FINACT2018A-04270-ROC.pdf

2018A-04270-ROC · Registrar of Contractors · 2019-04-03

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Stephen Michael Royle, Case No. 2018-04270 COMPLAINANT, v. Docket No. 2018A-04270-ROC

Duck and Bucks LLC, License No. ROC 298842, FINAL ADMINISTRATIVE DECISION AND ORDER RESPONDENT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an

administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the

Registrar must provide written justification setting forth the reasons for the modification or rejection.

REGISTRAR’S ACCEPTANCE

In this case, a hearing was held, and the administrative law judge issued a written decision. See

Administrative Law Judge Decision, attached. The Registrar reviewed that decision and hereby accepts

it.

CONCLUSION

Because the Registrar has accepted the administrative law judge’s decision, that decision is the

final administrative decision in this case and becomes effective on May 12, 2019.

FINAL NOTE

On page 9, line 10 replace “…website on {}.” with “…website.” On page 9, line 11 replace “{}.”

with “June 8, 2015.”

Dated April 2, 2019.

Registrar of Contractors

/s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal and Recovery Fund

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Copy mailed via USPS First Class mail April 2, 2019 to: Respondent Duck and Bucks LLC 15957 N 81st St Ste 101 Scottsdale, AZ 85260 John G. Ryan Esq. RYAN RAPP & UNDERWOOD, P.L.C. 3200 N Central Ave Ste 2250 Phoenix, AZ 85012 Complainant Stephen Michael Royle 14216 N Yerba Buena Way Fountain Hills, AZ 85268 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Respondent’s Attorney at email address of record with Registrar Complainant at email address on record with the Registrar

Office of Administrative Hearings Randolph D. Wolfson, Administrative Law Judge

Case No. 2018-04270 / DE

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 3.18.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Stephen Michael Royle, No. 2018A-04270-ROC

COMPLAINANT ADMINISTRATIVE LAW JUDGE DECISION v.

Duck and Bucks LLC, ROC License: ROC 298842

RESPONDENT

HEARING: February 28, 2019. APPEARANCES: Steven M. Royle, Complainant, Mary Royle, Complainant’s spouse, Travis Reed, Respondent and Qualifying Party, John Ryan, Esq., Respondent’s attorney; Jennifer Zook, paralegal for Mr. Ryan, Jack Grimm, ROC Investigator. ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson _____________________________________________________________________ FINDINGS OF FACT Respondent, Duck and Bucks, L.L.C., (hereinafter “D&B”) is the holder of License Number: ROC 298842 issued by the Arizona Registrar of Contractors (Registrar).1 1. On or about in May 16 2017,2 Stephen Michael Royle, (hereinafter, “Royle”) entered into a contract [hereinafter “The Contract”]3 with D&B to, among other things, provide general contractor services for the construction of a new house for Royle per plans attached to The Contract. A. Paragraph 4 ( c )4 of The Contract states:

1 Administrative Judicial Notice is taken of the entirety of the Registrars electronic and physical record in

this matter. Exhibit 21-A, Bate Stamped signature page is page with The Contract’s date is B & D000108. 3Ibid... Id., Exhibit 21-A, Bate Stamped B & D 000097.

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 3.18.2019 ROC LEGAL

Delays in Construction. If Contractor is delayed at any time during the progress of the work by …neglect or default of Owner, … or by any cause beyond Contractor's control, the time herein estimated for completion for the Residence shall be extended for a period equal to the time lost by reason of any of the causes aforesaid. For any delays not the responsibility of Contractor in the completion of the Residence The Contract Price shall be increased by the difference in Contractor’s ,costs occasioned by such delays, which increases shall be evidenced by a change order from the Contractor to the Owner submitted and approved pursuant to the provisions of Paragraph 9. [emphasis added].

B. Paragraph 5 of The Contract provides that [D&B] “…shall be responsible for complying with all governmental and Admistrtive codes. 5 C. Paragraph 5 of The Contract provides: [T]he contractor will assist [Royle] in obtaining the approval by the architectural control committee, but the ultimate responsibility for obtaining such approval is that of [Royle].”6 D. Paragraph 77 of The Contract states: PERMITS AND TESTS. Contractor shall secure and pay for all permits, licenses and all other approvals necessary for the proper execution and completion of the construction of the Residence unless specifically excluded. All such items shall be included in the costs of construction. Owner hereby authorizes and appoints Contractor to obtain such permits from applicable governmental agencies and authorizes Contractor to execute applications as agent for Owner and in the Owner's name. Where necessary, Owner agrees to assist Contractor in obtaining any such permits and licenses by completing all necessary applications and forms. The Contractor will obtain on behalf of the Owner soil reports on the Site for the construction of the Residence at the expense of The Contractor subject to any allowances. [emphasis added].

E. Paragraph 9 (d) of The Contract states: Changes in Law or by Building Department. If any changes to the plans and specifications are necessitated by the requirements of the building department having jurisdiction over the construction of the Residence or the architectural control committee for the subdivision in which the Property is located due to either changes in building codes, legal requirements, or any design guidelines of the architectural control committee, the Owner shall be

5 See, ¶5 of The Contract, bate stamped B & D 000099. Ibid. See, ¶9 of The Contract, bate stamped B & D 000101.

RECEIVED 3.18.2019 ROC LEGAL

responsible for any additional costs in construction caused by such changes and the time for substantial completion of construction will be extended as necessary to accommodate any delays in getting the plans and specifications approved and the additional construction time required by the changes. [emphasis added]. F. Paragraph 15(a) of The Contract provides:8

TIME ESSENCE. Time is of the essence of The Contract. Included pricing is good for a period of 300 days months [sic]9 from the date of The Contract. G. Paragraph 1610 of The Contract provides:

ENTIRE AGREEMENT. This Contract shall constitute the entire agreement between the parties regarding the Residence. Any prior discussions and oral agreements between the parties are merged into this Contact, and each party agrees that there are no oral agreements between the parties that are not expressed herein. No real estate broker or agent has any authority whatsoever to make any agreements, contracts or other binding commitments on behalf of tl1e Contractor or the 0w'1ler. No oral representation or statement shall be deemed a part hereof except as stated herein or unless agreed to in writing. Any amendment or modification of this Contract shall be in writing and signed by both parties hereto. [emphasis added].

2. On September 10, 2018, Stephen Michael Royle filed a written Complaint

with the Arizona Registrar of Contractors alleging D&B performed poor work and that

D&B abandoned the contracted work.

3. The Registrar assigned the Complaint to Jack Grimm, Registrar’s

Construction Investigator On or about October 18, 2018, a jobsite inspection [“JSI”] was conducted by Investigator Grim. Inspector Grimm’s jobsite notes provide:11

See, ¶15 of The Contract, bate stamped B & D. 0000103. This paragraph is contradictory to itself. The provision states The Contract pricing is limited to “300 days

months from The Contract execution.” No parole evidence has been offered to explain this obvious form error. To interpret this to mean that 300 months, rather than 300 days, would result in The Contract price of remaining static until 2042! [25 years = 300 months.or 300 months divided by 12 months = 25 years]. Such an interpretation strains the “time is of the essence” provision so greatly as to make the term meaningless. Time is critical to the prices of materials and labor. Hence, interpreting this provision to mean 300 months rather than 300 days from The Contract’s execution is absurd and irreconcilable with the meaning and purpose of the paragraph See, ¶16 of The Contract, bate stamped B & D 000105. Agency Record, Jobsite_Inspection_Notes 2018-04270.pdf

RECEIVED 3.18.2019 ROC LEGAL

Complaint Item #1: Builder collected $35,000 but did not submit plans to the City of Scottsdale. Travis delayed my house build through his incompetence and delays and is in violation of contract. Investigators Observation: The two parties no longer wish to work together and the property owner wants the contractor to get this project to a permit as stated in The Contract as the property owners believe they have paid to this point and want the work completed to permit with complete and approved plans and correct 3D model that was part of the agreement. The contractor agreed at the inspection to get the work to this point. This investigator asked if an agreement regarding the separation of the two parties or any kind of settlement agreement was in place and the parties stated no. It was discussed that The Contract is still valid and I will issue a directive for the completion of the current contract and they can work towards resolution and get me a copy of any settlement agreement if that takes place. Governing Rule: 32-1154(A)(8) Failure to complete a contract. 4. On October 22, 2018, Investigator Grimm issued to D&B a Written Directive containing a Corrective Work Order [“CWO”] stating: You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on November 8, 2018.

You are hereby directed to remedy the following violations by the appropriate means.

Complete home building project per contract.12 5. Following the issuance of the written directive, Respondent did not comply with the CWO by the Directive’s 17 day deadline. 6. The Registrar issued a Citation13 against Respondent, charging possible 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 A.R.S. § 32-1154(A)(3) - R4-9-108. Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108.

Agency Record, Directive 2018-04270.pdf. Agency Record, Citation 2018-04270 SIGNED.pdf

RECEIVED 3.18.2019 ROC LEGAL

Charge 3 A.R.S. § 32-1154,(A)(8). Failure in a material respect by the licensee to complete a construction project or operation for the price stated in The Contract, or in any modification of The Contract. Furthermore, on October 22, 2018, the Registrar issued Respondent, a written directive to take appropriate corrective action. Under A.R.S. § 32-1154(A)(22), Respondent’s license may not be revoked or suspended, nor may any other penalty be imposed on Respondent, for a failure to take that appropriate corrective action until after a hearing has been held. Therefore, the administrative law judge presiding over the hearing will determine whether the following charge against Respondent has merit: Charge 4 A.R.S. § 32-1154(A)(22). Failure 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. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. 7. A hearing was held on February 18, 2019 before the Office of Administrative Hearings, an independent agency from the Registrar. 8. Investigator Grimm testified, consistent with his job inspection notes, that at the JSI there was simply a bare lot without any visible construction to inspect. Both Steven M. Royle, Complainant and Travis Reed, Respondent and Qualifying Party, were present at the JSI. After review at the JSI of the parties’ written contract and discussion with the Complainant, Mr. Grimm determined that parties no longer desired to work together. Royle wants the contractor to get this project to a state where it could be permitted. On cross-examination, Investigator Grimm stated that he did not expect that anyone would have been able to complete construction of the Royle home within the 17 days that he directed D&B perform in his CWO. First, he acknowledged that no construction could be undertaken on the site lawfully unless and until the City of Scottsdale approved a permit for the project and Desert Mountain Design Review Board had approved the project design – neither of which had occurred at the time of the JSI and Directive. The reason, he stated, for issuance of the CWO was that he believed that

RECEIVED 3.18.2019 ROC LEGAL

the parties would quickly settle the issues between them and then move forward with the project. 9. Mr. Royle did not testify. Rather, Royle’s Case-in-Chief was presented through his examination of Mr. Grimm and by examining Travis Reed on direct and redirect examination. At the conclusion of the hearing, the ALJ ordered the parties to concurrently file their respective Final Arguments in writing because insufficient time was available at hearing for oral closing argument. The record was ordered held open until March 15, 2019 to allow the parties to prepare and file their Written Final Arguments. Mr. Royle filed his written Final Argument in this case on March 15, 2019. The ALJ finds Royle’ Written Final Argument failed to connect the evidence presented to any of the four charges alleged in the Citation. The Royle Final Argument It is comprised primarily of tangential non-sequiturs stated in defense of matters not in evidence. However, the Royle Final Argument did raise an issue that should be addressed. Royle’s Final Argument asserts: The contract was renewed on 1/1/2018.14 This new contract was signed by my wife and I and Travis. On the contract itself, it clearly states Effective Date‐ This contract shall become effective on the day it is executed by both parties. It was not signed in May 2017 but the date stated‐ 1/1/2018.

The document that Mr. Royle asserts is a “new contract” is exhibit 2. Exhibit 2 displays

only the single page 14 - without any other pages. Page 14 has no title on it. The last

line of page 14 states: “We, the undersigned, have read, understand and agree to each of

the provisions of this contract…” However, to what “provisions of this contract” that

Exhibit 2 refers is unknown since in evidence is only the single page 14. The document

that Mr. Royle asserts is a “new contract” is, on its face, vague, ambiguous and in need of

explanation in that the exhibit 2 displays only the page 14 without any other pages.

Hence, the ALJ allowed, without objection, evidence parole to the alleged agreement

offered by Royle as evidence of “new contract” between the parties.

Accordingly, Mr. Reed testified that Royle’s construction loan banker insisted the

parties execute a new signature page as part of Royle’s construction loan application

package as a re-affirmation that the original May 16, 2017 agreement of the parties was

14 Although not specifically identified by cite in the Final Argument by Royle, the single page that Royle

calls a “contract” [hereinafter referred to as “Page 14”] is located at Exhibit 2. No other pages of this document were introduced into evidence. RECEIVED 3.18.2019 ROC LEGAL

still in full force and effect. Reed testified that the parties, at the bank’s insistence, did re- sign page 14 in Exhibit 2 on January 1, 2018. Reed explained that no new funds were exchanged and no modification or alteration of the original May 16, 2017 agreement was made or considered under the January 1, 2018 re-signed page 14. Mr. Reed said there were no other pages attached to this renewed signature page. Royle offered no evidence to refute the explanation provided in Travis Reed’s testimony concerning the circumstances surrounding the parties signing Page 14 in Exhibit 2. 10. Qualifying Party Travis Reed testified for B &D. He was called in Royle’s Case-in-Chief. Per the terms of the May 16, 2017 Contract, Mr. Reed indicated that D&B was and is not now permitted to begin construction on this project until permits are issued by the City of Scottsdale, The Contract deposit is received by D&B, and Royle has issued a Notice to Proceed.15 He testified that none of these conditions are fulfilled. Mr. Reed stated that Royle, prior to The Contract in this case, had contracted with a different contractor16 who had worked on the project in this case. For reasons not provided at hearing, the prior builder’s contract was terminated. At the time of contracting with D&B, Royle already possessed permitted plans from the previous builder that existed to build their house. But, Royle wanted changes to those previous plans. Mr. Reed testified that the changes required a whole new set of drawings to be created.17 Any new drawings also had to be approved by the Desert Mountain Design Review Board [“DMMA”] and be reviewed and permitted by the City of Scottsdale.18 Mr. Reed contends, under The Contract, until permits are issued by the City of Scottsdale, The Contract deposit is received by D&B, and Royle has issued a Notice to Proceed, D&B had no right or legal ability to proceed with construction.19 He said none of these conditions were performed by Royle. Notwithstanding, he said, D&B submitted the plans to the City of Scottsdale for permitting, at D&B’s own expense. He explained that the City of Scottsdale responded with redlined comments on the plans that again required design drawing changes. Mr.

15 Exhibit 21-A at B & D 000097 ¶ 4(a). Fratantoni Luxury Estates, See Exhibit 24. 17 See, Addendum #1, Exhibit 21 C. It was Complainant’s responsibility, per The Contract, to get the plans approved by the DMMA, Exhibit 21-A B & D 000099 at ¶ 5. RECEIVED 3.18.2019 ROC LEGAL

Reid said that he is a builder; not a designer. He believes that he is prohibited from making the red-lined corrections to the revised plans because he is not a licensed architect. He explained that the plans along with the City of Scottsdale’s redline comments were then re-submitted to D&B’s draftsman, Ron Darling, for corrections.20 Mr. Reed testified that at the time the Complaint was filed, the revised plans re- drawn by Mr. Darling had just been approved by the DMMA. He said these plans had not yet been submitted to the City of Scottsdale for final permit approval. Mr. Reed said that, by law and ROC Rules, he cannot begin construction on a home without having the plans permitted by the City of Scottsdale. Thus, the only contractor services performed by D&B was to find a designer to draw up plans, coordinate the changes in the civil, landscape, architectural and structural plans, get them approved through the DMMA approval process and have them submitted for permit by the City of Scottsdale. All of these services were performed except obtaining approval from the City of Scottsdale for permitting [although plans were submitted to Scottsdale but were returned with red lined comments for changes]. Mr. Reed testified that as of January 31, 2018,21 Mr. Royle has removed B &D as the listed contractor from the City of Scottsdale’s Permit application and replaced it with Gorilla Builders.22 Mr. Reed testified that since he is no longer the listed contractor, the City of Scottsdale would not allow Reed to submit final drawings for consideration Mr. Reid testified further, that even if he had permitted plans, he would not have begun construction because Royle refused payment for increased expenses and costs associated with delays caused by Royle’s difficulty in obtaining construction loan financing, plan modifications requested by Royle and architectural approval from DMMA on this project. [Addendum #2].23 He testified that the Royle’s Construction loan finally

Exhibit 21-A at B & D 000097 ¶ 4(a), supra.

20 Exhibit 27. #TCH 000265, Mr. Darling was paid an initial deposit by Royle of $4,000.00 on the Darling invoice of $13,200.00. Testimony of Mr. Reed reflected that Darling prepared the initial set of drawings from scratch because Royle was unable to obtain the Computer Assisted Drafting files from his previous contractor and because Royle required additional room and square footage modifications to the prior contractor’s drawings. It is noted that the Complaint in this case was filed three months later on September 10, 2018. 22See, Exhibit 25, #TCH000259. . Exhibit 21-F. Addendum #2 states: “Unfortunately, during that period of delay the total cost of the labor and materials necessary for the construction of the Residence has increased substantially and, as a RECEIVED 3.18.2019 ROC LEGAL

funded on February 6, 2018. Only on account of Royle’s delay, the construction loan took 266 days after The Contract was executed to be funded.24 Reed stated that once the loan funded, D&B’s draftsman, Ron Darling went back to work preparing the plans, from scratch, for re-submittal to DMMA. He stated that the second submittal to DMMA was made by D&B on April 19, 2018—just two and a half months after the loan funded. He said, shortly after the second submittal was denied by DMMA, D&B met with Royle on May 5, 201825 to discuss the topics included in the denial. D&B also discussed the material and labor cost increase due to the delays in starting the Project.26 11. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on {}. Such prior License record reflects that Respondent’s License No. 256686 was first issued on {}. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. 2. Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 3. The document that Mr. Royle asserts is a “new contract” is exhibit 2. The tribunal determines that Exhibit 2 fails as a contract for want of consideration and lack of contractual intention of the parties. The contention of Royle that this document alters

result, completion of the Residence is not feasible based on the current Contract Price as reflected in the Construction Contract. 24 Exhibit21-A Bate Stamped 000087 and 000088. 354 days after The Contract date. 26 Paragraph 15 of The Contract specifically stated that the original Contract Price was only good for a

period of three hundred (300) days. Moreover, paragraph 4(c) of The Contract allows B & D to pass on any increase in material and labor costs as a result of any delays not caused by B & D. On May 11, 2018, B & D sent Royle Addendum # 2 which included the additional material and labor costs as a result of the delays in the lending approval process. RECEIVED 3.18.2019 ROC LEGAL

the “Effective Date” of the agreement and thereby amending paragraph 15(a) of the May 16, 2017 Contract appears specious and is not supported by the evidence. 4. The credible evidence of record demonstrates that there was a fourteen month construction delay caused by Royle alone. Royle did not have the construction financing in place for over eight months from the original date of the Agreement which resulted in an eight month delay to the Project [caused by Royle alone].. The other six month delay was the result of Royle’s decision to make significant changes to the plans that had been drawn by their previous contractor and approved by DMMA. Royle’s plan changes caused the DMMA approval and permitting process with the City of Scottsdale to start over. Both delays were outside of the control of D&B. Due to the delays, the costs of the Project increased significantly. Paragraph 15(a) of The Contract specifically provides both parties agree that the original Contract Price was only good for a period of three hundred (300) days. Moreover, paragraph 4(c) of The Contract allows D&B to pass on any increase in material and labor costs as a result of any delays not caused by D&B. D&B was well within its contractual rights to submit Addendum #2 to Royle and to refuse further contract work until paid under paragraph 4(c) and Paragraph 15(a) of The Contract. 5. On May 11, 2018, D&B sent Royle Addendum # 2 which included the additional material and labor costs as a result of the delays caused by Royle discussed in Paragraph 4, hereinabove. Royle made it clear that he would not sign Addendum #2 and would not pay the additional expenses caused by Royle’s delays. Due to Royle’s refusal to pay the additional expenses occasioned by his delays, Royle breached The Contract pursuant to paragraph 4(c). It is noted that nearly three months prior to the filing of this Compliant, Royle had already retained the contractor services of Gorilla Builders and had removed D&B as the listed contractor with the City of Scottsdale’s Permitting Division and substituted Gorilla Builders in D&B’s place. D&B made multiple requests for assurances that Royle would pay the increase in costs as a result of Royle’s delays. But, Royle either ignored D&B or unequivocally stated that they will not pay the additional costs set forth in Addendum #2 and hired another contractor, Gorilla

RECEIVED 3.18.2019 ROC LEGAL

Builders. As a result of Royle’s conduct, Royle anticipatorily repudiated The Contract which permitted D&B to terminate the Agreement.27 6. The credible evidence presented at hearing established that at the time of the Complaint Complainant’s project had not been completed. Royle’s breaches of contract and its anticipatory repudiation presents clear “legal excuse” for D&B’s refusal to complete the work contracted. Complainant DID NOT prove by a preponderance of the evidence that Respondent abandoned The Contract or refused to perform after submitting a bid on work without legal excuse for the abandonment or refusal in violation of A.R.S. § 32-1154(A)(1).28 7. D&B justifiably refused to complete the construction project because of Royle’s multiple contract breaches discussed in noted in paragraphs 3, 4, and 5, hereinabove. The preponderance of the evidence demonstrates that D&B did not fail to complete the Royle construction project for the price stated in The Contract, or in any modification of The Contract in violation of A.R.S. § 32-1154,(A)(8). 8. As to the issue of poor workmanship, the evidence failed to establish that D&B performed below standard workmanship. On the date of the Directive and through to the Directive’s deadline, there was no final pass on drawings submitted by D&B to the City of Scottsdale. A contractor cannot begin construction on a home without having the plans permitted by requisite Federal, City or County authorities.29 Thus, the only contractor services performed by D&B was to find a designer to draw up plans, coordinate the changes in the civil, landscape, architectural and structural plans, get them approved through the DMMA approval process and have them submitted for permit by the City of Scottsdale. All of these services were performed except obtaining approval from the City of Scottsdale for permitting [although plans were submitted to

Kammert Bros. Enter., Inc. v. Tanque Verde Plaza Co., 102 Ariz. 301, 307, 428 P.2d 678, 684 (1967) (In Banc). (Anticipatory repudiation occurs when one party provides a “positive and unequivocal manifestation” that they will not perform when the time for their performance becomes due. Ratliff v. Hardison, 219 Ariz. 441, 443, 199 P.3d 696, 698 (Ct. App. 2008) quoting Diamos v. Hirsch, 91 Ariz. 304, 307, 372 P.2d 76, 78 (1962). 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 §32-1154(A). The holder of a license or any person listed on a license pursuant to this chapter shall not

commit any of the following acts or omissions:: (11) Failure of a contractor to comply with any safety or labor laws or codes of the federal government, state or political subdivisions of the state. RECEIVED 3.18.2019 ROC LEGAL

Scottsdale but were returned with red lined comments for changes]. Mr. Reed testified that as of January 31, 2018, Mr. Royle had removed B &D as the listed contractor from the City of Scottsdale’s Permit application and replaced it with Gorilla Builders. Mr. Reed testified that since he is no longer the listed contractor, the City of Scottsdale would not allow D&B to submit final drawings for consideration. The evidence has shown that D&B performed per The Contract. It is found that D&B diligently pursued development of the plans required by DMMA and by the City of Scottsdale. Otherwise, D&B performed no construction or other contractor’s work for Royle. By a preponderance of the evidence, Complainant DID NOT establish that Respondent did not perform the work in a professional and workmanlike manner in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3).30 9. To establish that Respondent violated A.R.S. § 32-1154(A)(22) Royle must prove by a preponderance D&B’s “[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.” (Emphasis added).31 First, Investigator Grimm admitted at hearing that he agreed it was not possible for any contractor to have constructed the contracted home for Royle in the 17 days allowed by Mr. Grimm’s CWO. The time provided D&B for compliance is not reasonable. Secondly, the credible evidence of record demonstrates that Royle alone caused a fourteen month delay in this project. The Contract breaches noted in paragraphs 3, 4, and 5, hereinabove, are also valid justification for D&B’s refusal to continue work on this project without payment. Royle has NOT met its burden of proof to show D&B violated A.R.S. § 32-1154(A)(22).

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.” A.R.S. § 32-1154(A)(22) 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 RECEIVED 3.18.2019 ROC LEGAL

RECOMMENDED ORDER Based on the foregoing, IT IS RECOMMENDED that on the effective date of the Order, the Registrar should dismiss the complaint filed by Stephen Michael Royle, against Duck and Bucks LLC, ROC License: ROC 298842. FURTHER IT IS RECOMMENDED that the Registrar close this case.

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, March 16, 2019.

/s/ Randolph D. Wolfson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

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.” (Emphasis added).