ALJDEC decisions subject to certification as final

2018A-3828-ROC · Registrar of Contractors · 2019-03-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 15, 2019. APPEARANCES: Jon Howard, Complainant; Geoff Jones, Respondent & Q/P; Beau Cruz, ROC Investigator.

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

FINDINGS OF FACT On December 20, 2018, the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on February 15, 2019 at the Office of Administrative Hearings in Phoenix, Arizona.[1] Respondent. GEF Construction LLC, d/b/a: Edward Fisher Construction (hereinafter “GEF”), holds the active license number ROC 292335 first issued by ROC on June 3, 2014. Geoff Jones is the qualifying party for GEF. In November of 2017, Complainant had approached GEF, through Mr. Geoff Jones[2], to inquire about and to obtain an estimate for materials and labor to construct a 6 foot tall cinder-block wall on the West end of Complainant’s property,[3] a six foot cinder-block wall on the South end of the property and a wall with a two-course bottom and columns every 10 feet on the North end of the property.[4] Respondent Geoff Jones arranged for an August 17, 2017 meeting on the Complainant’s residential lot between Jon Howard and GEF’s sub- contractor,[5] Red Mountain Builders LLC [hereinafter “RMB”] who was represented by Brady Brookins, a member of RMB’s LLC[6] RMB sub- contracted the job to “D Masonry Construction” [hereinafter “DMC”].[7] GEF submitted an estimate to the Complainant for the walls’ construction that reflected the bid GEF’s sub-contractors provided. There is no evidence of record that there is any separate written contract agreement. All parties agree that DMC performed the work for this job. Payments by check for labor and materials were made by Complainant to GEF for the project in the amount of $12,175.00.[8] A direct payment in the amount of $4,500.00 was made to sub-contractor RMB by the Complainant.[9] GEF subsequently paid its sub-contractor RMB with two checks totaling $9,805.00 for materials and labor on Mr. Howard’s wall construction.[10] Per Complainant’s testimony, soon after the walls were constructed, each of the walls failed and toppled to the ground during a July 6, 2018 storm with high winds.[11] On August 17, 2018 Ron Howard filed a Complaint against GEF alleging poor workmanship.[12] In follow-up to the filing of the Complaint, ROC Investigator Beau Cruz provided notice for and conducted a Job Site Inspection [“JSI”]. At hearing, Investigator Cruz testified that he photographed the toppled walls and debris[13] He noted that contrary to standards of practice, it was observed that some of the wall’s blocks had no concrete mortar in the brick cavities, some had no rebar inside the brick and some had neither brick nor mortar/concrete. Mr. Cruz testified that it was critical to the stability of the wall units that both rebar and mortar/concrete be utilized. He testified that construction of these walls without mortar/concrete and rebar demonstrates below standard construction work. On October 14, 2018, Investigator Cruz issued a Directive to GEF with a Corrective Work Order [CWO] which stated:[14] After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4- 9-108)…You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on October 30, 2018.

You are hereby directed to remedy the following violations by the appropriate means:

Complaint Item 3: now on July 6 it was blown down I see where the problem is some of the columns had re bar with no concrete and some have concrete with no rebar.

Respondent is to properly construct collapsed CMU fencing on the property, and to ensure that such is constructed, and erected per all current standards.

Investigator Cruz testified that he was notified by e-mail and telephone call from Jon Howard that as of October 31, 2018 (a day after the CWO deadline) there had been no work done on the site to repair the wall or clean the debris left by the walls’ collapse. On June 17, 2015, ROC issued a Citation alleging that GEF may have violated A.R.S. § 32-1154(A)(2);[15]A.R.S. § 32-1154(A)(3);[16] a violation of A.R.S. § 32-1154(A)(12), specifically, § 32-1158 [17] and A.R.S. § 32- 1154(A)(22).[18] CONCLUSIONS OF LAW 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. “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). “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). 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). 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."). “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B). 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). 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. 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.

Ariz. Admin. Code section R4-9-108 (A) provides that “A contractor shall perform all work in a professional manner.” Ariz. Rev. Stat §32-1101(A)(3)Provides that the definition of "Contractor" is synonymous with the term builder" and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to: (a) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or any other structure or work in connection with the construction. [emphasis added].

Ariz. Rev. Stat §32-1101(A)(8) Provides that the definition of

"Residential contractor" is synonymous with the term "residential builder" and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid to, or does himself or by or through others, within residential property lines:(a) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any residential structure, such as houses, townhouses, condominiums or cooperative units. Residential structures also include apartment complexes of four units or less and any appurtenances on or within residential property lines.

The conduct described in paragraphs 3, 4 and 5 of the Findings of Fact, hereinabove, evidences, by a preponderance, that GEF acted in this case as both the Complainant’s “Residential Contractor” and a “Contractor” as contemplated and defined by Ariz. Rev. Stat §32-1101(A)(3) and §32- 11013(A)(8) in that GEF engaged RMB as a sub-contractor to bid and build the Complainant’s walls, GEF received payments from Complainant for materials and labor in building the walls and then GEF transmitted payments to RMB for work performed on the Complainant’s walls by RMB’s sub- contractor [DMC], Such acts, by a preponderance of the evidence, constitutes “…directly or indirectly supervis[ing] others to…Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof…. The preponderance of the evidence shows that GEF failed to properly supervise its sub-contractors such that the lack of rebar and mortar/concrete - which by industry masonry standards is required - is a “[d]departure from or disregard of plans or specifications … in any material respect which is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code. Thus, the preponderance of the evidence shows that GEF violated A.R.S. § 32-1154(A)(2). The preponderance of the evidence shows that GEF violated ARS §32- 1154(A)(3) in that GEF failed to perform its work in a professional or workmanship-like manner in that the walls in this case were constructed without the use of rebar and mortar/concrete contrary to standard industry specification and practice which contributed or was a primary cause of the failure and collapse of the structures. GEF’s failure is, by a preponderance, a violation of [a] rule adopted by the Registrar, namely in this case, A.A.C. R4-9-108 [workmanship standards]. The preponderance of the evidence shows that GEF violated §32-1158 - Required Minimum elements of a contract for licensed contractors – in that although GEF’s sub-contractors submitted a written estimate with a description of the work to be performed and the charges to be made, there is no written contract between the parties. The estimate does not comply with the requirements of ARS §32-1158 The preponderance of the evidence shows that GEF violated ARS §32- 1154(A)(22) by failing “…to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable time. GEF admits in the testimony of the qualifying party, Geoff Jones at hearing, that GEF is unable or unwilling to comply with the CWO because a. GEF hasn’t the funds to do the necessary repairs, b. Geoff Jones is no longer working for GEF [a business that Mr. Jones testified has been shut down and is dormant] and c. Because GEF did no work on the project – instead Geoff Jones asserts that GEF is not responsible for the work. Mr. Geoff Jones points to RMB and DMC alone as the parties responsible for the poor work. None of the conditions argued by GEF for its failure to comply with the Directive before the CWO’s stated deadline of October 30, 2019 constitute a valid justification. As the supervising general contractor on this job, GEF had and has a continuing duty to supervise its sub-contractors to insure compliance with ROC Rules. 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). Considering that GEF has acknowledged at hearing that it did not comply with the Directive and its stated reason for that failure, the imposition of a $500.00 civil penalty is appropriate. Considering the nature of the workmanship violation, the failure or refusal to comply with the ROC’s Directive, GEF’s failure to supervise the work of its sub-contractors, including GEF’s failure to insure unlicensed sub- contractors are not permitted to perform contracting for GEF are aggravating circumstances. There are no mitigating circumstances. Inasmuch as the qualifying party has testified that GEF is no longer in business and that Geoff Jones no longer works for GEF, a mere suspension of the Respondent’s license is not an effective discipline in this case.

RECOMMENDED ORDER IT IS RECOMMENDED that on the effective date of the final Order in this matter GEF Construction LLC, d/b/a Edward Fisher Construction’s license number 224179 be revoked. IT IS FURTHER RECOMMENDED that on or before the effective date of the final Order in this matter, GEF LLC must pay to the Registrar of Contractors in certified funds a civil penalty of $500.00. FURTHER IT IS RECOMMENDED that 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 any outstanding civil penalty.”

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 6, 2019. /s/Randolph D. Wolfson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

By:__________________

----------------------- [1] Administrative Judicial Notice is taken of the entirety of the Agency’s record in this matter, including - but not limited to – the ROC public access internet website. [2] See Respondent’s Answer, Agency Record, page 24. [3] See,”GEF Estimate,” Agency Record, page 101. [4] See,”GEF Estimate,” Agency Record, page 102. [5] In his testimony at hearing, Mr. Geoff Jones admitted that RMB was GEF’s sub-contractor on this job. Moreover, Respondent’s Answer, Agency Record, page 24, declares “Brady and the Mason provided me with the price and I gave Jon the estimate. Jon gave the go ahead and Brady got the mason started.” [6] Per the ROC public access website on March 6, 2019, Brady Brookins is listed a member of the RMB LLC. RMB holds an active Arizona Contractor license, number ROC 320641, a General Dual KB-2 Dual Residential and Small Commercial license. [7] Per the ROC public access internet website DMC is not listed by the ROC as a licensed contractor. [8] Agency Record, pages 113 and 114. [9] Agency Record, page 115. [10] See attachments to Respondents Answer, Agency Record, pages 22 and 23. [11] See also, Complaint Narrative, Agency Record, page 99. [12] Agency Record, page 98. [13] Agency Record, “JSI Photos, PSI P31 through and including P34. Additional photographs provided by the Complainant may be examined at Exhibits 30 through 41 of the Agency Record.. [14] Agency Record, “Directive,” page 150. [15] Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code. [16] A violation of any rule adopted by the Registrar; namely in this case, A.A.C. R4-9-108 [workmanship standards]. [17] § 32-1158. Required Minimum elements of a contract for licensed contractors. [18] 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 time.

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