ALJDEC decisions subject to certification as final

2020A-02316-RFA-LS-ROC · Registrar of Contractors · 2023-01-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Karen Boyk,

COMPLAINANT,

Art Enriquez Concrete LLC,

License No. ROC 180548,

RESPONDENT

No. 2020A-02316-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: January 9, 2023

APPEARANCES: Complainant Karen Boyk appeared on her own behalf. Megan Schandle, Esq. represented Respondent Art Enriquez Concrete, LLC. Maria Enriquez was present with counsel. Assistant Attorney General Seth Hargraves represented the Arizona Registrar of Contractors. Katelyn Rolling appeared as a witness for the Arizona Registrar of Contractors

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Background and Procedure

According to the Arizona Registrar of Contractors’ (“Registrar”) public website, on December 14, 2002, the Registrar issued License No. 180548, Specialty Dual CR-9 Concrete contracting license to Art Enriquez Concrete, LLC (“Respondent”). Jose Luis Enriquez is listed on the license as the Qualifying Party and a Member of Respondent.

On or about May 8, 2020, the Registrar received a Complaint filed by Karen Boyk (“Complainant”) against Respondent alleging poor work with respect to the pool refinishing project performed by Respondent. The Registrar assigned Stephen Lawton (“Investigator Lawton”) to investigate the Complaint.

Investigator Lawton conducted a jobsite inspection at the project site on May 29, 2020. During that inspection, Investigator Lawton took photographs of Respondent’s work. After the inspection, Investigator Lawton drafted Jobsite Inspection Notes.

On June 2, 2020, Investigator Lawton issued a Written Directive from the Registrar to Respondent due to having substantiated Complainant’s allegation that some of the work Respondent had performed failed to meet minimum workmanship standards. Respondent was put on notice that it had until 5:00 p.m. on July 2, 2020, to notify the Registrar of its compliance with the Written Directive or face discipline pursuant to Ariz. Rev. Stat. § 32-1154(A)(3); Ariz. Admin. Code R4-9-108, Ariz. Rev. Stat. § 32-1154(A)(22), and Ariz. Rev. Stat. § 32-1154(E).

Respondent failed to perform all of the required corrective work. Consequently, Investigator Lawton referred the Complaint to the Registrar’s legal department.

On October 20, 2020, the Registrar issued a Citation and Complaint to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22).

After receiving Respondent’s Written Answer to the Citation and Complaint, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent State agency, for an evidentiary hearing to determine whether the Registrar had cause to discipline Respondent’s license based upon Respondent’s alleged violations of this State’s contracting laws.

On September 16, 2020, an administrative evidentiary hearing took place at OAH.

On or about October 6, 2020, OAH transmitted the Administrative Law Judge Decision to the Registrar which recommended that discipline be imposed against Respondent’s contracting license as the Administrative Law Judge concluded that Respondent had violated the charged provisions of this State’s contracting laws. The Order also recommended that Respondent’s license be suspended for three days and that Respondent pay a civil penalty in the amount of $500.00.

On October 20, 2020, the Administrative Law Judge Decision was accepted by the Registrar.

On November 29, 2020, the Final Administrative Decision and Order became effective.

In June 2021, the Registrar received Complainant’s claim for payment from the Residential Contractors’ Recovery Fund (“Fund”) pursuant to Ariz. Rev. Stat. §§ 32-1132(A) and 32-1154(G), in the amount of $30,000.00.

On October 19, 2022, the Registrar issued a Notice and Order of Recovery Fund Claim Denial.

Complainant appealed the Registrar’s Recovery Fund Claim Denial and the matter was referred to OAH for an independent evidentiary hearing.

Hearing Evidence

At the hearing, the Registrar called Katelyn Rolling as a witness. Complainant testified on her own behalf. Respondent’s counsel primarily deferred to the Registrar’s presentation. All exhibits were admitted and administrative notice was taken of the agency record.

Ms. Rolling is a Legal Assistant II for the Registrar and she reviewed Complainant’s claim to the Fund. Ms. Rolling testified that she reviewed Respondent’s scope of work, the Complaint, the payments made to Respondent, the Written Directive, and the Fund claim form with the attached bids.

Ms. Rolling testified that upon review, she determined that Complainant was requesting a $30,000.00 award from the Fund, however, the requested award did not “match up” with Investigator Lawton’s findings.

Ms. Rolling testified that initially, the Registrar issued a rejection letter to Complainant dated June 24, 2022, because she had not obtained a letter from Respondent’s bonding company showing the final disposition of her claim.

Complainant subsequently filed an updated claim to the Fund.

Ms. Rolling testified regarding Complainant’s items of Complaint, which all were in reference to the coping, as well as the contract, Investigator’s Lawton’s Jobsite Inspection Notes, the Written Directive, the Compliance Inspection Notes, the Administrative Law Jude Decision, the Registrar’s Final Administrative Decision, as well as the Warranty Deed for the property, proof of payments, Complainant’s trust, and the bids for the corrective work that were submitted by Complainant.

Ms. Rolling determined that neither of the bids was in alignment with the Written Directive, as the decking was not part of Complainant’s Complaint, only the coping.

On October 6, 2022, the Registrar issued a letter to Complainant requesting, “[t]wo new itemized bids that are in alignment with the original contract and Written Directive.”

Complainant submitted two additional bids in response to the Registrar’s request.

Ms. Rolling testified that upon receipt of Complainant’s bids, she consulted with the Assistant Chief of Investigations, Steve Philpott, who determined that the bids were excessive in cost and scope and that other methods could be utilized to repair Respondent’s work. Investigator Philpott responded to Ms. Rolling’s request as follows:

I am going to recommend that you reject the recovery fund claim. The $48,000.00 proposal from Hardscapes and Masonry and the $30,560.00 Proposal from Pavers and More LLC do not align with the original contract agreement between the Complainant and Respondent, nor the written directive issued on June 2nd 2020.

Ms. Rolling clarified with Investigator Philpott his reasoning by asking, “Is that because the bids are for tile and pavers, and do not address the concrete?” Investigator Philpott responded by stating, “Yes, that is correct.”

Upon receipt of Complainant’s new bids, Ms. Rolling submitted those to Investigator Philpott for review as well. Investigator Philpott determined that the new bids were also excessive.

In order to calculate Complainant’s actual damages, Complainant was required to obtain bids from other contractors so that the lowest one could be chosen by the Registrar, and then permissible remediation costs could be tallied to calculate Complainant’s award. Ms. Rolling testified that all four of the bids obtained by Complainant included work that was beyond the scope of the work necessary for the repair to the coping, the subject of Complainant’s Complaint and the Written Directive. As such the Registrar denied Complainant’s claim to the Fund, having found the repairs excessive and because they did not specifically address Respondent’s deficient work. Therefore, the Fund could not determine or calculate the amount of Complainant’s actual damages, thereby rendering Complainant ineligible for a payout from the Fund. Ms. Rolling testified that Complainant would have been eligible for a payout if the bids she received had been in alignment with the Written Directive.

Ms. Rolling testified that Complainant did not submit any additional information or documentation to the Fund since the denial was issued.

Complainant testified that the contractors she contacted would not provide bids to repair the coping because it was “one hundred percent guaranteed to crack and the only solution was to put pavers down so the cracking would not come through.” However, Complainant did not provide any documentation from the contractors that provided bids, to corroborate her testimony that there was no other way to repair Respondent’s deficient work, nor did Complainant call any of those contractors as witnesses at the hearing.

Complainant expressed a misunderstanding of the Registrar’s role in this administrative process, as well as her role in obtaining appropriate documentation.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.

Complainant bears the burden of establishing by a preponderance of the evidence that the Fund improperly denied her claim.

“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(F) provides that “if a contractor’s license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter the registrar may order payment from the residential contractors’ recovery fund to remedy the violation.”

Ariz. Rev. Stat. § 32-1132.01(B) provides:

An award from the [Fund] may not exceed the actual damages suffered by the claimant as a direct result of a contractor's violation. Actual damages:

1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.

2. Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.

Ariz. Rev. Stat. § 32-1132.01(H) defines "actual damages" as “the reasonable cost of completing the contract and repairing the contractor's defective performance, minus the part of the contract price still unpaid.”

In this case, Complainant did not obtain and submit bids to the Registrar for the reasonable cost of repairing Respondent’s defective work. Instead, Complainant submitted four bids that greatly exceeded the scope of work required to repair the remaining deficiencies to the coping. While there is ample evidence that Complainant sustained damages as a result of Respondent’s poor workmanship, the evidence before the tribunal does not establish the actual damages for which Complainant should be reimbursed because Complainant did not submit bids in an amount that did “not exceed an amount necessary to complete or repair” Respondent’s work. The evidence of record established that Respondent’s deficient work could be repaired. What was not established was the cost to perform those repairs.

Therefore, the undersigned Administrative Law Judge concludes that the Registrar properly denied Complainant’s claim to the Fund. Complainant’s appeal is denied. However, nothing in this order would prevent Complainant from seeking a monetary award against Respondent from a civil court of competent jurisdiction.

RECOMMENDED ORDER

Based on the foregoing,

it is recommended that Complainant’s appeal be denied.

IT IS FURTHER RECOMMENDED that the Registrar affirm the denial of Complainant’s claim to the Fund.

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 forty (40) days from the date of that certification.

-54864001

001

-137160-45720000Done this day, January 24, 2023.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically or by mail to:

Jeffrey Fleetham, Director

Registrar of Contractors

[email redacted]

Seth T. Hargraves

Office of the Attorney General

Licensing & Enforcement Section

[email redacted]

Megan Schandle, Esq.

LANG & KLAIN P.C.

[email redacted]

Karen Boyk

P.O. Box 1401

Litchfield Park, AZ 85340

By: OAH Staff

-54864001

001

-137160-45720000