ALJDEC decisions subject to certification as final

2018A-2939-ROC · Registrar of Contractors · 2019-04-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 21, 2019 APPEARANCES: Complainant Steven S. Azevedo appeared on his own behalf. A 2 Z Garage Door Services LLC (Respondent) appeared through Katie Daggett, its member, and Lyle Joel Daggett, its qualifying party/member ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT A 2 Z Garage Door Services LLC (Respondent) is the holder of License No. 243721 issued by the Arizona Registrar of Contractors (Registrar). Respondent’s business was servicing garage doors. On or about February 5, 2018, Steven S. Azevedo (Complainant) entered into an agreement with John Lawson for the conversion of an existing Arizona room for a total price of $15,880.00. The invoice Mr. Lawson provided the company information as follows: Get the Advantage w/ A 2 Z GARAGE DOOR SERVICE ROC243721 550 S Cheri Lynn Dr 480-522-0360 Chandler, AZ 85225 Mobile Phone: (480) 522-0360 [email redacted]

Complainant paid Mr. Lawson $8,000.00 at the time of the agreement via a personal check made payable to John Lawson and endorsed by John Lawson. On March 16, 2018, Complainant paid Mr. Lawson $3,000.00 via an online banking transfer. On March 30, 2018, Complainant paid Mr. Lawson $3,000.00 via an online banking transfer. Mr. Lawson did not perform any additional work after March 30, 2018. On or about June 26, 2018, the Registrar received a Complaint against Respondent from Complainant alleging poor work and abandonment with respect to the project. The Registrar assigned the complaint to Investigator Beau Cruz. Investigator Cruz conducted a jobsite inspection that Complainant and Mr. Lawson attended. After the jobsite inspection, Investigator Cruz issued a written directive to Respondent that provided as follows: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a Citation, discipline of your license and a civil penalty pursuant to A.R.S. § 32- 1154(E) of up to $500.00. Failure to comply with this Directive may also be treated as an aggravating factor should the Registrar pursue discipline of your license[.] You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on December 7, 2018. You are hereby directed to remedy the following violations by the appropriate means: Permit required for project. When permit is pulled by the owner or owner’s agent and inspected, if the local jurisdiction determines that there are corrective issues during the inspection the Respondent will have to Correct by Appropriate Means. Any and all work performed by the respondent that was performed outside the scope of license, must be subcontracted out to an appropriately licensed contractor. *The scope of your license does not allow you to perform the work that you contracted to do, and you cannot do nor subcontract the recommended corrective work listed in this directive. The only available remedy under this license status, if appropriate, would be financial settlement.

Following the issuance of the written directive, the matter was not resolved through a financial settlement. The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(2); A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108; A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158; A.R.S. § 32-1154(A)(16); and A.R.S. § 32-1154(A)(22). Complainant testified that a neighbor referred him to Mr. Lawson for the project and that he believed Mr. Lawson was an owner of Respondent. Complainant stated that the project started “going sideways” and Mr. Lawson began offering excuses for why the work was not being completed and materials were not being ordered. Complainant indicated that at some point he learned that Complainant did not own Respondent and made contact with Katie Daggett and found out more about the situation from her. Ms. Daggett testified that Mr. Lawson was her father. Until she and her husband recently moved to Colorado with their children, she would see her father from time to time. When she was 21, he went to prison for five years for defrauding 32 elderly investors. Her relationship with her father has been toxic, although she acknowledged that she does talk to her father on occasion. Ms. Daggett testified that her brother, his wife, their four children, and Ms. Daggett’s mother lived with her father and that he was the sole support of the family. Her father used to have two contractor’s licenses but lost them. Ms. Daggett testified that since early 2018, her father had been using Respondent’s license without Ms. and Mr. Daggett’s consent. Ms. Daggett testified that Mr. Lawson uses a different invoice than Respondent’s invoice and submitted samples of both invoices. Ms. Daggett pointed out that Mr. Lawson used Respondent’s address on Cheri Lynn Drive and Respondent’s license number on the invoices, but used his own mobile number and email address. Ms. Daggett testified that Mr. Lawson never lived with her family at the Cheri Lynn Drive address, but resided with his family. Ms. Daggett testified that multiple property owners had filed complaints with the Registrar against Respondent based on Mr. Lawson’s unauthorized actions. Ms. Daggett testified that she and her husband have tried to resolve the complaints. Ms. Daggett testified that Respondent would never have undertaken Complainant’s project because it was beyond the scope of Respondent’s license. Ms. Daggett stated that most of the service work that Respondent performed under its license was for less than $100.00. If it replaced a garage door, it might cost $400.00 or $500.00. Ms. Daggett admitted that when she first heard about the work that Mr. Lawson did for Complainant, she was shocked, but told Complainant that she would call Mr. Lawson. Ms. Daggett testified that personnel at the Registrar told her to file an unlicensed contractor complaint against Mr. Lawson for using Respondent’s license without her authorization. Although she felt bad about depriving his family of income if he were convicted of a crime, she filed the complaint and tried to cooperate with the Registrar’s investigator. The Registrar’s public website includes an article for consumers, “Before You Hire A Contractor,” including the following advice: Verify the person you are negotiating your project with is an authorized representative of the licensed contractor by calling the contractor’s number listed on the ROC license record. . . . . Some payment guidelines to consider: . . . . [pic]Make checks payable to the name of the company/ contractor listed in your signed contract. [pic]Never make a check payable to individuals or companies not listed in your contract. [pic]Do not allow payments to get ahead of the work.

Ms. Daggett testified that she and her husband tried to sell Respondent’s business of servicing garage doors before they and their family moved to Colorado to have a nest egg to make a new start. Because Mr. Lawson had performed other jobs using Respondent’s license that Mr. and Ms. Daggett did not know about, some customers had written angry reviews on Yelp. Ms. Daggett testified that the negative reviews prevented her and her husband from selling their business. Administrative notice is taken of Respondent’s prior License record on April 10, 2019. Such prior License record reflects that Respondent’s License No. 243721 was first issued on April 3, 2008, and was active. Such prior License record also reflects that there were two open complaints and one resolved/settled complaint against Respondent’s license. 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 violations 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. Ms. Daggett credibly denied that Mr. Lawson was ever authorized to act for Respondent, that she did not know that Mr. Lawson had undertaken Complainant’s project until, well after he started the project and after he had been paid in full for the project, and that she never told Complainant that Mr. Lawson was Respondent’s employee. 4. There is no direct evidence that Mr. Lawson worked for or was an agent of Respondent. In such cases, “The ostensible agent is one where the principal has intentionally or inadvertently induced third persons to believe that such a person was its agent although no actual or express authority was conferred on him as an agent.”[1]

5. Under the circumstances of this case, Complainant did not establish that Respondent’s principals did anything to make Mr. Lawson its ostensible agent. Complainant acknowledged that he failed to take the steps that the Registrar advised consumers to take to ensure that they are dealing a licensed contractor rather than a person who is using the license number without the licensed contractor’s authority. 6. Although the result in this case is unfortunate, Complainant failed to establish by a preponderance of the evidence that cause existed to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32- 1154(A)(1), A.R.S. § 32-1154(A)(2); A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108; A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158; A.R.S. § 32-1154(A)(16); and A.R.S. § 32-1154(A)(22). RECOMMENDED ORDER Based on the foregoing, it is ordered that Complainant Steven S Azevedo’s complaint in Case No. 2018A-2939-ROC against Respondent A 2 Z Garage Door Services LLC’s License No. ROC 243721 shall be dismissed. 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, April 10, 2019.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Gulf Insurance Co. v. Grisham, 126 Ariz. 123, 126, 613 P.2d 283, 286 (1980) (quoting Canyon State Canners v. Hooks, 74 Ariz. 70, 74, 243 P.2d 1023, 1025 (1952)) (emphasis added).

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