FINACT2019A-03445.pdf

2019A-03445-CHC-ROC · Registrar of Contractors · 2020-04-09

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Frank Y C Ong, Case No. 2019-03445 COMPLAINANT, Docket No. 2019A-03445-CHC-ROC v. FINAL ADMINISTRATIVE Dumac LLC DECISION AND ORDER License No. ROC 303678, 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 May 3, 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: Registrar of Contractors P.O. Box 6748 Phoenix, AZ 85505-6748

of 3 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 FINAL NOTE On page two, paragraph four, line three, “24” should be “7.” On page two, paragraph four, line six, “September 27, 2017” should be “February 26, 2018.” On page two, paragraph four, lines six through seven, remove “and stopped on or about October 1, 2017.” On page two, paragraph five, line eight, “2018” should be “2019.” On page two, paragraph seven, line 17, “approximately 15-20” should be “five.” On page two, paragraph nine, line 23, “11” should be “22.” On page two, paragraph 10, line 27, add “work” between “corrective” and “in.” On page three, paragraph 14, lines 12 through 13, remove “The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record.” On page three, paragraph 16, line 20, “11” should be “10 On page four, paragraph two, line four, “Qualified” should be “Qualifying.” On page five, paragraph five, line 27, add “”” after “.” On page five, paragraph five, lines 28 through 29, “summary suspension” should be “suspension.” On page five, paragraph five, line 29, add “.” after “penalty.” On page five, paragraph five, line 29, remove “or recovery fund award.”” On page six, paragraph six, line three, add “of subsection A, paragraph 22 of this section” between “violation” and “.” Dated March 24, 2020. By: /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Arizona Registrar of Contractors

of 3 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 Copy mailed via USPS First Class Mail March 24, 2020 to: Respondent Dumac LLC 2633 E Indian School Rd Ste 320 Phoenix, AZ 85016 Complainant Frank Y C Ong 6407 E Hubbell St Scottsdale, AZ 85257 Copy sent electronically this same date to: Office of Administrative Hearings Antrara 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. 2019-03445/ KR

of 3 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 RECEIVED 2.27.2020 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Frank Y C Ong, No. 2019A-03445-CHC-ROC COMPLAINANT v. ADMINISTRATIVE LAW JUDGE DECISION Dumac LLC, License No. ROC 303678, RESPONDENT

HEARING: February 11, 2020. APPEARANCES: Frank Y C Ong, Complainant, appeared at the hearing and was represented by Randall Ong. Dumac LLC, Respondent, did not appear. ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera. _____________________________________________________________________ FINDINGS OF FACT 1. On or about March 31, 2016, the Registrar of Contractors (ROC) issued License No. 303678 for General Dual KB-2 Dual Residential and Small Commercial to Dumac LLC (Respondent). Respondent’s address of record for the license is 2633 East Indian School Road, Suite 230, Phoenix, AZ 85016-6761. Juan Duran is listed on the license as Qualifying Party and Member.1 2. Pursuant to Arizona Administrative Code (A.A.C.) R4-9-17, administrative notice is taken of Respondent’s prior license record, for License No. 303678, as reflected on the ROC’s public website on February 11, 2020. Such prior license record reflects that Respondent’s license is suspended. The record also reflects that there are two resolved/settled cases and five open complaints against Respondent’s license, one of which is presumed to be related to this matter. There is no surety bond information.2 3. The record also reflects that Respondent has another license of record under License No. 260263 for Specialty Dual CR-61 Carpentry, Remodeling and Repairs. Such prior license record reflects that Respondent’s License No. 260263 is expired. Such

1 See https://roc.az.gov/contractor-search?Id=a0ot0000000NkLk. Id. RECEIVED 2.27.2020 ROC LEGAL

prior license record reflects that there are no pending, disciplined, or open cases. There is an active surety bond with State Farm Fire and Casualty in the amount of $3,500.00.3 4. On or about February 24, 2018, Frank Ong (Complainant) entered into a written contract agreement whereby Respondent agreed to construct four apartment units at the address of 6801 East Avalon Drive, Scottsdale, Arizona, 85251. The total contract amount was $109,853.00. The project commenced on or about September 27, 2017, and stopped on or about October 1, 2017. Complainant paid Respondent $106,184.00. 5. On or about July 5, 2018, the ROC received a complaint alleging “slow work.” 6. On or about July 11, 2019, the ROC issued a Jobsite Inspection Notification letter to the parties, providing proper notice to them, and advising them that an onsite review would be conducted at the project site by an ROC investigator on August 8, 2019. The Jobsite Inspection was continued to September 18, 2019, due to a scheduling conflict. 7. On September 18, 2019, ROC investigator Steve Klein (Investigator Klein) conducted an inspection of the work that had been done on the project to date and took approximately 15-20 photographs. All parties were present at the Jobsite Inspection. 8. On or about September 18, 2019, Investigator Klein issued a Directive From The Registrar (Directive) to the parties because he substantiated Complainant’s allegation that Respondent’s work fell below workmanship standards. Specifically, Respondent was ordered to remediate complaint items 1, 3, 4, 5, and 8 via appropriate means. The compliance deadline for the Directive was October 11, 2019. 9. On or about October 11, 2019, Investigator Klein contacted Complainant to schedule a Compliance Jobsite Inspection. 10. On or about October 25, 2019, Investigator Klein conducted the Compliance Jobsite Inspection. Both Complainant and Respondent were present. Investigator Klein observed that Respondent did not perform any corrective in compliance with the Directive.

3 See https://roc.az.gov/contractor-search?Id=a0ot0000000NXif

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11. On an unspecified date, Respondent contacted Investigator Klein to inquire about the process and to explain that it had no money to complete the project. 12. On or about October 31, 2019, the ROC issued a Citation to Respondent for alleged violations of Arizona Revised Statute (A.R.S.) §§ 32-1154(A)(3) and 32- 1154(A)(22), and A.A.C. R4-9-108. Respondent was given until November 15, 2019, to respond with its Answer or face discipline pursuant to A.R.S. §§ 32-1154(A)(22) and 32- 1155. 13. On or about December 13, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for a hearing on February 11, 2020. 14. The Registrar issued a Notice of Hearing to Respondent, at its address of record, setting the hearing for February 11, 2020. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. The Notice of Hearing informed the parties that “[f]ailure to attend the scheduled hearing is likely to result in an adverse ruling against you.” 15. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the hearing was delayed 20 minutes, Respondent did not appear through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license. 16. Complainant presented 11 exhibits and presented the testimony of Steve Gallant. HEARING EVIDENCE 1. Investigator Klein testified that Respondent gutted the entire building and only completed two units. Respondent put up drywall but did not tape or texture it and it did not install the air conditioning units. The project had been going on for over one year. After he issued the Directive, Investigator Klein explained to Respondent that if it needed more than 15 days to complete a substantial amount of corrective work, Investigator Klein would advise Complainant to withdraw the Complaint so that Respondent could finish. Respondent did not attempt to complete any work.

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2. Complainant, through his representative, Randall Ong, presented the testimony of Mr. Gallant. Mr. Gallant was the supervising building inspector for the city of Scottsdale. Mr. Gallant made several observations during his inspections. Juan Duran, Respondent’s Qualified Party, was not present during the construction of the units. Respondent put up sheet rock without permits, did not put up the proper insulation, did not properly install the HVAC units, and did not complete the electrical work. Even though Respondent ultimately completed units C and D, those units had several poor workmanship issues. 3. With respect to the units that were unfinished, Mr. Gallant opined that Respondent covered up, made excuses, blamed the city for the lack of permits, and blamed others lack of materials and the excessive length of time. Additionally, Respondent built the carport without permits and without an inspection. 4. On or about February 21, 2019, Mr. Gallant witnessed Mr. Duran tell Complainant that if it did not complete the project in the next 45 days, that it would return Complainant’s money. 5. At the hearing, Mr. Ong testified that Complainant and his wife did not have a good working relationship with JR (no last name provided), Respondent’s foreman. JR yelled at Complainant’s wife so much that she had to go to the hospital for depression. After units C and D were completed Complainant finally saw Mr. Duran. Mr. Duran gave Complainant multiple excuses why there were no more materials and why the HVAC was not installed. 6. In February 2019, Mr. Duran committed to completing the project in 45 days. After this commitment, no one came to work for several days and no work was done by the end of the 45 days. In addition, even though units C and D were completed they had many issues including leaking. Additionally, the carport was not built according to the contract and caused leaking in unit C. The entire project was supposed to be completed by November 2018. In the end, Respondent essentially abandoned the project. 7. On or about February 10, 2020, Complainant received a letter from Respondent which indicated that Respondent closed its business and permanently shut

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down. Furthermore, Respondent stated that it was unable to continue the project and fulfill its contractual obligations. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. The copy of the Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable, and Respondent is deemed to have received notice of the hearing. See A.R.S. §§ 41-1092.04 and 41-1092.05(D). 2. Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2- 19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 3. A.A.C. 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.” 4. A.R.S. § 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.” 5. A.R.S. § 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.”

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6. A.R.S. § 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.” 7. The evidence is undisputed that Respondent’s incompletion of the project along with the issues that stemmed from the construction of the completed units resulted in poor workmanship in violation of A.R.S. § 32-1154(A)(3)-R4-9-108. 8. Respondent abandoned the remainder of the project. Respondent left the project with multiple issues such as leaking and improper installation of materials. 9. Furthermore, Complainant established that Respondent failed to take the appropriate corrective action following a written Directive from the Registrar in violation of A.R.S. § 32-1154(A)(22). 10. 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 Order, the Registrar shall revoke Respondent’s License No. 303678. It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 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 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 A.R.S. § 32-1101(A)(7), unless Respondent tenders payment of any outstanding prior civil penalty.

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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, February 27, 2020.

/s/ Antara Nath Rivera Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors

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