ALJDEC decisions subject to certification as final

2018A-05793-CHC-ROC · Registrar of Contractors · 2019-07-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 17, 2019, 8:30 A.M. APPEARANCES: Complainant Terrance Monahan appeared on his own behalf; no appearance was made on behalf of Respondent ADMINISTRATIVE LAW JUDGE: Roger A. Geddes _____________________________________________________________________ FINDINGS OF FACT Background and Procedure 1. NE2AZ, LLC, (Respondent), is the holder of License Number 310115 issued by the Registrar of Contractors (Registrar). 2. On or about December 6, 2018, Terrance Monahan (Complainant), filed a Complaint against Respondent with the Registrar alleging poor work and abandonment in connection a garage conversion at a residence in Mesa, Arizona. The Complaint also reflected a contract amount of $42,105.31. 3. Upon completion of an inspection performed by the Registrar on February 6, 2019, the Registrar issued a Directive, dated February 11, 2019, requiring Respondent to correct various alleged deficiencies in Respondent’s work by February 26, 2019, as follows: Complaint Item 3: front window broken by subcontractor - not addressed yet Cracked X/O slider window in front conversion bedroom. Complaint Item 4: no concrete slab poured for split A/C Heater Install condensing (heat pump) unit on appropriate pad. Complaint Item 5: closet doors in office and laundry not replaced Install louvered Bi-Fold doors for office room closet, and install louvered Bi-Fold doors for front conversion bedroom closet. Complaint Item 6: stucco not completed in water heater closet Complete and paint stucco repair in exterior water heater closet, large hole below water heater timer, and patch and properly plug all wall penetrations. Complaint Item 8: Work on carport hasn't been completed-last substantial work- 6/30/18 Complete construction of car port as per signed agreement between the parties. Complaint Item 9: Toilet in bathroom is connected to hot water line Properly running cold water line in the wall and connect tubing to existing compression Outlet Chrome Plated Brass 1/4 Turn Angle Valve. Complaint Item 10: Mounds of dirt, concrete, and building material are scattered in yard Remove mounds of dirt and construction debris noted in front side yard and on the rear northwest (N/W) corner of back yard. Complaint Item 11: HVAC (heat pump) unit in conversion does not function in heat setting. System failed to run in heat mode. 4. After a compliance inspection was conducted on March 27, 2019, at which it was observed that corrective work had not been performed or completed, the Registrar then issued a Citation to Respondent, dated April 19, 2019, for the alleged violation of the following: a. A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108 for failure to meet minimum workmanship standards); b. A.R.S. § 32-1154(A)(12) (violation of A.R.S. § 32-1158(A) for failure to include information in contract); c. A.R.S. § 32-1154(A)(22) (failure to perform corrective action without valid justification). 5. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. The Registrar issued a Notice of Hearing setting a hearing for June 17, 2019, at 8:30 A.M. 6. The Registrar mailed a copy of the Notice of Hearing to Respondent on or about May 14, 2019, at its address of record. 7. The Notice of Hearing informed the parties that “[f]ailure to attend the scheduled hearing is likely to result in an adverse ruling against you” and further included the procedure for requesting a continuance of the hearing. 8. A hearing was held on June 17, 2019, at 8:30 A.M. Complainant Terrance Monahan testified on his own behalf. The Tribunal received and admitted Complainant’s exhibit numbers 1 - 8.[1] 9. Although the commencement of the June 17, 2019, hearing was delayed approximately 15 minutes, Respondent did not appear at any time during the hearing through an authorized officer, employee, attorney, or any other person. Consequently, Respondent did not present any evidence to defend its license. Respondent further did not request to appear telephonically and did not request that the hearing be continued. 10. Complainant Terrance Monahan testified as to the existing deficiencies with Respondent’s work and that all of the Directive items were not completed with the exception of Complaint Item numbers 4 and 9. 11. Complainant presented a copies of the agreements between the parties reflecting a contract amount in excess of $1,000.00. They do not include any disclosure regarding potential complaints to the Registrar. (Complainant’s Exhibit 1-2).

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. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119. 3. To warrant such sanctions by the Registrar, a Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section 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). 4. A.R.S. § 32-1154(A) includes in pertinent part among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, any of the following: 3. Violation of any rule adopted by the registrar. …

12. Failure in any material respect to comply with this chapter. …

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.….

5. As it relates to A.R.S. § 32-1154(A)(3) concerning a violation of any rule adopted by the Registrar, Arizona Administrative Code Rule 4-9- 108(A), provides that “A contractor shall perform all work in a professional and workmanlike manner.” 6. As it relates to A.R.S. § 32-1154(A)(12) concerning failure in any material respect to comply with the chapter, A.R.S. § 32-1158(A) requires in pertinent part that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain the following information: … 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative….

7. Complainant has presented sufficient evidence to establish that Respondent’s work was not performed in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(3). There was no evidence presented that Respondent had corrected Complaint Item numbers 3, 5, 6, 8, 10, and 11 in the Directive. 8. Complainant has presented sufficient evidence to demonstrate a violation of A.R.S. § 32-1154(A)(12) for the failure on the part of Respondent in a material respect to comply with A.R.S. § 32-1158(A) regarding the required contents of a contract. The evidence presented showed that Respondent had violated A.R.S. § 32-1158(A) because the contract between the parties was in excess of $1,000.00 and did not include disclosure of the notice of the owner’s right to file a complaint with the Registrar. 9. Complainant has presented sufficient evidence to demonstrate a violation of A.R.S. § 32-1154(A)(22) for the failure on the part of Respondent to complete corrective action. There was no evidence presented to support a finding of a valid justification for Respondent not performing the corrective work in a workmanlike manner. 10. Complainant has established that Respondent’s license should be disciplined for a violation of § A.R.S. § 32-1154(A)(3), A.R.S. § 32- 1154(A)(12), and A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of this Order, NE2AZ, LLC’s, License Number 310115 is suspended for four days. IT IS FURTHER RECOMMENDED that pursuant to A.R.S. § 32-1154(E), Respondent must pay to the Registrar, a civil penalty of $250.00 in certified funds on or before 30 days from the effective date of this Order.

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 A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of the outstanding prior civil penalty. IT IS FURTHER RECOMMENDED that within thirty (30) days off the effective date of the final order, Respondent shall provide acceptable written proof to the Registrar that Respondent has modified its form contracts to include all of A.R.S. § 32-1158(A)’s nine required terms. If Respondent fails to provide such acceptable written proof, Respondent’s license shall be suspended until it does so. 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 five days from the date of the certification. Done this day, July 7, 2019.

/s/ Roger Geddes Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] The Tribunal also took administrative notice of the Registrar’s documents submitted to the Arizona Office of Administrative Hearings.

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