ALJDEC decisions subject to certification as final

2020A-03320-CHC-ROC · Registrar of Contractors · 2021-02-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jamie English,

COMPLAINANT,

v.

BCLD LLC

License No. 296383,

RESPONDENT.

No. 2020A-03320-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 09, 2021 at 1:30 PM.

APPEARANCES: Nicholas Darus, Esq., appeared on behalf of Jamie English (“Complainant”) with Complainant and Douglas Singer as witnesses. Bob McQuien appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of BCLD LLC (“Respondent”). Charles English 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 Registrar.

FINDINGS OF FACT

Background and Procedure

On February 24, 2015, the Registrar issued ROC License No 296383 for general residential B contracting to Respondent. Respondent’s address of record for the license is 2113 E Mesa Vista Pl., Fort Mohave, AZ 86426-6678. Roger Lester Nelson is listed on the license as Respondent’s Qualifying Party/Member and Brooke Ann Nelson is also listed on the license as a Member.

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior License record, for ROC License No. 296383, as reflected on the Registrar’s public website on February 09, 2021. Such prior License record reflects that Respondent’s license was revoked on August 21, 2020. The license was previously disciplined by the Registrar on one occasion, presumably resulting in the aforementioned revocation. The record also reflects that there is one complaint against Respondent’s license, which is presumed to be related to this matter. Respondent had 2 surety bonds on the license for $9,000.00 each, issued by Hudson Insurance Company and Merchants Bonding Company, but they were canceled on March 28, 2020, and July 13, 2020, respectively.

On or about May 07, 2020, Complainant purchased residential property located at 4944 S Mesa Verde Drive Fort Mohave, AZ 86426 for $299,000.00.

On or about July 09, 2020, the Registrar received a complaint from Complainant alleging 25 complaint items regarding poor workmanship. Specifically, Complainant alleged that the workmanship of the newly built residential property she purchased with her husband fell below the Registrar’s minimum workmanship standards, and that Respondent was the contractor of record for her residence. Attached to the complaint were copies of the deed for the underlying property and an affidavit of property value. It was registered as Complaint 2020-03320 and assigned to Bob McQuien (“Investigator McQuien”) for investigation.

On July 19, 2020, the Registrar received copies of Complainant’s Purchase Contract, building permit documents for the project, and a Certificate of Occupancy.

On September 06, 2019, Investigator McQuien issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an onsite review at the project site on July 28, 2020, at 11:00 a.m.

On July 20, 2020, Mr. Nelson notified the Registrar that Respondent “ceased to do business.” Mr. Nelson also noted that Respondent’s license had been suspended and that the bonds had already been claimed. Although Mr. Nelson denied having any responsibility for Respondent and alleged he retired, he provided an attached response to Complaint 2020-03320. Mr. Nelson argued that complainant’s issues were “cosmetic in nature,” some of which had been addressed by Respondent prior to the close of escrow, but that the complaint was “meritless” because Complainant’s purchase of the home effectively waived any claims against Respondent and “implied acceptance of the finishes.”

On July 28, 2020, Investigator McQuien inspected the work that had been done on the project and took 51 photographs of the project. Respondent was not present. When he was finished, Investigator McQuien drafted Jobsite Inspection Notes. Ultimately, Investigator McQuien substantiated 22 of Complainant’s 25 complaint items.

On July 30, 2020, Investigator McQuien issued a Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s allegations that Respondent’s work on the project failed to meet minimum Registrar workmanship standards. Respondent was ordered by the Registrar to complete corrective work on the project via appropriate means. Respondent was put on notice that he had until 5:00 p.m. on August 27, 2020, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22) and 32-1154(E).

On September 01, 2020, Complainant notified Investigator McQuien that no remediation efforts had been undertaken by Respondent, per order of the Registrar’s Directive, and that the parties had not entered into a financial settlement agreement.

On September 01, 2020, Investigator McQuien escalated Complaint 2020-03320 to the Registrar’s legal department with a Citation Recommendation.

On September 15, 2020, the Registrar issued a Citation to Respondent for an alleged violation of Ariz. Rev. Stat. §§ 32-1154(A)(3); also a violation of Ariz. Admin. Code R4-9-108. Respondent was given until September 30, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1155(C).

On September 21, 2020, received Respondent’s Answer whereby denied the statutory violations alleged in the Citation, and countered by offering 3 affirmative defenses. First, Respondent argued that because no contract existed between the parties that Complainant had no standing to make claims against Respondent. Second, Respondent argued that because Complainant’s allegations only involved “cosmetic imperfections” the complaint was “frivolous.” Third, Respondent argued that because Complainant purchased the home after the Certificate of Occupancy had been issued by the local governmental building authority, Complainant inherently accepted the condition of the property.

Respondent also attached estimates and Complainant’s punch list with handwritten indications of what items had been repaired.

On October 14, 2020, the Registrar referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on December 02, 2020. Per the Notice of Hearing the issue to be determined is whether the ROC has cause to discipline Respondent’s license based on the following charge:

Charge 1: 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).

Hearing Evidence

Complainant testified on her own behalf, called Investigator McQuien as a witness, and submitted 12 exhibits into the record. The Registrar’s electronic Agency File and Notice of Hearing were also admitted into the record as their own exhibits. The substantive evidence of record is as follows:

On April 17, 2020, Complainant had her home inspected by Zero Scope Home Inspections, who identified multiple electrical, gas, garage, and roof deficiencies in the interior and exterior of the home. For example, the inspector determined that the roof needed resealing, multiple outlets were not properly grounded or GFCI certified, the gas fuel meter was missing, there were leaky pipes and missing drains in the bathrooms, and multiple cosmetic deficiencies were noted in paint, flooring, and cabinetry throughout the home.

On July 09, 2020, paid Tri-State A/C Hero $162.00 for diagnostic and electrical repair.

On July 30, 2020, Complainant obtained an $11,069.00 quote from Colorado River Construction to remediate complaint items 1-5.

On October 09, 2020, Complainant obtained a $21,161.94 quote from Apple Construction to remediate complaint items 1-5, 8, 14, and 19-20.

On October 23, 2020, Complainant obtained a $3,900.00 quote from Ace Plumbing to remediate complaint item 13.

On November 17, 2020, Complainant obtained a $17,567.00 quote from Colorado River Construction to remediate complaint items 7,-8, 10-14, 17-18 and 20.

On November 21, 2020, Complainant obtained a $400.00 quote from Meyers Electric LLC to remediate complaint item 6.

In closing, Complainant argued that Respondent failed to perform in a workmanlike manner, that Respondent’s performance was outside of industry standards, and Respondent failed to remediate items substantiated for repair by the Registrar. Complainant opined that many of the repairs could have been easily addressed by Respondent, but his failure to do so evinced his unwillingness to take responsibility for his poor workmanship.

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 the Office of Administrative Hearings pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

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.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

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.”

Here, the material facts are clear.

The evidence of record establishes that Respondent’s construction of the underlying residential property at issue did not satisfy the minimum standards set for workmanship by the Registrar. It is also clear that because Respondent’s license was suspended during the Directive’s remediation period, his only means on compliance was to enter into a financial settlement agreement with Complainant which he failed to do.

Because Respondent did not meet minimum workmanship standards as required by Ariz. Admin. Code R4-9-108, Complainant has established a violation of Ariz. Rev. Stat. § 32-1154(A)(3).

Therefore, the only remaining issue to address is whether Respondent raised a sufficient justification or excuse for failing to construct Complainant’s residence in a workmanlike manner. This is an affirmative defense that Respondent bears the burden to establish. Because Respondent failed to appear, the record is devoid of mitigation evidence to refute Complainant’s evidence and justify subpar workmanship and corrective inaction in this matter.

Since Complainant has established the above-captioned statutory violations by a preponderance of the evidence, Complainant has also established cause for the Registrar to discipline Respondent’s license. Notably, Respondent’s revoked license does not deprive Complainant of her right to prosecute her complaint or prevent the Registrar from determining the merits of the complaint.

Complainant may also petition the Registrar’s Recovery Fund for financial recompense regarding this matter.

RECOMMENDED ORDER

In light of the foregoing,

IT IS RECOMMENDED that five (5) days after the effective date of the Final Order in this matter, Respondent BCLD LLC, ROC License No 296383, shall be revoked based on its violations of Ariz. Admin. Code R4-9-108 and Ariz. Rev. Stat. § 32-1154(A)(3).

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 five days from the date of that certification.

Done this day, February 23, 2021.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors