FINACT2019A-02868-CHC-ROC.pdf

2019A-02868-CHC-ROC · Registrar of Contractors · 2019-12-04

RECEIVED 11.18.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Clarence Hollins, No. 2019A-02868-CHC-ROC COMPLAINANT v. ADMINISTRATIVE LAW JUDGE DECISION Three C's Residential and Commercial Builders LLC, DBA: Arizona Construction Group, ROC License: ROC 277504, RESPONDENT HEARING: October 28 2019 APPEARANCES: Clarence Hollins (“Complainant”) appeared on his own behalf. Jim Bates appeared on behalf of Three C's Residential and Commercial Builders LLC (“Respondent”) ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera _____________________________________________________________________ FINDINGS OF FACT 1. On March 3, 2012, the ROC issued License No. 277504 for General Dual KB-2 Dual Residential and Small Commercial to Three C's Residential and Commercial Builders LLC, Doing business as Arizona Construction Group (“Respondent”). Respondent’s address of record for the license is 24654 N. Lake Pleasant Pkwy #108- 430, Peoria, AZ 85383-1359. Norman Wayne Botkin1 is listed on the license as Qualifying Party and Member.2 2. Administrative Notice is taken of Respondent’s prior License record, for License No. 277504, as reflected on the ROC’s public website on October 28, 2019. Such prior License record reflects that Respondent’s license is currently suspended.

The ROC website indicates that “[t]his contractor is not able to contract with this license

at this time. This contractor may be operating with other current licenses.” The license

has one open complaint against Respondent’s license, which is presumed to be related

to this matter. There is no surety bond information indicated on the website.3

Norman Wayne Botkin appeared at the hearing. See https://roc.az.gov/contractor-search?Id=a0Yt000000ACUPLEA5. Id.

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 11.18.2019 ROC LEGAL

3. On April 4, 2019, Clarence Hollins (“Complainant”) and his wife, Jennifer Hollins, entered into a verbal agreement whereby Respondent agreed to remodel the bathroom at Complainant’s residential property located at 4533 West Sanna Street, Glendale, AZ 85302 for the sum total of $3,400.00. The project commenced on April 4, 2019, and ended on May 6, 2019. Complainant paid Respondent’s subcontractors, per Respondent’s request, a total $2,500.00 by the time Respondent stopped working. 4. On or about June 4, 2019, the ROC received a workmanship complaint from Complainant which included an unsigned copy of the proposal. The ROC received an affidavit of payment to the subcontractors from Complainant. 5. On an unspecified date, the ROC issued a Jobsite Inspection Notification letter to the parties, providing proper notice to them, and advising that an onsite review would be conducted at the project site by an ROC investigator on July 31, 2019, at 10:00 a.m. 6. On or about July 31, 2019, ROC investigator Jack Grimm (“Investigator Grimm”) conducted a review of the proposal between the parties. Investigator Grimm also inspected the work that had been done on the project to date and took approximately fifteen photographs. 7. On or about August 2, 2019, Investigator Grimm issued a Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s allegation that Respondent’s work failed to meet minimum ROC workmanship standards. Specifically, Respondent was ordered to remediate complaint items 1 through 15 via appropriate means. Respondent was put on notice that it had until August 26, 2019, to notify the ROC 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. 8. On September 4, 2019, the ROC issued a Citation to Respondent for alleged violations of ARIZ. REV. STAT. §§ 32-1154(A)(3) and 32-1154(A)(22), and ARIZ. ADMIN. CODE R4-9-108. Respondent was given until September 19, 2019, to respond with its Answer or face discipline pursuant to ARIZ. REV. STAT. §§ 32-1154(A)(22) and 32-1155. 9. Respondent did not file an Answer to the Directive or the Citation. RECEIVED 11.18.2019 ROC LEGAL

10. On September 18, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on October 28, 2019. 11. At hearing, Investigator Grimm testified as to his observations during his investigation that led to the issuance of the Citation. Investigator Grimm confirmed that Complainant paid the subcontractors for the project and that corrective work was not performed. 12. At hearing, Complainant introduced testimony of Jennifer Hollins, Complainant’s wife. Mrs. Hollins testified that there was a verbal agreement with Respondent. After the project began Mrs. Hollins learned that the crew on the project were subcontractors and not employees of Respondent. When Mrs. Hollins tried to pay Respondent money, Jim Bates, an employee of Respondent, told Mrs. Hollins to pay the subcontractors directly. 13. During the installation of the shower door, the entire door shattered. Mr. Bates attempted to look for a replacement and never found one. The door was never replaced by Respondent, or any subcontractor. Mr. Bates refused to talk to Mrs. Hollins after she became upset. The work took longer than expected because the subcontractors worked at Complainant’s home for a few hours a day. Even though Mrs. Hollins and Complainant provided all the materials and items for the project, the subcontractors constantly left to go to Home Depot for more materials. 14. At hearing, Complainant testified there was a proposal with Respondent to remodel their bathroom for his father in law who was handicapped. A 7 day project turned into a 3 week project due to the subcontractors leaving the job. Complainant dealt with the subcontractors and paid the subcontractors. After one of the subcontractors broke the shower door, Complainant contacted Mr. Bates. Mr. Bates initially stated that he would find another shower door and then stopped responding to Complainant. At one point, Mr. Bates told Complainant to put money in a trust account so that Respondent could get paid. In the end, the shower door was never replaced, the tile was poorly installed, and the bathroom could not be used. 15. Mr. Bates testified on behalf of Respondent. Mr. Bates agreed to do the project for Complainant because he had a grandparent in a similar situation. Mr. Bates RECEIVED 11.18.2019 ROC LEGAL

created the proposal for the project. Mr. Bates stated that while Complainant never paid Respondent, he paid the two subcontractors. Although Mr. Bates created the proposal he did not know or agree to any changes or additions. The project took a long time because one of his subcontractors did not work out. After the second subcontractor was hired, Mr. Bates was oblivious to any dealings or results because he was not present at the project. 16. Mr. Bates acknowledged that he ended his relationship with Complainant and Mrs. Hollins when he heard Mrs. Hollins yelling over the phone. The relationship ended in the first week of June 2019. 17. Mr. Bates admitted that he did not want a written contract because he did not want to go through the city to obtain a permit. Mr. Bates blamed the subcontractors for the lack of receipts. Mr. Bates, himself, did not give Complainant a receipt because he did not receive any money from Complainant. Mr. Bates acknowledged that he informed Complainant to pay the subcontractors directly for their work only. CONCLUSIONS OF LAW 1. The ROC 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 ROC 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. 4 3. The purpose of the ROC’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.5 4. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.6 Respondent bears the

4 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). 5 See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 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). RECEIVED 11.18.2019 ROC LEGAL

burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.7 5. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”8 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.”9 6. 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.” 7. 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.” 8. 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 ROC has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.” 9. ARIZ. REV. STAT. § 32-1154(E) holds, in pertinent parts, that the ROC may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each

7 See ARIZ. ADMIN. CODE R2-19-119(B)(2). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999).

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violation of subsection A, paragraph 22 of this section. 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.” 10. Here, the material facts are not in dispute. It is undisputed that Complainant verbally contracted with Respondent for a bathroom remodel project that Complainant paid the agreed upon fees for Respondent’s subcontractors’ services. It is further undisputed that the ROC issued its Directive to Respondent on August 2, 2019, and required Respondent’s full compliance by August 26, 2019. Respondent failed to comply with the Directive. 11. Complainant established by a preponderance of the evidence that the work completed fell below the ROC’s minimum workmanship standards. The evidence presented established that the shower door was never replaced and that the bathroom remained unfinished and unusable. Thus, there are sufficient facts in the record to conclude that Respondent violated ARIZ. REV. STAT. §§ 32-1154(A)(3). 12. Complainant also established that Respondent failed to perform any corrective work pursuant to the Directive. Complainant established cause for the ROC to suspend or revoke Respondent’s contractor’s license under ARIZ. REV. STAT. § 32- 1154(A)(22). 13. Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to timely and completely finish Complainant’s project per contract. This is an affirmative defense that Respondent bears the burden to establish. Respondent did not provide any evidence in mitigation to refute Complainant’s evidence or justify his inaction in this matter. Respondent made it very clear that there was no communication with Complainant as of the first week of June 2019. Additionally, it was noted, by the Administrative Law Judge, that the owner of Respondent was present during the hearing and did not offer any testimony regarding Respondent’s failure to perform corrective work. Thus, its burden has not been sustained.

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14. Complainant may petition the ROC’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 findings of fact and conclusions of law, IT IS RECOMMENDED that on the effective date of the Final Order in this matter Respondent Three C's Residential and Commercial Builders LLC, doing business as Arizona Construction Group, ROC License No. 277504 shall be revoked. IT IS FURTHER RECOMMENDED that the ROC require Respondent to pay the sum total of $500.00 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 ROC’s Order, the ROC 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, November 15, 2019.

/s/ Antara Nath Rivera Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Clarence Hollins , Case No. 2019-02868 COMPLAINANT, Docket No. 2019A-02868-CHC-ROC v. Three C's Residential and Commercial Builders FINAL ADMINISTRATIVE LLC DECISION AND ORDER DBA: Arizona Construction Group, License No. ROC 277504, 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 of each finding of fact or conclusion of law. 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 accepts it. CONCLUSION AND ORDER 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 January 12, 2020. IT IS FURTHER ORDERED that Respondent pay a civil penalty in the amount of $500.00 payable to the Registrar on or before 30 days from the effective date of this Order. Payment may be hand-delivered to the Registrar’s physical address or mailed to:

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 Registrar of Contractors P.O. Box 6748 Phoenix, Arizona 85505-6748 FINAL NOTE On page 2, line 30, replace paragraph 9 with, “On September 18, 2019, Respondent filed an Answer to the Citation.” On page 7, line 14, replace “§ 32-1101(A)(5)” with “§ 32-1101(A)(7).” Dated December 3, 2019. By: /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Arizona Registrar of Contractors Copy mailed via USPS First Class mail December 3, 2019 to: Respondent Three C's Residential and Commercial Builders LLC DBA: Arizona Construction Group 24654 N Lake Pleasant Pkwy # 108-430 Peoria, AZ 85383 Complainant Clarence Hollins 4533 W Sanna St Glendale, AZ 85302 Copy sent electronically this same date to: Office of Administrative Hearings Antara Nath Rivera, Administrative Law Judge Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar Case No. 2019-02868 / fh

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19