ALJDEC decisions subject to certification as final

2019A-01511-CHC-ROC · Registrar of Contractors · 2019-09-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 05, 2019 at 1:00 PM. APPEARANCES: Laverne Theis (“Complainant”) appeared on her own behalf with Gregory Johndrow as a witness. James Sullivan appeared on behalf of Sun N Fun Construction 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 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 05, 2019. On September 17, 2017, the Registrar issued License No. 280824 for General Residential B contracting to Respondent.[1] License No. 280824 is current and renewed through September 30, 2020. James Francis Sullivan is listed as the Qualifying Party/Member on the license.[2] Respondent’s address of record on the license is 6500 N White Deer Ln, Tucson, AZ 85743-8756.[3] 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. Per internal Registrar records, however, there have been thirteen prior complaints filed against Respondents license, four of which resulted in disciplinary action against Respondent’s license.[5] Respondent has a $9,000.00 surety bond issued through RLI Insurance Company, effective September 02, 2014. 2. On February 16, 2019, Complainant and Respondent entered into a contract agreement whereby Respondent agreed to create an “Arizona room” for Complainant at her residence located at 264 N Camino Del Vate, Green Valley, AZ 85614.[6] Specifically, Respondent agreed to enclose Complainant’s patio and convert the space into a livable area for the sum total of $5,898.00.[7] 3. On July 11, 2018, Complainant issued a $2,000.00 down payment to Respondent via check.[8] 4. The project commenced on February 18, 2019. Work on the project stopped March 06, 2019. 5. On March 26, 2019, the Registrar received a complaint from Complainant alleging poor workmanship.[9] The Registrar numbered the complaint 2019-01511. 6. On March 29, 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 March 29, 2019, at 9:00 a.m.[10] 7. On April 04, 2019, the Registrar issued a second Jobsite Inspection Notification letter to the parties, advising that a rescheduled onsite review would be conducted at the project site by an investigator on April 26, 2019, at 9:00 a.m.[11] Respondent was instructed to submit a response to the complaint to the Registrar before the date of the scheduled inspection.[12] 8. Respondent did not submit a written response to the Registrar regarding Complaint No. 2019-01511. 9. On April 26, 2019, Registrar investigator Gregory Johndrow (“Investigator Johndrow”) appeared for the jobsite inspection and conducted a review of the contract executed between the parties. Investigator Johndrow inspected the work that had been done on the project to date and took twenty-six photographs.[13] When he was finished, Investigator Johndrow drafted Jobsite Inspection Notes.[14] 10. On May 03, 2019, Investigator Johndrow issued a Directive from the Registrar to Respondent because he substantiated Complainant’s allegation that the work Respondent had done on their project failed to meet minimum workmanship standards.[15] Respondent was put on notice that it had until 5:00 p.m. on May 28, 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).[16] 11. On May 29, 2019, the Registrar issued a Compliance Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by Investigator Johndrow on May 30, 2019, at 8:30 a.m.[17] 12. On May 30, 2019, Investigator Johndrow inspected the work that had been done on the project to date and took three photographs.[18] When he was finished, Investigator Johndrow drafted Compliance Inspection Notes.[19] 13. On May 30, 2019, Investigator Johndrow issued a Minimum Elements of a Contract Warning Letter to Respondent for a suspected violation of Ariz. Rev. Stat. § 32-1158 regarding Respondent’s contract with Complainant.[20] Respondent was further advised that failure to comply with Ariz. Rev. Stat. § 32-1158(A) was a violation of Ariz. Rev. Stat. § 32-1154(A)(12), which could result in discipline against Respondent’s license including suspension or revocation.[21] 14. On May 30, 2019, Investigator Johndrow also 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), 32-1154(A)(12); 32-1158, and 32-1154(A)(22).[22] 15. On June 07, 2019, the Registrar issued a Citation and Complaint to Respondent under Ariz. Rev. Stat. § 32-1155(A).[23] Respondent was given until June 24, 2019, to respond with its Answer.[24] 16. On June 17, 2019, the Registrar received Respondent’s written Answer.[25] Respondent conceded that an incompetent subcontractor had been hired to pour and finish the concrete flooring on the project, and that Respondent had intended to remediate the work. Respondent argued that Complainant denied access to the project on several occasions. Respondent denied informing Complainant that a permit was not required for the project, and argued that Complainant had been informed that she would need plans to secure a permit. Respondent’s architect had fallen ill and had not been able to complete the drawings, and Complainant had agreed to start the work before a permit could be secured. Per Respondent, after the project started Complainant stated that she did not have the funds necessary to secure a permit from the city and had chosen to “go in a different direction.” 17. On June 19, 2019, the Registrar referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on August 15, 2019. Per the Notice of Hearing issued on June 25, 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 A.R.S. § 32-1154(A)(22) (“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.”) Charge 2: 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 3: A violation of A.R.S. § 32-1154(A)(12) - A.R.S. § 32-1158 (“Failure in any material respect to comply with this chapter; Namely, A.R.S. § 32-1158.”) 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 the directive.”). Hearing Evidence 18. Complainant appeared on her own behalf with Registrar investigator Gregory Johndrow as a witness, and submitted one exhibit. James Sullivan appeared on behalf of Respondent. The facts of record are as follows:

a. Respondent’s contract agreement with Complainant was not in a legible state. As a result, a Warning Letter was issued to Respondent. b. A building permit was required for this project. c. Respondent informed Complainant that she needed a permit, but informed her that he could not obtain one because his architect, who would draft the plans for the project and submit them to the city, was sick and unavailable. Complainant sought the assistance of another contractor, but ultimately decided to hire Respondent for the job. Complainant should have obtained one prior to the commencement of the project. Once work on the project began, however, it was Respondent’s responsibility to obtain a proper permit. Contractors are not permitted to begin work on a project that requires a permit, other than demolition work that has been approved by an appropriate city official. d. Complainant was aware that the concrete slab Respondent’s subcontractor had poured was uneven from the beginning of the project. After she advised Respondent, the subcontractor was dispatched to remediate the work, but his efforts did not result in a correction of the unevenness. Once Respondent was informed, Respondent agreed to do the work over for Complainant. e. Days later Complainant attempted to cancel the parties’ contract via text message, and reversed course because she believed the response she received from Respondent was intimidating. f. March 12, 2019, Complainant received a Letter of Deficiency from the city regarding her project, which asked that she submit the full set of plans showing how the patio enclosure would be done. g. On March 06, 2019, Complainant paid a plumber to repair a leak in her Arizona room. h. During the April 26, 2019, jobsite inspection Respondent asserted that the job could be completed without obtaining a permit. Respondent was informed by Investigator Johndrow that he was required to obtain a permit, to which he responded he was unable to do because of an impending vacation. Investigator Johndrow reiterated his advisement, and noted that Respondent had over two weeks to comply. Complainant was specifically advised that she was not to try and obtain a permit for the project. i. Complainant would not allow Respondent on the property to participate in the May 30, 2019, compliance inspection. Investigator Johndrow determined that there was no change in the status of the project upon the completion of his prehearing inspection. j. Respondent sent plans to the city that were rejected. The city refused to issue a permit. 19. Complainant argued that she did not want Respondent to try and fix any of the problems with the project, and would instead seek assistance from the Registrar’s Recovery Fund. 20. Respondent argued that he is still willing to make the repairs necessary to Complainant’s Arizona room, and that he has since cut ties with the concrete subcontractor that did substandard work on Complainant’s 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.[26] 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.[27] 4. 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] 5. “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] 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. Admin. Stat. § 32-1154(A)(12) provides that a holder of a license may not fail in any material respect to comply with the chapter. 10. 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.” 11. Ariz. Rev. Stat. § 32-1158(A) holds that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a 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; and (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. 12. Here, the material facts are not in dispute. 13. It is undisputed that a permit was required for this project, and that once Respondent started work on the project he was the party responsible for obtaining the permit. 14. It is also undisputed that the work Respondent performed on this project failed to meet the Registrar’s minimum workmanship standards. 15. It is further undisputed that after the Registrar instructed Respondent to obtain a permit and remediate complaint items identified in the Directive that Respondent did not comply by the compliance deadline. 16. 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 28, 2019. This is an affirmative defense that Respondent bears the burden to establish. 17. At hearing, Respondent argued that the reason he had not complied with the Registrar’s Directive was because Complainant would not allow Respondent to make any attempts at remediation without a permit. Respondent noted that the city had rejected plans he submitted and refused to issue a permit. 18. Respondent did not sustain his burden here. 19. Because Complainant established by a preponderance of the evidence that Respondent did not fully perform the scope of work included in their contract agreement, and that Respondent 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). 20. 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 Sun N Fun Construction LLC, ROC License No. 280824, shall be suspended for one (1) business day. 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 23, 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=a0Yt000000ACTuUEAX. [2] Id. [3] Id. [4] Id. [5] See Registrar electronic file at pages 50-53. [6] An Arizona room is a semi-outdoor recreational room found frequently in homes in Arizona. Typically, the room is a patio that has been covered and screened-in, creating an outdoor feeling while preventing excessive heat, insects, and animals from getting in. [7] See Registrar electronic file at page 58. [8] See Registrar electronic file at page 63. [9] See Registrar electronic file at pages 56-57. [10] See Registrar electronic file at pages 47-49. [11] See Registrar electronic file at pages 34-36. [12] Id. [13] See Registrar electronic file at pages 66-91. [14] See Registrar electronic file at pages 31-33 [15] See Registrar electronic file at pages 28-30. [16] Id. [17] See Registrar electronic file at pages 25-27. [18] See Registrar electronic file at pages 16-18. [19] See Registrar electronic file at pages 19-20 [20] See Registrar electronic file at pages 21-22. [21] Id. [22] See Registrar electronic file at page 122. [23] See Registrar electronic file at pages 6-11. [24] Id. [25] See Registrar electronic file at page 121. [26] See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). [27] 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). [28] 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). [30] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [31] 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