ALJDEC decisions subject to certification as final

2021A-01386-CHC-ROC · Registrar of Contractors · 2021-09-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Sara Ashton Hendrickson,

COMPLAINANT,

v.

Fast Fix Drywall Inc.

ROC License No. 194559,

RESPONDENT.

No. 2021A-01386-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

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

APPEARANCES: Sara Hendrickson (“Complainant”) appeared on her own behalf. Gina Williams appeared on behalf of Fast Fix Drywall, Inc. (“Respondent”). Jason Simpson appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

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 April 07, 2004, the Registrar issued License No. 194559 for Specialty Dual CR-10 Drywall contracting to Respondent. Respondent’s address of record for the license is 4117 W. Redfield Rd. Phoenix, AZ 85053-5376. James Lee Williams is listed as the Qualifying Party and Officer on the license, and Gina Maria Williams is listed as an Officer on the license as well.

Pursuant to Ariz. Admin. Code R4-9-117 Administrative Notice is taken of Respondent’s prior license record, for ROC License No. 194559, as reflected on the Registrar’s public website. Such prior license record reflects that Respondent’s license is active and currently renewed through April 30, 2022. 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 $6,750.00 surety bond for the license issued through RLI Insurance Company (“RLI”), effective April 27, 2012.

On March 30, 2021, the Registrar received a 4-item complaint, Complaint 2021-01386, filed by Complainant alleging poor work performance on a residential wall removal project. Attached to the complaint were copies of and the parties’ contract and Complainant’s proof of payment.

On April 07, 2021, 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 April 21, 2021, at 10:00 a.m.

On April 07, 2021, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. §§ 32-1154(A)(12) and 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in its contracts, which could result in discipline against Respondent’s license including suspension or revocation.

On April 07, 2021, the Registrar issued a Warning Letter to Respondent to advise that building permit(s) were not obtained for the project in violation of the International Residential Code and the International Building Code. Respondent was further advised that failure to comply with the building codes was a violation of Ariz. Rev. Stat. § 32-1154(A)(2), which could result in discipline against Respondent’s license including suspension or revocation.

On April 07, 2021, the Registrar issued a Warning Letter to Respondent to advise that Respondent’s work on the underlying project required possession of an R-61 license that Respondent did not possess during the relevant time period, in violation of Ariz. Rev. Stat. § 32-1154(A)(16), which could result in discipline against Respondent’s license including suspension or revocation.

On April 21, 2021, Registrar investigator Jason Simpson (“Investigator Simpson”) inspected the work that had been done on the project to date, and took 9 photographs of the project. When he was finished, Investigator Simpson drafted Jobsite Inspection Notes. Ultimately, Investigator Simpson substantiated several complaint items; bifurcating 2 complaint items into 1A, 1B, 3A, and 3B; which were selected for remediation by Respondent along with complaint item 2.

On April 27, 2021, Investigator Simpson issued a Written Directive from the Registrar (“Directive”) 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 May 27, 2021, 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 December 15, 2020, Investigator Simpson escalated Complaint 2021-01386 to the Registrar’s legal department with a Citation Recommendation.

On June 10, 2021, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(b), 32-1154(A)(16), and 32-1154(A)(22). Respondent was given until June 25, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On June 24, 2021, the Registrar received an Answer on behalf of Respondent.

On June 30, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. Per the July 09, 2021, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged charges:

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

Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(b)

Charge 3: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158

Charge 4: A.R.S. § 32-1154(A)(16)

Charge 5: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant called Investigator Simpson as a witness and testified on her own behalf. Gina Williams testified on behalf of Respondent. The substantive facts of record are as follows:

Complainant owns residential property located at 1004 W. 13th St. Tempe, Arizona 85281.

Respondent was owned by Mr. Williams. Mrs. Williams served in a limited capacity as the company’s secretary, and is not listed on any of the business’ financial accounts.

On April 24, 2012, Mr. Williams submitted a written request to the Arizona Cooperate Commission to remove Mrs. Williams from its corporate license. Mr. Williams submitted no such request(s) to the Registrar.

Since 2012, Mrs. Williams had operated under the erroneous belief that she had been disassociated from ROC License No. 194559.

On March 16, 2021, the parties entered into a $1,500.00 contract agreement for Respondent to texture the kitchen ceiling, repair drywall in 2 bathrooms, and remove a wall between the kitchen and dining room. Complainant paid for the contract in full.

Complainant did not obtain a building permit prior to the onset of the project, and Respondent did not acquire a building permit after work on the project began March 25, 2021.

Unbeknownst to either party, the wall Respondent removed was a load-bearing wall. Once removed, Complainant’s ceiling immediately began to bow and crack, and adjoining walls began to crack as well. Respondent began to make repairs after being altered by Complainant, but was not able to completely remediate the project because Mr. Williams passed away unexpectedly on March 28, 2021.

The project was never completed.

Although Mrs. Williams received the Registrar’s Directive, she was not fully capable of addressing the terms due to her sudden bereavement; as she and Mr. Williams had been married for 42 years and she was in a deep state of grief.

When she was able to attempt to comply, she could not subcontract the work because Respondent did not have the appropriate license to remediate a large portion of the project. Mrs. Williams also discovered that she could not enter into a financial agreement to settle the dispute because she was unable to gain access Respondent’s financial accounts and authorize recompense to Complainant. Additionally, Mrs. Williams have the means to access personal funds, as she had been laid-off of work months prior to Mr. Williams’ passing, and, up until that time, had been using her husband’s income as her sole source of financial support.

As of the date of the hearing, although all $6,750.00 of Respondent’s surety bond with RLI remained available, Complainant had not filed a claim against it.

Both parties declined to provide a closing argument.

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)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” Specifically, Ariz. Rev. Stat. § 32-1158 which provides that “Any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:

1. The name of the contractor and the contractor's business address and license number.

2. The name and mailing address of the owner and the jobsite address or legal description.

3. The date the parties entered into the contract.

4. The estimated date of completion of all work to be performed under the contract.

5. A description of the work to be performed under the contract.

6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.

7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.

8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.

9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection.

Ariz. Rev. Stat. § 32-1154(A)(16) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.”

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 are clear.

The evidence of record establishes that Respondent did not have an opportunity to complete the project at issue, let alone address any workmanship issues before or after Complaint 2021-01386 was filed with the Registrar, because he passed away unexpectedly. To that end, the record also establishes that Respondent could not comply with the Registrar’s Directive and is justified in its noncompliance due Mr. Williams’ passing. No violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3); specifically Ariz. Admin. Code R4-9-108, and 32-1154(A)(22) have been established by a preponderance of the evidence.

However, the record reflects that Respondent failed to include all nine (9) required minimum elements in its contract with Complainant. Additionally, the record also reflects that Respondent acted outside the scope of its license, which was a contributing factor to most of the resulting damage Complainant sustained. The record is devoid of any evidence that would tend to excuse or otherwise justify Respondent’s conduct in these respects. Violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(12); specifically 32-1158, and 32-1154(A)(16) have been established by a preponderance of the evidence.

Because Complainant established violations of Ariz. Rev. Stat. §§ 32-1154(A)(12); specifically 32-1158, and 32-1154(A)(16) by a preponderance of the evidence, Complainant has also established cause for the Registrar to take disciplinary action against Respondent’s contractor’s license.

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

RECOMMENDED ORDER

In light of the foregoing,

IT IS RECOMMENDED that on the effective date of the Final Order in this matter, Respondent Fast Fix Drywall Inc., ROC License No. 194559, be suspended for two (2) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(12) and 32-1154(A)(16).

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, September 13, 2021.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors