ALJDEC decisions subject to certification as final

2021A-05809-CHC-ROC · Registrar of Contractors · 2022-04-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Gregorio Valencia ,

COMPLAINANT,

v.

AJML Builders LLC

ROC License No. 299716,

RESPONDENT.

No. 2021A-05809-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 04, 2022 at 1:00 PM.

APPEARANCES: Gregorio Valencia (“Complainant”) appeared on his own behalf. Jesús Melendez appeared on behalf of AJML Builders LLC (“Respondent”). Gregory Johndrow appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Adriana De Dominicis served as the Spanish language interpreter for the proceedings. Ernistina Valencia and Cesar Valencia 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 20, 2015, the Registrar issued License No. 299716 General Dual KB-2 Residential and Small Commercial contracting license to Respondent. The license is currently active and renewed through June 30, 2021. Jesús Adrian is the Qualifying Party/Member on this license. Respondent’s address of record for the license is 3081 N. Sunrise Pl. Nogales, AZ 85621. Respondent has an active $14,000.00 surety bond on the licensed issued by RLI Insurance Company effective August 23, 2018. The license has been disciplined by the Registrar on one prior occasion, and there has been one complaint that has been resolved or otherwise settled with the license. There is also one open complaint against the license, which is presumably related to this matter.

On February 26, 2021, Complainant and his wife closed escrow on a newly built $175,000.00 residence located at 1126 Avenida Leon, Rio Rico, AZ 85648.

On November 12, 2021, the Registrar received an 11-item complaint from Complainant against Respondent’s License No. 299716 alleging poor workmanship of his home’s construction; including the roof, exterior stucco, window seals, flooring and baseboards, cabinets, appliances, doors, and fixtures. The Registrar designated it Complaint No. 2021-05809 and assigned to Gregory Johndrow (“Investigator Johndrow”) for investigation.

On November 19, 2021, Investigator Johndrow issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on December 06, 2021, at 9:30 a.m.

On December 06, 2021, Investigator Johndrow conducted a review of Complainant’s closing disclosure and inspected the items identified on Complaint No. 2021-05809. He also took 25 photographs of the project site. Respondent was not present. When he was finished, Investigator Johndrow drafted his Inspection Notes. Ultimately, Investigator Johndrow substantiated a total of 8 complaint items; specifically, Investigator Johndrow determined that complaint items 2-3, 4b, 5-6, and 8-10 failed to meet the Registrar’s minimum workmanship standards, and required Respondent to perform corrective work to remediate the identified deficiencies.

On December 07, 2021, Investigator Johndrow issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on January 04, 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 January 04, 2022, Investigator Johndrow issued a Compliance Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site on January 07, 2022, at 10:00 a.m.

On January 07, 2022, Investigator Johndrow inspected the workmanship complaint items previously identified for remediation in the Registrar’s Directive and took 13 photographs. Respondent was not present. When he was finished, Investigator Klein drafted Compliance Jobsite Inspection Notes. Ultimately, Investigator Klein determined that although Respondent did make attempts to correct the work, complaint items 2-3, 4b, 5-6, and 8-10 still remained at issue and had not been satisfactorily remediated by Respondent.

On January 07, 2022, Investigator Johndrow escalated the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On January 11, 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 January 26, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On January 26, 2022, the Registrar received Respondent’s Answer whereby Mr. Melendez asserted that “[A]ll complaints have been resolved and the Complainant is fully satisfied with the corrections made. All work has been completed at this time.”

On February 09, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 04, 2022. Per the March 02, 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 his own behalf and called Investigator Johndrow as a witness. Respondent declined to provide witness testimony. 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 did not purchase his residence from Respondent.

Because Complainant’s Residential Sales Agreement was not provided as an exhibit, it is unclear whether Complainant and his wife purchased the underlying property at issue “as is.”

Between December 07, 2021, and January 04, 2022, Respondent made at least one attempt to perform corrective work per the Registrar’s Directive.

By January 04, 2022, the parties had not settled their underlying dispute.

In closing, Respondent offered to perform the outstanding corrective work outlined in the Directive.

In closing, Complainant argued that he should receive a favorable decision as a result of the hearing.

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.”

In the case at bar, the relevant and credible evidence of record establishes that Respondent performed the deficient work at issue in Complaint No. 2021-05809, and failed to perform corrective work as required by the 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. Here, Respondent did not sustain its burden. There is no evidence in the record that excuses or otherwise justifies failure to satisfy the minimum standards set for workmanship by the Registrar, or its failure to complete corrective work in a timely fashion as required by the Registrar’s Directive.

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) by a preponderance of the evidence, 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.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent AJML Builders LLC, ROC License No. 299716, be suspended for two (2) 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, April 11, 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