ALJDEC - Licensing

2021A-04957-CHC-ROC · Registrar of Contractors · 2023-06-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Donald C Phifer,

COMPLAINANT,

v.

Mayer & Sons LLC

ROC License No. 285811,

RESPONDENT.

No. 2021A-04957-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 31, 2023 at 9:00 AM.

APPEARANCES: Gary Smith, Esq. appeared on behalf of Donald Phifer (“Complainant”) with Complainant as a witness. Jack Grimm appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Jeremiah Gentry appeared on behalf of Mayer & Sons LLC (“Respondent”). Che Phifer observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT

Background and Procedure

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. On June 26, 2013, the Registrar issued License No. 285811 Specialty Dual CR-7 Carpentry contracting license to Respondent. The license is active and has been renewed through June 30, 2023. Robert Stephen Mayer is listed as the Qualifying Party and Member on the license. Jeremiah Levi Gentry and Heather Ann Gentry are listed on the license as the President and Vice President, respectively. Respondent’s address of record for the license is 1705S. Main Dr. Apache Junction, AZ 85120. Respondent has an active $6,750.00 surety bond on the license issued by RLI Insurance Company, effective June 10, 2013. The license no prior disciplinary record. There are, however, two (2) open complaints listed against the license; one of which is presumed to be related to this matter.

On or about October 03, 2021, the Registrar received a 21-item complaint from Complainant against Respondent’s License No. 285811 alleging poor workmanship of their residential deck replacement and stair installation construction project. The Registrar designated it Complaint No. 2021-04957 and assigned to Jack Grimm (“Investigator Grimm”) for investigation.

On October 18, 2021, Investigator Grimm issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on October 27, 2021, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On October 27, 2021, Investigator Grimm inspected the work that had been performed on the project to date. He also reviewed project-related correspondence provided by Complainant, and took 26 photographs of the project site. Mr. Welch was present. When he was finished, Investigator Grimm drafted his Inspection Notes. Ultimately, Investigator Grimm was able to substantiate 9 complaint items based on his firsthand observations. Specifically, Investigator Grimm concluded that Respondent’s workmanship on complaint items 4, 6-9, 11-12, 16, and 19 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.

On November 03, 2021, Investigator Grimm issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(2) for Respondent’s alleged failure to ensure necessary building permit(s) had been obtained for the underlying project prior to commencing work.

On November 04, 2021, Investigator Grimm 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 November 04, 2021, Investigator Grimm issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated nearly half of Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on December 02, 2021, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

The Directive notes, in pertinent part, as follows:

Respondent as “authorized agent who intends to construct” is to obtain all permits as required by the local building code jurisdiction. Costs of permit may be the responsibility of the property owner.

On December 12, 2022, Investigator Grimm issued a Written Directive from the Registrar Addendum (“Addendum Directive”) to Respondent which extended Respondent’s remediation compliance deadline to January 12, 2023.

The Addendum Directive notes, in pertinent part, as follows:

The property owner (complainant) has obtained the required permits (issued 11-29-22) and corrective work should begin per city approved plans and permits.

On January 18, 2023, Investigator Grimm forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On January 23, 2023, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). Respondent was given until February 07, 2023, to respond with his Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. Correspondence was not returned as undeliverable to Respondent.

On February 06, 2023, the Registrar received Respondent’s timely Answer whereby Mr. Gentry argued that he had informed and advised Complainant that a permit was needed for the project, as well as local building authority approval due to the historic nature of the project site. Mr. Gentry additionally argued that he could not perform corrective work until requisite permit(s) and authorization(s) had been issued, and that once they had he had “not heard back” from Complainant regarding moving forward.

On February 08, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 03, 2023. Per the February 24, 2023, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violations:

Charge 1: A.R.S. § 32-1154(A)(2)(a)

Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)

Charge 3: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on his own behalf and called investigator Grimm as a witness. Jeremiah Gentry testified on behalf of Respondent. The Registrar’s agency file, including the Notice of Hearing, was admitted into the record as its own exhibit. The substantive evidence of record is as follows:

On or about February 15, 2018, Complainant purchased historically registered property, built in 1936, located at 120 E. Carter Rd. Phoenix, AZ 85042.

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken that the Phoenix Historic Property Register (“Historic Register”), a subdivision of the City of Phoenix Planning and Development Department (“Planning & Development”), is the city's official listing of the historic and prehistoric properties that have been deemed worthy of preservation. The Historic Register designated Complainant’s property the Tudor Revival Residence in July 1993.

On or about April 22, 2021, the parties entered into a $32,690.00 residential contract agreement for Respondent to replace the property’s second story deck and stairs. Complainant paid the contract in full.

Work on the project commenced April 22, 2021, and stopped on or about July 31, 2021.

Complainant did not obtain a permit prior to hiring Respondent, and Respondent did not obtain a permit prior to the commencement of work through July 31, 2021.

After filing Complaint No. 2021-04957 Complainant learned that before Planning & Development would grant a building permit, Complainant first had to obtain authorization from the Historic Register, who required a public hearing for the requested construction. Said hearing took place on November 01, 2022.

On November 29, 2022, Permit No. CTR-[number redacted] was issued to Respondent for the underlying project.

Attached to Investigator Grimm’s Jobsite Inspection Notification Letter were two (2) other documents titled A Guide to Jobsite Inspections and A Guide to Written Directives. The latter included the following advisement, in pertinent parts:

Contractor obligations: The Written Directive will set a deadline for compliance. This is the period of time determined by the Investigator as necessary to complete the items listed in the Directive.

The deadline for compliance assumes the contractor will promptly begin working on the items listed in the Directive.

Do not wait. Both parties should communicate quickly to schedule the work.

Extensions: If good cause exists to extend this deadline, either party may submit a written request to the Investigator. The Registrar will review requests for extension and determine if the Directive should be extended.

Manner and method of performance: The Registrar does not provide specific instructions for how to correct poor work. A licensed contractor is expected to have the skill and professionalism to complete the work. Moreover, the complainant may not dictate the manner of repair. If the contractor fails to appropriately correct the work according to the contract, the Registrar will issue a Citation.

During the Addendum Directive’s compliance period no corrective work was performed on the project by or on behalf of Respondent. The only correspondence that took place between the parties occurred January 05, 2023, when Mr. Gentry issued the following to Complainant:

I was Wondering how things are going? How we are planning to move forward and how can we help? As I see from the drawings there are a few ways we can tackle this just looking for your input.

(All errors in original.)

On January 06, 2023, Complainant replied as follows, in pertinent part:

Thank you for reaching out. Would you please specify what you mean by "a few ways we can tackle this"? What are the choices? With no experience in building/ contracting I appreciate any guidance you could offer.

(All errors in original.)

Respondent did not reply to Complainant’s correspondence.

On January 27, 2023, Mr. Gentry asked Complainant for additional funds in order to complete corrective work on the project. Complainant declined.

Additional Evidence

After receiving a copy of approved plans and the building permit, Mr. Gentry believed the scope of work substantially differed from the parties’ original construction agreement. Mr. Gentry was also of the opinion that Respondent could not perform corrective work on the project unless an engineer drew new plans. Mr. Gentry did not, however, share his beliefs and opinions with Complainant.

Mr. Gentry testified that he told Complainant about the project’s need for engineered plans and city permit(s), but that he “didn’t force the issue.”

Mr. Gentry also testified that he agreed with Investigator Grimm’s substantiation of complaint items 4, 6-9, 11-12, 16, and 19, and admitted that they were “not my best work.”

Closing Arguments

In closing, Respondent offered to “still help” Complainant with the underlying project, despite its allegation that its business was “shuttered” and that Mr. Gentry was employed elsewhere.

In closing, Complainant argued that its burden of proof has been sustained, and that all witnesses, including Mr. Gentry, had given consistent testimony regarding the substantive facts of the case. As such, Complainant argued that discipline was warranted against Respondent’s license.

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 for the Registrar 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)(2)(a) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications in any material respect that is prejudicial to another without consent of the owner.”

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(a) requires that “[a] contractor shall perform all work in a professional and workmanlike manner.”

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.

Ariz. Rev. Stat. § 32-1154(E) provides, in pertinent parts, that the Registrar may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty.” It also provides that “[n]o future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.”

Statutes shall be liberally construed to affect their objects and to promote justice. In interpreting a statute, “[w]e first consider the language of the statute and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter, historical background, effects, consequences, spirit, and purpose.”

Statutes should be interpreted to provide a fair and sensible result. “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”

The Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.

The material facts in the case at bar are not in dispute.

It is undisputed that the parties had a $32,690.00 deck and stairs contract for Complainant’s historic residential property. It is undisputed that Complainant paid the contract in full. It is undisputed that no permit(s) were obtained prior to the commencement or completion of work. It is undisputed that some of Respondent’s workmanship on the project did not satisfy the minimum standards set by the Registrar. It is undisputed that no corrective work could be performed during the Directive’s compliance period due to the lack of required permit(s). It is undisputed that the Addendum Directive was issued after all necessary permit(s) and authorizations were granted, and that Respondent did not perform any remediations during the final compliance period.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive. This is an affirmative defense that Respondent bears the burden to establish by a preponderance of the evidence. Here, the Tribunal is not at liberty to make presumptions in favor of Respondent or accept facts in mitigation on behalf of Respondent that are not supported by the evidence. Here, Mr. Gentry’s contention that the approved plans were outside the scope of the parties’ original agreement is not corroborated by the record. Per Mr. Gentry’s own admission he did not raise this concern with Complainant or local authorities when Permit No. CTR-[number redacted] was issued. Thus, the evidentiary record in this matter reflects that Respondent failed to adhere to the Registrar’s Addendum Directive and had no affirmative defense(s) for doing so.

Based on the relevant and credible evidence of record, the Tribunal finds that Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22) by a preponderance of the evidence, which establishes grounds for the Registrar to take disciplinary action against ROC License No. 285811.

Complainant may petition the Registrar’s Recovery Fund for financial recompense.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Mayer & Sons LLC, ROC License No. 285811, be suspended for six (6) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3), and 32-1154(A)(22).

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $250.00 (two hundred and fifty dollars) in certified funds as a civil penalty in this matter.

IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s Final Order, the Registrar shall revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in Ariz. Rev. Stat. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

NOTICE

Pursuant to Ariz. Rev. Stat. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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 Final Order will be forty (40) days from the date of that certification.

Done this day, June 02, 2023.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Martín Quezada, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Mayer & Sons LLC, Respondent

1705 S. Main Dr.

Apache Junction, AZ 85120

[email redacted]

Gary Smith, Esq.

Guidant Law, Counsel for Complainant

402 E. Southern Ave.

Tempe, AZ 85282

[email redacted]

By: OAH Staff