated 41 of the 57 items and noted that the project had not been completed per the parties’ contract. 5. On April 26, 2016, Klein sent Respondent a Directive from the Registrar. The Directive listed the 41 items that required attention and directed Respondent to complete the project per the contract by 5:00 p.m. on May 13, 2016. 6. On May 17, 2016, Klein spoke via telephone with Complainant and confirmed that the items listed in the Directive were not addressed by Respondent and the project was still not complete. 7. Klein then forwarded the matter to the Registrar’s legal department for review. 8. On May 18 2016, the Registrar issued Respondent a Citation. That Citation contained five charges. Charge 1 referenced "[a] violation of Rule 4-9-108, titled ‘Minimum Construction Standards,’ in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3).” Charge 2 specified a violation of A.R.S. § 32-1154(A)(22), in particular, “[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.” 9. On June 6, 2016, the Registrar issued an order summarily suspending Respondent’s license. That Order provided as follows: Pursuant to A.R.S. § 41-1092.11(B), and with good cause appearing, IT IS ORDERED that Respondent's License No. CR61.302446-D shall be summarily suspended on the date of this Order. The Registrar finds that the public health, safety, and welfare imperatively require emergency action on the part of the Registrar. Respondent knowingly perpetrated acts in violations of A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(2), and A.R.S. § 32- 1154(A)(6) which violations include, without limitation, abandoning homeowner contracts after payment, failing to obtain permits and inspections, failure to pay subcontractors and materialmen which damaged the homeowners and other acts that demonstrate that the licensee is an ongoing danger to the public health, safety, and welfare. At the time of this Order, the Respondent has eleven complaints which have been filed against it or its Qualifying Party with the most recent complaint filed on May 27, 2016.[1]

10. On the same date, the Registrar on its own motion issued a Citation and Complaint against Respondent’s license, charging thirty two (32) violations of various statutes as cause to discipline Respondent’s license. 11. Complainant testified in that case as did Brandon Lederer, a member of Respondent. 12. On July 12, 2016, the undersigned issued an Administrative Law Judge Decision that recommended revocation of Respondent’s license and contained Findings of Fact and Conclusions of Law that apply with equal force to the instant case. The pertinent portions of that Decision are as follows: 34. With regard to the Johnson complaint, Lederer admitted Respondent entered into the contract in November 2015, after Respondent submitted its license application but before the license was officially issued. Lederer also acknowledged that the amount of the contract was $70,000, which is beyond the scope of a CR 61 license. He also agreed that the work done by Respondent needed to be fixed and that a window installed in the Johnson home was both installed improperly and had warranty issues. Lederer said that the Johnsons knew the replacement window was back-ordered but refused to allow other work to be done before the window was completed.

35. Lederer indicated that other delays were caused by contractors refusing to work for Ms. Johnson as well as by Mr. Johnson’s cancer diagnosis and subsequent request to have a break from construction.

36. Tom Johnson testified that when the contract was signed, he was told the project would be finished by December 18, 2015. He noted that his cancer diagnosis did not occur until January 2016. Johnson indicated that after several weeks, subcontractors began walking off the job claiming that Respondent had failed to pay them for their work. He stated that he had no choice but to pay the subcontractors himself. Johnson said he learned that many subcontractors used on the job were not licensed.

37. The Johnson complaint contains documentary evidence that the Johnsons paid subcontractors directly and received lien waivers. See Exhibit 8.

38. Johnson detailed a variety of problems with Respondent’s work including chips in tile and the need to redo the shower and tub. Johnson indicated he was “astonished” by the claim that Respondent had completed 300 jobs, as his experience was that he could not get Respondent to complete anything. He explained that this inability to complete work was the reason he told Lederer that Respondent had to replace the window and install it correctly before moving on to other parts of the parts of the project.

39. Lederer maintained that at the time of the filing of the Johnson complaint, he believed the project was on hold due to concerns over Mr. Johnson’s health. He said the window is still not available, but he is available to perform corrective work and finish the project if he were permitted access to the Johnson residence.

Conclusions of Law

7. The Registrar has established that Respondent abandoned the Whitetree, Joeng and Johnson projects without legal excuse within the meaning of A.R.S. § 32-1154(A)(1). The record reflects that Respondent was responsible for significant delays in these projects that amount to a constructive abandonment. Joeng, and Johnson did not have an obligation to wait for an unlimited period for their products to be ordered and arrive. Similarly, Whitetree was entitled to a finished shower without waiting seven months and counting. Respondent cannot cure the abandonment inherent in the significant and material delays by professing the intent to come back at some point in the future...

13. On July 26, 2016, the Registrar issued a Final Administrative Decision and Order that accepted the substance of the Administrative Judge Decision, made certain technical corrections to address typographical errors, and revoked Respondent’s license effective September 4, 2016. 14. Hearing in this matter was held on July 28, 2016. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the hearing was delayed 20 minutes, Respondent did not appear, through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license. 15. Complainant testified that she and her husband had been damaged financially by Respondent’s poor workmanship and had gotten bids from other contractors’ to fix the poor and incomplete work done by Respondent. She noted that they had not been contacted by Respondent in an attempt to do the work called for by the Directive. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. Respondent’s revoked license does not deprive Complainant of her right to prosecute her complaint or prevent the Registrar from determining the merits of the complaint. See A.R.S. § 32-1154(D). 3. The copies of the Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable and Respondent is deemed to have received notice of the hearing. A.R.S. §§ 41- 1092.04 and 41-1092.05(D). 4. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory sections cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (Rev. 6th ed. 1990). 5. Both the testimony in the prior hearing and the additional testimony taken in the instant case establish that Respondent performed poor work in installing the window and thereafter failed to complete the project per the parties’ contract. Lederer admitted in the prior proceedings that Respondent had installed the window incorrectly and was waiting to address this issue once a new window, which he claimed was backordered, arrived. Lederer also acknowledged that there were issues in the bathroom that needed to be fixed. Mr. Johnson testified in the prior proceeding regarding several workmanship issues with the window and chipped tile, among other things, that led him to doubt that Respondent could complete the work it promised. Accordingly, there is ample evidence of a violation of Rule 4-9-108, titled ‘Minimum Construction Standards,’ in the Arizona Administrative Code, and thereby of A.R.S. § 32- 1154(A)(3). 6. Finally, Respondent did not finish its work within the time period specified in the Directive and has still not finished the work needed to complete Complainant’s remodeling project. Respondent’s actions constitute a violation of A.R.S. § 32-1154(A)(22). Given that Respondent’s license has already been summarily suspended and is scheduled to be revoked, assessing a monetary civil penalty is not necessary. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall revoke Home Lift Now LLC’s License No. 302446.

Done this day, July 29, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] The Tribunal takes administrative notice of relevant documents filed in docket number 2016A-1713-ROC along with the Administrative Law Judge Decision and Final Administrative Decision and Order issued in that case against Respondent.

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