ALJDEC decisions subject to certification as final

2019A-03762-CHC-ROC · Registrar of Contractors · 2020-11-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Janice Kreway,

COMPLAINANT,

v.

Arizona Native Builders LLC,

License No. 313283,

RESPONDENT.

No. 2019A-03762-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 20, 2020 at 1:30 PM.

APPEARANCES: Janice Kreway (“Complainant appeared on her own behalf with David Blundell as a witness. George Alper appeared on behalf of Arizona Native Builders LLC (“Respondent”). Beau Cruz appeared as a witness on behalf of the Arizona Registrar of Contractors (“Registrar”).

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 May 05, 2017, the Registrar issued License No. 313283 for General Dual KB-1 Building contracting to Respondent. Respondent’s address of record for the license is 5235 S. Kyrene Rd. Ste. 8, Tempe, Arizona 85282-1780. Michael John Manone is listed on the license as the Qualifying Party/Member. George Aaron Alper is also listed on the license as a Manager.

Pursuant to Ariz. Admin. Code R4-9-117 Administrative Notice is taken of Respondent’s prior license record, for ROC License No. 313283, as reflected on the Registrar’s public website on October 20, 2020. Such prior license record reflects that Respondent’s license is active and currently renewed through May 31, 2021. The license has been previously disciplined on one occasion, and three complaints have been settled or otherwise resolved with the license. Respondent has an active $14,000.00 surety bond for the license issued through Western Surety Company, effective April 21, 2020.

On July 25, 2019, the Registrar received a complaint, with 12 complaint items, filed by Complainant alleging poor workmanship of a residential insurance claim remediation project. Attached to the complaint was a signed attestation from Vivian Kreway and Harry Kreway (“Homeowners”) authorizing Complainant, as Homeowners’ daughter to act on their behalf, and a copy of the underlying contract. The Registrar designated it Complaint No. 2019-03762.

On August 22, 2019, the Registrar received a copy of the complaint signed by Homeowners, a clearer copy of the parties’ contract, and proof of down payment by Homeowners to Respondent.

On July 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 September 13, 2019, at 2:15 p.m.

On September 13, 2019, Registrar investigator Beau Cruz (“Investigator Cruz”) inspected the work that had been done on the project to date and took 5 photographs of the project. During the inspection, Complainant raised an additional complaint, which Respondent agreed to address. The addendum complaint was numbered 13. When he was finished with his inspection, Investigator Cruz drafted Jobsite Inspection Notes detailing his substantiation of 3 of Complainant’s 13 complaint items. Specifically, Investigator Cruz determined that complaint items 3, 4, and13 required remediation.

On September 16, 2019, Investigator Cruz issued a Written Directive from the Registrar (“Directive “) to Respondent because he determined that some of the work Respondent had performed on the project failed to meet the Registrar’s minimum workmanship standards. Respondent was put on notice that he had until 5:00 p.m. on October 02, 2019, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(22), and 32-1154(E).

On September 26, 2019, Investigator Cruz received another addendum complaint from Complainant that contained 6 additional complaint items.

On September 30, 2019, the Investigator Cruz issued a 2nd Jobsite Inspection Notification letter to the parties, advising that another onsite review would be conducted at the project site on September 30, 2019, at 2:15 p.m. to review Complainant’s addendum complaint items.

On September 30, 2019, Investigator Cruz inspected Complainant’s addendum complaint items and took 9 photographs. When he was finished, Investigator Cruz drafted 2nd Jobsite Inspection Notes detailing his substantiation of Complainant’s first addendum complaint item, identified as complaint item 14.

On October 01, 2019, Investigator Cruz issued an Amended Written Directive from the Registrar to Replace Written Directive Dated September 16, 2019 (“Amended Directive”) to Respondent because he determined the work Respondent had performed on complaint item 14 failed to meet the Registrar’s minimum workmanship standards. The Amended Directive was issued to afford Respondent an opportunity to remediate complaint item 14, along with complaint items 3, 4, and 13. Respondent was put on notice that he had until 5:00 p.m. on October 17, 2019, to notify the Registrar of its compliance with the Amended Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(22), and 32-1154(E).

On January 06, 2020, Investigator Cruz issued a Compliance Jobsite Inspection Notice letter to the parties, advising that an onsite review would be conducted at the project site on February 05, 2020, at 8:15 a.m.

On February 05, 2020, Investigator Cruz inspected the project and took 4 photographs. When he was finished, Investigator Cruz drafted Compliance Jobsite Inspection Notes detailing his determination that Respondent successfully remediated complaint items 3 and 4, but that Respondent had failed to properly correct complaint items 13 and 14.

On February 11, 2020, Investigator Cruz escalated Complaint No. 2019-03762 to the Registrar’s legal department with citation recommendations.

On August 14, 2020, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until February 28, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On February 28, 2020, the Registrar received Respondent’s written Answer.

On March 19, 2020, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on May 18, 2020. Per the April 17, 2020, Notice of Hearing on Contested Case (“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 her own behalf, and called Investigator Cruz and her fiancé David Blundell as witnesses. George Alper testified on behalf of Respondent. The Registrar’s agency file (“Agency File”) and Notice of Hearing were admitted into the record as their own exhibits. The substantive evidence of record is as follows:

Homeowners, an elderly couple, own residential properly located at 7151 E. US Hwy 60, #735, Gold Canyon, Arizona 85118 where they live alone.

Complainant resides approximately 9mi away from her parents.

On January 12, 2019, Homeowners and Respondent entered into a contractual agreement whereby Homeowners agreed to pay Respondent the sum total of $2,000.00 in exchange for remediations due to vandalism damage sustained to their manufactured home. Specifically, Respondent was hired to make repairs to Homeowner’s roof, siding, screens, windows, and awning. Work on the project commenced Mid-April 2019, and stopped on approximately May 24, 2019.

Although Homeowners gave Respondent a $2,000.00 down payment, their homeowner’s insurance covered the cost of Homeowners’ contract with Respondent.

The parties’ relationship became contentious during the Directive’s corrective period. Respondent lost his temper on more than one occasion and yelled at Homeowners and Complainant. Complainant demanded to be present for all of Respondent’s corrective work, but was also unavailable for a considerable amount of the corrective period.

On September 30, 2019, Complainant left the state for several weeks.

On October 03, 2019, Complaint No. 2019-03762 was closed and the Amended Directive was canceled by the Registrar. Complainant was advised to reopen her complaint upon her return to the State of Arizona.

On December 09, 2019, Complainant submitted a request to reopen Complaint No. 2019-03762 to the Registrar.

Between December 19, 2019, and mid-February 2020, Respondent performed corrective work on the project, despite Respondent’s superintendent’s wife having a heart attack in January 2020. Respondent promised Homeowners he would complete the project by March 10, 2020, but failed to do so.

On January 05, 2020, Complaint No. 2019-03762 was reopened by the Registrar.

On January 06, 2020 a compliance jobsite inspection was scheduled by the Registrar.

On February 05, 2020, during the compliance jobsite inspection, Investigator Cruz noted a leak at the “w-bar” on Homeowners’ roof. Respondent was unable to commit to remediation because the issue was not a part of Homeowners’ original insurance claim.

In March 2020, Homeowners’ fired Respondent and hired another contractor to remediate and complete the project.

On March 20, 2020, Homeowners’ remediation contractor completed the replacement of Homeowner’s awning for $4,500.00.

On March 25, 2020, Homeowners’ drove to their Canadian residence to “shelter in place” due to the global COVID-19 pandemic.

On April 01, 2020, Complainant moved out of state.

On April 21, 2020, Investigator Cruz issued a Pre-Hearing Jobsite Inspection Notification letter to the parties, advising that an onsite review had been scheduled for May 14, 2020, at 8:15 a.m.

On May 08, 2020, Investigator Cruz issued another Pre-Hearing Jobsite Inspection Notification letter to the parties, advising that their onsite review had been rescheduled for August 25, 2020, at 8:15 a.m.

On an unknown date the parties agreed to reschedule the pre-hearing jobsite inspection for October 19, 2020, at 2:15 p.m.

On October 19, 2020, during the pre-hearing jobsite inspection, Investigator Cruz determined that Respondent had successfully remediated addendum complaint item 13 to meet the Registrar’s minimum workmanship standards, and that Homeowners’, through the work of another licensed contract they hired, had modified addendum complaint item 14.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction and has been properly brought before the Office of Administrative Hearings for adjudication.

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.

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 contractor shall perform all work in a professional and workmanlike manner, and that a contractor shall perform all work 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.

Here, the substantive facts are undisputed.

It is undisputed that some of Respondent’s work on the underlying project required corrective work.

Initially, Respondent was not required to complete remediations for the project until October 02, 2019, per the Registrar’s September 16, 2019, Directive. However, Respondent’s compliance period to remediate substantiated complaint items 3, 4, 13, and 14 was extended until October 17, 2019, per the Amended Directive issued by the Registrar on October 01, 2019.

It is also undisputed that Complainant conditioned the performance of Respondent’s corrective work on her presence at the project site, and that she was out of state from September 30, 2019, until approximately December 09, 2019.

It is also undisputed that the Registrar closed Complaint No. 2019-03762 and canceled the Amended Directive on October 03, 2019, and failed to reset and/or resume the corrective period when it reopened the complaint on January 05, 2020.

It is also undisputed that Investigator Cruz determined Respondent had successfully remediated complaint items 3 and 4 during his compliance inspection on February 05, 2020. While it is true that Investigator Cruz also determined Respondent had failed to properly correct complaint items 13 and 14 the compliance inspection, and also discovered a leak at the “w-bar” on Homeowners’ roof for the first time, the record reflects that Homeowners’ hired another contractor who modified Respondent’s work on complaint items 13 and 14, rendering Respondent’s alleged non-compliance for the remediation of those complaint items moot.

The Tribunal concludes that the issuance of the Citation on August 14, 2020, by the Registrar was in error.

Moreover, Respondent has established a valid affirmative defense by a preponderance of the evidence. Here, Respondent was never afforded a reasonable opportunity to correct the deficiencies in its workmanship as it related to addendum complaint items 13 and 14. However, Complaint No. 2019-03762 need not be reopened because those complaint items have already been modified by another contractor, relieving Respondent of any liability related to its alleged poor workmanship of said complaint items.

No statutory violations exist in this matter.

Because Complainant has not established violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22) by a preponderance of the evidence, Complainant has not established grounds for the Registrar to take disciplinary action against Respondent’s license.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that Complainant’s appeal be dismissed.

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 06, 2020.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors