ALJDEC decisions subject to certification as final

2020A-04550-CHC-ROC · Registrar of Contractors · 2021-04-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Chris Thomas McDuffee,

COMPLAINANT,

v.

All State Solutions LLC

License No. ROC 326619,

RESPONDENT.

No. 2020A-04550-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 24, 2021 at 9:00 AM.

APPEARANCES: Chris McDuffee (“Complainant”) appeared on his own behalf. Mike Wiskow appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Katee Parton appeared on behalf of All State Solutions LLC (“Respondent”). Amber McDuffee 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 October 23, 2019, the Registrar issued License No. 326619 for General Residential B contracting to Respondent. Respondent’s address of record for the license is 2128 W. Marco Polo Rd. Phoenix, AZ 85027-4154. David R. Thompson is listed as the Qualifying Party on the license, and Karlee Parton is listed as a Member on the license.

Pursuant to Ariz. Admin. Code R4-9-117 Administrative Notice is taken of Respondent’s prior license record, for ROC License No. 326619, as reflected on the Registrar’s public website. Such prior license record reflects that Respondent’s license is active and currently renewed through October 31, 2021. The license is in good standing and has not been previously disciplined. The record reflects that there is one open complaint against Respondent’s license, which is presumed to be related to this matter. Respondent has a $9,000.00 surety bond for the license issued through Western Surety Company, effective October 22, 2019.

On September 22, 2020, the Registrar received Complaint 2020-04550 filed by Complainant alleging poor work performance on a residential remodel and room addition project. Attached to the complaint were copies of an estimate and itemized billing statement.

On September 24, 2020, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by an investigator on October 05, 2020, at 9:00 a.m.

On October 05, 2020, Registrar investigator Mike Wiskow (“Investigator Wiskow”) reviewed the contract agreements between the parties, inspected the work that had been done on the projects to date, and took 40 photographs of the project. When he was finished, Investigator Wiskow drafted Jobsite Inspection Notes. Ultimately, Investigator Wiskow substantiated 15 of Complainant’s 24 complaint items. Specifically, Investigator Wiskow found that complaint items 1, 3, 5-10, 13, 16-17, 19-20, and 23-24 were in need of remediation by Respondent.

On October 06, 2020, Investigator Wiskow issued a Directive from the Registrar to Respondent based on the workmanship allegations he substantiated during his jobsite inspection. Respondent was put on notice that he had until 5:00 p.m. on November 03, 2020, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(22), and 32-1154(E).

On November 24, 2020, Complainant agreed to extend Respondent’s Directive compliance deadline to December 03, 2020.

On October 07, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in its contracts.

On December 02, 2020, Investigator Wiskow issued a Compliance Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site on December 10, 2020, at 9:00 a.m.

On December 10, 2020, Investigator Wiskow inspected the workmanship complaint item previously identified for remediation. When he was finished, Investigator Wiskow drafted Compliance Jobsite Inspection Notes. Ultimately, Investigator Wiskow determined that complaint items 6-10, 13, 17, 19-20, and 24 were moot, as they had been satisfactorily repaired or were no longer at issue between the parties, but concluded that complaint items 1, 3, 5, 16, and 23 remained at issue and hot not been satisfactorily remediated by Respondent.

On December 15, 2020, Investigator Wiskow escalated Complaint 2020-04550 to the Registrar’s legal department with a Citation Recommendation.

On December 18, 2020, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until January 02, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On January 01, 2021, the Registrar received Respondent’s Answer. Respondent informed the Registrar that complaint item 23 had been remediated, and that all other items “were going to be taken care of as soon as the parts came in for the cabinets.” Respondent alleged that the delays were related to the global COVID-19 pandemic, and argued that “[T]he very reason we scheduled all the remaining repairs to be done wat the time the cabinet parts came in was to limit our time at the property per the homeowners request. All State Solutions and the homeowner agreed that we could come back and repair these items when all parts were here so we did not have to make multiple visits due to COVID-19.” [sic]

On January 29, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 02, 2020. Per the March 24, 2021, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following charges:

Charge 1: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant called Mike Wiskow as a witness and testified on his own behalf. Respondent called Katee Parton as a witness. The Registrar’s agency file and Notice of Hearing were admitted into the record as their own exhibits. The substantive evidence of record is as follows:

Complainant owns residential property located at 25223 W. Blue Sky Dr. Wittmann, AZ 85361.

On or about January 28, 2020, the parties entered into a contract agreement whereby Complainant agreed to tender $161,300.00 to Respondent for a whole-home remodel of a 1600sq. ft. residence plus a Mother-in-Law suite room addition.

Complainant originally started the project with another contractor, but hired Respondent to complete the job when the professional relationship with the prior contractor ended. Respondent agreed to stay within the parameters of Complainant’s budget upon acceptance of the project.

Complainant executed an undisclosed number of Change Orders with Respondent, the amount of which is unknown.

On or about January 15, 2020, work on the project began. Work stopped on or about June 13, 2020.

Initially, Complainant moved-in with his mother-in-law so that Respondent could complete the project. Complainant’s mother-in-law sold her house and scheduled the close of escrow around the date Respondent had indicated the work would be complete. The project was not completed timely and Complainant moved back into his home during the painting phase of the project, which is when the relationship between the parties began to deteriorate.

On or about August 31, 2020, Complainant received a Mechanics Lien from Respondent against the property. Complainant had not received an invoice from Respondent by that time.

To avoid further animus, the parties agreed not to address the punch list items individually and instead allow Respondent to perform corrective work once all necessary materials were received

Respondent subcontracted out the repair work for 2 of 5 complaint items identified for remediation by the Registrar’s Directive. Respondent planned to address all remaining items after outstanding material components were received, but they did not come in prior to the expiration of the Registrar’s Directive compliance period.

In closing, Complainant argued that Respondent only used 1 week out of the 2 months it had to remediate the parties’ project and opined this evinced Respondent’s lack of intent to ever complete the work.

In closing, Respondent alleged that the parties’ relationship became acrimonious after Respondent issued Complainant an invoice for the work in September of 2020, but noted that it was still willing to complete the project as all requisite materials have been received.

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 OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

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

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.

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.”

Ariz. Rev. Stat. § 32-1154(A)(22) provides, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or 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 shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.”

The material facts in the case at bar are not in dispute.

It is undisputed that the parties had a contractual residential remodel agreement for which Complainant paid Respondent in full. It is also undisputed that a result of Respondent’s poor workmanship, the Registrar issued a Directive that required compliance by November 03, 2020. It is further undisputed that after Investigator Wiskow’s compliance jobsite inspection, there were 5 outstanding complaint items that Respondent had not remediated satisfactorily or at all.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and complete Complainants’ project per contract. This is an affirmative defense that Respondent bears the burden to establish.

Here, Respondent’s argument, that she was waiting for materials in an attempt to complete repairs in one visit, while credible, does not sustain the requisite burden of proof.

Because Complainant established violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

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

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent All State Solutions LLC, ROC License No. 326619, be suspended for two (2) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

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.

Done this day, April 09, 2021.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors