ALJDEC decisions subject to certification as final

2020A-00893-CHC-ROC · Registrar of Contractors · 2020-10-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Rebecca G. Barcy

COMPLAINANT

Sage Commercial Builders LLC

License No. 280704,

RESPONDENT

No. 2020A-00893-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 15, 2020, and October 7, 2020

APPEARANCES: Complainant Rebecca G. Barcy appeared and was represented by David Goldstein. Sage Lentz, Member, appeared on behalf of Respondent Sage Commercial Builders LLC and was represented by Greg Clark Gibbons.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Sage Commercial Builders LLC (Respondent) is the holder of License No. 280704 issued by the Arizona Registrar of Contractors (Registrar).

On or about April 29, 2019, Rebecca G. Barcy (Complainant) signed a contract with Respondent for the build out of a commercial property at which Complainant’s business, I Need and Angel, Inc. and Complainant’s non-profit, High Fives Charity were going to be located. The total contract price for the project was $159,925.00.

The terms of the contract provided that substantial completion of the entire work under the project would be completed no later than eighty (80) days from the date of the contract. Eighty days from April 29, 2019, was July 18, 2019.

The contract between the parties did not include Respondent’s license number or an advisement that Complainant had the right to file a complaint with the Registrar.

In December 2019, Respondent’s HVAC subcontractor went to Mexico to deal with a family emergency. Essentially no work was completed on the project in December 2019.

As the project took longer than expected, Complainant was forced to explain to donors why the project was delayed, which affected Complainant’s ability to fundraise. Complainant did report to Respondent that she was seeking donations for the project, and at times, that she was in need of more funds, but at no time did Complainant indicate she would be unable to pay for the project as agreed upon. At times, Complainant refrained from making specific decisions on certain items, like cabinets, because she was uncertain of the costs and funds she would have, but given the state of the project, those decisions did not delay the project.

On or about January 2, 2020, Complainant notified Respondent that it was locked out of the project due to a failure to complete the project in a timely manner. Prior to January 2, 2020, Respondent had full access to the property through the use of a lockbox.

Over the course of the project, Respondent issued numerous invoices to Complainant, and Complainant paid approximately $96,000.00 toward the project. The invoices did not include Respondent’s license number preceded by the acronym “ROC”.

On or about February 24, 2020, the Registrar received a Complaint against Respondent from Complainant alleging poor work and abandonment with respect to the project.

The Registrar assigned the complaint to Investigator Randy Morris. On or about April 10, 2020, Investigator Morris performed a jobsite inspection. After the jobsite inspection, Investigator Morris 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 May 15, 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:

Compliance Item: - 1. “Door openings are not all correct in width and height. The openings need to be re-framed.” (NOTE: The Complainant is referring to the Respondents failure to complete the project in accordance with the contract.)

Investigator’s Observation: During the job site inspection, both parties agreed that the framing of the walls and door openings have not been completed. The Respondent stated that he did not perform any work for the month of December 2019 and has not returned to the project site since the Complainant removed the lock box from the property on January 3, 2020. The Respondent was not able to provide a legal reason for not returning to the job site during the month of December to complete the contract. The allegation is verified. The Respondent shall complete the project in accordance with the contract.

. . . .

Compliance Item: - 2. “Electrical junction boxes in the ceiling are not supported and need to be relocated. Some junction boxes are over a doorway.” (NOTE: The Complainant is referring to the Respondents failure to complete the project in accordance with the contract.)

Investigator’s Observation: During the job site inspection, both parties agreed that the installation of the electrical system has not been completed. The Respondent stated that he did not perform any work for the month of December 2019 and has not returned to the project site since the Complainant removed the lock box from the property on January 3, 2020. The Respondent was not able to provide a legal reason for not returning to the job site during the month of December to complete the contract. The allegation is verified. The Respondent shall complete the project in accordance with the contract.

. . . .

Compliance Item: - 3. “Demising walls are incomplete.” (NOTE: The Complainant is referring to the Respondents failure to complete the project in accordance with the contract.)

Investigator’s Observation: During the job site inspection, both parties agreed that the framing of the walls have not been completed. The Respondent stated that he did not perform any work for the month of December 2019 and has not returned to the project site since the Complainant removed the lock box from the property on January 3, 2020. The Respondent was not able to provide a legal reason for not returning to the job site during the month of December to complete the contract. The allegation is verified. The Respondent shall complete the project in accordance with the contract.

. . . .

Compliance Item: - 8. “Estimated only $15,000.00 -$20,000.00 worth of work has been completed, the project was abandoned by the contractor. Sage ceased communications 11/27 with no response to requests for updates. (NOTE: The Complainant is referring to the Respondent’s failure to complete the project in accordance with the contract)

Investigator’s Observation: The ROC has determined that the Respondent has not completed the project in accordance with the contract with ARS §32-1154 (3), namely R4-9-108, Poor work not performed in accordance with professional industry standards (in this case failure to complete the project in accordance with the contract, approved plans and specifications and/or scope of work). The allegation is verified. The Respondent shall complete the project in accordance with the contract.

On or about May 18, 2020, after the deadline in the directive expired, Complainant notified Respondent that it was no longer allowed on the project.

Investigator Morris was notified that the project was stopped by the landlord on May 18, 2020, because the project had not yet been completed. Based on the information provided by the parties, Investigator Morris did not perform a compliance inspection and forwarded the matter to legal.

The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A); A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1124(B); A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158; and A.R.S. § 32-1154(A)(22).

Investigator Morris testified that both parties acknowledged that the work identified in the directive was not fully completed prior to the deadline in the directive, therefore he did not conduct a compliance inspection.

Complainant testified that she never agreed to change the date of completion on the project. Further, Complainant stated that because the project was not completed more than a year after the contract was signed, the landlord locked her out of the property as of May 18, 2020, which resulted in Respondent being locked out of the project also. Complainant denied that she did not have the funds to complete the project, but testified she did review different options to fund the project, and ultimately obtained a loan to ensure the project was completed. Complainant stated that the business she had built up for 16 years was devastated due to the loss of credibility and she had personally experienced lost income. Complainant stated she had to start over.

Mr. Lentz testified that items 1, 2, and 3, in the written directive were completed as required. Mr. Lentz acknowledged that Respondent did not complete the project in accordance with the contract as identified in item 8 of the written directive. Mr. Lentz pointed to being locked out of the project in January 2020 as justification for this failure to comply with the written directive. Mr. Lentz admitted he did not communicate with Complainant between December 2019 and January 2019 regarding the contract. Mr. Lentz also failed to provide an explanation as to why the project was not completed after the written directive was issued and prior to being locked out of the project on May 18, 2020. Respondent argued that the entire issue that it failed to comply with the written directive was moot because Complainant was locked out of the project by the landlord.

Administrative notice is taken of Respondent’s prior License record on October 27, 2020. Such prior License record reflects that Respondent’s License No. 280704 was first issued on September 7, 2012, and is active. Such prior License record also reflects that there were no other open complaints or resolved/settled complaints against 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 project in a timely manner as agreed upon under the contract. Therefore, Complainant established that Respondent did not complete the project in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A).

The evidence established that Respondent’s contract and invoices did not include Respondent’s license number preceded by the acronym “ROC” as required by A.R.S. § 32-1124(B). Therefore, Complainant established that Respondent failed to comply with the Registrar’s statue in violation of A.R.S. § 32-1154(A)(12).

The evidence established that Respondent’s contract did not include Respondent’s license number or an advisement that Complainant had the right to file a complaint with the Registrar as required in A.R.S. § 32-1158(A). Therefore, Complainant established that Respondent failed to comply with the Registrar’s statute in violation of A.R.S. § 32-1154(A)(12).

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).

Of utmost concern to the Administrative Law Judge is Respondent’s complete failure to take responsibility for the delay in the project, from 80 days to more than a year after the contract was executed. Further, Respondent’s attempt to assign a great deal of blame on Complainant’s purported lack of funds avoided the fact that the Respondent’s delay in completing the project affected Complainant’s ability to raise funds from donors. Finally, Respondent’s assertion that the entire matter was moot because Complainant was locked out of the project requires one to ignore that Complainant was locked out because Respondent failed to complete the project in a timely manner.

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. 280704.

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)(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.

-54864001

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-137160-45720000Done this day, October 27, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

001

-137160-45720000