ALJDEC decisions subject to certification as final

2021A-06547-CHC-ROC · Registrar of Contractors · 2022-11-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Kerri Ann Long,

COMPLAINANT

Sonoran Peak Construction & Roofing LLC

License No. ROC 305664,

RESPONDENT

No. 2021A-06547-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 19, 2022, October 12, 2022, and November 1, 2022

APPEARANCES: Complainant Kerri Ann Long appeared and was represented by Julianne C. Wheeler. Barry Cohen, Member and Qualifying Party, appeared on behalf of Respondent Sonoran Peak Construction & Roofing LLC, which was represented by Randolph D. Wolfson.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Sonoran Peak Construction & Roofing LLC (Respondent) is the holder of License No. 305664 issued by the Arizona Registrar of Contractors (Registrar).

On or about July 20, 2021, Respondent provided Kerri Ann Long (Complainant) with a Project Estimate (Estimate 1) for, among other things, an addition to her home. Estimate 1 did not include any reference to a permit or which party was required to obtain a permit. The total cost quoted in Estimate 1 was $94,926.17.

On or about August 9, 2021, Respondent provided Complainant with a Project Estimate (Estimate 2) for, among other things, an addition to her home. Estimate 1 did not include any reference to a permit or which party was required to obtain a permit. The total cost quoted in Estimate 2 was $104,605.50. Estimate 2 did not provide a breakdown of the cost of each area of the project, but just provided the total cost.

On or about August 10, 2021, Complainant provided Respondent a check for $13,000.00 as a deposit on the project for the windows and cabinets.

Complainant maintained that she signed Estimate 2 as the contract in this matter, but was unable to provide a signed copy of the document. Respondent denied having a signed copy of the document.

Concerned with the budget, Complainant requested a breakdown of the price in Estimate 2.

On or about September 9, 2021, Respondent provided Complainant with a Project Estimate (Estimate 3), which included the cost breakdown of the different parts of the project. Estimate 3 did not include any reference to a permit or which party was required to obtain a permit. The total cost quoted in Estimate 3 was $98,538.73.

On or about September 14, 2021, Respondent created a document entitled “Project Contract” which indicated it was a time and materials contract with hourly labor rates of $95.00 for supervisor, $60.00 for skilled specialty, $50.00 for labor, and $150.00 for “Barry.” The Project Contract provided that material receipts and labor costs would be delivered on Fridays and payment was expected the following Monday. The Project Contract provided that “Home owner responsible for any permitting if needed.”

Respondent stated that Complainant was looking for ways to save money on the project and was interested in doing some of the work herself. Respondent indicated that a time and materials contract allowed Complainant to reduce costs as she could narrow the scope of work to be done by doing it herself instead of having Respondent perform the work.

Respondent started work on the project prior to any permit being issued.

Respondent avowed that Complainant fully paid the weekly invoices submitted to her and that Complainant owed nothing on the time and materials contract.

Neither party provided a contract signed by either party.

Prior to December 20, 2021, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the project.

The Registrar assigned the complaint to Investigator David Fagerburg.

On or about January 21, 2022, Investigator Fagerburg conducted a jobsite inspection.

On or about February 1, 2022, Investigator Fagerburg issued a Written Directive substantiating six items in the complaint and setting a February 22, 2022 deadline for Respondent to correct the identified issues. Included in the Written Directive was an advisement that “[p]rior to any corrective work being performed the respondent is to obtain any and all required permits and complete all inspections through the City of Phoenix Planning & Development Department and correct by appropriate means.”

Following the issuance of the Written Directive, Respondent’s counsel provided Investigator Fagerburg with a copy of the Project Contract, which detailed that it was Complainant’s responsibility to obtain any necessary permits.

After reviewing the Project Contract, Investigator Fagerburg issued an Addendum Written Directive, which included the following:

After further investigation the Registrar determined that the Respondent is not responsible for obtaining any building permits per stated in the written time and material contract dated September 9, 2021. All other items listed on the Written Directive issued February 1, 2022 remain standing.

Complainant submitted additional complaint items to Investigator Fagerburg.

On or about March 29, 2022, Investigator Fagerburg conducted a second jobsite inspection.

On or about April 8, 2022, Investigator Fagerburg issued an Addendum #2 Written Directive to Respondent, which provided, in pertinent part, as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on Monday May 2, 2022.

. . . .

DIRECTIVE REQUIREMENTS

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

• The Directive Requirements listed on the Addendum Written Directive issued February 17, 2022 remain standing.

. . . .

Addendum Compliant Item 4: added to the complaint of cracks in ceiling and walls, the plaster finish is wavy with major defects on the walls and around the ceiling fixtures

Investigator’s Observation: The respondent is to correct all finished drywall that has cracks and is not uniform by appropriate means.

Governing Rule: ARS §32-1154 (A) (3) namely R4-9-108, Poor work not performed in accordance with professional industry standards.

. . . .

Addendum Compliant Item 20: East, west and north eves were cut back 1’ leaving poor workmanship of a wavy roof and facia line.

Investigator’s Observation: The respondent is to correct the east and west eaves that are improperly supported with wavy fascia lines by appropriate means.

Governing Rule: ARS §32-1154 (A) (3) namely R4-9-108, Poor work not performed in accordance with professional industry standards.

Following the issuance of the written directives, Complainant hired an architect and an engineer to assist in applying for a permit. During the application process, the City of Phoenix inspected the project and identified number items that were not to code.

Respondent performed some corrective work. After the deadline in the directive expired, Investigator Fagerburg was notified that not all the corrective work had been performed.

The Registrar issued a Citation against Respondent, charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A); and Ariz. Rev. Stat. § 32-1154(A)(22).

Investigator Fagerburg testified that he relied on the Project Contract as the operative contract in this matter because neither party had been able to provide a signed copy of any other version. Investigator Fagerburg noted that, with respect to Addendum Complaint Item 20, Respondent corrected the issue identified in the Addendum #2 Written Directive, but in so doing, Respondent had damaged the shingles above the facia. Investigator Fagerburg testified that damaging the shingles meant that Respondent did not correct the issue “by appropriate means.”

Complainant testified that, during the initial interactions with Respondent, Barry Cohen assured her that permits would not be required because he always built things to code. Complainant stated she understood she was operating under Estimate 2 as the contract, but wanted to see the cost breakdown as set forth in Estimate 3. Complainant denied entering into a time and materials contract with Respondent, but acknowledged that Respondent presented it as a way to reduce her costs and give her more flexibility with the project.

Mr. Cohen testified that Complainants did not owe Respondent anything on the project as she was “very prompt about paying” the invoices. Mr. Cohen admitted that he was unaware that a significant interior remodel and an addition to the home required a permit and that was his “mistake.” Mr. Cohen acknowledged that Respondent performed work on the project prior to any permits being obtained and that permits were pulled on the project only after the Written Directive was issued by the Registrar. Mr. Cohen stated that he was aware of the issue with the shingles that occurred while correcting the facia, but “forgot” to correct it.

On the third day of the hearing, counsel for Respondent stated he had discovered additional information that raised a “jurisdictional issue” in this matter. Counsel argued that he had reason to believe that Complainant and her husband did not own the property at issue as he understood title to the property was held by a trust. Counsel seemed to assert that, pursuant to Ariz. Rev. Stat. § 32-1154(B)(2), the Registrar was not authorized to investigate Complainant’s complaint in this matter. In making his argument, counsel maintained that, because Complainant was not the titled owner of the property, she was unable to “suffer[ ] a material loss or injury as a result” of Respondent’s actions. Counsel acknowledged that a tenant would be entitled to file a complaint despite not owning the property at issue, but failed to elucidate why that would be authorized under the statute he relied upon while arguing that Complainant could not file a complaint.

Administrative notice is taken of Respondent’s prior License record on November 28, 2022. Such prior License record reflects that Respondent’s License No. 305664 was first issued on June 27, 2016, and is active. Such prior License record also reflects that there were no other open or prior complaints against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s subject matter jurisdiction. See Ariz. Rev. Stat. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See Ariz. Rev. Stat. § 41-1092.07(G)(2); Ariz. Admin. Code R2-19-119(A) and Ariz. Admin. Code R2-19-119(B)(1); see also Vazzano v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

As to Respondent’s argument regarding ownership of the property, the argument does not present a jurisdictional issue, but rather a question as to whether the Registrar followed the statutory requirements applicable in its investigation of this matter.

Ariz. Rev. Stat. § 32-1154(B)(2), the statute cited by Respondent’s counsel in making his argument, provides, in pertinent part, as follows:

B. The registrar:

. . . .

2. Shall investigate the acts of a contractor in this state on the written complaint of any owner or contractor that is a party to a construction contract or a person who suffers a material loss or injury as a result of a contractor's failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards.

Ariz. Rev. Stat. § 32-1154(B)(2) sets forth those complaints that the Registrar must investigate. Nothing in the statute prevents the Registrar from investigating any other complaint that it receives. In fact, Ariz. Rev. Stat. § 32-1154(B)(1) provides that the Registrar “[m]ay investigate the acts of a contractor in this state on the registrar’s own motion,” indicating the Registrar has great leeway in what matters it may investigate.

Ariz. Rev. Stat. § 32-1154(B)(2) does not limit that the Registrar shall only investigate those complaints listed or that the Registrar shall not investigate any other complainants except those listed. Accordingly, the Registrar acted within its statutory authority to investigate Complainant’s complaint in this matter regardless of how title to the property was held.

While neither party was able to provide a signed contract, the parties operated pursuant to a time and materials contract. That is, Respondent submitted invoices with receipts for materials and time logs for labor costs, and Complainant promptly paid those invoices. So while the overall scope of the work contemplated by the parties was that in Estimate 2 and/or Estimate 3, the parties acted consistently with the Project Contract. Notably, Respondent acknowledged that Complainant owed nothing on the contract.

With respect to the permit itself, it is not necessary to determine which party had the obligation to obtain the permit on the project because Respondent was not cited with an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(2). The Registrar requires that contractors perform their work in a professional and workmanlike manner, including being familiar with the permitting requirements of the jurisdiction where they are operating. Whether Complainant or Respondent was required to obtain the permit on the project, Respondent should not have performed any work on the project until a permit was issued.

The evidence established that Respondent’s work was not in conformity with the Registrar’s standards and that Respondent performed work that required a permit without a permit being issued. Therefore, Complainant established that Respondent did not complete the project in a professional and workmanlike manner in violation of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A).

The evidence established that Respondent did not complete the corrective work following the Directive being issued. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of Ariz. Rev. Stat. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 305664 for a period of five days.

It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E).

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar 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.

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001

-137160-45720000Done this day, November 28, 2022.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically or by mail to:

Jeffrey Fleetham, Director

Registrar of Contractors

David Fagerburg

[email redacted]

Randolph D. Wolfson

Faith, Ledyard & Faith, PLC

[email redacted]

Julianne C. Wheeler Esq.

WHEELER LAW GROUP, PLLC

[email redacted]

By Miranda Alvarez

Legal Secretary

-54864001

001

-137160-45720000