ALJDEC decisions subject to certification as final

2020A-00804-CHC-ROC · Registrar of Contractors · 2020-10-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Karanbir S Sandhu,

COMPLAINANT,

v.

ACT Roofing LLC,

ROC License No. 308121,

RESPONDENT.

No. 2020A-00804-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

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

APPEARANCES: Timothy Ducar, Esq. appeared on behalf of Karanbir Sandhu (“Complainant”) with Complainant and Dennis Bierma as witnesses. Kenneth Mooney appeared on behalf of ACT Roofing LLC (“Respondent”) with Brian Beitman as a witness. Ryan Bradway 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 August 23, 2016, the Registrar issued License No. 308121 for Specialty Dual CR-42 Roofing contracting to Respondent. Respondent’s address of record for the license is 5917 Warner St., Phoenix, AZ 85043-1969. Kenneth Robert Mooney is listed on the license as the Qualifying Party/Member.

Pursuant to Ariz. Admin. Code R4-9-117 Administrative Notice is taken of Respondent’s prior license record, for ROC License No. 308121, as reflected on the Registrar’s public website on September 17, 2020. Such prior license record reflects that Respondent’s license is active and currently renewed through August 31, 2022. The license has been previously disciplined on one prior occasion. The record reflects that there is one open complaint against Respondent’s license, 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 August 02, 2016.

On February 18, 2020, the Registrar received a complaint filed by Complainant alleging poor work performance on a $9,250.00 commercial project located at 833 W. Main St., Mesa, Arizona 85210. Specifically, Complainant alleged that Respondent failed to provide a written contract, exceeded the scope of his license, failed to obtain a building permit from the local city building authority, and the work Respondent performed on the job failed to meet the Registrar’s minimum workmanship standards. The Registrar designated it Complaint 2020-00804 and assigned it to investigator Dennis Bierma (“Investigator Bierma”) for investigation.

On March 13, 2020, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by Investigator Bierma on April 17, 2020, at 11:00 a.m.

On April 17, 2020, Investigator Bierma reviewed related invoices and determined that no written contract had been executed between the parties, but that Compliant did pay the agreed upon amount for the work in full. He also inspected the work that had been done on the project to date and took 14 photographs of the project. When he was finished, Investigator Bierma drafted Jobsite Inspection Notes. Of Complainant’s 4 complaint items, Investigator Bierma substantiated 3 of them.

On April 28, 2020, Investigator Bierma issued a Warning Letter from the Registrar to advise that building permit(s) were not obtained for the project in violation of the International Residential Code and the International Building Code. Respondent was further advised that failure to comply with the building codes was a violation of Ariz. Rev. Stat. § 32-1154(A)(2), which could result in discipline against Respondent’s license including suspension or revocation.

On April 28, 2020, Investigator Bierma issued a Warning Letter from the Registrar to advise that Respondent’s 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 April 28, 2020, Investigator Bierma issued a Warning Letter from the Registrar to advise that Respondent’s work on the underlying project required possession of an R-7 or CR-7 license that Respondent did not possess during the relevant time period, in violation of Ariz. Rev. Stat. § 32-1154(A)(16).

On April 28, 2020, Investigator Bierma issued a Directive from the Registrar to Respondent because he substantiated Complainant’s allegation that the work Respondent had done on the project failed to meet minimum workmanship standards. Respondent was put on notice that he had until 5:00 p.m. on June 05, 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 July 16, 2020, Investigator Bierma escalated Complaint 2020-00804 to the Registrar’s legal department with citation recommendations against Respondent for violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(16), 32-1154(A)(12); namely 32-1158, and 32-1154(A)(22).

On July 20, 2020, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(16), and 32-1154(A)(12); namely 32-1158, and 32-1154(A)(22). Respondent was given until August 04, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On August 03, 2020, the Registrar received Respondent’s Answer whereby Respondent alleged, in part, that because Respondent was not the original contractor on the job and did not possess the architectural designs required by the city building authority to obtain, Respondent was unable to obtain a building permit for the underlying project.

On August 07, 2020, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on September 17, 2020. Per the August 14, 2020, 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.R.S. § 32-1154(A)(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.”

Charge 2: 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 3: A violation of A.R.S. § 32-1154(A)(12) (“Failure in any material respect to comply with this chapter; Namely A.R.S. § 32-1158.”)

Charge 4: A violation of A.R.S. § 32-1154(A)(16) (“Knowingly contracting beyond the scope of the license or licenses of the licensee.”)

Charge 5: 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 Bierma as a witness, and submitted 6 exhibits. Kenneth Mooney and Brian Beitman testified on behalf of Respondent. The Registrar’s agency file and Notice of Hearing were also admitted into the record as their own exhibits. The substantive evidence of record is as follows:

Complainant is the owner of commercial property located at 833 W. Main St., Mesa, Arizona 85210. Advertisement signage is located atop Complainant’s roof.

In or around August 2018, Complainant and Respondent entered into a verbal contractual agreement whereby Complainant agreed to pay $9,250.00 to Respondent for Respondent to take over for another contractor and repairs and replacement sections of Complainant’s roof.

On August 24, 2018, work on the project commenced. Prior to beginning work on the project, Respondent failed to determine whether requisite permits had been obtained from the local building authority. The project itself was not without difficulty. Respondent discovered that the roof required more repairs than originally anticipated, Respondent ran out of materials, and inclement weather threatened Respondent’s work on the project.

On September 06, 2018, work on the project stopped.

Respondent was paid in full for the project.

Complainant was present for the onset of Respondent’s work on the project, but returned to his out-of-state residence prior to the project’s completion.

Upon completion of the project, Complainant had the work inspected and learned that Respondent had not been properly licensed to perform the scope of work on Complainant’s project. Complainant also learned that a building permit from the local building authority had ever been obtained for the project. Complainant was also advised that there were “issues” with Respondent’s workmanship near and around Complainant’s rooftop signage.

The Registrar’s Directive specifically forbade Respondent from beginning remediations until Respondent obtained a building permit. Although Respondent made efforts after the expiration of the Directive compliance period, Respondent never secured the documents necessary to obtain a building permit from the local building authority.

Complainant obtained remediation estimates from 2 licensed contractors to determine how much it would cost to have his roof repaired properly. One estimate totaled $8,475.00, and the other totaled $11,700.00.

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.”

The material facts in this case are clear.

It is undisputed that Respondent did not provide a written contract to Complainant for the underlying project, was not properly licensed to perform the work required, and did not obtain a building permit from the local authority after commencing work on the project. It is also undisputed that some of Respondent’s work on the project, if not all of it, required corrective work. It is further undisputed that Respondent was not permitted to perform corrective work until it obtained a building permit, and Respondent failed to do so.

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 because it did not timely provide the documents necessary to the local building authority to obtain a building permit. The Tribunal concludes that Respondent’s actions, or inactions, do not satisfy the requisite affirmative defense(s) threshold.

Because Complainant established violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(16), and 32-1154(A)(12); namely 32-1158, and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established grounds for the Registrar to take disciplinary action against Respondent’s license.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that on the effective date of the Final Order in this matter Respondent ACT Roofing LLC, ROC License No. 308121, be suspended for five (5) days.

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, October 09, 2020.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors