ALJDEC decisions subject to certification as final

2020A-01823-CHC-ROC · Registrar of Contractors · 2020-08-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

William J. Kohler,

COMPLAINANT

Builders Investment Group, LLC,

License No. ROC 306835,

RESPONDENT

No. 2020A-01823-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: July 22, 2020

APPEARANCES: Complainant William J. Kohler appeared on his own behalf. Registrar of Contractors Investigator David Fagerburg appeared. Respondent Builders Investment Group, LLC did not appear.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

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

2. On or about September 24, 2018, William J. Kohler (Complainant) entered into a written contract with Respondent for Respondent to manage the construction of a garage for Complainant. The contract price was $6,500.00. Complainant paid Respondent in full.

3. On or about August 2, 2019, Complainant entered into a written contract with Respondent for the construction of a garage, including but not limited to, grading and drainage, a concrete pad, concrete driveway, dual steel doors, aluminum windows, and stucco. The contract price was $49,208.00.

4. On or about April 10, 2020, the Registrar received a Complaint against Respondent from Complainant alleging abandonment with respect to the project.

5. The Registrar assigned the complaint to Investigator David Fagerburg. Investigator Fagerburg conducted a jobsite inspection on May 7, 2020. At the jobsite inspection, Investigator Fagerburg observed a vacant lot behind Complainant’s residence where the garage was to be built. After a jobsite inspection, Investigator Fagerburg contacted Respondent and was informed that the permit was available, but that Respondent did not have the funds to pay for the permit or the grading contractor. Respondent acknowledged that no work was performed on the project. Investigator Fagerburg did not issue a Written Directive to Respondent, but instead, recommended to the Registrar that a Citation be issued against Respondent’s license.

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

7. 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 July 22, 2020. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. An Order converting the hearing to telephonic or video-conference was issued on July 8, 2020, to Respondent’s email address.

8. A hearing was held on July 22, 2020. Complainant testified on his own behalf and submitted ten exhibits.

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

10. Investigator Fagerburg testified that Complainant provided proof of payment to Respondent in the amount of $58,788.89. This amount included payments to other vendors, for engineering, and for blueprints, paid at Respondent’s direction.

11. Investigator Fagerburg testified consistently with his jobsite inspection notes which state the following:

At this jobsite investigation I observed a vacant lot behind the complainant’s main home. See P (3). The complainant explained that the respondent was given a deposit in the amount of $58,788.89 to build a garage but that no work was ever started. The complainant also stated that the respondent last visited the site in November 2019 with his grader to review the project and joined the two in conversation but that was the last time the complainant had any communication with the respondent. After this jobsite investigation I called and asked the respondent if he was aware that the permit is ready to be paid for and picked up. The respondent acknowledged that the permit is available and confirmed the complainant’s explanation of the last contact in November 2019 during the review of the site but does not have the money to pay for the permit or to hire the grader that he had scheduled to start the excavation in November 2019. The respondent acknowledged that there has been no work started and did receive the deposit in July of 2019.

12. A pre-hearing inspection was conducted on July 21, 2020, and there was no change at the site.

13. Complainant testified that he contracted with Respondent for the construction of a 40 foot by 36 foot garage and the construction management of the project for a total of $55,708.00. Complaint provided copies of payments to Respondent as follows:

i) August 6, 2018 - $650.00 to Absolute Steel for blue prints

ii) August 8, 2018 - $689.29 towards the management fee

iii) September 24, 2018 - $6,500.00 as payment in full for the management fee

iv) February 12, 2019 - $1,490.00 to Grading and Drainage Engineers, Inc. for grading

v) April 26, 2019 - $2,950.40 for permits and fees

vi) July 11, 2019 - $4,453.89 for permits and fees

vii) August 2, 2019 - $50,695.31 for the construction of the garage

viii) August 3, 2019 - $8,250.00 to Absolute Steel for the materials for the project

14. Complainant explained that he paid the full contract price and additional monies because Respondent convinced him that “he needed all of the money now because on a project as small as mine he would spend it all very quickly” and “it would slow the process down if he had to keep coming back for small draws.”

15. Administrative notice is taken of Respondent’s prior License record on July 27, 2020. Such prior License record reflects that Respondent’s License No. 306835 was first issued on September 19, 2016, and was suspended on March 30, 2020. Such prior License record also reflects that there are six open complaints including the instant complaint, and two prior complaints resulting in discipline, both resulting in suspension.

CONCLUSIONS OF LAW

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

2. The copy of the Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable and Respondent is deemed to have received notice of the hearing. A.R.S. §§ 41-1092.04 and 41-1092.05(D).

3. 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).

4. Respondent’s suspended license status does not deprive Complainant of his right to prosecute his complaint or prevent the Registrar from determining the merits of the complaint. See A.R.S. § 32-1154(D).

5. The evidence established that Respondent contracted and was paid for Complainant’s project and did not perform the work. 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.

6. Complainant established that he paid Respondent $65,018.89 toward the project and no work was completed. Complainant also paid additional sums to other entities at Respondent’s direction.

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 to Complainant the sum of $65,018.89 as restitution pursuant to A.R.S. § 32-1156.01.

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.

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-137160-45720000Done this day, August 5, 2020.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000