ALJDEC decisions subject to certification as final

2021A-03485-OMC-LS-ROC · Registrar of Contractors · 2021-11-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT

Kanmar Construction LLC

License No. ROC 281570, 280892

RESPONDENT

No. 2021A-03485-OMC-LS-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: August 16 and November 3, 2021

APPEARANCES: Joshua Scott appeared for Respondent on August 16, 2021, but no one appeared for Respondent on November 3, 2021; John Tellier, Esq. for the Registrar of Contractors

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On July 29, 2021, the Registrar of Contractors (“ROC”) issued an Order of Summary Suspension, Order Consolidating Cases, and Promptly Instituted Proceeding (“Initial Order”) setting the above-captioned matter for hearing on August 16, 2021 at the Office of Administrative Hearings.

The hearing was convened on August 16, 2021 and further hearing was conducted on November 3, 2021.

Through its Initial Order ROC alleged that Respondent Kanmar Construction LLC may have committed three violations of Ariz. Rev. Stat. sections 32-1154(A)(3), (A)(12) and (A)(22) and it summarily suspended Respondent’s license numbers 281570 and 280892. On August 9, 2021, ROC issued a Supplemental Notice providing more details about the allegations set out in its Initial Order.

Through a Second Supplemental Notice issued on August 12, 2021, ROC alleged that Respondent committed an additional violation of Ariz. Rev. Stat. section 32-1154(A)(3) and an additional violation of section 32-1154(A)(12).

Through a Third Supplemental Notice issued on October 8, 2021, ROC alleged that Respondent committed a violation of Ariz. Rev. Stat. section 32-1154(A)(17).

Joshua Scott a member of Respondent’s LLC appeared for Respondent and testified on the first day of hearing, but no one appeared for Respondent on the second day, and the matter was reconvened in Respondent’s absence at that time.

ROC presented the testimony of Investigators Mike Springer, Greg Johndrow and Jason Simpson, Assistant Chief Counsel Robert Sterling, and Susan Browning.

Although Mr. Scott testified on August 16, 2021, ROC had not completed its cross examination when the matter adjourned that day. The matter was adjourned at least in part to allow Respondent to submit documentary evidence supporting Mr. Scott’s testimony that he had suffered a severe injury and had been unable to work during part of the time at issue. Respondent did not submit to the tribunal or to ROC any proposed exhibits in support of Mr. Scott’s testimony that he had suffered such an injury.

Moreover, Ms. Browning provided credible testimony showing that although Mr. Scott had sustained a cut to his head, the only medical attention he received was from his father-in-law who stitched the cut. In addition, ROC had entered into evidence Facebook posts showing that Mr. Scott was in Hawaii for his own wedding during at least part of the time he was purportedly severely injured.

Mr. Scott’s testimony is therefore not credible or reliable.

Case number 2021-02352 (Besselman)

On May 5, 2021 ROC received from Patrick Besselman a complaint alleging that he entered a contract with Respondent on March 17, 2021 and had paid Respondent $3582.22, but Respondent had not started work on the project.

Through a letter dated May 27, 2021 ROC advised Respondent that its contract did not include the elements set out in Ariz. Rev. Stat. section 32-1158.

Mr. Springer testified to the effect that the contract did not contain the estimated date of completion or the required notification that the property owner could file a complaint with ROC. That contract shows however that the work would be completed within sixty days of signing and that the consumer could file a complaint with ROC.

On or about June 22, 2021, Mr. Springer confirmed that Respondent had not performed any work at the site.

On June 22, 2021, ROC issued to Respondent a Directive ordering Respondent to complete the project no later than 5:00 p.m. July 26, 2021.

Mr. Springer testified to the effect that Respondent did not complete any of the work ROC ordered it to complete by the deadline imposed by ROC.

Case number 2021-02380 (Hampton)

On May 26, 2021 ROC received from David Hampton a complaint alleging poor work on Respondent’s part.

Mr. Hampton’s complaint shows that the parties entered the contract on December 22, 2020, Respondent stopped work on December 26, 2020, and he had paid the contract price of $12,836.96.

Through a letter dated May 28, 2021 ROC advised Respondent that its contract did not include the elements set out in Ariz. Rev. Stat. section 32-1158. Mr. Springer testified to the effect that the contract did not contain the estimated date of completion or the required notification that the property owner could file a complaint with ROC. The contract shows however that the installation date would be the “14th” and that the consumer may file a complaint with ROC.

On or about June 25, 2021 ROC’s Mr. Springer conducted a jobsite inspection at which time he determined that Respondent’s work was deficient: (1) a screen missing; (2) some splines were too large; (3) screens were not flush and had sharp edges; (4) all fascia was not replaced; and (5) holes for drainage were too small.

On June 22, 2021, ROC issued to Respondent a Directive ordering Respondent to correct the deficiencies no later than 5:00 p.m. July 27, 2021.

Mr. Springer testified to the effect that Respondent did not complete all of the work ROC ordered it to complete by the deadline imposed by ROC.

Case number 2021-03022 (Athanas)

On June 29, 2021 ROC received from Richard Athanas a complaint alleging Respondent did not return his deposit.

Mr. Athanas’s complaint shows that the parties entered a contract on April 13, 2021, the contract price was $9110, he had paid $4550, Respondent had not started work on the project, on June 3, 2021 Respondent informed him that it could not do the work, and on June 7, 2021, he received from Respondent a check for the deposit amount, but that check was returned because there were insufficient funds in Respondent’s account.

Through a letter dated July 6, 2021 ROC advised Respondent that its contract did not include the elements set out in Ariz. Rev. Stat. section 32-1158. Mr. Springer testified to the effect that the contract did not contain the items listed in subsections 32-1158(A)(1) through (A)(5). The contract does however have the contractor’s name, the date the contract was entered, that the project would be completed in 60 days of signing, and a description of the work.

On or about July 23, 2021 ROC’s Mr. Springer conducted a jobsite inspection at which time he determined that Respondent had not performed any work.

On July 23, 2021, ROC issued to Respondent a Directive ordering Respondent to correct deficiencies no later than 5:00 p.m. August 10, 2021.

Mr. Springer testified to the effect that Respondent did not complete the work ROC ordered it to complete by the deadline imposed by ROC.

Case number 2021-03459 (Browning)

On July 23, 2021 ROC received from James Browning a complaint alleging poor work on Respondent’s part.

Mr. Browning’s complaint shows that the parties entered a contract on February 10, 2021, the contract price was $22,845, he had paid $11,500, and work started on March 8, 2021 and was ongoing. Other information shows that the parties entered a change order.

Mr. Browning’s complaint narrative shows he paid the full amount due, but ROC’s exhibits show that a stop-payment order on a $10,345.00 check to Kanmar was successful.

Through a letter dated July 26, 2021 ROC advised Respondent that its contract did not include the elements set out in Ariz. Rev. Stat. section 32-1158. Mr. Springer testified to the effect that the contract did not contain the estimated date of completion or a statement of the right to file a complaint. The contract shows however that the project would be completed within 60 days of signing and that the consumer may file a complaint with ROC.

On or about August 2, 2021 ROC’s Mr. Springer conducted a jobsite inspection. Mr. Springer found that there were leaks across the entire length of the inside structure and under the bottom sill plate of the wall, that wall panels were cut short, and that gaps existed.

Case number 2021-03377 (Ray)

On July 21, 2021 ROC received from Mel Ray a complaint alleging poor work on Respondent’s part.

Mr. Ray’s complaint shows that the parties entered the contract on June 11, 2020, Respondent stopped work on October 6, 2020, at which time the work was completed, the contract amount was $33,180 and he had paid $37,447. The parties entered at least one change order.

On or about August 10, 2021 ROC’s Mr. Johndrow conducted a jobsite inspection at which time he determined that Respondent’s work was deficient: (1) water-test shows lights fill with water; (2) seams leak; and (3) leak at junction with house.

Case number 2021-04036 (Moutinho)

On August 19, 2021 ROC received from Brian Moutinho a complaint against Respondent alleging abandonment.

ROC’s Jason Simpson had scheduled a jobsite inspection for September 8, 2021, but Mr. Moutinho withdrew his complaint on September 1, 2021 because Respondent had completed 90% of the work.

CONCLUSIONS OF LAW

Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

“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.” Ariz. Rev. Stat. § 41-1092.07(G)(2).

“At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(3).

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

The Administrative Law Judge may consider ROC’s administrative record. See Ariz. Admin. Code § R4-9-118.

Ariz. Rev. Stat. section 32-1154(A) provides that

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

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3. Violation of any rule adopted by the registrar.

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12. Failure in any material respect to comply with this chapter.

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17. Contracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.

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22. Failure to take appropriate corrective action to comply with this chapter or with 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.

Ariz. Rev. Stat. section 32-1158 sets out nine elements that must be set out in any contract of $1000 or more between the owner of a property and the contractor.

Ariz. Admin. Code section R49108(A) provides that “A contractor shall perform all work in a professional and workmanlike manner.”

ROC received five complaints against Respondent’s license in a relatively short period of time and its investigations showed that these complaints had merit. Consequently, the preponderance of the evidence shows that ROC was justified in summarily suspending Respondent’s license because the public health, safety or welfare imperatively required emergency action. Ariz. Rev. Stat. § 41-1092.11(B).

The preponderance of the evidence shows that Respondent’s work did not meet the workmanship standards in case numbers 2021-02352, 2021-02380, 2021-03022, 2021-03459, and 2021-03377. Consequently, Respondent has violated Ariz. Admin. Code section R4-9-108(A), which is a violation of Ariz. Rev. Stat. section 32-1154(A)(3).

The preponderance of the evidence shows that Respondent’s contract in case number 2021-03377 did not meet the requirements of Ariz. Rev. Stat. section 32-1158, which is a violation of section 32-1154(A)(12).

The preponderance of the evidence shows that Respondent engaged in contracting activity in case number 2021-04036 while its license was suspended. Consequently, Respondent has violated Ariz. Rev. Stat. section 32-1154(A)(17).

The preponderance of the evidence shows that Respondent failed to comply with ROC’s Directives without valid justification in case numbers 2021-02352, 2021-02380, and 2021-03022. Consequently, Respondent has violated Ariz. Rev. Stat. section 32-1154(A)(22).

Ariz. Rev. Stat. subsection 32-1154(B)(3) provides that ROC “May temporarily suspend ... or permanently revoke any or all licenses issued under this chapter if the holder of the license ... commits any of the acts or omissions set forth in” subsection 32-1154(A).

Ariz. Rev. Stat. section 32-1154(E) provides that ROC may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of Ariz. Rev. Stat. section 32-1154(A)(22).

Respondent’s failure to appear at the further hearing and that he apparently gave false testimony when he stated that he had suffered a severe injury that left him unable to work, are factors in aggravation.

Respondent’s licenses should be revoked and Respondent should be assessed a $250 civil penalty for each of the three proven violations of Ariz. Rev. Stat. section 32-1154(A)(22).

RECOMMENDED ORDER

IT IS RECOMMENDED that the Registrar of Contractors revoke Respondent Kanmar Construction LLC’s license numbers 281570 and 280892;

IT IS FURTHER RECOMMENDED that the Registrar of Contractors require Kanmar Construction LLC to pay a civil penalty of $750.

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 is forty days after the date of that certification.

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-137160-45720000Done this day, November 16, 2021.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000