FINACT2018A-3228-ROC.pdf

2018A-3228-ROC · Registrar of Contractors · 2019-03-21

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Lori VanSciver, Case No. 2018-3228 COMPLAINANT, Docket No. 2018A-3228-ROC v. Mirage Custom Homes LLC, FINAL ADMINISTRATIVE DECISION DBA: Hoctor and Sons Construction, AND ORDER License No. ROC 226450, 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. REGISTRAR’S ACCEPTANCE 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 accepts it. CONCLUSION Because the Registrar has accepted the administrative law judge’s decision, that decision is the final administrative decision in this case and becomes effective on April 29, 2019. IT IS FURTHER ORDERED that Respondent pay a civil penalty in the amount of $150.00 payable to the Registrar on or before 30 days from the effective date of this Order. Payment may be hand- delivered to the Registrar’s physical address or mailed to: Registrar of Contractors P.O. Box 6748 Phoenix, Arizona 85505-6748

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 FINAL NOTE

On page 2, line 12 replace “business” with “personal residence”.

On page 3, line 1 replace “July 16, 2018” with “July 17, 2018”. On page 3, line 5 replace “August

17, 2019” with “August 17, 2018”.

On page 10, line 23, replace “R4-9-1080” with “R4-9-108.”

On page 11, line 6 replace “five days after” with “on”.

Dated March 19, 2019.

Registrar of Contractors /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Copy mailed via USPS First Class mail March 19, 2019 to: Respondent Mirage Custom Homes LLC DBA: Hoctor and Sons Construction 5424 N 106th Ave Glendale, AZ 85307 Complainant Lori VanSciver 31627 N 129th Dr Peoria, AZ 85383

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 Office of Administrative Hearings Jenna Clark, Administrative Law Judge

Case No. 2018-3228 / mm

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Lori VanSciver, No. 2018A-3228-ROC COMPLAINANT ADMINISTRATIVE LAW JUDGE v. DECISION Mirage Custom Homes LLC , DBA: Hoctor and Sons Construction, License No. ROC 226450, RESPONDENT. HEARING: February 08, 2019 at 8:30 AM. APPEARANCES: Lori Van Scriver (“Complainant”) appeared on her own behalf with Leonard Van Scriver and Jim Diamond as witnesses. Phil Hoctor appeared on behalf of Mirage Custom Homes 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 Registrar of Contractors (“ROC”).

FINDINGS OF FACT BACKGROUND AND PROCEDURE

1. According to the ROC’s public website, on or about November 12, 2006, the ROC issued License No. 226450, B general residential contracting license, to Respondent.1 Philip Andrew Hoctor (“Mr. Hoctor”) is the Qualifying Party/Member on the license.2 Respondent’s address of record on the license is 5424 N. 106th Ave., Glendale, AZ 85307-4003.3

https://roc.az.gov/contractor-search?Id=a0Yt000000ACGopEAH. 2 Id. Id. Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 2. Administrative notice is taken that discipline has been issued against the license on three prior occasions, and that two prior cases have been either resolved or settled.4 There is one open case against License No. 226450 which is presumed to be Complainant’s. License No. 226450 has an inactive $9,000.00 surety bond issued by Travelers Casualty and Surety Company of America.5 $8,036.00 has been paid from the bond to date.6 3. Complainant is the residential property owner of 31627 N 129th Dr., Peoria, AZ 85383. 4. On June 06, 2017, the parties entered into a contractual agreement whereby Respondent agreed to perform residential room addition for Complainant, at the above-captioned business address, for $39,500.00. The scope of the project included stucco work, installing new doors and shower tile, wall framing, grouting, electrical, and paint.

5. Respondent began the project on August 31, 2017. The project was

completed on or about November 23, 2017.

6. On June 28, 2018, Complainant filed a complaint with the ROC alleging

that Respondent had performed poor work on her project, and further alleged that Respondent had caused damage to her property and left refuse on the jobsite. Complainant attached a copy of Respondent’s bid, four check stubs, two invoices, a bank statement, and an email.7 7. The ROC received Complainant’s complaint on July 16, 2018. The ROC assigned Case 2018-3228 to Timothy Pennington (“Investigator Pennington”) for investigation.

Id. Id. Id. It is unclear if the remaining $964.00 balance is available for recoupment as the bond is cancelled. More information may be available at https://roc.az.gov/recovery-fund?targetclass=answer-question- collect#question-collect. 7 See Hearing File, pages 45-62. 8. On July 16, 2018, the ROC issued a JOBSITE INSPECTION NOTIFICATION letter to both parties advising receipt of Complainant’s complaint.8 The parties were advised that a jobsite inspection would take place on August 09, 2018, at 9:00 a.m.9 9. On July 23, 2018, the ROC advised the parties that the jobsite inspection was rescheduled for August 17, 2019, at 9:00 a.m.10 10. On July 26, 2018, the ROC advised the parties that the jobsite inspection was rescheduled for September 04, 2019, at 9:00 a.m.11 11. On September 04, 2018, Investigator Pennington conducted a review of the contract executed between the parties and inspected the work that had been done on the project to date. Investigator Pennington also took photographs of the property. When he was finished Investigator Pennington drafted inspection notes.12 12. On September 04, 2018, Investigator Pennington issued a DIRECTIVE FROM THE REGISTRAR to Respondent because he substantiated thirteen of

Complainant’s allegations that Respondent’s work failed to meet minimum

workmanship standards.13 Respondent was put on notice that it had until September

22, 2018, to notify the ROC 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 13. On October 10, 2018, Investigator Pennington issued an UNLICENSED CONTRACTOR notification letter to Respondent to advise Respondent that he may in violation of ARIZ. REV. STAT. § 32-1154(A)(9), which would also constitute a violation of ARIZ. REV. STAT. §§ 32-1164(A)(1).15

8 See Hearing File, page 94-96. Id. See Hearing File, page 102. See Hearing File, page 103. See Hearing File, pages 97-100. See Hearing File, pages 63-65. Id. 15 See Hearing File, page 66. 14. Also on October 10, 2018, Investigator Pennington issued a MINIMUM ELEMENTS OF A CONTRACT notification letter to Respondent to advise that Respondent may be in violation of ARIZ. REV. STAT. § 32-1158(A).16 15. On November 14, 2018, the ROC issued a CITATION to Respondent under ARIZ. ADMIN. CODE R4-9-108 and ARIZ. REV. STAT. §§ 32-1154(A)(9), 32-154(A)(12) – 32-1124(B), and 32-1154(A)(22).17 Respondent was given until November 29, 2018, to respond with its ANSWER.18 16. Respondent filed a timely ANSWER.19 17. On December 13, 2018, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on February 08, 2019, at 8:30 a.m. Per the NOTICE OF HEARING the issue to be determined is whether the ROC has cause to discipline Respondent’s license based on the following charges: Charge 1: A violation of Rule 4-9-108, titled “Minimum Construction Standards,” in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3). Charge 2: A violation of A.R.S. § 32-1154(A)(9) (“Aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one's license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.”) Charge 3: A violation of A.R.S. § 32-1154(A)(12) – 32-1124(B) (“Failure in any material respect to comply with this chapter; Namely A.R.S. § 32-1124(B).”) Charge 4: 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

See Hearing File, pages 67-68. Hearing File, pages 5-11. Id. 19 The answer is not a part of the ROC’s electronic file. the directive.”).20 HEARING EVIDENCE

18. Complainant appeared on her own behalf with Leonard Van Scriver and

Jim Diamond as witnesses, and submitted one exhibit. Mr. Hoctor appeared on behalf

of Respondent and submitted one exhibit. The NOTICE OF HEARING was also admitted

into the evidentiary record. Mrs. Van Scriver’s testimony 19. Mrs. Van Scriver testified that she hired two contractors to perform work on her home located at 31627 N 129th Dr., Peoria, AZ 85383. Respondent was hired to complete a room addition and another company was hired to perform landscaping work in the backyard. Both projects were to be completed in tandem, with specific aspects of each job completed at certain times to permit the other contractor to continue and/or begin specific portions of their project. 20. Mrs. Van Scriver testified that she paid Respondent $37,624.00 on their contract for her residential room addition. 21. Per Mrs. Van Scriver, Respondent originally gave his word verbally that his job would be completed by Thanksgiving 201721, then later promised that the project would be complete by March 23, 2018, before committing to a completion date of July 03, 2018, in writing.

22. Mrs. Van Scriver testified that Respondent did not timely complete the

project, and the work Respondent did complete was subpar. Mrs. Van Scriver also

alleged that Respondent damaged her driveway, her gas and electrical lines, and also

damaged brick pavers and lights in the backyard that had recently been installed by the landscaping company she had hired to perform work alongside Respondent. 23. Mrs. Van Scriver testified that she and her husband filed a complaint with the ROC on June 28, 2018.

See Hearing File, pages 17-23. 21 Administrative Notice is taken that Thanksgiving 2017 occurred on Thursday, November 23 that year. 24. Per Mrs. Van Scriver, Respondent was present for the jobsite inspection on September 04, 2018. The ROC issued a DIRECTIVE to the parties that same day which substantiated thirteen of Complainant’s action items; three of which were corrected by Respondent by the ROC’s compliance deadline.22 25. Mrs. Van Scriver testified that Respondent remediated additional complaint items, but had yet to finish five of them by the date of the hearing.23 Mrs. Van Scriver testified that she had not hired another contractor to remediate any of the outstanding complaint items Respondent failed to correct. Mr. Van Scriver’s testimony 26. Mr. Van Scriver argued that instead of addressing Complainant’s “punch list” that Respondent placed a lien on Complainants’ property. Investigator Diamond’s testimony 27. Investigator Diamond testified that Investigator Pennington had originally

been assigned to Case 2018-3228, and had conducted the underlying investigation at

issue, but that Investigator Pennington had left the ROC in January of 2018 so he had

been assigned to testify in the hearing at bar by the ROC.

28. Investigator Pennington issued a formal complaint notification to the parties on July 17, 2018.24 29. Investigator Diamond testified that a jobsite inspection was conducted by Investigator Pennington on September 04, 2018, whereby he took notes and photographs. A subsequent DIRECTIVE was issued to the parties that same day. 30. On October 09, 2018, Investigator Pennington held a compliance inspection at the project site. Investigator Pennington confirmed that the DIRECTIVE had not been complied with by Respondent. 31. Per Investigator Diamond, he conducted a prehearing inspection of the project site on January 31, 2019. Both parties were present. Investigator Diamond

Respondent corrected complaint items #19, #21, and #22. Specifically referring to complaint items #4, #6, #18, #20, and #23. 24 Hearing File, pages 94-96. confirmed that Respondent had completely remediated complaint items #1, #19, #21 #22, and #24.25 32. Investigator Diamond testified that a city inspection took place on February 07, 2019, whereby the city issued several “red-tag” items. Per Investigator Diamond, once those issues are remediated by Respondent the project could be deemed complete. 33. In speaking with Mr. Hoctor and another of his employees, Investigator Diamond opined no violation of ARIZ. REV. STAT. § 32-1154(A)(9) occurred. Mr. Hoctor’s testimony 34. Mr. Hoctor testified that he is the Qualifying Party on ROC License No. 226450. 35. Mr. Hoctor argued that he had already updated his contract template and forwarded a copy to the ROC, but that he was informed that a revision of his contract

with Complainants was not necessary so he did not make one.

36. Mr. Hoctor denied “aiding and abetting” the use of unlicensed

subcontractors. Per Mr. Hoctor, the Jorge Franco referenced in Investigator

Pennington’s notes is an hourly employee. Unbeknownst to Mr. Hoctor, Mr. Franco did bring unlicensed trades on Complainants’ project site, but once he was informed they were all removed. 37. Mr. Hoctor denied placing a lien on Complainants’ property. 38. Mr. Hoctor admitted that the completion of Complainants’ project was untimely. 39. Regarding complaint items outlined for remediation in the DIRECTIVE, Mr. Hoctor testified that Complainants’ agreed to remove the first complaint item. As for the remaining complaint items, Respondent admitted that they were not fully addressed on or before September 22, 2018.

25 Leaving complaint item #3, #4, #6, #18, #20, and #23 outstanding as of the date of the hearing. 40. Regarding complaint item #4, Mr. Hoctor testified that there were variations in the grout color, so he came to an agreement with Complainants whereby they will pick a new color and he will lay and seal it. Regarding complaint item #6, Mr. Hoctor testified that he told Complainants to buy replacement lights and deduct the cost from their final payment. Mr. Hoctor denied damaging the backyard brick pavers, and argued that they were just dirty. He agreed to have them cleaned with solvent. Regarding complaint item #11, Mr. Hoctor argued that Investigator Pennington told him that he did not need to forward the ROC an updated contract bearing a completion date for Complainants’ project. Mr. Hoctor testified that he has since remediated the underlying issue regarding complaint item #21. 41. Per Mr. Hoctor, only four items remain at issue, which the city inspector needs to approve in order to receive a “certificate of occupancy” and deem the project fully completed.26 CONCLUSIONS OF LAW 1. The ROC has jurisdiction over this matter pursuant to ARIZ. REV. STAT. §§ 32-1101 et seq. and 32-1154(A). 2. The ROC may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.27 3. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.28 Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.29

Mr. Hoctor offered Complainants a one-year labor warranty, including inspection and repair, from the date of completion. 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). 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). 29 See ARIZ. ADMIN. CODE R2-19-119(B)(2). 4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”30 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.”31

5. ARIZ. ADMIN. CODE R4-9-108 holds, in pertinent part, that a contractor

shall perform all work in a professional and workmanlike manner and that a contractor

shall perform all work in accordance with any applicable building codes and

professional industry standards.

6. ARIZ. REV. STAT. § 32-1154(A)(3) holds that a holder of a license may not

violate a rule adopted by the ROC. 7. ARIZ. REV. STAT. § 32-1154(A)(9) holds that “[a]iding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one's license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.” 8. ARIZ. REV. STAT. § 32-1154(A)(12) holds that a license holder may not fail in any material respect to comply with this chapter.32

MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). ARIZ. REV. STAT. § 32-1124(B) holds, that “[l]icenses issued under this chapter and any renewals shall be signed by the registrar or the registrar's designated representative and by the licensee. The license shall be nontransferable, and satisfactory evidence of possession shall be exhibited by the licensee on demand. The license number appearing on any licenses held by the licensee shall be preceded by the acronym "ROC" and shall be posted in a conspicuous place on premises where any work is being performed, shall be placed on all written bids submitted by the licensee and shall be placed on all broadcast, published, internet or billboard advertising, letterheads and other documents used by the licensee to correspond with the licensee's customers or potential customers in the conduct of business regulated by this chapter. A violation of this subsection relating to posting and placement of license numbers shall be, at the discretion of the registrar, grounds for disciplinary action pursuant to section 32- 1154, subsection A, paragraph 12, but not grounds for preventing the award of a contract, voiding an awarded contract, or any other claim or defense against the licensee. For the purposes of this subsection, advertising does not include a trade association directory listing that is distributed solely to the members of the association and not to the general public.” 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 ROC 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 part, that the ROC may

impose 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. The facts in this matter are not in dispute between the parties. 12. There is insufficient evidence in the record to hold Respondent in violation of ARIZ. REV. STAT. §§ 32-1154(A)(9), 32-1154(A)(12), and/or 32-1124(B). 13. There is, however, sufficient evidence in the record to hold that Respondent is in violation of ARIZ. ADMIN. CODE R4-9-1080, and ARIZ. REV. STAT. §§ 32- 1154(A)(3) and 32-1154(A)(22). 14. Here, Complainant has shown by a preponderance of the evidence that the parties’ had a contract agreement, that Complainant tendered funds to Respondent per the terms of said agreement, and Respondent failed to timely complete the underlying job. Complainant has also established that by a preponderance of the evidence that Respondent failed to timely comply with the DIRECTIVE issued by the ROC in this matter regarding Respondent’s poor workmanship. 15. Thus, Complainant has established cause for the ROC to suspend or revoke Respondent’s contractor’s license under ARIZ. REV. STAT. §§ 32-1154(A)(3), 32- 1154(A)(22), and ARIZ. ADMIN. CODE R4-9-108.

RECOMMENDED ORDER Based on the foregoing findings of fact and conclusions of law, IT IS RECOMMENDED that five days after the effective date of the FINAL ORDER in this matter, Respondent Mirage Custom Homes LLC, dba Hoctor and Sons Construction, License No. 226450 be suspended for one day based on its violation of ARIZ. ADMIN. CODE R4-9-108 and ARIZ. REV. STAT. §§ 32-1154(A)(3) and 32- 1154(A)(22). IT IS FURTHER RECOMMENDED that Respondent shall pay the sum of $150.00 as a civil penalty pursuant to ARIZ. REV. STAT. § 32-1154(E). IT IS FURTHER ORDERED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the FINAL ORDER, the ROC shall revoke Respondent’s license, effective on such deadline date. 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, March 11, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors