ALJDEC decisions subject to certification as final

2018A-2991-CHC-ROC · Registrar of Contractors · 2018-12-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 28, 2018 APPEARANCES: David Brnilovich, Esq. for Complainant; Bob Michael Ellis for Respondent ADMINISTRATIVE LAW JUDGE: Thomas Shedden FINDINGS OF FACT 1. On September 11, 2018, the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on October 22, 2018 at the Office of Administrative Hearing. The matter was continued and the hearing was conducted on November 28, 2018. 2. The Notice of Hearing shows that the hearing was set to consider the charges made in the Citation and complaint.[1] 3. Arizona Valley Home Builders, LLC, holds license No. 302555 issued by ROC. Bob Michael Ellis is a member of the LLC; John Arthur Grabow is Arizona Valley Home Builders’ qualifying party.[2] 4. Through the Citation, ROC alleges that Respondent Arizona Valley Home Builders may have violated Ariz. Rev. Stat. sections 32- 1154(A)(3) and (A)(22). The Citation shows that ROC could not determine whether Arizona Valley Home Builders has actually committed any of the alleged violations, which is why the matter was set for hearing. The Citation also shows that the Citation itself is not evidence that Arizona Valley Home Builders has violated any statute or rule. 5. The Citation shows that if the Administrative Law Judge finds that any of the alleged charges are valid, ROC may suspend or revoke Arizona Valley Home Builders’ license. 6. On or about April 18, 2017, Complainant Catherine Michelle Peralta entered a contract with Prestige Construction Company to remodel her existing Arizona room. This work included installation of a spray-foam roof. 7. Ms. Peralta asserts that Prestige Construction hired Arizona Valley Home Builders to do the roofing work, but Arizona Valley Home Builders disputes this allegation. The evidence is not sufficient to show that Arizona Valley Home Builders performed the work at issue. 8. On June 29, 2018, ROC received from Ms. Peralta a complaint against Arizona Valley Home Builders. Ms. Peralta also filed with ROC a complaint against Prestige Construction Company. 9. ROC assigned Investigator Timothy Pennington to Ms. Peralta’s complaints. 10. Mr. Pennington conducted a jobsite inspection on July 6, 2018. Present at that inspection were Bradley Allen Fenton from Prestige Construction and a man who introduced himself as John Grabow. At the hearing, Mr. Ellis showed Mr. Pennington and Ms. Peralta a photograph of Mr. Grabow and both agreed that he was not the man present at the inspection. 11. Arizona Valley Home Builders had entered into evidence an email from Mr. Grabow showing that he had never met with ROC. 12. Mr. Ellis testified as to his belief that it was John Endrees who appeared at the job-site inspection and represented that he was Mr. Grabow. Mr. Endrees had been employed by Arizona Valley Home Builders working on IT matters, but was fired on June 1, 2018. 13. Ms. Peralta acknowledged that she had never entered a contract with Arizona Valley Home Builders. 14. Arizona Valley Home Builders’ answer to the Citation shows that it had not been hired to perform any work at Ms. Peralta’s home. Before the hearing, Mr. Ellis had informed Mr. Pennington and Ms. Peralta that Arizona Valley Home Builders had not been hired to do any work at Ms. Peralta’s home. 15. Mr. Ellis testified that Arizona Valley Home Builders had not been hired by Prestige Construction or anyone else to perform work at Ms. Peralta’s home and that it had not performed any work at Ms. Peralta’s home. 16. Mr. Ellis testified to the effect that Arizona Valley Home Builders’ primary business is fencing and septic systems, and although it does build spec homes, it generally subcontracts out for the roof. 17. ROC had provided to Arizona Valley Home Builders a copy of a $900 check from Prestige Construction made out to AVHB that Prestige purported was payment for the roofing work. Mr. Ellis testified that Arizona Valley Home Builders had not received that check and that the check had not been deposited in any of its accounts. 18. Ms. Peralta testified that a man named Mike Simms had been at her house with a man named Javier who actually was doing the roofing work. Ms. Peralta testified that Mr. Simms identified himself as a salesperson and he was wearing an Arizona Valley Home Builders shirt. 19. Mike Simms had been employed by Arizona Valley Home Builders for a short time but was fired in or about March 2017. 20. Mr. Ellis is the only person at Arizona Valley Home Builders who is authorized to enter contracts. 21. Ms. Peralta argued to the effect that the man who represented himself as Mr. Grabow and Mr. Simms should be considered as authorized agents for Arizona Valley Home Builders. 22. Through a Directive dated July 24, 2018, ROC ordered Arizona Valley Home Builders to make certain corrections to the foam roof. ROC’s Directive required Arizona Valley Home Builders to provide ROC with written proof that it had made the required corrections by no later than 5:00 p.m. August 13, 2018. 23. Arizona Valley Home Builders did not make the corrections ROC ordered it to complete. 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. Ariz. Admin. Code § R2-19-119. 2. “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.” Ariz. Rev. Stat. § 41-1092.07(G)(2). 3. “At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(3). 4. 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). 5. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). 6. Substantial evidence is evidence that a reasonable mind would use to reach a conclusion. See Mealey v. Arndt, 206 Ariz. 218, P.3d 892 (App. 2003). 7. “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B). 8. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 9. There was no substantial evidence adduced showing that Arizona Valley Home Builders is unscrupulous, unqualified, or financially irresponsible. 10. Ariz. Rev. Stat. section 32-1154(A) provides that 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. ***** 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….

11. Ariz. Admin. Code section R4-9-108(A) provides that “A contractor shall perform all work in a professional and workmanlike manner.” 12. Ariz. Rev. Stat. section 32-1154(E) provides that ROC may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of Ariz. Rev. Stat. section 32- 1154(A)(22). 13. The preponderance of the evidence does not show that Arizona Valley Home Builders violated Ariz. Rev. Stat. section 32- 1154(A)(3) because it has not been shown that Arizona Valley Home Builders performed the work at issue. 14. The preponderance of the evidence does not show that Arizona Valley Home Builders violated Ariz. Rev. Stat. section 32- 1154(A)(22) because it was justified in not complying with ROC’s Directive. 15. Because it has not been shown that Arizona Valley Home Builders committed the alleged violations, this matter should be dismissed. RECOMMENDED ORDER IT IS ORDERED that Case Number 2018-2991 is 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 is forty days after the date of that certification.

Done this day, December 14, 2018. /s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] The Notice of Hearing does not provide the date the Citation was issued or when the complaint was issued or filed. There appears to be no dispute that ROC issued the Citation on August 15, 2018, or that Complainant filed with ROC a complaint against Respondent on June 29, 2018. [2] ROC’s website shows Respondent’s name as Arizona Valley Home Builders; in his correspondence, Mr. Ellis shows it as Arizona Valley Homebuilders.

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