ALJDEC decisions subject to certification as final

2021A-05599-CHC-ROC · Registrar of Contractors · 2022-06-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Roya Faraji,

COMPLAINANT,

v.

HandyBros Services LLC

ROC License No. 312654,

RESPONDENT.

No. 2021A-05599-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 10, 2022 at 1:30 PM.

APPEARANCES: Roya Faraji (“Complainant”) appeared on her own behalf. David Visser appeared on behalf of HandyBros Services LLC (“Respondent”). Steve Klein appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

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 April 04, 2020, the Registrar issued License No. 312654 Specialty Residential R-62 Minor Home Improvements contracting to Respondent. The license is currently active and renewed through April 30, 2023. David Alan Visser is the Qualifying Party/Member on the license. Respondent’s address of record for the license is 329 W. Lone Cactus Dr. Phoenix, AZ 85027. Respondent has an active $4,250.00 surety bond on the licensed issued by State Farm Fire and Casualty Company effective March 21, 2017. There is no prior discipline noted for the license, save one open complaint which is presumably Complainant’s.

Complainant owns residential property located at 4733 E. Gatewood Rd. Phoenix, AZ 85050.

On or about October 14, 2019, Complainant and Respondent entered into a $15,591.87 for a whole-home renovation involving, but not limited to, the following areas: master shower, master bedroom, kitchen, and garage. Complainant paid for the project in full. The project commenced on October 17, 2019, and stopped on March 14, 2020.

On November 02, 2021, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 312654 alleging poor workmanship of their project. The Registrar designated it Complaint No. 2021-05599 and assigned to Steve Klein (“Investigator Klein”) for investigation.

On November 03, 2021, Investigator Klein issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on December 21, 2021, at 10:00 a.m.

On November 03, 2021, Investigator Klein conducted a review of the contract executed between the parties and inspected the work that had been performed on the project to date. He also took 58 photographs of the project site. When he was finished, Investigator Klein drafted his Inspection Notes. Ultimately, Investigator Klein determined that there were a total of 16 complaint items contained in Complainant’s narrative complaint. Of those, he substantiated 12 of 16 complaint items. Specifically, Investigator Klein verified complaint items 1, 3, 5-8, and 10-11. Investigator Klein concluded that about 75% of Respondent’s workmanship on the project failed to meet the Registrar’s minimum standards.

On January 21, 2022, Investigator Klein issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated a majority of Complainant’s workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on February 14, 2022, 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 February 10, 2022, Complainant extended Respondent’s Directive compliance deadline date to March 14, 2022.

Because Investigator received correspondence from Complaint alleging that Respondent had not addressed the Directive at all, a Compliance Jobsite Inspection was not scheduled.

On March 28, 2022, Investigator Klein forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On March 30, 2022, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until April 14, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On April 12, 2022, the Registrar received Respondent’s Answer. In pertinent parts, Mr. Visser noted that he had agreed to “fix the issued that the inspector noted in his report,” but that only on “the contingency of correcting only items that were in my estimates and the complainant would need to buy the products to fix any of those issues. Per my contract, my part was labor only to install products purchased by the complainant. I do not warranty product I do not buy.” [sic]

On April 15, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on June 02, 2022. Per the May 03, 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)(3) – A.A.C. R4-9-108

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Klein as a witness. David Visser 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:

Complainant has been “flipping” houses since 2007. The Gatewood Rd. property intended for resale.

Although Complainant had supplied most of the project materials, on occasion Mr. Visser did purchase materials while he was working on the project.

When Respondent stopped work on the project, Complainant initially believed it was related to the global COVID-19 pandemic, as the project was not complete at the time. Later, after checking Respondent’s website, she learned that Respondent was deemed “essential” and still active, though work on her project never resumed.

On February 11, 2022, Mr. Visser came to the project site to perform an inspection. No corrective work was performed.

Respondent also sent an unknown number of trades to the project to perform inspections, but none of them performed corrective work either.

At no time between January 21, 2022, and March 15, 2022, did Respondent perform corrective work, as the parties disagreed as to which was responsible for the purchase of materials needed for Respondent to address the Registrar’s Directive.

Mr. Visser opined that in order to address each corrective action item on the Directive, new materials were needed. Because Complainant would not purchase any, Mr. Visser refused to purchase the materials himself and perform the corrective work.

No subcontractor or financial settlement agreement was reached.

In closing, Respondent argued that although he tried to make Complainant happy, she was never satisfied.

In closing, Complainant alleged that she only filed the underlying complaint because Respondent stopped communicating with her, and the parties remained at an impasse during the Directive compliance period.

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 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)(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 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

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.”

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

It is undisputed that the parties had a whole-home renovation contract for $15,591.87, of which Complainant paid the amount in full. It is also undisputed that most of the work Respondent performed did not satisfy the minimum standards set for workmanship by the Registrar. It is further undisputed that Respondent was required to timely perform corrective work and remediate workmanship deficiencies on the project identified in the Registrar’s Directive, and that Respondent failed to timely comply.

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. Here, Respondent did not sustain his burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project. Mr. Visser’s assertion that he was not obligated to purchase materials necessary to perform corrective work, on work he performed poorly in the first place, because the term was not a part of his original contract agreement with Complainant is without merit. Nothing in the record suggests the required materials were unavailable or that Respondent was financially unable to secure them. The parties’ financial dispute does not justify Respondent’s inaction in this matter.

Therefore, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent HandyBros Services LLC, ROC License No. 312654, be suspended for seven (7) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

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, June 17, 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