ALJDEC decisions subject to certification as final

2018A-3416-RFA-ROC · Registrar of Contractors · 2020-08-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

David Hendrickson and Laura Jacobson,

COMPLAINANTS,

v.

Blue Mountain Custom Builders LLC,

License No. ROC 295555,

RESPONDENT.

No. 2018A-3416-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 17, 2020 at 9:00 AM.

APPEARANCES: Assistant Attorney General Sarah Asta, Esq. appeared on behalf of the Arizona Registrar of Contractors with Daniel Edwards as a witness. Ryan O’Neal, Esq. appeared on behalf of David Hendrickson and Laura Jacobson (“Complainants”). No appearance(s) by or on behalf of Blue Mountain Custom Builders LLC (“Respondent”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT

Background and Procedure

According to the Registrar’s public website, on or about May 26, 2009, the Registrar issued License No. 295555, for specialty dual CR-61 carpentry, remodeling, and repairs contracting license to Respondent. Esteban Perez Rios is listed as the Qualifying Party and Member on this license. Vanessa Perez is also listed on the license as a Member. Respondent’s address of record on the license is PO Box 4215 Yuma, AZ 85366-2415.

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. On May 24, 2013, License No. 295555 was voluntarily cancelled by Respondent. There are no open complaints against the license, nor is there any records to indicate that the license has been disciplined by the Registrar on any prior occasion. There is no bond information listed for License No. 295555.

On July 23, 2018, Complainants filed a complaint against Respondent with the Registrar essentially alleging abandonment. In the complaint, Complainants asserted that on or about November 12, 2017, Complainants and Respondent entered into a contract whereby Respondent agreed to perform residential roof removal and replacement services for Complainants for the sum total of $27,811.73, and Respondent failed to complete the project as contracted. On July 26, 2018, the Registrar received the complaint whereby it was designated Complaint No. 2018-03416 and assigned to John Smith (“Investigator Smith”) for investigation.

On August 15, 2018, Investigator Smith completed his inspection of Complainants’ project. Respondent was in attendance. Ultimately, Investigator Smith determined that the work Respondent had performed fell below the Registrar’s minimum workmanship standard as he substantiated 2 of Complainants’ 4 poor workmanship complaint allegations against Respondent.

On August 20, 2018, a Directive From The Registrar (“Directive”) was issued by the Registrar which instructed Respondent to complete the project per contract and provide written proof of completion to the Registrar no later than 5:00pm on September 20, 2018. Respondent was also put on notice that if its license had been revoked it was only permitted to remedy the listed violation(s) by paying a licensed contractor as hired by Complainants.

Respondent did not complete corrective work as instructed by the Directive by September 10, 2018, nor did the parties execute a settlement agreement by that date.

On September 12, 2018, Investigator Smith completed a compliance inspection of Complainants’ project. Respondent was not present. Ultimately, Investigator Smith determined that the Directive had not been complied with as no corrective work had been performed by Respondent. In his Compliance Jobsite Inspection Notes Investigator Smith described that “[a]ll work is in the same condition as during the original inspection.”

On November 29, 2018, a Citation was issued and sent certified and first class mail to Respondent’s address of record charging Respondent with departure from plans or specifications in violation of Ariz. Rev. Stat. §§ 32-1154(A)(2), failure to meet minimum construction standards in violation of § 32-1154(A)(3); namely Ariz. Admin. Code R4-9-108, failure to comply in any material respect in violation of § 32-1154(A)(12); namely with § 32-1158, acting in the capacity of a contractor under any license issued under this chapter in violation of § 32-1154(A)(14), and for failing to take corrective action after a written directive was issued by the Registrar in violation of § 32-1154(A)(22). Respondent was advised to submit a written Answer to the Registrar by December 14, 2018, and that failing to do so would constitute an admission pursuant to Ariz. Rev. Stat. § 32-1155(B).

Respondent did not submit an Answer to the Registrar.

On December 20, 2018, the Registrar issued a Final Administrative Decision and Order to the parties whereby Respondent was held to be in violation of Ariz. Rev. Stat. §§ 32-1154(A)(2), 32-1154(A)(3), 32-1154(A)(12), 32-1154(A)(14), and 32-1154(A)(22). As such, the Registrar revoked Respondent’s licenses under Ariz. Rev. Stat. §§ 32-1154 and 32-1155.

On June 10, 2019, the Registrar received a claim for payment with the Residential Contractors’ Recovery Fund (“Recovery Fund”) from Complainants. Complainants did not indicate a specific amount of deposit to be refunded, however, Complainants did specifically request a $23,777.73 payment from the Recovery Fund.

On March 02, 2020, the Registrar issued a Notice Of Claim for Administrative Award which held Complainants was awarded $16,273.23 from the Fund.

On March 17, 2020, the Registrar received a timely appeal request from Respondent contesting Complainants’ Recovery Fund award. No appeal from Complainants was received by the Registrar.

On May 22, 2020, the Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an independent evidentiary hearing on July 17, 2020. The issue at hearing was to determine if an award and payment from the Recovery Fund pursuant to Ariz. Rev. Stat. § 32-1131 et seq. is justified by the evidence.

On June 29, 2020, OAH issued an Order informing the parties that the above-captioned matter would be held via tele/video conference. The Order required the parties to utilize the link and/or number provided to connect to the conference.

Hearing Evidence

At the hearing, the Registrar presented the testimony of Daniel Edwards and submitted Exhibits 1-22. Complainants submitted Exhibits 1-2 but declined to testify. No appearance(s) by or on behalf of Respondent. No written request to continue received by OAH by or on behalf of Respondent. The Notice of Hearing and the Registrar’s electronic hearing file (“Agency File”) were also admitted into the record as their own exhibits. The substantive facts are as follows:

Mr. Edwards is a Legal Assistant II for the Registrar. Mr. Edwards made the determination that Complainants were eligible for a payout from the Fund, and also determined Complainants’ payout award.

Complainants are the owners of residential property located at 610 N. Mint Dr. Oracle, Arizona 85623, which is the site of the underlying project at issue.

On April 05, 2018, the parties executed a $3,502.50 Change Order.

Complainants paid a total of $14,323.04 on their contract with Respondent.

On November 30, 2018, issued a $584.63 payment to Kaiser Structural (“Kaiser”) in exchange for a roof evaluation and report. Complainants submitted the Kaiser report to their local building authority in an effort to obtain a building permit.

Complainants also paid $781.79 to Sunbelt Rentals for a boom lift in order for the aforementioned evaluation to be conducted.

On May 30, 2019, Complainants obtained a dual bid from Scott Roofing Company (“SRC”) to remediate their roofing project. Specifically, Complainants were quoted $29,144 for a 15 year warranty, and $31,398.00 for a 20 year warranty for the same remediations.

Prior to receiving a determination from the Registrar, however, SCR began remediations on the underlying project at Complainants’ direction.

The Registrar’s Recover Fund award to Complainants was calculated by disallowing payments for work that was not originally included in the underlying contract, the Directive, and payments that could not be verified by the Registrar. An unpaid balance was also deducted from the compensable repair costs. Ultimately, the Registrar calculated that Complainants were eligible for a $16,273.23 payout by law.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction and was properly brought before OAH for adjudication.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

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. 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.

Respondent bears the burden of establishing by a preponderance of the evidence that Complainants are ineligible for a payout from the Recovery Fund and/or that the Registrar’s payout amount to Complainants was incorrect.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

By failing to appear at the hearing, Respondent failed to meet the required burden of proof. As such, the appeal must be denied.

Notably, because Complainants failed to appeal the Registrar’s Notice Of Claim for Administrative Award, Complainants lack standing to dispute the award they received by the Recovery Fund.

Therefore, based on the credible and relevant evidence of record, the Tribunal concludes that Complainants were appropriately found to be eligible to access the Registrar’s Recovery Fund. The Tribunal further concludes that the Registrar properly calculated Complainants’ administrative payout award from the Recovery Fund.

ORDER

Based on the foregoing,

it is ORDERED that the Registrar affirm the Notice of Claim for Administrative Payout dated March 02, 2020, and deny Respondent’s request to amend the payout amount from the Recovery Fund.

IT IS FURTHER ORDERED that this matter is hereby vacated from OAH’s calendar and remanded to the Registrar for further action, if any.

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 forty (40) days from the date of that certification.

Done this day, August 06, 2020.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors