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2017A-1728-ROMC-ROC · Registrar of Contractors · 2017-11-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Registrar of Contractors No. 2017A-1728-ROMC-ROC COMPLAINANT -v- ADMINISTRATIVE LAW JUDGE DECISION Catalyst Construction LLC License No. 300440 RESPONDENT

HEARING: August 29, 2017, at 8:30 AM APPEARANCES: Dale Rittenhouse (“Mr. Rittenhouse” as Qualifying Party of Catalyst Construction, LLC), Steve Nelsen (“Investigator Nelsen” Investigator for the Registrar of Contractors (Registrar or ROC)), Matt Gunstra (“Investigator Gunstra” Investigator for the Registrar (Registrar or ROC)), and Thomas Raine (“Mr. Raine” Attorney for the Registrar). NON-APPEARANCE: Catalyst Construction, LLC (“Respondent”) ADMINISTRATIVE LAW JUDGE: Linda Marie Brown _____________________________________________________________________ The hearing was convened to determine whether Respondent violated the charged provisions of A.R.S. §§ 32-1154(A)(1), (3), and 32-1154(A)(9), pursuant to A.R.S. 32-1154(B) which authorizes the Registrar to impose discipline against licensees for violations of Title 32, Chapter 10 of the Arizona Revised Statutes. The Registrar entered Exhibits labeled C1 through C12. Testimony and evidence was offered and the following Findings of Fact, Conclusions of Law and Recommended Order are made. FINDINGS OF FACT 1. A license application was filed by Respondent on or about July 14, 2015. The license application was signed by Dale Lewis Rittenhouse as the qualifying party, and submitted by Yamne Rosas Borsenki as a member of Catalyst Construction, LLC and not qualifying party. In its application, Ms. Borsenki replied “yes” and attached a

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826 copy of a criminal background check to Part 4, question 25, of its application.1 A “B” License General Contractor, License number 300440 was issued to Respondent on or about August 14, 2015. 2. Catalyst Construction, LLC, is registered with the Arizona Corporate Commission as incorporated on May 20, 2015, and approved on June 15, 2015. Member information listed for this entity is Yamne Borsenik, 5001 North Chiquita Lane, Paradise Valley, AZ 85253. As of May 4, 2017, no statutory agent information was provided and no other members listed to this entity on the Arizona Corporate Commissions website.2 3. Complaint No. 2017-1169 was filed with the Registrar by Yasir Shareef (“homeowner”) on or about March 2, 2017. Mr. Shareef’s is the homeowner/occupant of 16112 East Quartz Mountain, Paradise Valley, AZ 85253. In his Complaint he list Joel Borsenik as the contractor, and Dale Lewis Rittenhouse as partner and Yamne Borsenik as wife. Mr. Shareef answered to the Complaint a contract date of January 19, 2015, and work stopped sometime in September 2016. The contract amount listed was $140,000 / approx. $1.8 million; and amount paid as $137,000 / 1.8 million.3 4. Mr. Shareef’s Complaint alleged abandonment and poor sourcing to include a list of 20 items of work poorly performed or incomplete as follows: (1) interior doors defective assembly and installation of doors and finish; (2) door hardware defective installation; (3) home marble floor poor quality; (4) pool completion incomplete; (5) hardwood floor installation one room incomplete, others poor; (6) baseboard installation incomplete; (7) missing plumbing fixtures; (8) missing electrical work; (9) paver installation incomplete; (10) paint incomplete and poor quality work; (11) drywall poor quality work and incomplete; (12) garage door incomplete; (13) exterior paint color wrong, does not meet city code; (14) backyard drain incomplete; (15) roof deck/stairs incomplete; (16) plumbing right side of house has no hot water; (17) did not pay paint contractor, they are asking for money; (18) did not pay paver contractor, they

1 See Registrar’s Exhibit 2. See Registrar’s Exhibit 4. See Registrar’s Exhibit 5. are asking for money; (19) paid for solar plans, but took money and did not provide; and (20) paid for low volt, did not receive anything.4 5. The homeowner provided the following checks5 made payable to Joel Borsenik: Date Check No. Amount Memo 11/23/2015 208 $15,520.00 Misc 9180 12/23/2015 166 $ 4,000.00 ponywall 01/14/2016 177 $ 4,391.00 stucco 05/20/2016 244 $11,238.00 drywall mat, labor 09/28/2016 308 $ 13,200.00 Interior doors – 6112 Quartz 10/21/2016 317 $ 6,850.00 Reim. Tile, pavers, fili 6. Homeowner provided additional checks6 made payable to Catalyst Construction as follows: Date Check No. Amount Memo 12/15/2015 215 $15,000.00 stucco #2 12/15/2015 216 $14,484.76 drywall 12/29/2015 172 $ 3,662.00 stucco material 01/14/2016 176 $38,239.41 electrical & low volt (3661)8 (never delivered) 03/01/2016 187 $40,000.00 deposit fixtures Plumbing 06/04/2016 274 $ 9,876.80 drywall 06/17/2016 293 $ 6,400.00 electrical 06/28/2016 252 $ 6,381.60 tile, labor & install 10/17/2016 315 $ 5,000.00 fencing

7. The Registrar assigned the matter to Investigator Matt Gunstra, who thereafter scheduled to perform a jobsite inspection. The jobsite inspection was conducted on March 23, 2017, along with Steve Nelson, another Investigator of the ROC. Yasir Shareef, Ayesha Hussain, and Joel Borsenick were present. During this inspection, Investigator Gunstra noticed a Catalyst Construction yard sign with a ROC number on it located on the property. Investigator Gunstra stated in his report that he believed Joel Borsenick acted as a general contractor on this project.7 See Registrar’s Exhibit 5. See Registrar’s Exhibit 3. See Registrar’s Exhibit 8. See Registrar’s Exhibit 6. 8. At the jobsite inspection, the homeowner stated he hired other contractors to repair and complete much of the work he listed in his complaint as substandard. Investigator Gunstra reviewed each of the 20 complained of items and noted those items repaired by others, and those items substantiated as still existing at the time of the inspection.8 Investigator Gunstra provided photos taken the day of his inspection.9

9. Additional exhibits were provided to include an unsigned document titled Employment Agreement between Yasir Shareef and Ayesha Husain and Joel Borsenik dated January 19, 2015. The document set forth scope of work for an employee to render construction management services.10 10. Building Permit No. BD14-38419 was obtained for address 6112 E Quartz Mountain Rd TPV Mummy Mountain Park 2101. BD14-38419 was issued on December 3, 2014, listing Owner as Hays Living Trust and Contractor Owner/Builder Joel Borsenik. The Building Permit’s expiration date is July 26, 2017.11 11. On May 23, 2017, the Registrar of Contractors, on its own motion, issued a Citation against Catalyst Construction, LLC (“Respondent”) charging Respondent with three (3) alleged violations. The citation was sent both regular and certified mail to the Respondent at its address of record: 5001 N. Chiquita Lane, Paradise Valley, AZ 85253-7017.12 12. The Registrar received a document titled, written answer to Citation and Complaint, on or about June 6, 2017, signed by Dale L. Rittenhouse, Past QP for CCLLC [1-29-15 through 4-27-17].13 13. A hearing was scheduled before the Office of Administrative Hearings. Hearing 14. At the hearing, Mr. Raine provided in its opening statement that the Respondent is charged with abandonment, poor workmanship and aiding and abetting

See Registrar’s Exhibit 6. 9 See Registrar’s Exhibit 7. See Registrar’s Exhibit 9. See Registrar’s Exhibit 10. See Registrar’s Exhibit 1. See Registrar’s Exhibit 11. an unlicensed contractor, namely Joel Borsenik. The Registrar is seeking discipline against Respondent. 15. The Registrar presented testimony of Investigator Matt Gunstra. Investigator Gunstra was assigned to investigate the complaint filed by Yasir Shareef, and responsible for performing a jobsite inspection on March 23, 2017, of the property located at 6112 E. Quartz Mountain, Paradise Valley, Arizona.14 16. Investigator Gunstra credibly testified and provided a narrative as to his involvement in the Yasir Shareef complaint (Matter No. 2017-1169) which lead to this action taken by the Registrar. He stated that he attempted to reach Yamne Borsenik by calling the phone number listed in the ROC IMS database and it was a wrong number. 17. Investigator Gunstra testified he took several photos at the time of the jobsite inspection.15 He provided a detailed account as to his observations during his inspection. For example, lippage on the tile flooring is a tripping hazard and needed to be properly ground down, and the grout lines were rough and unpolished, missing paint, doors missing striker plates and not able to receive hardware, etc.. All of his observations were noted in his jobsite inspection and he testified that the electrical is not yet complete and outlets not installed which pose a safety issue.16 18. He provided detailed testimony as to his findings regarding Catalyst Construction LLC sign at the jobsite17 19. Investigator Gunstra stated that Yamne Borsenik was not present at the jobsite inspection but that Joel Borsenik showed up. 20. Mr. Rittenhouse asked why the qualifying party was not notified to which the reply was that the notice is sent to the license holder, in this case, Yamne Borsenik. 21. When asked why no directive was issued, Investigator Gunstra replied that the Contractor no longer had a qualifying party. 22. Investigator Gunstra also explained that Investigator Nelson accompanied him as a ride along observation and peer review but remained silent during the jobsite inspection. See Registrar’s Exhibit 6. See Registrar’s Exhibit 7. See Registrar’s Exhibit 6. See Registrar’s Exhibit 7, JSI p.22, 23. Dale L. Rittenhouse testified that he was the qualifying party at the time work was performed at 6112 E. Quartz Mountain, Paradise Valley, Arizona. He further stated that he was a 1099 independent contractor with no ownership interest in Catalyst Construction and received monthly payments from Respondent. He testified that he was to receive $1,000.00 a month and that Respondent was behind in payments to him so he went to the 6112 S. Quartz Mountain property to see Joel Borsenik about payments and meet Yasir Shareef at that time. 24. Mr. Rittenhouse defended against Registrar’s Exhibit 9 Employment Agreement in stating that a signature is not required.18 25. When questioned whether he noticed the contractor’s sign posted at the property, he replied, I can’t remember, but argued upon review of the photo taken by Investigator Gunstra that he would interpret such a sign as an advertisement only for Respondent, and further argued that the Building Permit Numbers19 are incorrect even though Respondent’s ROC # is clearly listed on the sign.20 26. He further testified as to how he became involved with Catalyst Construction, LLC, in that he was contacted by an attorney who asked him if you may be interested in an opportunity to serve as a qualifying party to which he agreed to serve as a qualifying party to Catalyst Construction, LLC, in exchange for a monthly fee. He testified that monies are still owed him by Respondent. 27. A fully executed Affidavit of Self Employment Exemption Under the Workers’ Compensation Act, dated July 10, 2015, and signed by Yamne Borsenik for Catalyst Construction, LLC (Name of License Applicant [Business Name]) submitted to the Registrar of Contractors.21

This Tribunal notes that the document titled Employment Agreement expressly states above the signature lines, “The parties have had a reasonable time to review and consider the terms of this Agreement, and by their signatures below, willingly agree to the same.” The document does not address who is responsible for the payment of taxes on monies paid but attempts to give the impression of an employee/employer relationship between Joel Borsenik and Yasir Shareef and Ayesha Husain. No signed copy was provided in the record. See Registrar’s Exhibit 10, and Exhibit 7, JSI Photos p.22. This Tribunal notes that the sign was detailed and descriptive to include the property address along with what appears to be an architectural drawing of the home. See Registrar’s Exhibit 12. 28. In closing, Mr. Raine argued that it is undisputed based on testimony and evidence provided by the ROC investigator that the project was abandoned and any work that was performed did not meet minimum workmanship standards. Additionally, Catalyst Contraction, LLC, aided and abetted an unlicensed contractor as a means to evade contractor laws, and that the Employment Agreement22 does not reflect the true business relationship of the parties particularly when aligned with the checks made payable to Joel Borsenik. Therefore, discipline is warranted under Charges 1, 2, and 3 against Respondent. CONCLUSIONS OF LAW 1. “At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” ARIZ. REV. STAT. § 41-1092.07(G)(2). 2. Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. ARIZ. ADMIN. CODE § R2-19-119. 3. A preponderance of the evidence is: The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.23

4. In an Administrative Law Judge Decision, “[f]indings of fact shall be based exclusively on the evidence and on matters officially noticed.” ARIZ. REV. STAT. § 41- 1092.07(F)(6). 5. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). See Registrar’s Exhibit 9. Black’s Law Dictionary 1373 (10th ed. 2014). 6. “Statutes shall be liberally construed to effect their objects and to promote justice.” ARIZ. REV. STAT. § 1-211(B). 7. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 8. The preponderance of the evidence does show that Catalyst Construction, LLC is exactly the type of contractor the Registrar should be protecting the public from in regards to unscrupulous, unqualified, or financially irresponsible behaviors. 9. The Citation issued by the Registrar of Contractors in this matter alleges violations of Charge 1: A.R.S. 32-1154(A)(1) Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal; Charge 2: Rule 4-9-108 Minimum Construction Standards in the Arizona Administrative Code (“A.A.C.”) and thereby of A.R.S. § 32-1154 (A)(3) )24; and Charge 3: A.R.S. § 32-1154(A)(9) Aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one’s license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.25

10. This Tribunal finds that Respondent did violate A.R.S. § 32-1154(A)(1). Yasir Shareef provided copies of checks made payable to both Catalyst Construction, LLC and Joel Borsenik for work to be performed at 6112 E. Quartz Mountain, Paradise Valley. Checks payable to Catalyst Construction, LLC dated 12/12/2015 through 10/17/2016 for a total of $139,044.5726, and checks payable to Joel Borsenik dated 11/23/2015 through 10/17/2016 for a total of $55,199.0027. In light of Investigator Gunstra’s testimony from his observations of numerous items left unfinished and

24 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.” 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.” See Registrar’s Exhibit 1. See Registrar’s Exhibit 8. See Registrar’s Exhibit 3. incomplete on March 23, 2017, the Registrar established a finding that Respondent did violate A.R.S. § 32-1154(A)(1). 11. Regarding Charge 2, the Registrar met its burden of proof that the complained of items listed and substantiated from the jobsite inspection report of 03/23/2017, as it pertains to workmanship issues as follows: interior doors (defective assembler and installation, many missing striker plates and finish hardware); home marble floor installation tile install is poor quality; pool completion still not complete; hardwood floor installation, one room incomplete, other poor; baseboard installation- incomplete, needs repair; missing electrical work; paint incomplete and poor quality work; drywall poor quality work and incomplete; garage door work incomplete; exterior paint color wrong, does not meet city code; roof deck/stairs incomplete; paid for solar plans but took money and did not provide, and paid for low volt and did not receive substantiates a violation of the workmanship rule.28

12. The evidence established that Respondent’s work on the project included

numerous below par and substandard workmanship issues. Therefore, the Registrar established that Respondent did not perform the work in a workmanship manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. 13. Lastly, in regards to Charge 3, based upon the weight of the credible evidence of the record, this Tribunal finds that Respondent did in fact aid and abet an unlicensed person and that grounds exist to impose discipline against Respondent’s license. The evidence established that Respondent aided and abetted unlicensed contractors as demonstrated by the control Joel Borsenik exercised over the entire project at 6112 E. Quartz Mountain, Paradise Valley, including but not limited to, the appearance that Joel Borsenik gave to others as his name appeared as the contractor on Yasir Shareef’s complaint, payments made directly from Yasir Shareef to Joel Borsenik, and Joel Borsenik’s name appearing on the Building Permit29 as the contractor. Therefore,

The following items were listed on the complaint and inspected by Investigator Gunstra but noted as completed by others he hired: missing plumbing fixtures, paver installation, backyard drain, plumbing right side of house has no hot water, and non-payment of contractors (painters and paver). See Registrar’s Exhibit 10. the Registrar established that Respondent did violate the statutory provisions as set forth in its Citation. 11. The Administrative Law Judge concludes, based upon the undisputable credible testimony and evidence that grounds exist for the Registrar to impose discipline against Respondent’s license for all three (3) charges set forth in the Citation. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall revoke Catalyst Construction, LLC License No 300440.

In the event of certification of this 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 the certification.

Done this day, September 22, 2017.

/s/ Linda Marie Brown Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors