ALJDEC decisions subject to certification as final

2018A-04964-ROC · Registrar of Contractors · 2019-03-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 13, 2019 APPEARANCES: Michael Zwanziger appeared on behalf of Complainant Options Medical Weight Loss. Jimmy Johnson appeared on behalf of Respondent Aion Construction, LLC. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson _____________________________________________________________________ FINDINGS OF FACT 1. On or about June 22, 2018, Complainant Options Medical Weight Loss (“Option”) entered into commercial construction contract with Respondent Aion Construction, LLC (“Aion), wherein Aion agreed to make several improvements to Option’s facility located at 2815 E. Ocotillo Road, Suite 1, Chandler, AZ 85249 (“property”). 2. Jimmy Johnson owns Aion. 3. Michael Zwanziger owns Option. 4. Option agreed to pay Aion $170,000 for the construction. 5. Aion did not provide Options with a contract which informed it of its right to file a complaint with the Registrar against Aion for an alleged violation of Ariz. Rev. Stat. (“A.R.S.”) § 32-1154(A), within the time allowed by A.R.S. § 32-1155(B). 6. On or about July 11, 2018, Aion began work under the contract.

On or about September 11, 2018, Aion completed the work. 7. Option paid Aion approximately $176,704.25 for the work it performed. 8. On or about October 19, 2018, the Registrar of Contractors (‘Registrar”) received a complaint from Option alleging poor workmanship on the part of Aion. 9. On or about November 19, 2018, Registrar Investigator John Smith conducted a job site inspection. 10. On November 20, 2018, Investigator Smith issued a Directive to Aion. The Directive provides, in relevant part, as follows: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4- 9-108). You are hereby directed to remedy the following violations by the appropriate means:

Complaint Item 3: “Poor workmanship, flooring by doorjambs caulked because misalignment.” Complaint Item 4: “Poor patchwork of drywall.” This includes voids by electrical plates, voids by electrical lights, and voids and gaps below the reception desk. Complaint Item 5: “Paint on flooring throughout space.”

11. Through the Directive, the Registrar ordered Aion to remedy the alleged violations by appropriate means no later than December 7, 2018. 12. Aion did not remedy the alleged violations by December 7, 2018. 13. On December 10, 2018, Investigator Smith conducted a compliance job site inspection and determined that Aion had performed no corrective work. 14. On December 11, 2018, the Registrar issued a Citation for an alleged violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108;[1] A.R.S. § 32- 1154(A)(12) and (A)(22); A.R.S. § 32-1158. 15. Aion filed a timely response to the Citation. 16. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, to schedule an evidentiary hearing. 17. On January 16, 2019, the Registrar issued a Notice of Hearing setting the above-captioned matter for hearing at 1:00 p.m. on March 13, 2019, at the Office of Administrative Hearings in Phoenix, Arizona. 18. On or about March 11, 2019, Investigator Smith conducted a prehearing inspection and determined that Aion had performed no corrective work. 19. A hearing was held on March 13, 2019. 20. At hearing, Mr. Zwanziger testified on behalf of Option. Mr. Johnson testified on behalf of Aion. Investigator Smith testified regarding the investigation of the complaint and the issuance of the Directive. 21. At hearing, Mr. Zwanziger asserted that Aion performed poor work in connection with the improvement project at Option’s property. 22. Mr. Johnson did not dispute that Aion performed poor work in connection with the commercial construction project at the property. Mr. Johnson explained that Aion was unable to perform corrective work due to a financial hardship. 23. Administrative notice is taken of Respondent’s prior License record on March 14, 2019. Such prior License record reflects that Respondent’s License No. 209737 was first issued on July 20, 2005, and is suspended. Such prior License record also reflects that there are two open complaints against Respondent, and one complaint that resulted in discipline against Respondent’s license. CONCLUSIONS OF LAW 1. 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. Arizona Administrative Code R2-19-119. 2. The suspended status of Respondent’s license does not deprive Complainant of his right to prosecute his complaint against Respondent or prevent the Registrar from determining the merits of Complainant’s complaint.[2] This matter lies within the Registrar’s jurisdiction.[3] 3. “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.” A.R.S. § 41- 1092.07(G)(2). 4. “At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” A.R.S. § 41-1092.07(G)(3). 5. 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.

Black’s Law Dictionary 1373 (10th ed. 2014). 6. A.R.S. § 32-1154(A) provides: 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: ***** 3. Violation of any rule adopted by the registrar. *****

7. A.A.C. section R4-9-108(A) provides that “A contractor shall perform all work in a professional manner.” 8. The preponderance of the evidence shows that Aion 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).[4] 9. The preponderance of the evidence shows that Aion failed to comply with the Directive in violation of A.R.S. § 32-1154(A)(22). 10. The preponderance of the evidence shows that Aion violated A.R.S. § 32-1158(B), and thereby A.R.S. § 32-11158(A)(12), by failing to provide Options with a written contract which advised it of its right to file a complaint with the Registrar against Aion for an alleged violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(B). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the order in this matter, License No. 209737 of Aion Construction, LLC shall be revoked. It is further recommended that Respondent shall be required to pay the sum of $500.00 as civil penalties for its four failures to comply with the Registrar’s written directives issued under A.R.S. § 32-1154(A)(22) pursuant to A.R.S. § 32-1154(E).[5] 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, the Registrar shall revoke Respondent’s license, 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 penalties. 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 forty days from the date of that certification. Done this day, March 14, 2019.

/s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] 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.” [2] 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 . . . .” [3] See A.R.S. § 32-1154(A). [4] 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.” [5] A.R.S. § 32-1154(E) provides in relevant part as follows: The registrar may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of subsection A, paragraph 22 of this section. . . . The failure by the licensee to pay any civil penalty imposed under this subsection results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. No future license may be issued to an entity consisting of a person, as defined in section 32-1101, subsection A, paragraph 6, who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.

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