FINACT2018A-01975-OMC-ROC.pdf

2019A-01975-OMC-ROC · Registrar of Contractors · 2019-05-22

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Arizona Registrar of Contractors, Case No. 2019-01975 COMPLAINANT, Docket No. 2019A-01975-OMC-ROC v. We Can Fix it Remodeling LLC, FINAL ADMINISTRATIVE DECISION License No. ROC 315440, AND ORDER RESPONDENT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an

administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the

Registrar must provide written justification setting forth the reasons for the modification or rejection.

REGISTRAR’S ACCEPTANCE

In this case, a hearing was held, and the administrative law judge issued a written decision. See

Administrative Law Judge Decision, attached. The Registrar reviewed that decision and hereby accepts

it.

CONCLUSION

Because the Registrar has accepted the administrative law judge’s decision, that decision is the

final administrative decision in this case and becomes effective on June 26, 2019.

Dated May 17, 2019. Registrar of Contractors /s/ Joseph Citelli Joseph Citelli, Chief Counsel, Chief of Legal and Recovery Fund

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Copy mailed via USPS First Class mail May 17, 2019 to: Respondent We Can Fix it Remodeling LLC 2722 E Bell Rd Phoenix, AZ 85032 AND copy electronically mailed this same date to: Witnesses Penny Hughey at email address on record with the Registrar Rene McKinley at email address on record with the Registrar Ronald Victory at email address on record with the Registrar Thomas Hubbard at email address on record with the Registrar

Respondent at email address on record with the Registrar

John Tellier, Esq. Assistant Attorney General

Office of Administrative Hearings Velva Moses-Thompson, Administrative Law Judge Case No. 2019-01975 / MC

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 5.15.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors, No. 2019A-01975-OMC-ROC

COMPLAINANT, ADMINISTRATIVE LAW JUDGE v. DECISION We Can Fix it Remodeling, LLC, ROC License: ROC 315440

RESPONDENT.

HEARING: May 2, 2019 APPEARANCES: Assistant Attorney General Thomas Raine appeared on behalf of the Arizona Registrar of Contractors. No one appeared on behalf of Respondent We Can Fix it Remodeling, LLC. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson _____________________________________________________________________

FINDINGS OF FACT

1. On April 4, 2019, the Registrar of Contractors (“Registrar”) issued an

ORDER OF SUMMARY SUSPENSION, ORDER CONSOLIDATING CASES, AND NOTICE OF

PROMPTLY INSTITUTED PROCEEDING (“ORDER”) setting the above-captioned matter for

hearing at 1:00 p.m., on May 2, 2019, at the Office of Administrative Hearings.

2. No representative appeared for Respondent We Can Fix It Remodeling,

LLC (“We Can Fix It Remodeling” or “WCF”) at the scheduled time and the hearing was

convened in its absence at about 1:10 p.m. on May 2, 2019.

3. In the ORDER, the Registrar presented its determination that the public

welfare imperatively required emergency action and it summarily suspended WCF’s

license. Citing ARIZ. REV. STAT. § 41-1092.11(B). 4. WCF holds license number 315440 issued by Registrar. 5. On April 23, 2019, the Registrar also issued a SUPPLEMENTAL NOTICE to clarify and detail the specific charges against WCF.

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 5.15.2019 ROC LEGAL

6. The SUPPLEMENTAL NOTICE provided a Statement of Facts and a Formal Statement of Alleged Violations in which Registrar alleged that WCF had committed four violations of ARIZ. REV. STAT. section 32-1154(A)(1), three violations of ARIZ. REV.

STAT. section 32-1154(A)(3), one violation of ARIZ. REV. STAT. section 32-1154(A)(12),

one violation of ARIZ. REV. STAT. section 32-1158(A), one violation of ARIZ. REV. STAT.

section 32-1154(A)(2), and one violation of ARIZ. REV. STAT. section 32-1154(A)(16).

7. The Registrar is requesting that WCF’s license be revoked.

8. In March and April of 2019, the Registrar received four complaints against

WCF which were consolidated into this single proceeding.

9. Because of this public safety issue and to protect the public welfare by

eliminating the risk that other consumers would enter contracts with WCF, the Registrar

issued its ORDER summarily suspending WCF’s license. The preponderance of the

evidence shows that Registrar was justified in issuing the summary suspension.

10. At hearing, the Registrar presented the testimony of its Bonny Allan, Staff

Attorney, Senior Investigator Steve Klein, Investigator Dennis Bierma, Investigator Jim

Dimond, Penny Ann Hughey, Kerry Lee Hubbard, and submitted exhibits 1 through 19.

11. Bonny Allan explained that she issued the orders of summary suspension, and supplementary notices. Ms. Allan explained that the Registrar has received nine additional complaints against WCF’s license that are currently being investigated. 12. On August 21, 2017, the Registrar issued License No. 315440 to We Fix Ugly Houses of Arizona, LLC. The license was a B-03 General license. 13. On or about October 24, 2018, We Fix Ugly Houses of Arizona, LLC changed its name to We Fix Ugly Houses of Arizona, LLC, DBA: We Can Fix It Remodeling. 14. On or about December 5, 2018, We Fix Ugly Houses of Arizona, LLC, DBA: We Can Fix It Remodeling changed its name to We Can Fix It Remodeling, LLC. 15. On or about October 30, 2018, Penny Ann Hughey entered into a home remodeling contract with WCF for $38,500. WCF agreed to remodel the guest bathroom, the master bathroom, and the patio cover at Ms. Hughey’s home. 16. On or about March 12, 2019, the Registrar received a complaint from RECEIVED 5.15.2019 ROC LEGAL

Ms. Penny Ann Hughey alleging poor workmanship and abandonment on the part of WCF. See Exhibit 1. 17. On or about April 8, 2019, Investigator Jim Dimond conducted a jobsite

inspection regarding Ms. Hughey’s complaint. See Exhibit 10. Investigator Dimond,

made the following observations: 85% of the patio cover sheathing had been removed

and exposed to the elements, the drywall sagged in the master bathroom and had not

been touched, and the trim on the guest bathroom linen closet had not been completed.

Investigator Dimond observed that there was a crack in the kitchen ceiling where the

roof met the west side of the cover. See id.

18. During the jobsite inspection, Ms. Hughey explained to Investigator

Dimond that WCF informed her that they would not return to the project without

additional funding. Ms. Hughey paid for almost two thirds of the project, but only 1/3 of

the project had been completed. After the job site inspection, Investigator Dimond

visited WCF’s office on Bell Road. Investigator Dimond testified at hearing that the

office appeared to be like a “ghost town.”

19. Investigator Dimond also discovered that WCF had a B3 license and was

required to use a subcontractor licensed to perform plumbing work. However, Ms. Hughey informed Investigator Diamond that WCF did not use any subcontractors for the plumbing work. 20. On October 30, 2018, Ms. Hughey paid WCF $12,833.33 in connection with the remodeling project. See Exhibit 8. On November 26, 2018, Ms. Hughey paid WCF $12, 833.32 for the project. The checks were deposited and posted to Ms. Hughey’s account on November 2, 2018, and November 27, 2018, respectively. See id. 21. Investigator Dimond mailed the letter regarding the jobsite inspection to WCF. However, no one appeared on behalf of WCF. 22. Investigator Dimond reviewed the contract between WCF and Ms. Hughey. Investigator Dimond determined that the contract did not contain language which advised Ms. Hughey of her right to file a COMPLAINT with the Arizona Registrar of Contractors (“Registrar”) against WCF for an alleged violation of ARIZ. REV. STAT. RECEIVED 5.15.2019 ROC LEGAL

section 32-1154(A), within the time allowed by ARIZ. REV. STAT. section 32-1155(B) (hereinafter “complaint advisement”). 23. On April 11, 2019, Investigator Dimond issued a DIRECTIVE to WCF. See

Exhibit 10. The April 11, 2019 DIRECTIVE provided, in relevant part, as follows:1

After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). Failure to comply with this Directive constitutes a violation of A.R.S. § 32-l 154(A)(22) and may result in the issuance of a Citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-l I 54(E) of up to $500.00. Failure to comply with this Directive may also be treated as an aggravating factor should the Registrar pursue discipline of your license, You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on April 29, 2019. You are hereby directed to remedy the following violations by the appropriate means: Complaint Item 1: The patio cover was demolished and any protective covering all the juncture of the roof and patio cover were removed.

The respondent is to correct tile condition in an appropriate constructing cover in accordance to the plans and specs and correcting the corollary damage in the master bathroom.

Complaint Item 2: Misrepresentation: The license presents that this company will use the required subs needed and has the knowledge and experience required/or the work Evidence and information indicates that the respondent self- performed the plumbing in the guest bath that was completed. The respondent’s B-3 license does allow the licensee to contract for restricted work but that work must be subcontracted to an appropriately licensed contractor. The respondent contracted outside of the scope of the license in violation of ARS 32-1154.A.16. 1 See id. RECEIVED 5.15.2019 ROC LEGAL

The respondent is to only operate within the scope of the licenses held in an appropriate manner. (See violation letter attached.

Complaint Item 5: Breach of contract The complainant has paid approximately 2/3 of the contract much less than 1/3 of the work is completed. The respondent appears to be refusing to complete the contract for the amount stated on the contract in violation of ARS 32- 1154.A. (8). Additionally, the respondent is refusing to perform after submitting a bid on work without a legal excuse/or the refusal in violation of ARS 32-1154.A. (1).

The respondent is to complete the contract, for the stated price (pending any written and signed change orders) in an appropriate manner.

Complaint Item 6: The contract used by the respondent does not comply with Arizona statute.

The respondent's contract lacks the notice of the right to file an ROC complaint as indicated by ARS 32-1158.A. (9)

The respondent is to correct their paperwork going forward in a manner that is compliant with statute in an appropriate manner and provide a voided copy to the investigator within the timeframe of this directive.

24. At hearing, Ms. Hughey stated that she works as an account manager at a brokerage firm and is familiar with the construction business. Ms. Hughey stated that she has a crack in her ceiling that she first noticed the crack on January 8, 2019 after WCF removed the cover patio. Ms. Hughey explained that she had all her material ready for installation and that WCF contracted to perform the labor. Mr. Hughey

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asserted that recently WCF offered to pay her back only approximately $16,000 of the $26,000 that she paid for the work. 25. On or about November 25, 2018, Thomas Hubbard entered into a

contract with WCF, wherein WCF would remodel the hall and master bathrooms in

Mr. Hubbard’s home for a total of $35,000. See Exhibit 16.

26. On November 26, 2018, Mr. Hubbard paid WCF $10,000 for the

remodeling project. See Exhibit 16. The check was deposited and posted to

Ms. Hubbard’s account on November 30, 2018.

27. Ms. Hubbard took out a loan from EnerBank USA for $25,000 for the

remodeling project. EnerBank issued a check directly to WCF on 1/8/2019. See

Exhibit 19.

28. On or about April 2, 2019, the Registrar received a complaint from

Mr. Hubbard alleging poor workmanship and abandonment on the part of WCF.

See Exhibit 4.

29. On or about April 17, 2019, Investigator Dennis Bierma conducted a

jobsite inspection. See Exhibit 18. Investigator Bierma observed that WCF completed

most of the work on the master bathroom. However, the hall bathroom was only partially completed. Investigator Bierma attempted contact WCF, but no one returned his phone calls. 30. At the job site inspection, Mr. Hubbard informed Investigator Bierma that he had not had any contact with WCF in 10 days. Mr. Hubbard also stated that WCF had not informed them of the date that the project would be completed. 31. Investigator Bierma sent a job site inspection letter to WCF, however no one from WCF attended the job site inspection. 32. At hearing, Kerry Lee Hubbard explained that WCF performed good work on her master bathroom. Ms. Hubbard explained that WCF performed the work themselves and did not use a contractor until the end. Ms. Hubbard’s complaint about the work in the master bathroom was that the granite did not come close enough to the wall. Ms. Hubbard also stated that WCF demolished her padding and promised to replace her carpet. RECEIVED 5.15.2019 ROC LEGAL

33. Ms. Hubbard explained that the shower sprout and the drain in the hallway bathroom were not centered. Ms. Hubbard explained that WCF moved her shower head sprout but there are only pipes sticking out. Ms. Hubbard explained that

subcontractor named DG contracting told her that they were on their way to center the

shower head sprout and drain in her home, but DG contracting told the subcontractor

not to do any work. Ms. Hubbard explained that she left several voice mails with WCF

in the past and now cannot leave a voice mail message. Ms. Hubbard testified that she

drove by WCF’s business office recently and no one was there. An individual from the

business next door relayed that he had not seen anyone in days.

34. On or about January 14, 2019, Ronald Victory entered into a contract with

WCF, wherein WCF would remodel Mr. Victory’s kitchen for $18,900. See Exhibit 3.

Mr. Victory paid WCF $5,000 on January 14, 2019, and $1,000 on January 28, 2019.

See Exhibit 14.

35. On or about March 29, 2019, the Registrar received a complaint from Mr.

Victory alleging abandonment on the part of WCF.

36. On or about April 17, 2018, Investigator Bierma conducted a jobsite

inspection with regard to Mr. Victory’s complaint. See Exhibit 15. Investigator Bierma observed that WCF had performed no work. The homeowner bought a new oven that was not installed. However, there were no other materials. See id. 37. On or about February 6, 2019, WCF entered into a contract with Rene McKinley to make several repairs to her home for a total of $11,059. See Exhibit 2. On February 6, 2019, Ms. McKinley paid WCF $5,780 for the project. See Exhibit 11. On February 8, 2019, Ms. McKinley paid WCF $6,279 for the repair project. See id. 38. On or about March 20, 2019, the Registrar received a complaint from Ms. McKinley alleging poor workmanship on the part of WCF. 39. On or about April 15, 2018, Investigator Steve Klein conducted a jobsite inspection regarding the complaint. See Exhibit 13. Investigator Klein tried calling and emailing the WCF but he received no response. Investigator Klein was unable to reach WCF. Investigator Klein made the following observations at the jobsite inspection: a RECEIVED 5.15.2019 ROC LEGAL

garage fire door was installed at the front door (the contract required a fiberglass door), the tile installed was not level, and no air conditioning units had been installed. See id. 40. On April 15, 2019, Investigator Klein issued a DIRECTIVE to WCF. See

Exhibit 13. The April 15, 2019 DIRECTIVE provided, in relevant part, as follows:2

After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-I08). Failure to comply with this Directive constitutes a violation of A.RS. § 32-l I 54(A)(22) and may result in the issuance of a Citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. Failure to comply with this Directive may also be treated as an aggravating factor should the Registrar pursue discipline of your license. You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on May 1, 2019. You are hereby directed to remedy the following violations by the appropriate means: Complaint Item 1: Used front door installed should have been fiberglass. • Verified wrong door installed. • Respondent shall complete project per original contract agreement, properly executed change orders and manufacturers installation instructions.

Complaint Item 5: A/C in Arizona room incomplete • Verified ale not installed in Arizona room. • Respondent shall complete project per original contract agreement, properly executed change orders and manufacturers installation instructions. Complaint Item 6: Ceiling in hall incomplete.

Investigator's Observation: Verified drywall repairs are incomplete.

2 See id. RECEIVED 5.15.2019 ROC LEGAL

Respondent shall complete project per original contract, properly executed change orders, and manufacturer’s installation instructions. Governing Rule: Violation of Any Rule Adopted By the Registrar 32-1154 A-3 Namely Rule R4-9-108. Complaint Item 7: Grout on floor not cleaned up.

Investigator's Observation: Verified grout voids and lippage

Governing Rule: Violation of Any Rule Adopted By the Registrar 32-1154 A-3 Namely Rule R4-9-108.

Complaint Item 8: Paint spilled on driveway Investigator's Observation: Verified paint on driveway. Governing Rule: Violation of Any Rule Adopted By the Registrar 32-1154 A-3 Namely Rule R4-9-108.

Complaint Item 9: Back porch ceiling incomplete.

Investigator's Observation: Verified shutters were not repaired Respondent shall complete project per original contract agreement, properly executed change orders and manufacturers installation instructions. Governing Rule: Violation of Any Rule Adopted By the Registrar 32-1154 A-3 Namely Rule R4-9-108. 41. At hearing, Investigator Klein explained that he called Ms. McKinley but had not heard back from her. Investigator Klein did not know whether WCF had made any repairs. CONCLUSIONS OF LAW 1. “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. (“A.R.S.”) section 41-1092.07(G)(2). 2. Respondent’s suspended license does not deprive Complainant their RECEIVED 5.15.2019 ROC LEGAL

right to prosecute the complaints or prevent the Registrar from determining the merits of the complaints. See A.R.S. section 32-1154(D). 3. 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 section R2-

19-119.

4. 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). 5. A.R.S. 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: ***** 1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

6. 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."). 7. “Statutes shall be liberally construed to effect their objects and to promote justice.” A.R.S. section 1-211(B). 8. 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). RECEIVED 5.15.2019 ROC LEGAL

9. The undisputed evidence in this matter established that Respondent violated A.R.S. sections 32-1154(A)(1), (A)(2), (A)(3), (A)(12), (A)(16); A.A.C. 4-9-108; and A.R.S. section 32-1158(A).

10. Consequently, WCF’s license should be revoked.

ORDER

IT IS ORDERED that on the effective date of the final ORDER in this matter,

We Can Fix It Remodeling, LLC’s license No. 315440 is revoked.

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, May 14 2019.

/s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors