ALJDEC decisions subject to certification as final

2021A-05345-CHC-ROC · Registrar of Contractors · 2022-04-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ellen Martin Keenan,

COMPLAINANT,

v.

JP Custom Wood Works Inc.

ROC License No. 282171,

RESPONDENT.

No. 2021A-05345-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 06, 2022 at 1:00 PM.

APPEARANCES: Ellen Martin Keenan (“Complainant”) appeared on her own behalf. Randy Cason appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of JP Custom Wood Works Inc. (“Respondent”).

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 November 27, 2012, the Registrar issued License No. 282171 Specialty Dual CR-60 Finish Carpentry contracting license to Respondent. Although renewed through November 30, 2022, on October 23, 2021, the license was suspended by the Registrar. Peter Klaus Antoni is the Qualifying Party/Officer on this license, and Jeffrey Leroy William is also listed as an Officer. Respondent’s address of record for the license is 4824 N. Stewart Rd., A7280 N. Glen-Harbor Blvd., Ste. 103 Glendale, AZ 85307. Respondent has an active $6,750.00 surety bond on the licensed issued by RLI Insurance Company effective November 03, 2014. The license has been disciplined on one (1) prior occasion, and has three (3) open complaints; one of which is presumably related to this matter.

On or about July 18, 2021, Complainant and Respondent entered into a $3,175.00 cabinetry contract to install kitchen cabinets and molding at Complainant’s residence.

On or about October 21, 2021, the Registrar received a short narrative complaint from Complainant against Respondent’s License No. 282171alleging abandonment of their project. The Registrar designated it Complaint No. 2021-05345 and assigned to Randal Morris (“Investigator Morris”) for investigation.

On November 01, 2021, Investigator Morris issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 20, 2021, at 10:00 a.m.

On December 06, 2021, Investigator Morris issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s allegations of abandonment against Respondent. Respondent was put on notice that it had until 5:00 p.m. on December 28, 2021, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22) and 32-1154(E).

On January 07, 2022, Investigator Morris issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 10, 2022, at 1:00 p.m.

On January 10, 2022, Investigator Morris inspected the project site and took 5 photographs. When he was finished, Investigator Morris drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Morris determined that Respondent had not complied with the Registrar’s Directive.

On January 11, 2022, Investigator Morris 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 his contracts, including his contract with Complainant.

On January 11, 2022, Investigator Morris forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On January 20, 2022, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until February 04, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On February 04, 2022, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted that “[Complainant] wanted JP to finish a job started by another contractor. She gave me a name of where to get the material as well as the stain color. Diamond & Kitchen knew nothing of this project. I made [Complainant] aware of this and she put the project on hold for awhile. I went out to re-measure and made her aware of the situation on material availability. She said she understood.” [sic]

On February 14, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 11, 2022. Per the February 28, 2022, 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)(1)

Charge 2: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158

Charge 3: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Randy Cason, Assistant Chief Compliance Officer for the Registrar as a witness. 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:

Complainant owns residential property located at 7718 E. Chaparral Rd. Scottsdale, AZ 85250.

On March 01, 2020, Respondent provided Complainant a $3.175.00 cabinetry quote.

On July 09, 2021, Respondent resent the quote to Complainant.

On July 13, 2021, Complainant tendered a check for $1,675.00 to Respondent for the project. The check cleared on July 16, 2021.

Respondent did not participate in the jobsite inspection or the compliance jobsite inspection.

Between December 06, 2021, and December 28, 2021, Complainant did not have any contact with Respondent, nor did Respondent physically come to the project site to perform work on the project.

On January 05, 2022, Complainant confirmed with Asst. Chief Cason that no substantive work had been performed on the project by Respondent or an appropriately licensed subcontractor.

On April 04, 2022, Asst. Chief Cason conducted a prehearing jobsite inspection. Respondent did not participate. Ultimately, Asst. Chief Cason determined that work on the project had never commenced, and Complainant was never refunded in whole or in part.

Respondent never alleged access to the project had been denied, only that the project was “on hold because of materials.”

The parties did not settle their dispute prior to hearing.

In closing, Complainant argued that she never placed her project on hold, and opined that Respondent had her project confused with someone else’s. Per Complainant, the project remained incomplete and she never received a return of her deposit. As such, Complainant asked for a decision in her favor so that she could petition for recompense from the Registrar’s Recovery Fund.

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.

The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from the Registrar as well.

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)(1) holds, in pertinent part, that that among the grounds for suspension or revocation of a contractor’s license is “[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)(12) holds, in pertinent part, that among the grounds for suspension or revocation of a contractor’s license is a “[f]ailure in any material respect to comply with this chapter.” Specifically, Ariz. Rev. Stat. § 32-1158 provides that “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.

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.”

The material facts in this matter are not in dispute.

It is undisputed that the Complainant paid Respondent over half of the contract price for the underlying project. It is also undisputed that Respondent made no overt attempt to begin work on the project per the terms of the underlying contract, or refund Complainant’s deposit. It is further undisputed that Respondent failed to timely comply with the Registrar’s Directive.

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. Because Respondent failed to appear and provide testimony, this burden has not been sustained. The record shows that Respondent failed to adhere to a Registrar Directive, and had no affirmative defense(s) for doing so. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project. Moreover, the record clearly reflects that Respondent did not refund any monies Complainant paid towards the completion of the underlying project.

Therefore, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(12); 32-1158, and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter, as the Tribunal has no jurisdiction to award a refund of the underlying amount contracted between the parties.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that that on the effective date of the Final Order in this matter Respondent JP Custom Wood Works Inc., ROC License No. 282171, shall be suspended for ten (10) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(12), and 32-1154(A)(22).

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $200.00 (two hundred) 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.

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, April 20, 2022.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

By: Miranda Alvarez

Legal Secretary