ALJDEC decisions subject to certification as final

2022A-03086-CHC-ROC · Registrar of Contractors · 2022-11-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Rick Kroon,

COMPLAINANT

The Creta Group LLC

License No. ROC 318688,

RESPONDENT

No. 2022A-03086-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 20, 2022

APPEARANCES: Complainant Rick Kroon appeared on his own behalf. Ioan Galea, Qualifying Party appeared on behalf of Respondent The Creta Group LLC, and was represented by Josh A. Valdez.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

The Creta Group LLC (Respondent) is the holder of License No. 318688 issued by the Arizona Registrar of Contractors (Registrar).

On or about September 15, 2021, Rick Kroon (Complainant) entered into an agreement with Respondent for, among other things, the construction of various structures in his backyard. The parties did not sign a contract, but had agreed on a scope of work to be performed and the price of the same. Respondent indicated it would be able to complete the project by Christmas 2021.

Respondent was to build a shower/steam room including a cold plunge tub and sauna, resurface the swimming pool, build a hot tub, and build a golf simulator room for a total of $125,000.00. Progress payments were to be made during the project including a $42,000.00 deposit, a payment of $33,000.00, a payment of $30,000.00, and a final payment of $20,000.00 due upon completion. Complainant paid $110,000.00 towards the total cost of the project, more than due under the payment plan until the project was completed.

Respondent informed Complainant that there were additional costs on the project and Respondent needed more money to complete the project.

On or about April 15, 2022, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the project.

The Registrar assigned the complaint to Investigator Lisa Melton. After a jobsite inspection, Investigator Melton issued a written directive to Respondent that provided 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 July 5, 2022.

RESTRICTIONS

• You may not perform or hire other contractors to perform work that is outside the scope of your license.

• If your license is currently suspended for administrative reasons, or is inactive, expired, or cancelled, you may not perform any corrective work nor contract in any manner, which includes hiring other contractors to perform work, until the suspension of your license(s) has been lifted or your license(s) has been reactivated.

DIRECTIVE REQUIREMENTS

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

Compliance Item 1: Literally every aspect of this job has been botched. Nothing is complete except the pool resurface (steam room, sauna, pool, hot tub, golf room). They told me it'd be done before Christmas 2021. It's nowhere near done right now. They never show up when they say they are going to. They are liars and crooks. And I plan to use the full extent of the law to bring their thievery to an end.

Investigator’s Observation: Prior to scheduling this inspection a request for a response to the allegations was sent to the Respondent at their email and physical addresses of record. No response was received. Respondent also did not appear for this inspection. The City of Phoenix building permit database returns no permit for this project. Work is not complete. Respondent should complete their scope of work and comply with all requirements of the local building authority.

Governing Rule:

A.R.S. §32-1154 (A) (1), Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

A.R.S. §32-1154 (A) (2) (b), Departure from or disregard of: A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

ARS §32-1154 (A) (3), Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(b): A contractor shall perform all work in accordance with any applicable building codes and professional industry standards. For work to be performed in accordance with professional industry standards, a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.

A.R.S. §32-1154 (A) (8), Failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.

Following the issuance of the written directive, Respondent did not obtain a permit and did not perform any corrective work. After the deadline in the directive expired, Investigator Melton was notified no corrective work had been performed.

The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(1); A.R.S. § 32-1154(A)(2)(b); A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(B); A.R.S. § 32-1154(A)(8); and A.R.S. § 32-1154(A)(22).

In its answer, Respondent asserted that no building permits were required on the project and that any sums above and beyond the contract were the result of separate agreements with Complainant. Respondent stated that the parties agreed to extend the size of the golf room from 16 feet to 24 feet.

Investigator Melton testified that no permits had been issued as of the morning of the hearing.

Complainant testified that Respondent failed to obtain any permits on the project. Complainant stated that nothing was built to the specifications in the plans and that the things Respondent built would have to be deconstructed and rebuilt. Complainant acknowledged that he kicked Respondent off the project prior to filing the complaint in this matter. Complainant stated that he submitted plans to his homeowners association, and he believed that, when they responded to him, they had also replied to Respondent.

Mr. Galea testified that Respondent did not obtain permits because the city would not issue a permit if the homeowners association had not approved the plans. Mr. Galea stated Respondent was not permitted on the property at some point, but he was uncertain of the timeframe. Mr. Galea admitted that Respondent never obtained permits.

Administrative notice is taken of Respondent’s prior License record on November 9, 2022. Such prior License record reflects that Respondent’s License No. 318688 was first issued on March 23, 2018, and is active. Such prior License record also reflects that there were two open complaints and one prior complaint resulting in discipline against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. 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).

The evidence established that, while the project took longer than expected, Respondent continued to work on the project until Complainant told Respondent it was not permitted to return to the jobsite in April 2022. Accordingly, Complainant failed to establish that Respondent abandoned the contract and failed to complete the project in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(1).

The evidence established that Respondent did not obtain permits prior to commencing work on the project as required. As such, Respondent did not complete the project in accordance with the applicable building code in a manner that was prejudicial to Complainant. Complainant established that Respondent departed from or disregarded applicable building code in violation of A.R.S. § 32-1154(A)(2)(b).

The evidence established that Respondent’s work was not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(B).

The evidence established that Respondent required additional funds in excess of the contract price. No written change orders were provided to establish the parties agreed to the change in scope and price. Therefore, Complainant established that Respondent failed to complete the project for the price stated in the contract in violation of A.R.S. § 32-1154(A)(8).

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 A.R.S. § 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. 318688 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 A.R.S. § 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 A.R.S. § 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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-137160-45720000Done this day, November 9, 2022.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically or by mail to:

Jeffrey Fleetham, Director

Registrar of Contractors

Rick Kroon

[email redacted]

The Creta Group LLC

[email redacted]

Lisa Melton

[email redacted]

Josh A. Valdez, Esq.

Valdez Law

[email redacted]

By Miranda Alvarez

Legal Secretary

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001

-137160-45720000