ALJDEC decisions subject to certification as final
2021A-07009-CHC-ROC · Registrar of Contractors · 2022-04-07
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Chad Joseph Shimek,
Innovative Lighting & Electric Inc.,
COMPLAINANT,
v.
G M Studios LLC,
ROC License No. 195854,
RESPONDENT.
No. 2021A-07009-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: March 28, 2022, at 1:00 PM.
APPEARANCES: Chad Shimek (“Complainant”) appeared on his own behalf. Steve Klein appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of G M Studios LLC (“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 May 07, 2004, the Registrar issued License No. 195854 Specialty Dual CR-60 Finish Carpentry contracting license to Respondent. The license is currently active and renewed through May 31, 2023. Gerard Maurier Merchant is the Qualifying Party/Member on this license, and Debbie Lee Merchant is also a Member. Respondent’s address of record for the license is 502 W. 3rd Ave. Ste. 11 Mesa, AZ 85210. Respondent has an active $6,750.00 surety bond on the licensed issued by RLI Insurance Company effective April 03, 2020. There is no prior discipline noted for the license, save one open complaint which is presumably related to this matter.
On or about October 26, 2020, Complainant and Respondent entered into a $32,424.69 contract to install kitchen cabinets at Complainant’s residence.
On or about December 31, 2021, the Registrar received a short narrative complaint from Complainant against Respondent’s License No. 195854 abandonment of their project. The Registrar designated it Complaint No. 2021-07009 and assigned to Steve Klein (“Investigator Klein”) for investigation.
On January 04, 2022, Investigator Klein issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 10, 2022, at 10:00 a.m.
On or about January 13, 2022, 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 19 photographs of the project site. When he was finished, Investigator Klein drafted his Inspection Notes. Ultimately, Investigator Klein substantiated Complainant’s sole complaint, as he determined that the job was incomplete. Investigator Klein determined that Respondent failed to meet the Registrar’s minimum workmanship standards and required Respondent to perform corrective work to remediate the identified deficiencies and complete the project per contract.
Investigator Klein did not issue a Written Directive from the Registrar (“Directive”) to Respondent because he received an email from Respondent that curtly expressed the business’ closure and Mr. Merchant’s insistence that he would not finish the job.
On or about January 14, 2022, Investigator Klein forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On January 19, 2022, the Registrar issued a Citation to Respondent for alleged violation(s) of Ariz. Rev. Stat. § 32-1154(A)(1). Respondent was given until February 03, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154 and 32-1155.
On February 02, 2021, the Registrar received Respondent’s Answer. In pertinent parts, Respondent offered three (3) reasons for his lack of performance including (1) not being paid in full, (2) Complainant’s denial of his design idea, and (3) closure of his business for “lack of qualified man power.” Respondent argued, despite the contract agreement entered into by the parties, that there was no money to be made on the project. Mr. Merchant noted that he was “not able or willing to try to complete [Complainant’s] job.”
On February 02, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 28, 2022. Per the February 16, 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 violation(s):
Charge 1: A.R.S. § 32-1154(A)(1)
Hearing Evidence
Complainant testified on his own behalf and called Investigator Klein as a witness. The Registrar’s agency file was admitted into the record as its own exhibit. The substantive evidence of record is as follows:
Mr. Shimek is the President of Innovative Lighting & Electric Inc., ROC. License No. 294946. Mr. Shimek owns residential property located at 6231 E. Corrine Dr. Scottsdale, AZ 85254, where he resides with his wife and small children.
A general contractor Mr. Shimek is acquainted with referred Mr. Merchant as a reliable cabinet contractor. Mr. Shimek hired Mr. Merchant to perform work at his residence.
On October 26, 2020, work on the project commenced. On or about December 15, 2021, work on the project stopped. In total, approximately two (2) weeks’ worth of work was completed. At that time nearly half of the project had been completed, and Mr. Shimek was not pleased with Mr. Merchant’s work to that point.
Mr. Merchant told Mr. Shimek that he was closing his business and would not be able to complete his project. Mr. Shimek was not refunded in part or in whole, though he provided Respondent $33,000.00 on the contract.
The remainder of the materials needed to complete the underlying project were not given to Complainant, and remained in Respondent’s possession as of the date of the hearing.
In closing, Complainant argued that he would like to access the Registrar’s Recovery Fund so that he may complete his project without spending any additional money.
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.”
The material facts in this matter are not in dispute.
The relevant and credible evidence of record establishes that Complainant and Respondent entered into a contractual agreement whereby Complainant paid the price in full. Moreover, the record reflects that Respondent did not complete the project.
Therefore, the only remaining issue to address is whether Respondent raised sufficient justification or excuse for failing to complete Complainant’s project in a timely fashion or return his down payment within a reasonable period of time. These are an affirmative defenses that Respondent bears the burden to establish. 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. Respondent’s absence from this administrative proceeding is, however, a factor in aggravation. The evidentiary record in this matter reflects that Respondent failed to complete the underlying project at issue and never returned Complainant’s down payment; in whole or in part, and had no affirmative defense(s) for doing so.
Because Complainant successfully established a violation of Ariz. Rev. Stat. § 32-1154(A)(1) by a preponderance of the evidence, Complainant has also established grounds for the Registrar to take disciplinary action against 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 G M Studios LLC, ROC License No. 195854, be revoked based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(1).
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 07, 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