ALJDEC decisions subject to certification as final

2019A-04821-CHC-ROC · Registrar of Contractors · 2020-05-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Cary Jonathan Broshat,

COMPLAINANT

Rojo Ornamental Iron LLC,

License No. ROC 168479,

RESPONDENT

No. 2019A-04821-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: April 15, 2020

APPEARANCES: Cary Jonathan Broshat on his own behalf; Brian A. Laird, Esq. for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On March 13, 2020, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on April 15, 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 Rojo Ornamental Iron LLC on January 29, 2020.

Through the Notice of Hearing, ROC alleges that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(3), (A)(12), (A)(14) and (A)(22).

Respondent holds license No. 168479 issued by ROC. Alberto Rojo is Respondent’s owner.

Complainant is Cary Jonathan Broshat.

Complainant contacted Respondent on or about April 30, 2019. On May 1, 2019, Mr. Rojo’s son, Nathan Rojo responded.

Nathan and Mr. Broshat met and discussed the project, which called for the construction of a corrugated metal fence, a trellis, and a mailbox, for a total cost of $6500.00. The parties subsequently agreed to remove the mailbox from the scope of work.

The fence was to be less than seven feet tall, which is the maximum the County allows without a permit.

Nathan Rojo prepared a written estimate/proposal on Rojo Ornamental Iron LLC letterhead dated May 15, 2019.

Nathan Rojo and Mr. Broshat engaged in further discussion/negotiation and Mr. Broshat provided plans to Nathan Rojo.

Nathan Rojo and Mr. Broshat agreed on a price of $6110.00. Nathan told Mr. Broshat to make the down-payment check out to Rojo Iron Specialists. Mr. Broshat thought that this was an odd request, but he wrote to Rojo Iron Specialists a check for $3055.00.

Rojo Iron Specialists provided Mr. Broshat a receipt for the down payment that included a statement of the agreed upon work.

Rojo Iron Specialists is not licensed by ROC and not a registered “dba” of Respondent.

Alberto Rojo testified to the effect that Nathan Rojo had been attempting to start an offshoot of Respondent using the name Rojo Iron Specialists.

Work started on the project in July 2019; According to Mr. Broshat, there were workmanship issues and delays occasioned by Respondent’s failure to regularly appear at the site.

In August 2019, Mr. Broshat meet with Alberto and Nathan and Respondent agreed to return to the project on August 12, 2019 and to complete the work by August 23, 2019. Respondent failed to show on August 12th and Nathan Rojo informed Mr. Broshat that he did not have enough money to pay for concrete that was required for the project.

On August 14, 2019, Nathan Rojo and Mr. Broshat executed an addendum that called for Mr. Broshat to pay for the concrete, with the cost to be deducted from the balance due on the contract. That addendum shows the contractor as Rojo Iron Specialists.

After what Mr. Broshat considered to be false promises from Nathan Rojo regarding completion of the project, on September 16, 2019, Nathan requested Mr. Broshat provide a list of the work that remained to be completed. Mr. Broshat responded requesting a meeting to walk the project, but Nathan Rojo did not reply.

Mr. Broshat then called Alberto Rojo to inform Rojo Ornamental Iron LLC that he planned to file a complaint with ROC.

Rojo Ornamental Iron LLC did not return his call and on September 24, 2019, Mr. Broshat filed with ROC a complaint against “Rojo Iron Specialists/Rojo Ornamental Iron” alleging abandonment and poor work. Mr. Broshat acknowledged that he had paid to Respondent only $3656.16 of the contract price.

ROC investigator Arlo Houston conducted a jobsite inspection on October 11, 2019.

Through a letter to ROC dated November 19, 2019, Respondent provided that “Rojo Ornamental Iron, LLC, license no. 168479 hereby acknowledges its contractual obligation for the entire project and agrees that the entire contract was performed in its entirety under ROI’s license. ROI acknowledges its responsibility to perform any/all corrective work on the project.”

In its letter of November 19, 2019, Respondent asserted that “On November 11, 2019, at approximately 11:30 AM, ROI’s representative telephoned the complaining homeowner and requested to arrange a time for ROI to return to the property and perform all corrective work. The homeowner refused to allow ROI to come to the property to perform any work.”

ROC prepared a written Directive dated November 27, 2019, that provided in part:

WRITTEN DIRECTIVE FROM THE REGISTRAR

Dear Respondent:

After investigation, the Registrar has verified that your work fails to meet minimum workmanship

standards. A.R.S. § 32-1154(A)(3); A.A.C. R4-9-108. *** You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on December 18, 2019.

***

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

Complaint Item 1: “Project remains incomplete, with numerous quality issues.”

Investigator’s Observation: Verified. At time of inspection I observed many areas of poor welds on the corrugated metal fence, areas of exposed fasteners in the corrugated metal fence, exposed seams in corrugated metal fence panels, construction debris and gaps in welds in the angle iron of the corrugated metal fence.

Governing Rule: 32-1154 (A)(3) Violation of Any Rule Adopted by the Registrar Namely Rule R4-9-108

Complaint Item 2: “Work not to provided spec / agreement – over allowable height, gate too narrow.”

Investigator’s Observation: Verified. At time of inspection I observed areas of the corrugated metal fence which were above 7’ in height as specified in proposal and the gate installed on the West side of the property is not the width specified in proposal of approx. 9-10’.

Governing Rule: 32-1154 (A)(3) Violation of Any Rule Adopted by the Registrar Namely Rule R4-9-108

Complaint Item 6: “Unclear if contractor is working under license of Rojo Ornamental Iron or Rojo Iron Specialist.”

Investigator’s Observation: Verified. Invoice #1513 submitted by respondent contains the name Rojo Iron Specialist which is not the name, or a DBA, of the respondent’s ROC licensed entity name of Rojo Ornamental Iron, LLC. Respondent has acknowledged that the entire contract was performed in its entirety under Rojo Ornamental Iron, LLC’s ROC license.

Governing Rule: 32-1154 (A)(14)

Complaint Item 7: “Originally bid under Rojo Ornamental Iron, work appears to be performed by Rojo Iron Specialist.”

Governing Rule: 32-1154 (A)(14)

Complaint Item 8: “Rojo Iron Specialist does not appear to be licensed, no ROC number displayed on invoice.”

Governing Rule: 32-1154 (A)(14)

Complaint Item 9: “Rojo Ornamental Iron ROC # not displayed on bid.”

Investigator’s Observation: Verified. The Rojo Ornamental Iron, LLC proposal submitted by respondent does not contain respondent’s ROC license number.

Governing Rule: 32-1124 (B)

ROC’s Directive shows that it had determined that Mr. Broshat’s complaint Items 3, 4, and 5 were unverified and required no corrective action on Respondent’s part.

At the hearing, Alberto Rojo confirmed that Respondent is willing to make the corrections ROC ordered it to complete. He also testified to the effect that this was the first complaint against Respondent in over twenty years of business.

Through its Directive, ROC allowed Respondent fifteen days to complete the project, plus five days for mailing time, which Mr. Houston testified was standard practice.

Mr. Houston’s opinion was that fifteen days to complete the project was a reasonable amount of time, and he noted that he did not receive any requests to extend that time.

After receiving a copy of ROC’s Directive, Mr. Broshat called Respondent and received a return call from Alberto Rojo on December 9, 2020. At that time, Alberto was not aware that ROC had ordered Respondent to complete its work by December 18, 2019.

Mr. Broshat, Alberto and Nathan met on December 14, 2019, and between December 16 and 18, 2019, Respondent completed some work at the site.

On December 20, 2019, Alberto Rojo called Mr. Broshat and requested an opportunity to complete the work. Because the time for Respondent to comply with ROC’s Directive had elapsed, Mr. Broshat declined to allow Respondent access to complete the work, choosing instead to allow ROC to conduct a compliance jobsite inspection.

On January 7, 2020, Mr. Houston conducted a compliance jobsite inspection at which time he observed that the corrective action ROC ordered Respondent to undertake had not been completed.

ROC issued to Respondent a Citation dated January 29, 2020 through which it alleges that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(3), (A)(12)(violation of 32-1158), (A)(14), and (A)(22)

In February 2020, the parties discussed the possibility of Respondent finishing the project. They planned to meet on February 17, 2020, but did not and they dispute whether there was a firm meeting time set. Through an email dated February 18, 2020, Respondent’s attorney suggested to Mr. Broshat that he should schedule appointments through the attorney’s office to avoid confusion.

Through the email of February 18, 2020, the attorney informed Mr. Broshat that Respondent was ready, willing, and able to make the required repairs and requested that Mr. Broshat let him know when Respondent could come to complete the work that ROC ordered it to complete.

On February 21, 2020, Mr. Broshat sent to Respondent’s attorney an email showing that he would be willing to review any written proposal from Respondent regarding the completion of the work, but any such proposal would require Respondent to agree to relieve Mr. Broshat from making any additional payments to Respondent.

On February 21, 2020, Respondent’s attorney replied to Mr. Broshat, noting that Respondent was willing to comply with ROC’s Directive, but that the Directive did not require the parties to enter a new contract or that Respondent waive its right to payment. Mr. Broshat responded, showing that Respondent had Mr. Broshat’s conditions and that he would not mediate. Respondent’s attorney replied showing that it was willing to mediate, but its offer was to complete the work if Mr. Broshat would allow access.

At the hearing, Mr. Broshat testified that Alberto Rojo offered to complete the project and to relieve Mr. Broshat from his obligation to pay any outstanding balance. Alberto Rojo disagreed and testified that it was Mr. Broshat who raised the possibility of no payment. Mr. Broshat’s email of February 21, 2020 shows that he was the person proposing terms and Mr. Broshat’s proposal does not show that Respondent had previously agreed to do the work for free.

On March 27, 2020, Respondent’s attorney again wrote to Mr. Broshat asking if he would allow Respondent access to comply with the Directive with final payment not due until the project meets ROC’s standards. Mr. Broshat responded showing that Respondent had had plenty of time to complete the project and showing that he would allow Respondent to complete the project if that is what ROC ordered after the hearing.

As set out in ROC’s substantive policy statement 2017.01, parties to contracts are required to cooperate in the performance of those contacts and a breaching party should be given the opportunity to cure any breach.

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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3. Violation of any rule adopted by the registrar.

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12. Failure in any material respect to comply with this chapter.

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14. Acting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth on the license.

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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 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.

Ariz. Admin. Code section R49108 provides that “A contractor shall perform all work in a professional and workmanlike manner[,] ” and that “a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.”

“Any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information: 1. The name of the contractor and the contractor's business address and license number....” Ariz. Rev. Stat. § 32-1158.

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).

Mr. Houston observed numerous areas of poor workmanship, the details of which are set out in ROC’s Directive. Respondent did not dispute that it is responsible for that poor workmanship. The preponderance of the evidence shows that Respondent violated Ariz. Admin. Code section R4-9-108 by failing to perform its work in a professional and workmanlike manner, which is also a violation of Ariz. Rev. Stat. section 32-1154(A)(3).

Respondent’s contract with Mr. Broshat did not include Respondent’s name or license number. The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. section 32-1158, which is a violation of subsection 32-1154(A)(12).

Respondent acted as contractor under the name Rojo Iron Specialists, which is a name that is not set forth on Respondent’s license. The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(14).

It has not been shown by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(22) because Respondent began to make the repairs that ROC ordered it to complete during the time allowed, and within two days of the expiration of the Directive, it requested that Mr. Broshat allow it additional time to complete those repairs, which provides a justification for Respondent’s failure to comply.

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

Respondent has been licensed since 2001 without any other complaints against its license, which is a factor in mitigation.

Respondent made several offers to complete the work in compliance with ROC’s Directive, including its offer of December 20, 2019, which was only two days after the Directive’s deadline. Considering ROC’s substantive policy statement 2017.01, it is appropriate to allow Respondent the opportunity to cure its deficient work.

RECOMMENDED ORDER

IT IS RECOMMENDED that the Registrar require Rojo Ornamental Iron LLC to complete the repairs set out ROC’s Directive, with such repairs to be completed before the effective date of the final Order in this matter;

IT IS FURTHER RECOMMENDED that ROC dismiss this matter if Mr. Broshat is unwilling to provide Rojo Ornamental Iron LLC with access to make the required repairs.

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, May 4, 2020.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000