ALJDEC decisions subject to certification as final

2021A-02047-CHC-ROC · Registrar of Contractors · 2021-11-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

John Walter Popescu,

COMPLAINANT,

v.

No Limit Tile LLC,

License No. ROC 321061,

RESPONDENT.

No. 2021A-02047-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 25, 2021 at 1:30 PM.

APPEARANCES: John Popescu (“Complainant”) appeared on his own behalf. Jack Grimm appeared on behalf of the Arizona Registrar of Contractors. Ivan Montes appeared on behalf of No Limit Tile LLC (“Respondent”) with Daliah Nava-Sanchez as a witness.

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 July 13, 2018, the Registrar issued License No. 321061 for Specialty Dual CR-48 Ceramic, Plastic and Metal Tile contracting to Respondent. Respondent’s address of record for the license is 1225 W. Main St., Ste. 101-486 Mesa, AZ 85201. Ivan Montes is listed as the Qualifying Party and 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. 321061, as reflected on the Registrar’s public website. Such prior license record reflects that Respondent’s license is active and currently renewed through July 31, 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, effective July 10, 2018.

On or about May 08, 2021, the Registrar received Complaint 2021-02047, an 11 item complaint, filed by Complainant alleging poor work performance and abandonment of a residential bathroom tiling project.

On May 12, 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 May 18, 2021, at 8:30 a.m.

On May 18, 2021, Registrar investigator Jack Grimm (“Investigator Grimm”) reviewed the written and verbal contract agreements between the parties, inspected the work that had been done on the projects to date, and took 11 photographs of the project. When he was finished, Investigator Grimm drafted Jobsite Inspection Notes. Ultimately, Investigator Grimm substantiated 1 of Complainant’s 11 complaint items. Specifically, Investigator Grimm found that only complaint item 6 was in need of remediation by Respondent.

On May 20, 2021, Investigator Grimm issued a 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 June 21, 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 May 20, 2021, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. §§ 32-1154(A)(9) and (A)(13) for Respondent’s use and employment of unlicensed subcontractors on Complainant’s project.

On May 20, 2021, 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 June 22, 2021, because Respondent took no affirmative steps to complete and/or remediate the underlying project, Investigator Grimm escalated Complaint 2021-02047 to the Registrar’s legal department with a Citation Recommendation.

On June 24, 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, and 32-1154(A)(22). Respondent was given until July 09, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On July 07, 2021, the Registrar received Respondent’s Answer. Respondent informed the Registrar that the project “didn’t work out” because Complainant was “unbearable, impossible, and scary to work with.” Respondent accused Complainant of being “crazy” and a “stalker.” Per Respondent, after Complainant belittled his installer, referred to him in the third-person, and accused the installer of theft, the installer refused to complete the job and left the project site. In turn, Respondent refused to supply another trade to complete the project due to Complainant’s abusive behavior. Respondent offered to perform demolition and return the project to its original stripped state, but Complainant refused.

On July 09, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 27, 2021. Per the July 19, 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 Investigator Grimm as a witness and testified on his own behalf. Respondent called Ivan Montes and Daliah Nava-Sanchez as witnesses. The Registrar’s agency file and August 30, 2021, Minute Entry – Granting Continuance were admitted into the record as their own exhibits. The substantive evidence of record is as follows:

Complainant owns residential property located at 757 E. Hiddenview Dr. Phoenix, AZ 85048.

On or about May 03, 2021, the parties entered into a contract agreement whereby Complainant agreed to tender $2,560.00 to Respondent for completion of 60sq. ft. residential master bathroom tiling project.

Complainant originally started the project with another contractor, but hired Respondent to complete the job when the professional relationship with the prior contractor ended.

Complainant executed at least one Change Order with Respondent to increase the size of the project by 30sq.ft.

On May 03, 2021, work on the project began. Work stopped on or about May 05, 2021.

Complainant did not tender a deposit or make any payment(s) towards the contract to Respondent.

In the months leading to the commencement of the project the parties maintained all levels of communication with one another, often discussing the project after normal business hours. However, the parties’ professional relationship soured with Respondent established boundaries with Complainant regarding the frequency and time of his contacts.

On May 07, 2021, Respondent notified Complainant that none of the company’s trades would agree to complete the project due to Complainant’s attitude. Respondent offered to perform demolition work to return the project back to its original state at the start of the project.

On May 08, 2021, Complainant declined Respondent’s offer and advised he would file a complaint with the Registrar.

On May 21, 2021, Respondent advised Investigator Grimm that although the Directive had been received, Respondent would not complete the underlying project. Respondent offered to pay for its work to be demolished by another contractor, but did not agree to cover costs associated with completing the project. Per Respondent, none of its employees felt safe or comfortable returning to work in Complainant’s residence, and Respondent did not want to place its business in further jeopardy by taking a chance and finishing the project based on Complainant’s unpredictable behavior.

On June 22, 2021, Investigator Grimm confirmed with Complainant that no corrective work had been performed on the project, and that the parties had not entered into a Settlement Agreement.

No Compliance Jobsite Inspection or Prehearing Jobsite Inspection was performed in this matter.

In closing, Complainant argued that Respondent’s conduct warranted discipline by the Registrar, including the assessment of a civil penalty.

Respondent 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)(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 clear.

It is clear that while the parties had a contractual agreement for Respondent to finish the tile work in Complainant’s master bathroom, Complainant made not payment(s) to Respondent for the materials or labor. It is also clear that Respondent began the project and walked off the job days later, in large part, due to Complainant’s behavior; which was perceived as rude, but nonviolent. It is also clear that the Registrar’s Directive required Respondent to complete the project per contract by June 21, 2021, and that Respondent did not do so.

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, while Respondent’s assertion that none of its trades or Mr. Montes would agree to complete the project is credible, it does not excuse Respondent’s failure to attempt to utilize all other satisfactory remedies available, such as subcontracting the project to an appropriately licensed contractor of Complainant’s choosing or entering into a financial settlement agreement with Complainant. Nothing in the record reflects that Respondent made either of these attempts, or any suitable alternative(s). Thus, Respondent’s burden of proof is not sustained.

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 No Limit Tile LLC, ROC License No. 321061, be suspended for one (1) day 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, November 10, 2021.

Officer of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors