ALJDEC decisions subject to certification as final

2019A-04665-CHC-ROC · Registrar of Contractors · 2020-06-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Teresa Adela Glenn,

COMPLAINANT

Brothers Reidhead Holdings LLC,

ROC License: ROC 324312, 315274, 325316,

RESPONDENT

No. 2019A-04665-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: January 24 and June 22, 2020

APPEARANCES: Teresa Adela Glenn on her own behalf; Ty Reidhead for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On December 20, 2019, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on January 24, 2020 at the Office of Administrative Hearing.

The Notice of Hearing shows that the hearing was set to consider the charges made in the complaint and citation that were served on Respondent Brothers Reidhead Holdings LLC on November 12, 2019.

Respondent holds license numbers 324312, 315274, and 325316 issued by ROC.

Complainant Teresa Adela Glenn hired Respondent to perform roofing work at her house. While the work was ongoing, rain caused water damage to the house. Respondent accepted responsibility to have the damage repaired.

On September 16, 2019, ROC received from Ms. Glenn a complaint against Respondent alleging poor work on Respondent’s part. The complaint shows that the contract price was $9650.00, and that Complainant had made no payments to Respondent.

ROC assigned Investigator Greg Johndrow to Ms. Glenn’s complaint.

On October 21, 2019, ROC issued to Respondent a Directive through which it ordered Respondent to correct the water damage, to correct nails that were protruding through an overhang at an excessive length, and to replace damaged flashing at the chimney. The Directive required Respondent to notify ROC that it had made the required corrections by 5:00 p.m. November 6, 2019.

Because Ms. Glenn and her husband did not want Respondent to return to the property it hired another licensed contractor to make the repairs that ROC ordered it to make.

In a compliance jobsite inspection conducted on November 8, 2019, ROC determined that the repairs had not been properly completed. Respondent subsequently made the required repairs itself.

On November 12, 2019, ROC issued to Respondent a Citation through which it alleged that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(2), (A)(3) and (A)(22).

On January 21, 2020, Mr. Johndrow determined that Respondent had made all repairs that ROC had ordered it to complete, with the damage from the water leak having been repaired by American Technologies Inc. (ATI). At that time, the issue of payment for the water damage was being worked out between the parties’ insurance companies, but Respondent was still acknowledging that it was responsible for that damage.

The hearing was convened on January 24, 2020, but no evidence was taken. The parties agreed to continue the matter, with the intention being to reach a financial settlement regarding the Glenns’ out-of-pocket costs for the restoration work.

The parties could not reach a settlement and the matter was reconvened on June 22, 2020.

Ms. Glenn testified that the Glenns’ out-of-pocket expenses total $8640.63, which is: $1000.00 for an insurance deductible; $3611 for living expenses from November 1st to the15th and December 6th to the 13th, 2019; three month’s mortgage payments for a total of $917; $943.99 for “pack in” or storage costs; and $2168.73 that was paid to ATI for structural damage.

Ms. Glenn provided an invoice from ATI for the storage costs and information from ATI showing that the Glenns had an outstanding balance of $2168.73 for structural repairs, but she provided no other receipts or other proof that she incurred the expenses for which she seeks repayment.

Respondent acknowledged that it had accepted responsibility to repay Ms. Glenn for her out-of-pocket costs, but takes the position that an email from ATI to one of the insurers shows that there were delays caused by the Glenns, which delays were responsible for some of the expenses now at issue. Respondent also noted that it had not received any receipts from Ms. Glenn.

Ms. Glenn’s exhibit 1 includes emails between the parties in February 2020. In those emails, Ms. Glenn notes that the balance due to ATI is $9878.33. Although there is no explicit reference to a total of $15,500 in Ms. Glenn’s emails, Mr. Ty Reidhead wrote that Respondent was ready to write a check for the Glenns’ out-of-pocket expenses, but $5500 was much more “doable” than $15,500.

CONCLUSIONS OF LAW

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 § R2-19-119.

“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. § 41-1092.07(G)(2).

“At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(3).

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).

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.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

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).

The Administrative Law Judge may consider ROC’s administrative record. See Ariz. Admin. Code § R4-9-118.

Ariz. Rev. Stat. 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:

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2. Departure from or disregard of:

(a) Plans or specifications in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.

(b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

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3. Violation of any rule adopted by the registrar.

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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 must set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance may not be less than fifteen days from the date of issuance of the directive....

Ariz. Admin. Code section R49108 provides that “A contractor shall perform all work in a professional and workmanlike manner [and a] contractor shall perform all work in accordance with any applicable building codes and professional industry standards.”

Ariz. Rev. Stat. section 32-1154(E) provides that ROC may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of Ariz. Rev. Stat. section 32-1154(A)(22).

The preponderance of the evidence shows that Respondent violated Ariz. Admin. Code section R4-19-108 by failing to perform its work in a professional manner, which is also a violation of Ariz. Rev. Stat. section 32-1154(A)(3).

It has not been shown by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(2).

It has not been shown by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(22). Respondent hired another contractor to complete the work at issue because Ms. Glenn did not want to allow Respondent access to make the required repairs, which provides a valid justification for Respondent’s failure to meet the deadline imposed by ROC.

Because Respondent has violated Ariz. Rev. Stat. section 32-1154(A)(3), ROC has authority to discipline its license.

Respondent accepted responsibility to have the water damage at Ms. Glenn’s house repaired. Respondent’s email of February 11, 2020, shows a willingness to pay Ms. Glenn $5500 for that work.

Although Ms. Glenn asserts that her damages are $8640.63, she provided no receipts or substantial evidence to support her position that she incurred living expenses of $3611 during the three weeks in November and December 2019. Ms. Glenn has not shown that she should be reimbursed $3611 for living expenses.

When Ms. Glenn’s proposed total of $8640.63 is reduced by her purported living expenses of $3611 for three weeks, the total is $5029.72. Although Ms. Glenn did not provide receipts to justify this total, in light of Respondent’s apparent acceptance that the damages totaled $5500, it is appropriate to require Respondent to pay to Ms. Glenn $5029.72 as restitution.

Respondent’s licenses should be suspended until ROC receives proof that it has paid to Ms. Glenn $5029.72 as restitution for the damage caused by the roof leak. See Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 803 P.2d 430, (App. 1990)(ROC may order a party to pay restitution as a condition to the reinstatement of a suspended license.).

RECOMMENDED ORDER

IT IS RECOMMENDED that on the effective date of the final Order in this matter Brothers Reidhead Holdings LLC’s license numbers 324312, 315274, and 325316 be suspended until the Registrar receives proof that Respondent has paid to Complainant Teresa Adela Glenn $5029.72 as restitution for Respondent’s violation of Ariz. Rev. Stat. section 32-1154(A)(3).

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.

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-137160-45720000Done this day, June 30, 2020.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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001

-137160-45720000