ALJDEC decisions subject to certification as final

2021A-02490-CHC-ROC · Registrar of Contractors · 2021-11-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Stuart M Sandler ,

COMPLAINANT,

v.

Sami Zarifi 14 LLC

License No. ROC 296401,

RESPONDENT.

No. 2021A-02490-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 28, 2021, at 9:00 AM.

APPEARANCES: Stuart Sandler (“Complainant”) appeared on his own behalf. Michael Vingelli, Esq. appeared on behalf of Sami Zarafi 14 LLC (“Respondent”). Arlo Houston 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 October 23, 2019, the Registrar issued License No. 296401 for General Residential B contracting to Respondent. Respondent’s address of record for the license is 3400 E. Finger Rock Cir. Tucson, AZ 85718. Samuel Ahmad Zarafi 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. 296401, as reflected on the Registrar’s public website. Such prior license record reflects that Respondent’s license is active and currently renewed through February 28, 2023. The license is in good standing and has not been previously disciplined, but has had one previous complaint settled or otherwise resolved against it. 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 RLI Insurance Company, effective April 29, 2021.

On June 02, 2021, the Registrar received Complaint 2021-02490 filed by Complainant alleging failure to fulfill a contractor warranty on a newly built residence.

On June 03, 2021, the Registrar issued a letter to Complainant to request a copy of the underlying Purchase Agreement and proof of payment.

On June 04, 2021, the Registrar issued a letter to Complainant to request copies of the seller’s Property Disclosure Statement and the buyer’s Inspection Report and seller’s Response.

On June 29, 2021, Complainant submitted the requested information to the Registrar, which was forwarded to Respondent the same date.

On June 14, 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 June 30, 2021, at 9:00 a.m.

On June 30, 2021, Registrar investigator Arlo Houston (“Investigator Houston”) inspected the work that had been done on the projects to date, and took 31 photographs of the project. When he was finished, Investigator Houston drafted Jobsite Inspection Notes. Respondent was not present. Ultimately, Investigator Houston substantiated 1 of Complainant’s 22 complaint items. Specifically, Investigator Houston found that complaint item 8 was in need of remediation by Respondent. All other complaint items were deemed outside of the Registrar’s jurisdiction or unverified because Respondent’s work had subject to neglect, modification, or abnormal use by Complainant.

On or about July 01, 2021, the Registrar received a 2-item Addendum Complaint from Complainant. That same date the Registrar issued an Addendum Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site on July 15, 2021, at 9:30 a.m.

On July 10, 2021, the Registrar received 1 additional addendum complaint items from Complainant. As such, the Addendum Jobsite Inspection was rescheduled to 9:30 a.m. on July 20, 2021.

On July 15, 2021, Investigator Houston inspected the addendum complaint items and took 31 photographs of the project. When he was finished, Investigator Houston drafted Addendum Jobsite Inspection Notes. Ultimately, Investigator Houston substantiated 1 of Complainant’s 3 addendum complaint items. Specifically, Investigator Houston found that complaint item 25 was in need of remediation by Respondent.

On July 20, 2021, the Registrar received a letter from Respondent’s counsel that provided notice of Sami Zarifi’s untimely death.

On July 29, 2021, Investigator Houston 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 August 19, 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 August 20, 2021, Investigator Houston escalated Complaint 2021-02490 to the Registrar’s legal department with a Citation Recommendation.

On August 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 September 08, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On September 07, 2021, the Registrar received a Motion to Continue Time to Answer Citation on behalf of Respondent. The Registrar was advised that Respondent’s sole Qualifying Party and Member, Sami Zarifi, passed on July 08, 2021, and was scheduled to be laid to rest on July 18, 2021. The Registrar was asked if the subcontractors hired to perform the defective work at issue, or another appropriately licensed contractor, could complete the corrective work needed to satisfy the Directive.

On September 10, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on October 28, 2021, 2021. Per the September 20, 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 Houston as a witness and testified on his own behalf. Respondent did not present a Case-in-Chief, but did cross examine Complainant’s witnesses. The Registrar’s agency file was admitted into the record as its own exhibit. The substantive evidence of record is as follows:

Complainant owns residential property located at 3496 N. Camino La Jicarrilla Tucson, AZ 85712. The property construction was completed in August 2020. The original owner resided in the property for 9 months until it was sold to Complainant. Escrow closed on May 25, 2021.

Sami Zarifi is the sole Qualifying Party/Manager on Respondent’s license. Respondent performed work on Complainant’s newly constructed residence, which was warrantied.

After Complaint 2021-02490 was received by the Registrar, but before the Directive was issued, Mr. Zarifi unexpectedly passed away. He was 31 years old, single, and had no children. Mr. Zarifi is survived by his parents.

Of the 25 workmanship complaint items submitted against Respondent by Complainant, only 2 were substantiated by the Registrar.

It is unclear from the record whether the Registrar responded to Respondent’s September 07, 2021, inquiry regarding having a subcontractor remediate the project.

No corrective work was performed on the project.

The parties have not entered into a Settlement Agreement regarding this matter.

In closing, Respondent argued, pursuant to the Rules of Civil Procedure, that the matter should be stayed for no less than a 2 year period so that Mr. Zarifi’s estate, which has not yet gone through probate, could settle with Complainant.

In closing, Complainant argued that Respondent was afforded a sufficient amount of time to perform corrections prior to Mr. Zarifi’s passing, but would be amenable to Respondent covering the cost of subcontractors of his choosing to remediate the project.

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.

Here, it is undisputed that Respondent performed work on Complainant’s newly constructed residents and/or hired subcontractors to perform work on the build. It is also undisputed that some of Respondent’s workmanship on the build fell below the Registrar’s minimum standards, and as a result the Registrar issued a Directive that required compliance by August 19, 2021. However, the record also clearly establishes that Respondent’s sole Qualifying Party/Member, Sami Zarifi, passed away on July 08, 2021. Although Respondent directly inquired with the Registrar if appropriately licensed subcontractors could perform corrective work to satisfy the Directive, complaint items 8 and 25 were not remediated by the Directive compliance deadline date.

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.

Mr. Zarifi’s passing is unquestionably tragic. There are no words to adequately express the emotional positions of both parties in this matter. However, the undersigned shall attempt to broach the subjects tenderly.

There is no mitigating evidence in the record to reasonably establish that Respondent was unable to hire an appropriately licensed subcontractor to perform corrective work to complaint items 8 and 25, or that Respondent was unable to enter into a settlement agreement to render the underlying dispute moot. Therefore, based on the credible evidence of record, it must be concluded that Respondent’s poor work performance and failure to timely comply with the Registrar’s Directive constitute violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). As such, grounds exist 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, December 01, 2021.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors