ALJDEC decisions subject to certification as final

2021A-03454-OMC-LS-ROC · Registrar of Contractors · 2021-09-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT

C K L Remodeling LLC

License No. ROC 244395,

RESPONDENT

No. 2021A-03454-OMC-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 17, 2021

APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General Sarah A. Asta. Respondent C K L Remodeling LLC did not appear.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

On or about April 24, 2008, the Arizona Registrar of Contractors (“Registrar”) issued License No. 244395, a B-3 General Residential General Remodeling and Repair Contractor license to C K L Remodeling LLC (Respondent). Billy Doty is Respondent’s Qualifying Party and Member.

Between March 2021 and July 2021, the Registrar received five complaints against Respondent which were consolidated into this single proceeding.

On or about July 23, 2021, the Registrar issued an Order of Summary Suspension, Order Consolidating Cases, and Notice of Promptly Instituted Proceedings (Order). In the Order, the Registrar presented its determination that the public health, safety or welfare imperatively required emergency action and summarily suspended Respondent’s license. The Registrar also consolidated two cases pending before the Registrar with the summary suspension proceeding.

On or about August 9, 2021, the Registrar issued a Second Order Consolidating Cases (Second Order) consolidating three more cases pending before the Registrar to the summary suspension proceeding and setting the above-captioned matter for an expedited hearing at 9:00 a.m. on August 17, 2021, at the Office of Administrative Hearings. The Second Order was sent to Respondent at its address and email address of record.

Hearing Evidence

The Registrar called the following witnesses: Chance Peterson, Assistant Chief Counsel, Investigators Wes Ellington, Daniel Edwards, and Steven Avila, and Complainant Jeanne Silvers.

Respondent did not request to appear telephonically or by videoconference and did not request that the hearing be continued. Although the start of the hearing was delayed, Respondent did not appear through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license.

Complaint No. 2021-03418

On or about July 22, 2021, the Registrar received a Complaint against Respondent filed by Jennifer Higgins. In her complaint, Ms. Higgins alleged abandonment with regard to the bathroom remodel project undertaken by Respondent. Ms. Higgins’ Complaint indicated that the contract price was $17,000.00 and that she paid Respondent $9,500.00.

On or about July 28, 2021, Registrar Investigator Daniel Edwards conducted a jobsite inspection. Respondent did not appear at the jobsite inspection. Investigator Edwards inspected the work that had been done on the project and took photographs of the project. Subsequent to the jobsite inspection, Investigator Ellington drafted Jobsite Inspection Notes.

Investigator Edwards’ Jobsite Inspection Notes provide, in pertinent part, as follows:

Respondent appears to have abandoned this project part-way through construction. It appears respondent has ceased work and the project is incomplete. Numerous materials purchased by the owner, to be installed by respondent, remain uninstalled. Additionally, various construction materials and debris have been left in front of the home by respondent.”

On or about July 29, 2021, Investigator Ellington issued a WARNING LETTER to Respondent for a violation of Ariz. Rev. Stat. § 32-1154(A)(2) because Respondent did not obtain the necessary building permits for the project.

On or about July 29, 2021, Investigator Ellington issued a WARNING LETTER to Respondent for a violation of Ariz. Rev. Stat. § 32-1158(A) because Respondent’s contract was missing at least one of the required elements.

Investigator Edwards testified that Respondent did not complete the project as contracted.

Complaint No. 2021-03440

On or about July 23, 2021, the Registrar received a Complaint against Respondent filed by Douglas Alan Janette. In the Complaint, Mr. Janette alleged that Respondent had abandoned their bathroom remodel after a deposit was paid, but before any work was performed on the project. The Complaint indicated that the contract price was $40,302.00 and that Mr. Janette paid Respondent $20,150.00.

On or about July 22, 2021, Respondent sent Mr. Janette an email that provided, in pertinent part, as follows:

We are sorry to inform you that CKL Remodeling LLC is out of business as of 07/22/2021.

Investigator Edwards was assigned to investigate Ms. Shinpaugh’s Complaint.

On or about July 28, 2021, Investigator Edwards conducted a jobsite inspection at which Mr. Janette was present, but Respondent was not. Investigator Edwards took photographs of the project site. Investigator Edwards testified that, while the master bathroom appeared to have had some demolition work performed, Mr. Janette bought the home in that condition and had contracted with Respondent to complete the renovation.

Complaint No. 2021-03467

The Registrar received a Complaint against Respondent filed by Roger Martin Zesbaugh. In his Complaint, Mr. Zesbaugh alleged that Respondent had abandoned the parties’ contract for the remodel of his home. The Complaint indicates that the contract price was $128,408.88 and Mr. Zesbaugh paid Respondent $141,826.00.

Investigator Steven Avila was assigned to investigate Mr. Zesbaugh’s Complaint. On or about July 29, 2021, the Registrar issued a Jobsite Inspection Notice to the parties, advising that a jobsite inspection would be conducted on August 13, 2021.

On or about August 13, 2021, Investigator Avila conducted a jobsite inspection at which Mr. Zesbaugh was present, but Respondent was not. According to Investigator Avila’s Jobsite Inspection Notes, the project was not completed. Investigator Avila took photographs of the jobsite.

Complaint No. 2021-03499

On or about July 26, 2021, the Registrar received a Complaint against Respondent filed by Rebecca Barber Shinpaugh. In the Complaint, Ms. Shinpaugh alleged that Respondent had abandoned the project and had taken a cabinet door to match paint and had not returned it. The Complaint indicated that the contract price was $10,970.00 and that Ms. Shinpaugh paid Respondent $5,922.00.

On or about July 22, 2021, Respondent sent Ms. Shinpaugh an email that provided, in pertinent part, as follows:

We are sorry to inform you that CKL Remodeling LLC is out of business as of 07/22/2021.

Investigator Wes Ellington was assigned to investigate Ms. Shinpaugh’s Complaint. On or about August 3, 2021, the Registrar issued a Jobsite Inspection Notice to the parties, advising that a jobsite inspection would be conducted on August 19, 2021, which was later rescheduled to August 16, 2021.

On or about August 3, 2021, Investigator Ellington issued a WARNING LETTER to Respondent for a violation of Ariz. Rev. Stat. § 32-1158(A) because Respondent’s contract was missing at least one of the required elements.

On or about August 16, 2021, Investigator Ellington conducted a jobsite inspection at which Ms. Shinpaugh was present, but Respondent was not. According to Investigator Ellington’s Jobsite Inspection Notes, the project was not completed. Investigator Ellington took photographs of the jobsite.

Investigator Ellington testified that no work had been completed on the project and one cabinet door above the refrigerator was missing.

Complaint No. 2021-03709

On or about August 3, 2021, the Registrar received a Complaint against Respondent filed by Jeanne A. Silvers. In the Complaint, Ms. Silvers alleged that Respondent had entered into a contract for a bathroom remodeling project, but had never began work on the project. The Complaint indicated that the contract price was $6,670.00 and that Ms. Silvers paid Respondent $4,002.00.

On or about July 22, 2021, Respondent sent Ms. Silvers an email that provided, in pertinent part, as follows:

We are sorry to inform you that CKL Remodeling LLC is out of business as of 07/22/2021.

Investigator Avila was assigned to investigate Ms. Silvers’ Complaint. On or about August 6, 2021, the Registrar issued a Jobsite Inspection Notice to the parties, advising that a jobsite inspection would be conducted on August 10, 2021.

On or about August 10, 2021, Investigator Avila conducted a jobsite inspection at which Ms. Silvers was present, but Respondent was not. According to Investigator Avila’s Jobsite Inspection Notes, no work had been completed on the project. Investigator Ellington took photographs of the jobsite.

Ms. Silvers testified that she was attempting to obtain a refund of the payment from her credit card company and had recently been issued a provisional credit.

Complaint No. 2021-03454

Chance Peterson, Assistant Chief Counsel for the Registrar, testified regarding the Order of Summary Suspension and the alleged violations therein, as well as the Supplements thereto and the alleged violations therein.

Mr. Peterson noted that prior to the hearing, he was calling the complaining parties regarding the hearing when he accidentally called Billy Doty, Respondent’s Qualifying Party and Member. Mr. Peterson disconnected the call when he realized his error. Mr. Doty promptly returned Mr. Peterson’s call.

Mr. Peterson asked one of the assigned investigators to call Mr. Doty regarding the hearing. During the conversation, Mr. Doty indicated he was unlikely to attend the hearing as there was nothing else for him to do.

Administrative Notice is taken of Respondent’s prior License record, for License No. 244395, as reflected on the Registrar’s public website on September 7, 2021. Such prior License record reflects that Respondent’s license was first issued on April 24, 2008, and was suspended on July 23, 2021. The record also reflects that there were four open complaints against Respondent’s license, all of which are related to this matter and one complaint resulting in discipline. Respondent had an active surety bond that was issued through RLI Insurance Company effective July 23, 2018, of which $9,000.00 remained available.

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 copies of the Notice of Hearing that the Registrar mailed to Respondent at its address and email address of record were reasonable and Respondent is deemed to have received notice of the hearing. A.R.S. §§ 41-1092.04 and 41-1092.05(D).

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

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.”

Respondent’s suspended license does not deprive the Registrar or the complainants of their right to prosecute the Complaints or prevent the Registrar from determining the merits of the Complaints.

The Registrar 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.

The standard of proof on all issues in this matter is that of a preponderance of the evidence.

“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)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”

Ariz. Rev. Stat. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license:

Departure from or disregard of:

(a) Plans or specifications in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.

(b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

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.” Ariz. Rev. Stat. § 32-1158(A) provides:

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 A. The information in this paragraph must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12-1365.

It was undisputed that Respondent entered into remodeling contracts with Ms. Higgins, Mr. Janette, Mr. Zesbaugh, Ms. Shinpaugh, and Ms. Silvers, and Respondent did not complete those any of those projects in violation of Ariz. Rev. Stat. § 32-1154(A)(1).

It was undisputed that Respondent did not obtain a permit for Ms. Higgins’ project as required in violation of Ariz. Rev. Stat. § 32-1154(A)(2).

It was undisputed that none of Respondent’s contracts with Ms. Higgins, Mr. Janette, Mr. Zesbaugh, Ms. Shinpaugh, and Ms. Silvers contained all the required elements of a contract in violation of Ariz. Rev. Stat. § 32-1158(A).

Because the Registrar established by a preponderance of the evidence that Respondent violated this State’s contracting laws as set forth above, the Registrar has also established cause for it to take disciplinary action against Respondent’s contractor license.

Considering Respondent’s conduct in these matters, the Registrar shall revoke Respondent’s license to ensure the protection of the public’s welfare.

RECOMMENDED ORDER

Based on the foregoing,

IT IS ORDERED affirming the summary suspension issued by the Registrar.

IT IS FURTHER ORDERED that on the effective date of the Final Order in this matter, C K L Remodeling LLC’s License No. 244395 shall be revoked.

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 forty (40) days from the date of that certification.

-54864001

001

-137160-45720000Done this day, September 7, 2021.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

001

-137160-45720000