ALJDEC decisions subject to certification as final

2022A-01575-CHC-ROC · Registrar of Contractors · 2022-07-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jayne Kristen Bahoura,

COMPLAINANT,

v.

New Modern LLC,

ROC License No. 324446,

RESPONDENT.

No. 2022A-01575-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 01, 2022 at 9:00 AM.

APPEARANCES: Jayne K. Bahoura (“Complainant”) appeared on her own behalf. Chris Fultz appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of New Modern 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 02, 2019, the Registrar issued License No. 324446 General Residential B-3 Remodeling and Repair contracting to Respondent. The license is active, in good standing, and renewed through May 31, 2023. Schuyler Clark Pierce is the Qualifying Party, Manager, and Signer on the license. Respondent’s address of record for the license is 4238 N. 82nd St. Scottsdale, AZ 85251. Respondent has an active $9,000.00 surety bond on the licensed issued by Old Republic Surety Company effective March 22, 2019. There is no prior discipline noted for the license, save one open complaint which is presumed to be Complainant’s.

On February 24, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 324446 alleging abandonment and poor workmanship of their project. The Registrar designated it Complaint No. 2022-01575 and assigned to Chris Fultz (“Investigator Fultz”) for investigation.

On March 07, 2022, Investigator Fultz issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on March 22, 2022, at 12:00 p.m.

On March 22, 2022, Investigator Fultz 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 116 photographs of the project site. Respondent was not present. When he was finished, Investigator Fultz drafted his Jobsite Inspection Notes. Ultimately, Investigator Fultz determined that there were a total of twenty (20) complaint items contained within Complainant’s narrative complaint. Of those, Investigator Fultz substantiated 17 of 20 complaint items. Specifically, Investigator Fultz verified complaint items 1, 3-9, 11-12, and 14-20. Investigator Fultz concluded that the work Respondent had performed failed to meet the Registrar’s minimum workmanship standards.

On March 31, 2022, Investigator Fultz 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 April 19, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(22), and 32-1154(E).

On April 21, 2022, Investigator Fultz forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On April 25, 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 May 10, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On May 10, 2022, the Registrar received Respondent’s Answer, which reads as follows:

I would really appreciate a hearing to have everyone who worked on the job there to tell their side of the story. I am getting documents together and would like to know the next steps.

On May 12, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on July 01, 2022. Per the May 26, 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(a)

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf, and called Investigator Fultz as a witness. The Notice of Hearing, including the Registrar’s agency file, and Supplemental Hearing Packets were admitted into the record as their own exhibits. The substantive evidence of record is as follows:

Complainant owns residential property located at 5725 E. Hedgehog Pl. Scottsdale, AZ 85266.

On or about March 21, 2021, Complainant and Respondent entered into a $42,544.00 contract for a whole-home renovation including demolition, flooring, framing, drywall, plumbing, and electrical. Complainant paid for the project in full. The project commenced on or about March 21, 2021, and stopped on or about November 11, 2022.

On March 31, 2022, upon receipt of Investigator Fultz’s Jobsite Inspection Notes and Directive, Respondent asked “Why was I not invited to this inspection?” Investigator Fultz advised Respondent that he had indeed been notified on March 07, 2022, and had even responded via email the same day.

Because no work had been performed by Respondent during the Directive’s compliance period, a Compliance Jobsite Inspection was not performed.

On June 22, 2022, a Prehearing Jobsite Inspection took place. Respondent was not afforded prior notice. No corrective work had taken place, however, evidence of further/worsening poor workmanship specifically regarding complaint items 1 and 2 were observed by Investigator Fultz.

Complainant declined to provide a closing argument.

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 Notice of Hearing mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because OAH and the Registrar mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable by the United States Postal Service, Respondent is deemed to have received all correspondence regarding the matter as well.

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(a) requires that “[a]ll work shall be performed in a professional and workmanlike manner.”

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.”

Ariz. Rev. Stat. § 32-1154(E) provides, in pertinent parts, that the Registrar may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty.” It also provides that “[n]o future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.”

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

It is undisputed that the parties had a residential remodeling contract, and that Complainant paid Respondent in full on said contract. It is also undisputed that Respondent did not complete the project per the terms of their agreement, and that the work Respondent performed failed to meet the Registrar’s minimum workmanship standards. It is further undisputed that Respondent failed to timely comply with the Registrar’s 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 Complainant’s 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 Respondent’s inaction and/or lack of performance on the underlying project.

Therefore, because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22), 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 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 New Modern LLC, ROC License No. 324446, be suspended for ten (10) days based on its violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $500.00 in certified funds 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 and restitution on or before thirty (30) days following the effective date of the Registrar’s Final Order, the Registrar shall 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 and restitution.

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, July 14, 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