FINACT2018A-04968-CHC-ROC.pdf

2018A-04968-ROC · Registrar of Contractors · 2019-08-12

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Chad Jewell, Case No. 2018-04968 COMPLAINANT, Docket No. 2018A-04968-ROC v. Adobe Fire Protection LLC, FINAL ADMINISTRATIVE DECISION DBA: Adobe Sprinkler, AND ORDER License No. ROC 305661, 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. MODIFICATION AND WRITTEN JUSTIFICATION 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 modifies it. Here, the administrative law judge recommended a provisional suspension until Respondent repaid Complainant $8,807.77. ALJ Dec. 17-20. The administrative law judge further recommended that Respondent’s license be revoked if Respondent failed to pay a $200 civil penalty within 30 days of the Registrar’s Final Administrative Order’s effective date. ALJ Dec. 8:23-26. However, in the administrative law judge’s recommended order, the administrative law judge ordered, without qualification that “No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in ARIZ. REV. STAT. § 32-1154(A)(5).” ALJ Dec. 8:26-27. This recommended order is incorrect as a matter of law.

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Under A.R.S. § 32-1161(A), after suspension, a license may be renewed upon proof of compliance

by the contractor with provisions or the judgment relating to renewal of the license, or in the absence of

a judgment or provisions therein as to renewal, upon proper showing that all loss caused by the act or

omission has been fully satisfied.” Additionally, the rights of a contractor after revocation of a license

are governed by A.R.S. § 32-1161(C). That section states “After revocation of a license upon any of the

grounds set forth in section 32-1154, the license shall not be renewed or reissued for one year after final

determination of revocation and then only on proper showing that all loss caused by the act or omission

for which the license was revoked has been full satisfied.” Because the administrative law judge

misstated Respondent’s rights after suspension or revocation, the Registrar modifies the Administrative

Law Judge Decision.

CONCLUSION AND ORDER

The Registrar modifies the Administrative Law Judge Decision by:

• Striking “No future license shall be issued to any entity consisting of persons associated

with Respondent, as defined in ARIZ. REV. STAT. § 32-1154(A)(5)” on page 8, lines 26-

27.

The Registrar accepts the remainder of the Administrative Law Judge Decision, which the final

administrative decision in this matter, and becomes effective on September 17, 2019.

FINAL NOTES

On page 1, line 25 remove “Samuel”. On page 3, line 2 remove “COMPLIANCE”. On page 3, line

15 replace “March 15” with “April 18”.

Dated August 8, 2019. Registrar of Contractors /s/ Joseph Citelli Joseph Citelli, Chief Counsel Chief of Legal Department and Recovery Fund

of 3 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 August 8, 2019 to: Respondent Adobe Fire Protection LLC DBA: Adobe Sprinkler 723 E University Dr Mesa, AZ 85203 Complainant Chad Jewell 711 S Nassau Mesa, AZ 85206 Attorney for Complainant Scott Reynolds 51 W 3rd St Suite E240 Tempe, AZ 85281 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar Complainant’s Attorney at email address of record with Registrar

Office of Administrative Hearings Jenna Clark, Administrative Law Judge Case No. 2018-04968/tw

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Received 7/22/2019 ROC Legal

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Chad Jewell, No. 2018A-04968-ROC COMPLAINANT, ADMINISTRATIVE LAW JUDGE vs. DECISION Adobe Fire Protection LLC, dba Adobe Sprinkler, ROC License: ROC 305661, RESPONDENT. HEARING: July 22, 2019 at 9:00 AM. APPEARANCES: Scott Reynolds, Esq., appeared on behalf of Chad Jewell (“Complainant”) with Dennis Bierma as a witness. No appearance(s) by or on behalf of Adobe Fire Protection, LLC (“Respondent”). ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ Having heard the evidence and testimony and having considered the record in

this matter, the undersigned Administrative Law Judge hereby makes the following

Findings of Fact and Conclusions of Law and issues the following RECOMMENDED

ORDER to the Director of the Arizona Registrar of Contractors (“Registrar”).

FINDINGS OF FACT

BACKGROUND AND PROCEDURE

1. According to the Registrar’s public website, on July 28, 2016, the

Registrar issued License No. 305661 for Specialty Dual CR-16 Fire Protection Systems

contracting to Respondent.1 Respondent’s address of record for the license is 723 E. University Dr., Mesa, AZ 85203-7928.2 Samuel Jonathan William Horacek is listed on the license as Respondent’s Member/Qualifying Party.3 2. Administrative Notice is taken of Respondent’s prior License record as of July 22, 2019. Such prior License record reflects that Respondent’s license is currently See https://roc.az.gov/contractor-search?Id=a0Yt000000ACWxeEAH. 2 Id. Id. Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 Received 7/22/2019 ROC Legal active and renewed through July 31, 2020.4 The license has not been disciplined previously. The record reflects that there is one open complaint against Respondent’s license, which is presumed to be Complainant’s.5 Respondent has an active $6,750.00

surety bond that was issued through RLI Insurance Company effective April 12, 2016.6

3. On March 14, 2017, Complainant and Respondent entered into two

contractual agreements whereby Respondent agreed to install a fire sprinkler system

and underground fire line at Complainant’s commercial property located at 5801 E.

Main St., Mesa, AZ 85206 for the sum total of $33,500.00.7 Complainant issued an

$8,807.77 deposit to Respondent for both contracts. Per the terms of the contracts, the

projects were to commence on March 15, 2017, and be completed by December 31,

2017.

4. On October 19, 2018, the Registrar received a complaint from

Complainant alleging abandonment of contract.8 Specifically, Complainant alleged that

that no work on the projects had started since the date he gave Respondent a deposit,

no drawings had been provided, no permits had been obtained, and Complainant

received no response from Respondent regarding his multiple requests for a refund

and cancellation of the contract. Complainant included copies of his contractual agreements with Respondent, payment statement, email communiques between Complainant and Respondent, and a copy of Complainant’s request for refund.9 5. On November 05, 2018, the Registrar issued a JOBSITE INSPECTION NOTIFICATION letter to the parties, advising that an onsite review would be conducted at the project site by a Registrar investigator on December 20, 2018, at 10:00 a.m.10 6. On December 20, 2018, Registrar investigator Dennis Bierma (“Investigator Bierma”) conducted a review of the contracts executed between the parties and inspected the work that had been done on the project to date. Investigator Id. Id. Id. See Registrar’s electronic hearing file at pages 26-30; see also Complainant Exhibits 1-2. See Registrar’s electronic hearing file at pages 20-21. See Registrar’s electronic hearing file at pages 22-30. 10 See Registrar’s electronic hearing file at pages 56-58. Received 7/22/2019 ROC Legal Bierma also took three photographs of the project site.11 When he was finished, Investigator Bierma drafted COMPLIANCE JOBSITE INSPECTION NOTES.12 7. On December 20, 2018, Investigator Bierma issued a DIRECTIVE FROM THE

REGISTRAR to Respondent because he substantiated Complainant’s allegation that

Respondent abandoned the contracted projects.13 Respondent was put on notice that it

had until January 17, 2019, to notify the Registrar of its compliance with the corrective

order or face discipline pursuant to ARIZ. ADMIN. CODE R4-9-108, and ARIZ. REV. STAT.

§§ 32-1154(A)(22) and 32-1154(E).14

8. On January 22, 2019, the Registrar issued a CITATION to Respondent for

alleged violations of ARIZ. REV. STAT. §§ 32-1154(A)(1) and 32-1154(A)(22),.15

Respondent was given until February 06, 2019, to respond with its ANSWER or face

discipline pursuant to ARIZ. REV. STAT. § 32-1155.16

9. On February 19, 2019, the Registrar referred this matter to the Office of

Administrative Hearings, an independent state agency, for an evidentiary hearing on

March 15, 2019.17 Per the NOTICE OF HEARING the issue to be determined is whether the

Registrar has cause to discipline Respondent’s license based on the following charges:

Charge 1: A violation of 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 violation of 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.”).18

11 See Registrar’s electronic hearing file at pages 53-55. See Registrar’s electronic hearing file at pages 51-52. See Registrar’s electronic hearing file at pages 33-34. Id. See Registrar’s electronic hearing file at pages 8-14. Id. Respondent’s ANSWER is not included in the Registrar’s electronic file. The matter was rescheduled and heard on July 22, 2019. 18 See NOTICE OF HEARING. Received 7/22/2019 ROC Legal

HEARING EVIDENCE

10. Complainant testified on his own behalf, called Registrar investigator

Dennis Bierma as a witness, and submitted eleven exhibits. The Registrar’s electronic

hearing file and NOTICE OF HEARING were also admitted into the record as their own

exhibits. No appearance(s) by or on behalf of Respondent.

Dennis Bierma’s testimony

11. Investigator Bierma testified that he was assigned to investigate

Complaint No. 2018-04968.

12. Respondent was not present for the jobsite inspection that took place on

December 20, 2018. As no work had been performed on site, in violation of the contract

terms, a DIRECTIVE was issued to Respondent.

13. The DIRECTIVE issued to Respondent was not returned as undeliverable.

Respondent could have come to a financial settlement with Complainant or hired subcontractors to complete the contract, but took no steps to remediate the parties’ disagreement by the January 17, 2019, compliance deadline. Respondent did not request to have an extension of the compliance deadline. 14. Per Investigator Bierma, on January 17, 2019, the Registrar received a letter from Respondent dated January 11, 2019, and an email attachment dated October 15, 2018.19 In its letter Respondent admitted to having contractual agreements with Complainant as outlined in the DIRECTIVE, and further admitted to having received a deposit from Complainant regarding said contracts. Respondent alleged that a tenant occupying Complainant’s commercial property informed it that Complainant “put the job on hold.”20 Respondent agreed that Complainant provided notice that wanted to cancel the contract and have his deposit refunded. Respondent alleged that it emailed Complainant an offer to refund $2,887.20 on October 15, 2018, but that Complainant failed to respond.21

See Registrar’s electronic hearing file at pages 46-48. Id. 21 Id. Received 7/22/2019 ROC Legal 15. On January 18, 2019, Investigator Bierma forwarded the underlying matter to the Registrar’s legal department along with a citation recommendation for alleged violations of ARIZ. REV. STAT. §§ 32-1154(A)(1) and 32-1154(A)(22).22

Complainant’s testimony

16. Complainant testified that he has two tenants occupying the commercial

space he owns located at 5801 E. Main St., Mesa, AZ 85206. Complainant has an

onsite property manager that provides customer service for both tenants. Complainant

verified with both tenants and his property manager that none of them had been

contacted, in any capacity, by Respondent or any of its representatives regarding the

parties’ contract.23

17. Complainant testified he sent multiple emails24 and made multiple phone

calls to Respondent, but was never able to reach anyone who could give him a

definitive response regarding his refund inquiry.

18. On or about October 15, 2018, Complainant delivered a written demand

for refund at Respondent’s office.25 At that time he was able to meet with Respondent’s

President, Jonathan Horacek, who informed Complainant that he had emailed

Complainant a refund offer. When Complainant asked to view the offer, Mr. Horacek responded that he was too busy to locate the document or discuss the matter further. 19. Complainant denied ever receiving a refund offer from Respondent, and questioned why he would not be refunded his full deposit as Respondent never provided an indicia of proof that any work had been performed on the project. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter pursuant to ARIZ. REV. STAT. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before the Office of Administrative Hearings pursuant to ARIZ. REV. STAT. §§ 41-1092 et seq. 2. The Registrar may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering See Registrar’s electronic hearing file at page 74. See Complainant Exhibits 9-11. See Registrar’s electronic hearing file at pages 64-66; see also Complainant Exhibit 3. 25 See Registrar’s electronic hearing file at page 63; see also Complainant Exhibit 5. Received 7/22/2019 ROC Legal payment of restitution if a proven statutory violation was not remedied by corrective action.26 3. The purpose of the Registrar’s licensing statutes is to protect the public

from unscrupulous, unqualified, and financially irresponsible contractors.27

4. The NOTICE OF HEARING the Registrar mailed to Respondent’s address of

record is sufficient, and Respondent is deemed to have received notice of the hearing

in this matter.28 Because the Registrar mailed all correspondence to Respondent in the

same manner and failed to receive any mail returned as undeliverable, Respondent is

deemed to have received all correspondence regarding this matter from the Registrar

as well.

5. Complainant bears the burden of proof to establish cause to discipline

Respondent’s license by a preponderance of the evidence.29 Respondent bears the

burden to establish factors in mitigation of the penalty and affirmative defenses by the

same evidentiary standard.30

6. “A preponderance of the evidence is such proof as convinces the trier of

fact that the contention is more probably true than not.”31 A preponderance of the

evidence is “[t]he 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.”32 7. ARIZ. REV. STAT. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license,

See ARIZ. REV. STAT. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990). See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). See ARIZ. REV. STAT. §§ 41-1092.04, 41-1092.05(D), and 41-1061(A). ARIZ. REV. STAT. § 41-1092.07(G)(2); ARIZ. ADMIN. CODE R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). See ARIZ. ADMIN. CODE R2-19-119(B)(2). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 32 BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). Received 7/22/2019 ROC Legal “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” 8. ARIZ. REV. STAT. § 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.”

9. ARIZ. REV. STAT. § 32-1154(A)(22) holds, in pertinent part, that “[a] holder

of a license may not fail to take appropriate corrective action to comply with this chapter

or 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. The Registrar has the authority to issue license discipline under this provision,

including summary suspension, revocation, or imposing a civil penalty or recovery fund

award.”

10. ARIZ. REV. STAT. § 32-1154(E) holds, in pertinent parts, that the Registrar may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also holds that no future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.” 11. ARIZ. REV. STAT. § 32-1156.01 holds, that “[a]fter a hearing pursuant to this article, an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee. 12. Here, the material facts are not in dispute. 13. Complainant has shown by a preponderance of the evidence that the parties’ had two contract agreements, that Complainant tendered funds to Respondent Received 7/22/2019 ROC Legal per the deposit terms of said agreements, and Respondent failed to timely start or complete the underlying jobs. Complainant has also established by a preponderance of the evidence that Respondent failed to timely comply with the DIRECTIVE issued by the

Registrar in this matter.

14. Therefore, the only issue in dispute is whether Respondent raised a

sufficient justification or excuse for failing to timely and completely finish Complainant’s

project per contract. This is an affirmative defense that Respondent bears the burden

to establish. Because Respondent failed to appear and provide testimony, this burden

has not been sustained. The record shows that Respondent failed to adhere to a

Registrar corrective work order, and had no affirmative defense(s) for doing so.

15. Because Complainant established by a preponderance of the evidence

that Respondent failed to perform the scope of work included in the parties’ contract,

Complainant has also established cause for the Registrar to suspend or revoke

Respondent’s contractor’s license under ARIZ. REV. STAT. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, IT IS RECOMMENDED that that on the effective date of the FINAL ORDER in this matter, Respondent Adobe Fire Protection LLC, License No. 305661 shall be suspended until it provides the Registrar satisfactory proof that it has paid Complainant Chad Jewell $8,807.77 in certified funds pursuant to ARIZ. REV. STAT. § 32-1156.01. IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $200.00 as a civil penalty pursuant to ARIZ. REV. STAT. § 32-1154(E). IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s FINAL ORDER, the Registrar 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 ARIZ. REV. STAT. § 32-1101(A)(5). 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. Received 7/22/2019 ROC Legal Done this day, July 22, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors