ALJDEC decisions subject to certification as final

2022A-01079-CHC-ROC · Registrar of Contractors · 2022-12-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Deborah Evenchik,

COMPLAINANT,

v.

A F Sterling Home Builders Ltd

ROC License No. 080734,

RESPONDENT.

No. 2022A-01079-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 20, 2022 & December 14, 2022.

APPEARANCES: Deborah Evenchik (“Complainant”) appeared on her own behalf. Jeff Brei, Esq. appeared on behalf of A F Sterling Home Builders Ltd. (“Respondent”) with Robert Brack as a witness. Manny Bermudez appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Jon Fenton, Randy Agron, Jeff Andre, and Daniel Waits observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the Arizona Registrar of Contractors (“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 04, 1988, the Registrar issued License No. 080734 General Residential B contracting license to Respondent. The license is in good standing and has been renewed through October 31, 2023. Jonathan Daru Fenton is listed as the Qualifying Party/Officer on the license, along with Randall Jay Agron and Peter Bruce Aronoff who are also listed as Officers. Respondent’s address of record for the license is 6340 N. Campbell Ave., Ste. 240 Tucson, AZ 85718. Respondent has an active $15,000.00 surety bond on the license issued by Ohio Casualty Insurance Company, effective December 15, 2010. The license has not been previously disciplined by the Registrar, however, there is one (1) open complaint against the license, which is presumed to be related to this matter.

On or about February 08, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 080734 alleging poor workmanship regarding a newly built residence. The Registrar designated it Complaint No. 2022-01079 and assigned to Manny Bermudez (“Investigator Bermudez”) for investigation.

On March 08, 2022, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by Investigator Bermudez on April 05 2022, at 9:30 a.m.

On April 05, 2022, Investigator Bermudez inspected the work that had been done on the project to date. He also took 99 photographs of the project. When he was finished, Investigator Bermudez drafted Jobsite Inspection Notes. Ultimately, Investigator Bermudez determined that Complaint No. 2022-01079 contained nineteen (19) separate and distinct complaint items, of which he substantiated 8. Specifically, Investigator Bermudez determined that complaint items 1-5, 12-13 and 17 constituted poor or incomplete work, and failed to meet the Registrar’s minimum workmanship standards.

On April 13, 2022, Investigator Bermudez issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on May 11, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22), and 32-1154(E).

On June 07, 2022, Investigator Bermudez issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on June 13, 2022, at 9:00 a.m.

On June 13, 2022, Investigator Bermudez inspected the corrective work that had been performed on the project and took 23 photographs. When he was finished, Investigator Bermudez drafted his Compliance Jobsite Inspection Notes. During the inspection, Complainant informed Investigator Bermudez that she wanted to let complaint item 2 “go,” and Investigator Bermudez was able to determine that Respondent had satisfactorily remediated complaint item 12. As such, Investigator Bermudez determined that Respondent had not performed corrective work necessary to remediate complaint items 1, 3-5, 13, and 17.

On June 13, 2022, Investigator Bermudez escalated Complaint No. 2022-01079 to the Registrar’s legal department with citation recommendations for violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22).

On July 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(a), and 32-1154(A)(22). Respondent was given until July 26, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1155.

On July 19, 2022, the Registrar received Respondent’s timely written Answer whereby Respondent alleged complaint items had been completed as follows:

Item 1 – completed 7/6/22

Item 3 – completed 7/14/22

Item 4 – completed 7/14/22

Item 5 – completed 7/8/22

Item 13 – completed 7/14/22

Item 17 – completed 7/6/22

Respondent further noted that it had never ignored the Registrar’s Directive, and argued that “there was either a material lead time issue, or the inspector simply felt that the repairs did not meet ‘ROC Workmanship Standards’.” Respondent further opined that “[U]nprecedented labor and supply issues facing contractors has made completing work in a timely manner very difficult,” and that the discipline was not warranted because Complainant’s “aesthetic issues” were not “life and safety concerns.”

On July 22, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on September 20, 2022. Per the August 09, 2022, Notice of Hearing the issue(s) to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following charges:

Charge 1: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Bermudez as a witness. Robert Brack testified on behalf of Respondent. The Registrar’s agency file (“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 newly constructed residential property located at 2465 E. De Lupe Tucson, AZ 85716. Complainant closed escrow on the home August 13, 2020.

Respondent began construction on the home on or about November 19, 2019, and finished around August 13, 2020.

Complainant paid $389,945.00 for the property.

On or about February 08, 2022, Complainant submitted a complaint regarding19 punch list items to the Registrar against Respondent’s license.

On June 07, 2022, Respondent remediated complaint item 17, but in doing so caused a surface scratch upon Complainant’s shower drain cover. The drain cover was subsequently replaced by Respondent.

Between July 01, 2022, and August 29, 2022, Respondent remediated complaint items 3-5 to Complainant’s satisfaction. In addition, Respondent tendered $490.00 to Complainant as settlement for half of complaint item 13, whereby Complainant agreed to accept and have another contractor repair the remaining half of the complaint item.

Although Respondent performed corrective work on complaint item 1 on July 06, 2022, Investigator Bermudez was not asked to inspect the item. Complainant did, nonetheless, agree that Respondent’s work was satisfactory. However, shortly thereafter, rains washed away the paint and revealed rust. Complainant did not inform Respondent.

Closing Arguments

In closing, Respondent argued that all complainant items had been successfully remediated to the best of its knowledge, although admittedly most of which occurred after the expiration of the Registrar’s Directive compliance period. Respondent opined that discipline was not warranted, as Complainant had been made whole

In closing, Complainant argued that she had sustained her burden of proof, and asked that discipline be imposed against Respondent’s license.

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 Respondent constructed Complainant’s residence, and that Complainant files a complaint after residing in the home for about 18 months. It is also undisputed that Complaint No. 2022-01079 was comprised of 19 complaint items, of which 8 had been substantiated for correction by the Registrar. It is also undisputed that Respondent had until May 11, 2022, to comply with the Registrar’s Directive, and that by the compliance jobsite inspection June 13, 2022, complaint items complaint items 1, 3-5, 13 and 17 remained outstanding. It is further undisputed that Respondent performed post-Directive corrective work satisfactory to Complainant to remedy all remaining complaint items, with the partial exception of complaint item 1 due to rain damage unbeknownst to Respondent.

Thus, the credible and relevant evidence of record establishes that while Respondent did commit violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22), they are moot as all substantiated complaint items were corrected by Respondent.

While grounds may exist for the Registrar to discipline Respondent’s contractor’s license, discipline would be de minimis. As such, discipline is not recommended in this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that Complainant’s appeal be denied by the Registrar.

IT IS FURTHER RECOMMENDED that Complainant 2022-01079 be closed by the Registrar.

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, December 22, 2022.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

A F Sterling Home Builders Ltd, Respondent

6340 N. Campbell Ave., Ste. 240

Tucson, AZ 85718

[email redacted]

Deborah Evenchik, Complainant

2465 E. Calle De Lupe

Tucson, AZ 85716

[email redacted]

By: Miranda Alvarez

Legal Secretary