ALJDEC decisions subject to certification as final

2019A-05523-CHC-ROC · Registrar of Contractors · 2020-07-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Richard A. Henry,

COMPLAINANT,

v.

Desert Escape Landscaping LLC,

ROC License: ROC 231318,

RESPONDENT.

No. 2019A-05523-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 17, 2020 at 9:00 AM.

APPEARANCES: Richard Henry (“Complainant”) appeared on his own behalf with Steve Klein as a witness. Clayton Rivard appeared on behalf of Desert Escape Landscaping LLC (“Respondent”) with Amanda Rivard as a witness. Rochelle Henry observed.

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 April 05, 2007, the Registrar issued License No. 231318 for specialty dual CR-21 hardscaping and irrigation systems contracting to Respondent. Respondent’s address of record for the license is 14036 N 161st Ct Surprise, AZ 85379-5008. Clayton Emmanuel Rivard is listed on the license as the Qualifying Party and Member.

Pursuant to Ariz. Admin. Code R4-9-117 Administrative Notice is taken of Respondent’s prior license record, for ROC License No. 231318, as reflected on the Registrar’s public website on June 17, 2020. Such prior license record reflects that Respondent’s license is active and currently renewed through April 30, 2021. The license has not been previously disciplined, however, one prior complaint against the license has been settled or otherwise resolved. The record reflects that there are two open complaints against Respondent’s license, one of which is presumed to be related to this matter. Respondent has a $6,750.00 surety bond for the license issued through RLI Insurance Company, effective May 16, 2019.

On or about November 05, 2019, the Registrar received a complaint filed by Complainant alleging abandonment of a residential backyard remodeling project, including the installation of a pool, fire pit, pavers, lights, and a barbeque island grill. Complainant included copies of the underlying contract, change orders, and proof of payments.

On November 08, 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 December 05, 2019, at 1:30 p.m.

On December 05, 2019, Registrar investigator Steve Klein (“Investigator Klein”) inspected the work that had been done on the project to date and took 6 photographs of the project. When he was finished, Investigator Klein drafted Jobsite Inspection Notes.

On December 06, 2019, Investigator Klein issued a Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s abandonment allegation, and also determined that the work Respondent had performed on the project failed to meet minimum workmanship standards. Respondent was put on notice that he had until 5:00 p.m. on January 06, 2020, 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 December 06, 2019, Investigator Klein issued a Warning Letter to Respondent to advise that the pool portion of the project was beyond the scope of Respondent’s license in violation of Ariz. Rev. Stat. § 32-1154(A)(16).

On December 06, 2019, Investigator Klein issued a Warning Letter to Respondent to advise that his contract with Complainant did not meet statutory minimum elements in violation of Ariz. Rev. Stat. § 32-1158(A). Respondent was further advised that failure to comply with Ariz. Rev. Stat. § 32-1158(A) was a violation of Ariz. Rev. Stat. § 32-1154(A)(12), which could result in discipline against Respondent’s license including suspension or revocation.

On January 07, 2020 Investigator Klein drafted Compliance Jobsite Inspection Notes to the parties whereby he noted that Respondent failed to timely comply with the Registrar’s Directive.

On January 07, 2020, Investigator Klein escalated Complaint 2019-05523 to the Registrar’s legal department with a Citation recommendation.

On January 09, 2020, the Registrar issued a Citation and Complaint to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); a violation of Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until January 24, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1155(C).

On January 24, 2020, the Registrar received Respondent’s Answer whereby stated that it was still working on the underlying project for Complainant and that Respondent intended to complete the job.

On February 14, 2020, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 19, 2020. Per the 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 his own behalf, called Investigator Klein as a witness, and submitted Exhibits 9 and 12 into the record. Clayton Rivard and Amanda Rivard testified on behalf of Respondent. The Registrar’s agency file and Notice of Hearing were admitted into the record as their own exhibits. The substantive facts are as follows:

Complainant owns residential property located at 6215 E Juniper Ave Scottsdale, Arizona 85254.

On or about February 09, 2019, Complainant and Respondent entered into a contractual agreement whereby Respondent agreed to complete a backyard remodeling project for Complainant. Specifically, Complainant agreed to pay Respondent the sum total of $49,776.00 for materials and labor relating to the installation of pavers, a block wall, decorative lights, synthetic grass, a fire pit, a barbeque island, and a tiled in-ground pool with a waterfall feature.

Respondent has never been issued a pool contracting license.

On March 26, 2019, work on the project commenced.

On June 21, 2019, Respondent began excavation for the pool portion of the project.

On or about October 08, 2019, a permit was issued for the project by local city authorities.

The completion date for the project had been set for June 2019, but was ultimately extended through March 19, 2020, by Complainant. The work had not been finished by November 05, 2019, when Complainant submitted his complaint to the Registrar.

Complainant issued progress payments to Respondent as follows: $10,000.00 on February 08, 2019, $7,000.00 on April 08, 2019, $8,000.00 on April 12, 2019, $7,122.50 on May 23, 2019, $10,175.00 on June 25, 2019, and $7,912.08 on July 25, 2019.

Respondent was present for Investigator Klein’s December 05, 2019, jobsite inspection and received a copy of his resulting Directive on or about the following day. Respondent did not comply with the Registrar’s Directive by the compliance deadline.

On or about March 19, 2020, Complainant closed access to the project site.

Complainant hired a subcontractor for $20,000.00 to complete the project.

CONCLUSIONS OF LAW

The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

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]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.”

Ariz. Rev. Stat. § 32-1154(A)(22) provides, 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.”

Ariz. Rev. Stat. § 32-1154(E) provides, 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 provides that “[n]o 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.”

The material facts in this case are clear.

It is undisputed that Complainant paid the full price of the underlying contract. It is also undisputed that Respondent did not complete the project, and that the work Respondent did perform fell below the Registrar’s minimum workmanship standards. It is further undisputed that the Registrar’s post investigative Directive required Respondent’s full compliance by January 06, 2020, and that Respondent did not timely comply.

Therefore, the only remaining issue to address is whether Respondent raised sufficient justification or excuse for failing to timely and completely remediate all complaint action items outline in the Registrar’s Directive. This is an affirmative defense that Respondent bears the burden to establish. Here, the record reflects that Respondent failed to adhere to a Registrar Directive, and had no affirmative defense(s) for doing so.

Because Respondent did not meet minimum workmanship standards as required by Ariz. Admin. Code R4-9-108, Complainant has established a violation of Ariz. Rev. Stat. § 32-1154(A)(3).

Because Respondent failed to take appropriate corrective action after the Directive was issued by the Registrar for the underlying project, Complainant has established a violation of Ariz. Rev. Stat. § 32-1154(A)(22).

As such, Complainant has also established grounds for the Registrar to take disciplinary action against Respondent’s license and impose a civil penalty against Respondent pursuant to Ariz. Rev. Stat. § 32-1154(E).

Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter, if any is permitted, 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 Final Order in this matter Respondent Desert Escape Landscaping LLC, ROC License No. 231318, be suspended for two (2) days.

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $1,000.00 in certified funds as a civil penalty.

IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s Order, the Registrar shall 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, July 07, 2020.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors