ALJDEC decisions subject to certification as final

2019A-00852-CHC-ROC · Registrar of Contractors · 2019-09-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 10, 2019 at 1:00 PM. APPEARANCES: Christopher Milliken Jr. (“Complainant”) appeared on his own behalf with Steve Klein as a witness. Javier Andrade appeared on behalf of JJA Plumbing LLC (“Respondent”). Mike Nation observed. 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 Arizona Registrar of Contractors (“Registrar”). FINDINGS OF FACT Background and Procedure 1. Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s license file as shown on the Registrar’s public website as of September 10, 2019. On October 02, 2014, the Registrar issued License No. 294917 for Specialty Dual CR-37 Plumbing contracting to Respondent.[1] License No. 294917 is current and renewed through March 31, 2020. Javier Estuardo Andrade- Illescas Sullivan is listed as the Member on the license.[2] Jorge Raul Andrade-Illescas is listed as the Qualifying Party on the license.[3] Respondent’s address of record on the license is 513 N Marble St. Gilbert, AZ 85234-4864. There is one open complaint against the license, which is presumed to be Complainant’s.[4] No other disciplinary action is listed on the license. Respondent has a $6,750.00 surety bond issued through RLI Insurance Company, effective March 01, 2018. 2. On August 01, 2018, Complainant and Respondent entered into a contract agreement whereby Respondent agreed to install a natural gas line for Complainant at his residence located at 6940 E. Cholla St. Scottsdale, AZ 85254.[5] Specifically, Respondent agreed to follow plans approved by the City of Scottsdale (“City”) to install a gas line to a guest house and fire pit in Complainant’s backyard for the sum total of $8,300.00.[6] The complaint included a copy of the parties’ contract with addendums, a July 25, 2018, email from Complainant to Respondent regarding plans for the underlying project, and five progress payments. 3. On August 01, 2018, Complainant issued a $2,500.00 down payment to Respondent via check.[7] On August 27, 2018, Complainant issued a $4,700.00 progress payment to Respondent.[8] On September 04, 2018, Complainant issued a $693.00 progress payment to Respondent.[9] On October 11, 2018, Complainant issued a $3,100.00 progress/Change Order payment to Respondent.[10] On October 25, 2018, Complainant issued a $700.00 Change Order payment to Respondent.[11] 4. The project commenced on August 15, 2018. Work on the project stopped November 25, 2018. 5. On February 21, 2019, the Registrar received a complaint from Complainant alleging poor workmanship and deviation of plans.[12] The Registrar numbered the complaint 2019-00852. 6. On February 25, 2019, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by an investigator on April 16, 2019, at 10:00 a.m.[13] 7. On April 16, 2019, Registrar investigator Steve Klein (“Investigator Klein”) appeared for the jobsite inspection and conducted a review of the contract executed between the parties, the approved plans for the project, and the City’s inspection record. Investigator Klein inspected the work that had been done on the project to date and took eight photographs.[14] When he was finished, Investigator Klein drafted Jobsite Inspection Notes.[15] 8. On April 16, 2019, Investigator Klein issued a Directive from the Registrar to Respondent because he substantiated Complainant’s allegation that the work Respondent deviated from approved City plans, and that the work Respondent had done on their project failed to meet minimum workmanship standards.[16] Respondent was put on notice that he had until 5:00 p.m. on May 03, 2019, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1154(E).[17] 9. On May 06, 2019, the Registrar issued a Directive Compliance Letter to the parties to note that a compliance inspection would take place because the Directive had not been address by Respondent.[18] 10. That same day Investigator Klein referred the matter to the Registrar’s legal department with a Citation Recommendation for Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(2), 32-1154(A)(3), and 32-1154(A)(22).[19] 11. On May 10, 2019, the Registrar issued a Citation and Complaint to Respondent under Ariz. Rev. Stat. § 32-1155(A).[20] Respondent was given until May 28, 2019, to respond with its Answer.[21] 12. On June 07, 2019, the Registrar referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on August 05, 2019. Per the Notice of Hearing issued on June 11, 2019, the issue to be determined is whether the Registrar 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)(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.”). Hearing Evidence 13. Complainant appeared on his own behalf with Registrar investigator Steve Klein as a witness, and submitted thirty-four exhibits. Javier Andrade appeared on behalf of Respondent and submitted four exhibits. The facts of record are as follows:

a. In mid-2018 Complainant began a project to build a casita and barbeque pit in the backyard of his residential property. b. Complainant contracted with Respondent to install a natural gas line that ran to the guesthouse and the barbeque pit. c. On July 25, 2018, Complainant received his architect’s approved plans and a building permit from the city. d. That same day Complainant gave Respondent a copy of the City’s approved plans.[22] The plans called for a gas line to be installed with one inch pipes. e. On July 31, 2018, Complainant and Respondent participated in a pre-project walkthrough with one of the City’s inspectors. f. On August 24, 2018, a City inspector issued a partial green tag for the project regarding the piping of gas from the service meter to the guesthouse and barbeque pit, and water.[23] g. A Certificate of Occupancy was issued by the City on November 21, 2019.[24] h. In early-December 2018 Complainant discovered that there were insufficient heating units feeding into the barbeque pit,[25] which was confirmed by a City building inspection supervisor.[26] i. On December 14, 2019, Complainant provided Respondent with notice that Respondent had incorrectly installed three-quarter inch pipes instead of one inch pipes,[27] and that pipe placement did not adhere to City-approved plans.[28] Complainant offered Respondent two options for mediation. Respondent could either (1) obtain and install a gas boost pump from the local utility company at no cost, or (2) dig up the three quarter pipes and replace them with one inch pipes at no cost. Respondent was advised to respond by December 17, 2018, and further advised that if he did not Complainant would file a complaint with the Registrar. j. After Complainant filed his complaint with the Registrar, Investigator Klein determined that Respondent’s contract agreement with Complainant was not in a legible state. As a result, a Warning Letter was issued to Respondent. Investigator Klein also issued a Directive for poor workmanship. k. Once the compliance deadline for the Directive had expired, Investigator Klein escalated the matter to the Registrar’s legal department with a citation recommendation. l. During his testimony Respondent agreed that Complainant mailed him the City’s approved plans for the project, but denied downloading or reading them before starting the job. Respondent admitted that he used a three quarter inch pipe instead of a one inch pipe, because the one inch pipe was on a one and a half month backorder from his supplier. Respondent conceded that he had used the wrong size pipe because he was in a “hurry” to finish the project. 14. Respondent argued that he did not think it was fair that he be held solely financially responsible for remediating the issues underlying the work on his project with Complainant, and further argued that he not be held liable because a City inspector should have caught his error. 15. Complainant opined that it would take a significant amount of time and money to remediate the mistakes Respondent made on the project, and asked that the Registrar take disciplinary action against Respondent’s license as a result of his conduct on their project. 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 purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.[29] 3. 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.[30] 4. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[31] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[32] 5. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[33] 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.”[34] 6. Ariz. Rev. Stat. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture 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.” 7. 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.” 8. 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.” 9. Ariz. Rev. Stat. § 32-1154(A)(22) provides, 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 Registrar 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 parts, that the Registrar may “[i]mpose 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. Here, the material facts are not in dispute. 12. It is undisputed that the City approved plans for the installation of a one inch pipes for Complainant’s gas line, and further approved the installation of said pipes at specific locations in Complainant’s backyard. 13. It is also undisputed that Respondent deviated from these plans. 14. It is further undisputed that Respondent did not attempt to remediate his workmanship on this project after instructed to by the Registrar’s Directive. 15. Therefore, the only outstanding issue to be addressed is whether Respondent raised a sufficient justification or excuse at hearing for failing to completely adhere to the Registrar’s Directive by 5:00 p.m. on May 03, 2019. This is an affirmative defense that Respondent bears the burden to establish. 16. Respondent did not sustain his burden here. 17. Because Complainant established by a preponderance of the evidence that Respondent did not fully perform the scope of work included in their contract agreement, deviated from approved plans, and failed to comply with a Registrar Directive, Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license under Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22). 18. Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter, as the Tribunal has no jurisdiction to award a refund of the underlying amount contracted between the parties. RECOMMENDED ORDER Based on the foregoing, IT IS RECOMMENDED that on the effective date of the Final Order in this matter Respondent JJA Plumbing LLC, ROC License No. 294917, shall be suspended for three (3) business days. IT IS FURTHER RECOMMENDED that the Register require Respondent to pay the sum total of $1,500.00 as a civil penalty in this matter 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 shall 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 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 40 days from the date of that certification. Done this day, September 24, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See https://roc.az.gov/contractor-search?Id=a0Yt000000ACX79EAH. [2] Id. [3] See Registrar electronic file at page 45. [4] See https://roc.az.gov/contractor-search?Id=a0Yt000000ACX79EAH. [5] See Registrar electronic file at pages 64-65 and 68. [6] Id.; see also Complainant Exhibit 6. [7] See Registrar electronic file at page 69. [8] See Registrar electronic file at page 71. [9] See Registrar electronic file at page 72. [10] See Registrar electronic file at page 74. [11] See Registrar electronic file at page 71. [12] See Registrar electronic file at pages 64-65. [13] See Complainant Exhibit 22. [14] See Registrar electronic file at pages 66-91. [15] See Registrar electronic file at page 37 [16] See Complainant Exhibit 26. [17] Id. [18] See Complainant Exhibit 28. [19] See Registrar electronic file at page 122. [20] See Registrar electronic file at pages 6-11. [21] Id. [22] See Registrar electronic file at page 31-32, 49, and 66. [23] See Registrar electronic file at page 27; see also Complainant Exhibits 24-25. [24] See Registrar electronic file at page 26. [25] See Complainant Exhibit 19. [26] See Complainant Exhibit 23. [27] See Registrar electronic file at page 30; see also Complainant Exhibit 14. [28] See Complainant Exhibits 11-13. [29] See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). [30] 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). [31] 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). [32] See Ariz. Admin. Code R2-19-119(B)(2). [33] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [34] Black’s Law Dictionary at page 1220 (8th ed. 1999).

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