ALJDEC decisions subject to certification as final

2021A-03651-CHC-ROC · Registrar of Contractors · 2022-02-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Robyn Lee Kellogg ,

COMPLAINANT

Freedom Contracting LLC

License No. ROC 323040,

RESPONDENT

No. 2021A-03651-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: February 16, 2022

APPEARANCES: Robyn Lee Kellogg on her own behalf; Dane Barney for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On November 17, 2021, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above captioned matter for hearing on December 17, 2021 at the Office of Administrative Hearings. The matter was continued and the hearing was conducted on February 16, 2022.

Through its Notice of Hearing, ROC alleges that Respondent Freedom Contracting LLC may have violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22).

Respondent holds license No. 323040 issued by ROC. Dane Barney, Respondent’s qualifying party and a member of the LLC appeared and testified for Respondent. Alisa Barney, Mr. Barney’s wife is also a member of the LLC.

Complainant is Robyn Lee Kellogg, who appeared and testified.

Mr. Barney and his wife own Next Door Ventures Inc., which is not licensed.

Ms. Kellogg and the Barneys were friends.

Next Door purchased the house at issue, with the intention of reselling it.

Next Door had scheduled a contractor to perform drywall repairs at the house.

Ms. Kellogg and the Barneys engaged in negotiations with Next Door offering to sell the house for $179,000 if Next Door had the drywall work completed and for $175,800 without the repairs.

Next Door subsequently agreed to have the drywall repairs completed, to recoat the roof, and to rebuild a wall. After this work was completed, Next Door sold the house to Jimmy James, Ms. Kellogg’s father.

The purchase price was $178,000, with the contract showing that the house was being sold “as-is.” Mr. Barney signed for Next Door on June 30, 2021 and Mr. James signed on July 6, 2021.

After the sale, there was a water leak. Ms. Kellogg called Mr. Barney and he agreed to try to repair the leak, but he was unable to determine the cause or location. ROC’s Investigator Mike Springer was of the opinion that the scuppers were leaking and that this was not Respondent’s responsibility.

On or about August 2, 2021, Ms. Kellogg filed with ROC an Unlicensed Complaint Form against Respondent alleging several deficiencies in Respondent’s work.

In her complaint, Ms. Kellogg declared under penalty of perjury that she had paid Respondent $5100, but there was no evidence adduced to show that she did so.

On August 6, 2021, Mr. Barney sent to ROC a response to Ms. Kellogg’s complaint in which he explained that Respondent had not renewed its license and had not engaged in any contracting “this year.” Mr. Barney also wrote that Respondent was not the owner of the house.

On the date of the hearing, Respondent’s license was active and in good standing, but Mr. Barney confirmed that Respondent’s license had not been inactive for at least part of 2021.

Mr. Barney provided credible testimony to the effect that Respondent was not involved in the transaction in any way, and that when he attempted to find the source of the leak he was doing so as a friend to Ms. Kellogg.

Ms. Kellogg testified that she did not believe that Mr. Barney was acting only as a friend and that Mr. Barney was wearing a Freedom Contracting shirt while doing the work.

Ms. Kellogg produced no documentary evidence showing that Freedom Contracting was involved in either the work on the house before her father purchased it or when Mr. Barney attempted to fix the leak.

ROC investigator Mr. Springer conducted a jobsite inspection on September 16, 2021.

On September 17, 2021, ROC issued to Respondent a Directive that provided in part:

*** You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on October 7th, 2021.

***

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

Compliance Item: 3 - Drywall not finished to standard.

Investigator’s Observation: Drywall around window sills is unfinished. Texture overspray is on baseboards.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 5 - Specific areas of drywall not replaced as discussed. Hot mud was used to disguise as "new" drywall.

Investigator’s Observation: Wall on West side of house has a large hole with insulation hanging out. There is not a contract or sales agreement to verify the scope of work. However, Respondent states the hole was made to try and verify roof leaks and should be repaired.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 7 - Wall added in kitchen does not match existing wall dimensions.

Investigator’s Observation: Wall built in kitchen has an approx 1/2" difference between drywall widths. In speaking with with the Respondent, this was a part of the sales agreement.

Governing Rule: Violation of any rule adopted by the Registrar;

Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Compliance Item: 1 - Roof fix was done poorly and continues to leak after multiple attempts to fix.

Investigator’s Observation: Both parties state the roof was to be recoated as part of the sales deal, which was done. The leaks appear to be coming from the scuppers around the house. These scuppers would need to be addressed separately as roof coating would not repair a leaking scupper. Leaks are substantially old as the floor is rotted beneath them. No contract or sales agreement was provided to show scope of work.

Governing Rule: N/A

Compliance Item: 2 - New drywall throughout house was ruined because of leaking roof.

Investigator’s Observation: Drywall has been affected in several areas of the home. Leaks appear to be located at scupper locations.

Governing Rule: N/A

Compliance Item: 4 - Scuppers were not fixed as agreed.

Investigator’s Observation: There is not a contract or sales agreement that states whether scuppers were to be fixed, only that the roof be recoated.

Governing Rule: N/A

Compliance Item: 6 - Insulation not replaced or sprayed before doing new drywall work. Black mold was not addressed as discussed.

Investigator’s Observation: There is not a contract or proposal to repair or replace insulation.

Governing Rule: N/A

ROC issued to Respondent a Citation dated October 14, 2021, through which ROC alleges that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22).

Mr. Barney testified that Next Door paid the drywall contractor $3200 for the drywall work that was completed before the house was sold and he estimated the items on ROC’s Directive could be repaired for less than $1000.

Mr. Barney provided credible testimony that bids Ms. Kellogg provided to ROC were for work that was not listed in ROC’s Directive.

ROC’s administrative record includes an email from Mr. Springer in which he informed Ms. Kellogg that bids she had provided included work that was not included in ROC’s Directive.

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:

*****

3. Violation of any rule adopted by the registrar.

*****

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

There is not substantial evidence showing that Respondent had any involvement in the transactions at issue. To the contrary, the weight of the evidence shows that Respondent was not involved in the transactions at issue.

Consequently, it has not been shown that Respondent violated either Ariz. Rev. Stat. subsection 32-1154(A)(3) or subsection (A)(22).

RECOMMENDED ORDER

IT IS ORDERED that case number 2021-03651 is dismissed.

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, February 16, 2022.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000