ALJDEC decisions subject to certification as final

2019A-02133-CHC-ROC · Registrar of Contractors · 2019-12-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Scott Murdo Brunsdon,

COMPLAINANT,

v.

Remodel and Build AZ Inc.,

ROC License: ROC 297420,

RESPONDENT.

No. 2019A-02133-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 04, 2019 at 1:30 PM.

APPEARANCES: Scott Murdo Brunsdon (“Complainant”) appeared on his own behalf with Alison Brunsdon and Beau Cruz as a witnesses. Erica Graham appeared on behalf of Remodel and Build AZ Inc. (“Respondent”) with Thomas Straub as a witness.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the Arizona Registrar of Contractors (“Registrar”).

FINDINGS OF FACT

Background and Procedure

On April 15, 2015, the Registrar issued License No. 297420 for general residential B contracting to Respondent. Respondent’s address of record for the license is 7950 E Acoma Dr., Ste. 107, Scottsdale, AZ 85260-6963. Thomas Lawrence Straub is listed on the license as Respondent’s Qualifying Party and Officer.

Pursuant to Ariz. Admin. Code R4-9-117 Administrative Notice is taken of Respondent’s prior License record, for License No. 297420, as reflected on the Registrar’s public website on December 04, 2019. Such prior License record reflects that Respondent’s license is currently active and renewed through April 30, 2021. The license has been disciplined on one prior occasion by the Registrar. There is one complaint against Respondent’s license, which is presumed to be related to this matter. The license has an active $9,000.00 surety bond issued through Merchants Bonding Company effective March 09, 2015, of which the total amount remains available.

On December 14, 2018, Complainant entered into a contract agreement with Respondent, whereby Respondent agreed to remodel residential property owned by the Brunsdon Family Trust located at 15156 E. Twilight View Dr. Fountain Hills, AZ 85268 for the sum total of $24,141.00.

On December 14, 2018, Complainant entered into a $34,391.77 contract agreement with Builders Depot Arizona LLC for cabinet fabrication and installation for the project. Complainant paid the contract in full on the day of signing.

The project commenced in late-December 2018 and stopped on or around March 07, 2019.

Per contract, Complainant was to provide an $11,745.50 deposit to Respondent at signing, and then provide four additional progress payments: $5,872.75 after plumbing and electrical rough in and demo, $2,936.37 after paint, $1,468.18 after tile installation, and a final payment of $1,468.20 upon completion of the project. A separate payment of $650 was to be paid for removal and replacement of kitchen items.

On April 25, 2019, the Registrar received an abandonment and poor workmanship complaint from Complainant, which included copies of pertinent contract agreements, invoices, proof of payments, and a summary of Complainant’s allegations against Respondent.

On May 01, 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 June 28, 2019, at 8:30 a.m.

On June 28, 2019, Registrar investigator Beau Cruz (“Investigator Cruz”) conducted a review of the contract executed between the parties and inspected the work that had been done on the project to date. Respondent attended. Investigator Cruz took five photographs of the project. When he was finished, Investigator Cruz drafted Jobsite Inspection Notes.

On July 01, 2019, Investigator Cruz issued a Directive from the Registrar to Respondent because he substantiated two of Complainant’s complaint items that alleged Respondent’s work on the project failed to meet minimum workmanship standards. Respondent was ordered to complete the project per contract via appropriate means. Respondent was put on notice that he had until 5:00 p.m. on July 17, 2019, to notify the Registrar of its compliance with the corrective order or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1154(E).

Respondent failed to timely comply.

On July 22, 2019, Investigator Cruz escalated the matter to the Registrar’s legal department with a citation recommendation for violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-018, and 32-1154(A)(22).

On July 23, 2019, the Registrar issued a Citation and Complaint to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); a violation of Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until August 07, 2019, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On August 07, 2019, the Registrar received Respondent’s Answer. Writing on Respondent’s behalf, Counsel argued that the Registrar’s Directive only required Respondent to remove trim and replace cabinets, and that the originally placed cabinets were off-centered which permitted the newly installed cabinets to be off-centered as well. Counsel further argued that Respondent was only the installer of the soapstone counter, and that Builders Depot Arizona LLC was liable for providing the correct type of countertop.

On August 19, 2019, the Registrar referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on October 16, 2019. Per the September 12, 2019, Notice of Hearing 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

Complainant testified on his own behalf, called Alison Brunsdon and Investigator Cruz as witnesses, and submitted two exhibits. Respondent called Erica Graham as a witness and submitted one exhibit. The Registrar’s electronic agency record and Notice of Hearing were also admitted into the evidentiary record.

Investigator Cruz’s testimony

Although there were multiple communications between the parties, and between the parties and Investigator Cruz, no remediations on the project were performed after the Directive was issued by the Registrar.

Remediations for the underlying project were within the scope of Respondent’s license.

The parties did not enter into a financial agreement in lieu of Respondent performing corrective work on the project.

Complainant’s testimony

Complainant paid a total of $65,647.68 for its project with Respondent and Builders Depot Arizona LLC.

Regarding Complaint Item #39, Complainant rejected Respondent’s suggestion to cut down the molding, and countered with a subcontracting agreement Respondent rejected.

Regarding Complaint Item #40, Respondent refused to address it because it argued Builders Depot Arizona LLC was financially responsible for covering the cost of a new soapstone countertop. Complainant was notified by the fabricator that his first choice of stone was unavailable and instructed Complainant to choose another stone, which Complainant did. Complainant, who had issued two payments for the countertop, asked Respondent for a reimbursement but got no response.

Complainant did not deny Respondent access to the project site.

Complainant was willing to permit Respondent to perform corrective work, but Respondent did not appear on the jobsite after March 05, 2019, save on May 01, 2019, to discuss remediation of damage that had occurred to Complainant’s front yard.

Respondent filed a lien against Complainant, which Complainant paid $1,468.20 to remove.

Alison Brunsdon’s testimony

Respondent and Builders Depot Arizona LLC were located in the same office and utilized the same administrative staff, which lead Complainant to believe that Complainant had only contracted with one company for its remodeling project, not two.

The cabinet installer informed Complainant that the cabinets had not been properly measured for Complainant’s kitchen.

The professional relationship between the parties deteriorated when a representative of Respondent followed a guest through Complainant’s front gate and commenced work on the project. When questioned by Complainant, the discussion escalated into a shouting match whereby local law enforcement was called and Respondent was removed from the property for trespassing.

Erica Graham’s testimony

Respondent only made attempts to remediate Complaint Item #39. Respondent sent multiple emails to Complainant to discuss. Respondent rejected both of the settlement options Complainant suggested. Respondent could not get Complainant to meet for a meeting to discuss remediation/settlement matters further.

CONCLUSIONS OF LAW

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.

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.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

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.”

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.”

Ariz. Rev. Stat. § 32-1154(A)(22) holds, 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.”

Ariz. Admin. Stat. § 32-1154(E) holds, in pertinent parts, that the Registrar may impose 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.

Here, the substantial evidence in the record is clear.

It is undisputed that Complainant paid Builders Depot Arizona LLC in full for its portion of the underlying project.

It is also undisputed that Complainant issued timely progress payments to Respondent, save the final payment, at the time the underlying complaint was filed with the Registrar, and issued the final payment shortly afterward.

The cabinets at issue were not properly installed, and the proper countertop was not installed. Complainant was not issued a refund, in whole or in part, either complaint item substantiated by the Registrar.

It is undisputed that Respondent did not complete the project, and did not perform remediations as directed by the Registrar by the compliance deadline noted in the Directive.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to address all of the remediation action items outlined in the Registrar’s Directive by the compliance deadline. This is an affirmative defense that Respondent bears the burden to establish.

Here, Respondent has provided insufficient evidence in mitigation to refute Complainant’s evidence and justify its inaction in this matter. Thus, Respondent’s burden in this matter has not been sustained. The record shows that Respondent failed to adhere to a Directive issued by the Registrar, and had no affirmative defense(s) for doing so.

Because Complainant established by a preponderance of the evidence that Respondent failed to adhere to an issued Directive regarding Respondent’s poor workmanship, Complainant has also established cause for the Registrar to take disciplinary action against Respondent’s contractor’s license under Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and/or 32-1154(A)(22).

RECOMMENDED ORDER

In light of the foregoing,

IT IS RECOMMENDED that that on the effective date of the Final Order in this matter Respondent Remodel and Build AZ Inc., ROC License No: 297420, shall be suspended for two (2) business days.

It is further recommended that the Registrar require Respondent to pay the sum total of $200.00 as a civil penalty 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 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 will be 40 days from the date of that certification.

Done this day, December 20, 2019.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors