ALJDEC decisions subject to certification as final

2020A-01325-CHC-ROC · Registrar of Contractors · 2020-10-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Dawn B McDermott,

COMPLAINANT

M.G.M. Unlimited Construction LLC

License No. ROC 318688,

RESPONDENT

No. 2020A-01325-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: September 25, 2020

APPEARANCES: Dawn B. McDermott on her own behalf; Joseph A. Hoxie, Esq. for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On June 30, 2020, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on July 30, 2020 at the Office of Administrative Hearing. The matter was convened on that date and the parties agreed to have it continued to allow each party time to better prepare.

The hearing was conducted on September 25, 2020. After the presentation of evidence the parties agreed to keep the matter open for one week to explore settlement, but no notice of settlement was filed.

The Notice of Hearing shows that the hearing was set to consider the charges made in the Citation and complaint that were served on Respondent M.G.M. Unlimited Construction LLC on May 19, 2020.

Respondent holds license No. 318688 issued by ROC. John Gelea is Respondent’s qualifying party and a member of the LLC.

Respondent performed work at a residential property owned by Complainant Dawn B. McDermott.

Respondent began work on or about November 5, 2019. At that time, neither Respondent nor Ms. McDermott had obtained the required permits.

Ms. McDermott obtained the required permits in early March 2020.

On March 16, 2020, Ms. McDermott filed with ROC a complaint against Respondent alleging poor work on Respondent’s part.

ROC investigator Steve Philpott conducted a jobsite inspection on April 8, 2020.

On April 16, 2020, ROC issued to Respondent a Directive that provided in part:

.... You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on 5/16/2020.

***

DIRECTIVE REQUIREMENTS

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

Respondent shall complete project per original contract agreement, properly executed change orders, local building codes, and manufactures installation instructions. Respondent confirmed at the jobsite inspection that the plumbing work was “self-performed”. Plumbing work shall be inspected by a properly licensed sub-contractor. Any workmanship violations and/or any building code deficiencies identified or code violations caused by the Respondent shall be corrected by a properly licensed subcontractor.

Compliance Item: 5 - Poor drywall work – no insulation in new wall

Investigator’s Observation: This complaint item is verified. Drywall work will have to be removed and replaced for required inspections to occur. Plumbing and gas lines have been installed and concealed without proper building permits obtained. Respondent shall correct by appropriate means

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 6 - Plumbing not as instructed – gave drawings (Must redo)

Investigator’s Observation: This complaint item is verified. New plumbing was installed without approved plans as required by the city of Flagstaff, the jurisdiction having authority. §32-1154(A)(3) RULE 4-9-108 WORKMANSHIP STANDARDS

B. A contractor shall perform all work in accordance with any applicable building codes and professional industry standards. For work to be performed in accordance with professional industry standards, a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity. Respondent shall correct by appropriate means

Governing Rule: Departure from or disregard of: (b)A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

Compliance Item: 7 - Gas line improperly installed

Investigator’s Observation: This complaint item is verified. New gas line was installed with our proper permits and inspections. Respondent shall correct by appropriate means. §32-1154(A)(3) RULE 4-9-108 WORKMANSHIP STANDARDS

Governing Rule: Departure from or disregard of: (b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

Compliance Item: 9 - Complaint Item 10: Plumbing / Gas improperly done – not as described

Governing Rule: Departure from or disregard of: (b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

Compliance Item: 10 - Complaint Item 11: Toilet wrong placement /plumbing not as discussed

Governing Rule: §32-1154(A)(3) RULE 4-9-108 WORKMANSHIP STANDARDS

Governing Rule: Departure from or disregard of: (b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

The Directive shows that ROC had determined that the other allegations in Ms. McDermott’s complaint did not require correction.

On May 18, 2020, Mr. Philpott conducted a compliance jobsite inspection at which time he verified that Respondent had not completed any of the work ROC ordered it to complete.

ROC issued to Respondent a Citation dated May 19, 2020. Through that Citation ROC alleges that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(2)(a), (A)(2)(b), (A)(3), (A)(12), (A)(16) and (A)(22).

At the hearing, Mr. Philpott testified that Respondent had conducted work without obtaining the required permits, that Respondent had failed to have its work properly inspected by the City of Flagstaff, that Respondent had contracted beyond the scope of its license by performing plumbing work, and that the issues set out in ROC’s Directive were violations of the applicable statutes that required corrective action.

Mr. Philpott noted that the failure to have the gas line work inspected created a health and safety risk, which was heightened by the fact that Ms. McDermott’s property is part of a multifamily building.

On May 14, 2020, before ROC issued its Citation, Mr. Galea requested additional time for Respondent to comply with the Directive. Because Ms. McDermott was not willing to allow Respondent more time, ROC refused to extend its deadline for compliance.

At the hearing, Mr. Philpott testified as to his opinion that the Directive had provided Respondent with sufficient time to comply, provided that Respondent began working as soon as the Directive was issued. Mr. Philpott acknowledged that compliance with the Directive required the involvement of the City of Flagstaff, but he was of the opinion that the City responds to requests from contractors fairly quickly and he saw no evidence that Respondent had contacted the City in a timely manner after receiving ROC’s Directive.

Mr. Philpott also testified to the effect that Respondent was apparently confused as to the scope of ROC’s Directive in that he was asking for guidance about issues that the City had determined to require correction but were not part of ROC’s Directive.

CONCLUSIONS OF LAW

Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2).

“At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(3).

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

The Administrative Law Judge may consider ROC’s administrative record. See Ariz. Admin. Code § R4-9-118.

The term “knowingly” requires “[o]nly a knowledge that the facts exist that bring the act or omission within the provisions of the statute using such a word” and “[d]oes not require any knowledge of the unlawfulness of the act or omission.” Ariz. Rev. Stat. § 1-215(17).

Ariz. Rev. Stat. section 32-1154(A) provides that:

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

*****

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.

(b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

*****

3. Violation of any rule adopted by the registrar.

*****

12. Failure in any material respect to comply with this chapter.

*****

16. Knowingly contracting beyond the scope of the license or licenses of the licensee.

*****

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 must set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance may not be less than fifteen days from the date of issuance of the directive. A license may not be revoked or suspended nor may any other penalty be imposed for a violation of this paragraph until after a hearing has been held.

Ariz. Rev. Stat. section 32-1154(16) provides a list of nine elements that must be included in all contracts for more than $1000.

Ariz. Admin. Code section R49108(A) provides in part: “A contractor shall perform all work in a professional and workmanlike manner[,] ” and that “a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.”

Ariz. Rev. Stat. section 32-1154(E) provides that ROC may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of Ariz. Rev. Stat. section 32-1154(A)(22).

The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(2)(b) in that it performed work without the required building permits, which was prejudicial to Ms. McDermott.

The preponderance of the evidence shows that Respondent violated Ariz. Admin. Code section R4-9-108 in that it performed work without obtaining the required permits and without having its work properly inspected, which is also a violation of Ariz. Rev. Stat. section 32-1154(A)(3).

The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(16) in that it performed plumbing work, which is beyond the scope of its license.

The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(22) in that it did not comply with ROC’s Directive within the time allotted.

It has not been shown that Respondent violated Ariz. Rev. Stat. sections 32-1154(A)(2)(a) or (A)(12).

Considering the above, particularly the health and safety risk created by Respondent’s failure to have its work inspected, Respondent’s license should be suspended for three days and Respondent should be assessed a civil penalty of $250.

RECOMMENDED ORDER

IT IS RECOMMENDED that Respondent M.G.M. Unlimited Construction LLC’s license number 318688 be suspended for three days;

IT IS FURTHER RECOMMENDED that Respondent M.G.M. Unlimited Construction LLC be ordered to pay to the Registrar of Contractors a civil penalty of $250.

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 is forty days after the date of that certification.

-54864001

001

-137160-45720000Done this day, October 22, 2020.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

-54864001

001

-137160-45720000