ALJDEC decisions subject to certification as final

2020A-00580-CHC-ROC · Registrar of Contractors · 2020-06-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ronald H. Raybon ,

COMPLAINANT

Builders Investment Group LLC,

License No. ROC 306835,

RESPONDENT

No. 2020A-00580-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 3, 2020

APPEARANCES: Complainant Ronald H. Raybon appeared and was represented by Andrew J. Wenker. Respondent Builders Investment Group LLC did not appear.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Builders Investment Group LLC (Respondent) is the holder of License No. 306835 issued by the Arizona Registrar of Contractors (Registrar).

On or about October 11, 2017, Ronald Raybon (Complainant) signed a contract with Respondent for the construction of a new home with a total contract price of $647,000. The build was to take six months from when permits were obtained.

Respondent broke ground in December 2018. According to the terms of the contract, the project should have been completed no later than July 2019. Respondent obtained draws from the financing during the progress of the project and Complainant paid out of pocket for certain expenses.

Respondent performed very little work on the project after October 2019.

On or about January 28, 2020, the Registrar received a Complaint against Respondent from Complainant alleging abandonment with respect to the project.

The Registrar assigned the complaint to Investigator David Fagerburg. After a jobsite inspection, Investigator Fagerburg issued a written directive to Respondent that provided as follows:

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. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A) (22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on Monday 3-9-2020.

RESTRICTIONS

• You may not perform or hire other contractors to perform work that is outside the scope of your license.

• If your license is currently suspended for administrative reasons1, or is inactive, expired, or cancelled, you may not perform any corrective work nor contract in any manner, which includes hiring other contractors to perform work, until the suspension of your license(s) has been lifted or your license(s) has been reactivated.

DIRECTIVE REQUIREMENTS

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

• The respondent is to complete the project per the written contract.

Compliance Item: There has been very minimal work done on our house since October 2019. The only work has been was repair of drywall where fire places go due him not framing them correc. A few days one of his employees did dig a few ditches for a drain pipe and thats all. Throughout our building process there have been weeks of no work due to lack of funds by Greg. He continually tells the subs it is due to our changes in the plans which is false. I have an email where Greg states he is waiting for a line of credit to finish. To date we have given him over $653,000 on a contract price of $647,077. Some extra due to upgrades.

Investigator’s Observation: I was able to verify that the project is not complete. The respondent acknowledged that no significant work has been performed since October 2019.

Governing Rule: ARS §32-1154 (A) (1) (Abandonment)

Complaint Item 2: Multiple subs have contacted me during the construction due to outstanding bills for work completed. The ones we know of come up to $35,000. (A/C, Grading we already paid Greg for this, Electrical) Amount for subs we know of that will not start their work until paid comes to $79,000 There are more. The above shows the work has stalled because he mismanaged the 653K we have already given him. Thus abandoning finishing our house due to his lack of funds. I just found out today he also owes the roofer, G and D company and painter. I have written proof of all stated items above.

Investigator’s Observation: I was able to verify that the project is not complete. The respondent acknowledged that no significant work has been performed since October 2019.

Governing Rule: ARS §32-1154 (A) (1) (Abandonment)

All errors in original.

Following the issuance of the written directive, Respondent removed a construction dumpster and a portable toilet from the jobsite, but did not perform any additional work on the project. After the deadline in the directive expired, Investigator Fagerburg was notified no corrective work had been performed.

The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(1); A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108; and A.R.S. § 32-1154(A)(22).

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

The Registrar issued a Notice of Hearing, setting a hearing at 1:00 p.m. on June 3, 2020. The Registrar sent copies of the Notice of Hearing to Respondent at its address and email address of record. By order of the Office of Administrative Hearings, the parties could appear at the hearing via telephone or through a videoconference.

A hearing was held on June 3, 2020. Complainant testified on his own behalf and submitted 29 exhibits.

Respondent did not appear telephonically or through videoconference and did not request that the hearing be continued. Although the start of the hearing was delayed 10 minutes, Respondent did not appear through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license.

Investigator Fagerburg testified that while delays often occur during construction projects, the delay on this project was not acceptable. Investigator Fagerburg also indicated that during his conversations with Respondent, Respondent acknowledged that it had not done any work since October 2019 and that it did not have any funds to complete the project. Investigator Fagerburg stated that he was also handling other complaints against Respondent’s license.

Complainant testified that, as of the date of the hearing, the construction loan had only $49,500.00 left to pay draws on the project, but it would cost approximately $150,000.00 to finish the project. Complainant stated that Respondent acknowledged it had insufficient funds to complete the project and owed subcontractors for work that had already been completed. Complainant testified that he had sold his prior home in Peoria and had to move into a significantly smaller house and his children and grandchildren were living with him. Complainant reported that the unfinished home was costing him approximately $2200.00 a month in interest, taxes, utilities, and other costs.

Administrative notice is taken of Respondent’s prior License record on June 8, 2020. Such prior License record reflects that Respondent’s License No. 306835 was first issued on September 19, 2016, and is suspended. Such prior License record also reflects that there were three other open complaints and two prior complaints resulting in suspensions of Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

The evidence established that Respondent did not complete the work under the contract. Accordingly, Complainant established that Respondent abandoned the contract and failed to complete the project in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(1) and A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.

The evidence established that Respondent did not attempt to complete the corrective work following the Directive being issued. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall revoke Respondent’s License No. 306835.

It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(E).

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar 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 A.R.S. § 32-1101(A)(7), 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.

-54864001

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-137160-45720000Done this day, June 10, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

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-137160-45720000