ALJDEC decisions subject to certification as final

2019A-06057-CHC-ROC · Registrar of Contractors · 2020-07-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Granville W. Graves,

COMPLAINANT,

v.

J&M Vega Contractors LLC,

License No: 310765,

RESPONDENT.

No. 2019A-06057-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 09, 2020 at 1:30 PM.

APPEARANCES: Granville Graves (“Complainant”) appeared telephonically on his own behalf Mike Springer as a witness. No appearance(s) by or on behalf of J&M Contractors LLC (“Respondent”). Ramona Graves and Jeff Fuller observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT

Background and Procedure

According to the Registrar’s public website, on or about January 25, 2017, the Registrar issued License No. 310765, general KB-2 dual residential and small commercial contracting license to Respondent. José Manuel Vega is the Qualifying Party on this license. Marisela Rodriguez Vega is also listed as the Owner on the license. Respondent’s address of record on the license is 200 N. Haskell Ave. Willcox, Arizona 85643-2122.

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. Although ROC License No 310765 has not previously been disciplined by the Registrar, there are 2 settled or otherwise resolved complaints on the license. There is also one open complaint against the license, which is presumed to be related to this matter. The license has an active $14,000.00 surety bond issued by RLI Insurance Company effective December 20, 2016.

On December 09, 2019, Complainant filed a complaint against Respondent with the Registrar alleging abandonment of a residential add-on project. Complainant included proof of payment and a letter from the City of Benson denying the architectural plans for the underlying project.

On December 12, 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 January 06, 2020, at 10:30a.m.

On January 06, 2020, Registrar investigator Mike Springer (“Investigator Springer”) inspected the work that had been done on the project to date and took 1 photograph of the project. Respondent was in attendance. When he was finished, Investigator Springer drafted Jobsite Inspection Notes.

On January 06, 2020, Investigator Springer issued a Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s abandonment allegation. Respondent was put on notice that he had until 5:00 p.m. on January 24, 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 January 27, 2020, Investigator Springer escalated Complaint 2019-06057 to the Registrar’s legal department with a Citation recommendation.

On January 30, 2020, the Registrar issued a Citation and Complaint to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1) and 32-1154(A)(22). Respondent was given until February 14, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1155(C).

On February 12, 2020, the Registrar received Respondent’s Answer whereby Respondent essentially denied abandoning the underlying project and blamed unforeseen delays, including a 7-week hospitalization, on the not being able to obtain a permit from the City of Benson. Respondent alleged that Complainant “had put the permit on hold” after the jobsite inspection took place.

On March 11, 2020, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on May 01, 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 A.R.S. § 32-1154(A)(3) (“Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.)

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 and called Investigator Springer as a witness, and submitted 1 exhibit into the record. 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 1915 W Casa Del Rio Dr. Lot 158 Benson, Arizona 85602.

On June 19, 2019, the parties entered into verbal a construction contract agreement whereby Complainant agreed to pay Respondent the sum total of $105,000.00 in exchange for Respondent constructing an add-on to Complainant’s residence.

On June 19, 2019, Complainant tendered a $40,000.00 down payment to Respondent for the project.

Between mid-June and early-October of 2019 there was no traction on the project.

On October 11, 2019, the City of Benson issued a letter to Complainant, whereby Complainant was put on notice that the plans for his add-on lacked specificity and basic information for constructability. Complainant was provided with an itemized guideline of 18 points and instructed to address each prior to resubmitting his permit application.

Work on the project never began because a permit was never obtained.

On January 06, 2020, Complainant notified Investigator Springer that Respondent had not obtained the necessary permit or begun work on the project.

At no point in time did Respondent issue a refund of Complainant’s down payment.

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.

The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from the Registrar as well.

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)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”

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 not in dispute.

It is undisputed that Complainant issued a $40,000.00 down payment to Respondent on the underlying contract. It is also undisputed that Respondent did not complete the project as contracted. It is further undisputed that the Registrar’s post-investigative Directive required Respondent’s full compliance by January 24, 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 commence work on the underlying project, or refund Complainant’s down payment, Complainant has established a violation of Ariz. Rev. Stat. § 32-1154(A)(1).

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 J&M Vega Contractors LLC, License No: 310765, be suspended for one (1) day.

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $5000.00 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 24, 2020.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors