ALJDEC decisions subject to certification as final

2018A-516-CHC-ROC · Registrar of Contractors · 2018-11-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 06, 2018 at 1:30 PM and October 12, 2018 at 1:30 PM.[1] APPEARANCES: Paul Levine, Esq. appeared on behalf of J L Bates LLC (“Complainant”) with Bobbi Burk and Steven Philpott as a witnesses. Raymond Bratton appeared on behalf of Bratton Construction LLC (“Respondent”). Jaime Heller and Eric Stewart observed.[2] 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 Order to the Director of the Registrar of Contractors (“the Registrar”). FINDINGS OF FACT Background and Procedure 1. According to the Registrar’s public website, on or about May 07, 2015, the Registrar issued License No. 298187 General Residential B-3 General Remodeling and Repair Contractor license to Respondent.[3] The license is currently active and renewed through May 31, 2019.[4] Raymond Lee Bratton is the Qualifying Party/Member on this license.[5] Respondent’s address of record on the license is 8402 E San Miguel Ave Scottsdale, AZ 85250-6761.[6] 2. Complainant owns property located at 37405 N. School House Rd., Cave Creek, Arizona 85331. 3. On or about September 27, 2017, Complainant and Respondent entered into a $10,580.00 contract to remove and replace the roof over Complainant’s patio off the kitchen, outside the shower, master bedroom, casita, and the patio and windows on the second story guest bedrooms.[7] Complainant gave Respondent a down payment of $6,348.00 on or about October 12, 2017.[8] 4. The contract between the parties, a Purchase Order, establishes a fair description of the scope of work that Respondent would perform regarding the removal of Complainant’s old wooden roof and the installation of its new metal roof.[9] No start or completion dates were noted on the Purchase Order. Respondent’s license number did not appear on the Purchase Order, and no language appeared to apprise Complainant of its right to file a complaint with the Registrar for Respondent’s alleged violation of Ariz. Rev. Stat. § 32-1154(A) with the time allowed by Ariz. Rev. Stat. § 32-1155(A), nor did the Purchase Order provide the Registrar’s public website address and telephone number.[10] 5. On February 01, 2018, Complainant filed a complaint with the Registrar alleging that Respondent had abandoned work on Complainant’s project, located at 37405 N. School House Rd., Cave Creek, Arizona 85331.[11] According to the complaint, Respondent never started work on the project or delivered any project materials to the project site. Attached to the complaint was a copy of Complainant’s business account bank statement to show proof of payment to Respondent.[12] 6. The Registrar received the complaint on February 02, 2018, and it was assigned to Steven Philpott (“Investigator Philpott”) for investigation. 7. On February 07, 2018, Investigator Philpott mailed a job inspection letter to the parties, notifying them that a jobsite inspection was to take place at Complainant’s property on February 26, 2018, at 11:00 a.m.[13] 8. The inspection was conducted on February 26, 2018. Complainant attended but Respondent did not. Investigator Philpott took eleven photographs of the project site. Investigator Philpott substantiated Complainant’s complaint item. Specifically, that a Purchase Order was issued on September 27, 2017, a deposit paid on October 12, 2017, and that work on the project had not been started. 9. On March 05, 2018, Investigator Philpott issued a Directive From The Registrar, substantiating that Respondent’s work failed to meet minimum workmanship standards pursuant to Ariz. Admin. Code R4-9- 108.[14] Respondent was required to remedy the violation by appropriate means, per the parties’ original contract agreement, and properly adhere to local building codes and manufactures installation instructions. The deadline for Respondent to comply with the Directive was on or before 5:00 p.m. on March 21, 2018.[15] Respondent was further placed on notice that failure to comply with the Directive constituted a violation of Ariz. Rev. Stat. § 32-1154(A)(22) and could result in the issuance of a Citation, discipline of Respondent’s license, and/or the levy of a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E) of up to $500.00.[16] 10. After Respondent failed to comply with the Directive, Investigator Philpott escalated the complaint to the Registrar’s legal department.

11. On March 29, 2018, the Registrar issued a formal Citation to Respondent that charged cause to suspend or revoke Respondent’s license under Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3), 32- 1154(A)(12), 32-1154(A)(22), 32-1158(A), and Ariz. Admin. Code R4-9- 108.[17] The Citation reads, in pertinent parts, as follows: The Registrar hereby notifies Bratton Construction LLC that if the act or acts charged in the written complaint are proved at an administrative hearing, then S Bratton Construction LLC may be found to have violated the following statutory provisions and rules: 1: A violation of A.R.S. § 32-1154(A)(1) (“Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”). 2: A violation of A.R.S. § 32-1154(A(12) (“Failure in any material respect to comply with this chapter.”). 1158(A): A violation of A.R.S. § 32-1158(A) (“Any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of property to be improved shall contain in writing at least the following information: 1. The name of the contractor and the contractor's business address and license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12- 1365.”). 3: 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 the directive.”).

The Citation further warned that Respondent’s failure to timely submit his Answer by April 13, 2018, would be deemed an admission to charges under Ariz. Rev. Stat. § 32-1155(B), and could result in the suspension or revocation of his license. 12. Respondent timely submitted his Answer to the Registrar. 13. In the Answer Respondent asserted that the project started after the Directive deadline, and alleged once Complainant’s roof was removed it was discovered that the underlying materials were rotted and needed to be replaced before Respondent could affix Complainant’s new roof, per contract. Respondent offered to wait until Complainant remediated the structural integrity of the roof and comply with the contract afterwards, or deliver the materials for the project in order to be released from the contract. 14. After reviewing Respondent’s Answer the Registrar referred the complaint to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. Hearing Evidence 15. An evidentiary hearing was held on September 06, 2018 at 1:30 p.m., and continued on October 12, 2018 at 1:30 p.m. Mr. Levine appeared on behalf of Complainant with Ms. Burk and Investigator Philpott as a witnesses. Complainant also submitted two exhibits. Mr. Bratton appeared and testified on behalf of Respondent. The Registrar’s electronic file, the Notice of Hearing, and the September 07, 2018 Continued Hearing Minute Entry were also admitted into the record. Bobbi Burke’s testimony 16. Ms. Burke testified that she resides in the casita located at 37405 N. School House Rd., Cave Creek, Arizona 85331 and that she is also employed as a Property Manager by the property’s owner, Complainant. 17. Per Ms. Burke, Complainant paid Respondent $1,999.72 for materials purchased from Home Depot, Lowe’s, and Tractor Supply in August of 2018. Although the removal of the wooden roof occurred sometime in October of 2017, materials for the new roof were not delivered to the project site until on or about October 05, 2018. 18. Per Ms. Burk, Mr. Bratton appeared on October 10, 2018 and worked on the job site no more than three hours. He returned the following day with another worker and labored for approximately five hours. 19. Ms. Burke testified that Respondent was only denied access to the project site on one occasion, sometime in August 2018, after the property owner instructed her not to let Respondent on the project site without the materials for the job. 20. As of the date of the continued hearing, Ms. Burke testified that the project, per the agreement between Complainant and Respondent, has not been completed, Specifically, Ms. Burke testified that there are support beams that still need to be stained and installed, and then the metal roofing needs to be installed. Raymond Bratton’s testimony 21. At the hearing, Mr. Bratton testified that he is the Qualifying Party on Respondent’s license and that he entered into a contract with Complainant for roof removal and replacement on September 27, 2017. 22. Mr. Bratton testified that he received payments for the project from Complainant on October 12, 2018 for $6,348.00, May 31, 2018 for $1,239.21, June 18, 2018 for $3,450.00, and July 20, 2018 for $5,857.50.[18] 23. Mr. Bratton testified that during demolition he discovered that nearly all of the wood beams under the roof were rotted and needed to be replaced before a metal roof could be installed. Per Mr. Bratton, he originally declined to replace the beams as the action item was outside the scope of his contract with Complainant, but he did eventually agree to do so in December of 2017. Mr. Bratton testified that no written Change Order was executed between the parties, but rescinded that assertion on cross-examination.[19] 24. Mr. Bratton testified that of the twenty-five beams that needed to be replaced, he had already replaced fifteen of them. Mr. Bratton testified that he had intentionally not finished the replacing the remaining ten beams because he was worried he would not get paid for the work, and because he did not have a signed contract with Complainant. 25. Mr. Bratton testified that Complainant had provided the money for the down payment on roofing materials, and although he purchased the materials and placed them in his storage unit for safekeeping, the materials were “lost.” Upon further questioning Mr. Bratton admitted that the materials, along with the other contents of the storage unit, were repossessed by the storage facility because Respondent was in arrears on his storage unit payments. Mr. Bratton testified that he repurchased the roofing materials on September 09, 2018, and that he received the materials on October 04, 2018. Per Mr. Bratton, he delivered them to the project site the following day. 26. Mr. Bratton alleged that Ms. Burke instructed him not to return to the project site on August 22, 2018, but admitted that the property owner overrode her instruction and granted Respondent permission to enter that same day. Steven Philpott’s testimony 27. Investigator Philpott testified that he conducted two prehearing compliance inspections. The first inspection took place on May 30, 2018, whereby both parties were present. Investigator Philpott took sixteen photographs that captured work performed on the casita and the replacement of several wooden beams. No metal roofing had been installed by that date. The second prehearing compliance inspection took place on August 23, 2018. Only Complainant was present. Investigator Philpott took seventeen photographs that captured the completion of the casita and the staining of the remaining beams. No metal roofing had been installed by that date. 28. Investigator Philpott testified that although he had identified that some of the wooden beams were rotten, he was unable to evaluate the suitability of the metal roof installation for several reasons. First, he was never provided installation plans from either party. Additionally, he was unaware if Respondent took note of any visibly rotten beams when Respondent bid on the project.[20] Also, Investigator Philpott did not know if Respondent identified any rotten wood beams prior to demolition. Investigator Philpott testified that because the project had not been “red-tagged” by the city, the time allotted in the Directive was deemed sufficient by the Registrar for Respondent to complete the project. 29. Investigator Philpott testified that Respondent’s March 21, 2018 email to the Registrar was insufficient to establish compliance with the Registrar’s Directive.[21] CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before the Office of Administrative Hearings pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

2. The Registrar 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.[22]

3. Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[23] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[24] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[25]

4. Ariz. Rev. Stat. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”

5. Ariz. Rev. Stat. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.”

6. Ariz. Rev. Stat. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.”

7. Ariz. Rev. Stat. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure 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.”

8. Ariz. Rev. Stat. § 32-1158(A) lists the nine requisite action items that must be included in any contract one thousand dollars or more entered into between a contractor and the owner of property to be improved.

9. Ariz. Admin. Code R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

10. Complainant has sustained its burden of proof in this matter.

11. Here, Complainant established by a preponderance of the evidence that it contracted with Respondent to remove an old roof and install a new one at Complainant’s property, that Respondent began demolition for the project, and that Respondent intentionally ceased working on the project whereby he effectively abandoned the project per Ariz. Rev. Stat. § 32-1154(A)(1).

12. Mr. Bratton admitted that there was an unwritten change order for the project whereby Respondent agreed to replace rotted wood beams before affixing Complainant’s new metal roof. Per Mr. Bratton, after installing half of the beams that needed replacing and staining the remainder of the beams, he intentionally ceased work. Mr. Bratton’s rationale, that he thought he would not be paid, is undermined by his own admission that he had been timely paid for all of the work he had performed on the project.

13. It is undisputed that Respondent did not attempt to complete the corrective work following the issuance of the Registrar’s Directive. Respondent’s assertions that he feared he would not be paid for his work and that he was not allowed on the project site are unreliable, as Mr. Bratton admitted he received permission to resume work on the project the same morning he had been barred from the jobsite by Ms. Burke. Therefore, Complainant established by a preponderance of the evidence that Respondent failed to take appropriate corrective action following a written Directive from the Registrar in violation of Ariz. Rev. Stat. §§ 32-32-1154(A)(3) and 32-1154(A)(22).

14. It is also undisputed that Respondent did not note all nine requisite elements of a contract in the agreement it executed with Complainant. Therefore, Complainant established by a preponderance of the evidence that Respondent is in violation of Ariz. Rev. Stat. § 32-1158(A).

15. Lastly, Mr. Bratton’s loss of materials that Complainant paid for, and subsequent untimely replacement of said materials, constitutes a violation of Ariz. Admin. Code R4-9-108.

16. Therefore, Complainant established cause for the Registrar to discipline Respondent’s contractor’s license under Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-32-1154(A)(3), 32-1154(A)(12), 32-1154(A)(22), 32- 1158(A), and Ariz. Admin. Code R4-9-108.

RECOMMENDED ORDER Having considered the foregoing findings of facts and conclusions of law, IT IS RECOMMENDED that five days after the effective date of the Registrar’s Final Order in this matter, Bratton Construction LLC License No: 298187 be suspended for three calendar days based on his violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-32-1154(A)(3), 32-1154(A)(12), 32- 1154(A)(22), 32-1158(A), and Ariz. Admin. Code R4-9-108. Respondent may avoid suspension if the Registrar receives credible proof that Respondent has fully complied with one of the following conditions: (1) Respondent has remedied the aforementioned violation outlined in the Registrar’s Directive by appropriate means, OR

(2) Respondent has entered into a signed mutually acceptable arrangement with Complainant.

If the Registrar receives credible written proof that Respondent has complied with the foregoing conditions on or before the deadline identified above, then the above provided license suspension shall not take place.

IT IS FURTHER RECOMMENDED that that five days after the effective date of the Registrar’s Final Order in this matter, Bratton Construction LLC License No: 298187 pay a $200.00 civil penalty in certified funds to the Registrar pursuant to Ariz. Rev. Stat. § 32-1154(E).

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s Final Order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in Ariz. Rev. Stat. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty in certified funds. 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, November 01, 2018.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Per Respondent’s request the September 06, 2018, hearing was continued so that he could secure counsel and submit evidence to the tribunal. On September 07, 2018, the undersigned Administrative Law Judge issued a Minute Entry which reads, in pertinent part: Good cause appearing, so that Respondent may secure legal counsel, the hearing in the above-entitled matter is continued to Friday, October 12, 2018 at 1:30 p.m. Respondent shall instruct his counsel to file a Notice of Appearance with the Office of Administrative Hearings as soon as possible, but no later than October 11, 2018. Respondent shall supply Complainant with copies of all evidence intended for use at the continued hearing by October 05, 2018. Respondent did not comply with the tribunal’s directive to provide his evidence on or before October 05, 2018, and he did not appear with counsel for the October 12, 2018, continued hearing. Respondent did not request an additional continuance to secure counsel, but did request that his exhibits be admitted. Respondent’s request was denied as no good cause for his untimely submission was offered to the tribunal. [2] Ms. Heller and Mr. Stewart only observed on October 12, 2018. [3] https://roc.az.gov/contractor-search?Id=a0Yt000000ACWaHEAX. [4] Id. [5] Id. [6] Id. [7] See the Registrar’s electronic file at Intake Complaint Submittal1.pdf. [8] Id. [9] Id. [10] Id. [11] See the Registrar’s electronic file at Intake Complaint Submittal1.pdf. [12] Id. [13] See the Registrar’s electronic file at Rcc012 Formal Inspection Jobsite 1.rtf. [14] See the Registrar’s electronic file at Rcc014 Corrective Work Order1.rtf. [15] Id. [16] Id. [17] See the Registrar’s electronic file at Rch424 Citation Multiple Charges Workmanship W221.rtf. [18] Mr. Bratton also testified that he charged Complainant $50.00 per person per hour to replace the wooden beams on the project. [19] See Complainant Exhibit 2. The parties amended their agreement in writing on July 20, 2018, which notes that the project is to be complete by August 15, 2018. [20] See the Registrar’s electronic file at Insp Action Letters1pdf. Investigator Philpott opined that photo #8 evinced the unsuitability of the wood and that a professional contractor would know, particularly at the time of bidding, that a roof could not be installed on beams in that condition. Investigator Philpott further opined that the state of the wood beams in Complainant’s project were not in an unforeseeable condition. Specifically regarding photo #8, Investigator Philpott opined that Mr. Bratton should have requested that the wood be tested prior to bidding and/or starting the project, if the holes were visible to him. [21] See the Registrar’s electronic file at Insp Correspondence From Respondent1.pdf. [22] 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). [23] See Ariz. Rev. Stat. § 41-1092.07(G)(2); Ariz. Admin. Code R2-19- 119(A); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [24] Morris K. Udall, Arizona Law of Evidence § 5 (1960). See also Black’s Law Dictionary 1373 (10th ed. 2014) which states that 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.” [25] See Ariz. Admin. Code R2-19-119(B)(2).

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