ALJDEC decisions subject to certification as final

2022A-03557-CHC-ROC · Registrar of Contractors · 2022-10-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Sarah Mobley,

COMPLAINANT,

v.

Statewide Property Inspections Inc.

dba M & M Renovations

ROC License No. 320679,

RESPONDENT.

No. 2022A-03557-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 23, 2022 at 9:00 AM.

APPEARANCES: Sarah Mobley (“Complainant”) appeared on her own behalf. Martin Markzon appeared on behalf of Statewide Property Inspections Inc. (“Respondent”). Chris Fultz appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

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 July 06, 2018, the Registrar issued License No. 320679 Specialty Residential R-62 Minor Home Improvements contracting to Respondent. Although the license was not set to expire until July 31, 2022, it was voluntarily cancelled by Respondent on June 14, 2022. Martin Eric Markzon is the Qualifying Party/Officer on the license. Respondent’s address of record for the license is 3808 E. Daley Ln. Phoenix, AZ 85050. On an unknown date, Respondent cancelled a $4,250.00 RLI Insurance Company surety bond for the license. There is no prior discipline noted for the license, save one open complaint which is presumably Complainant’s.

On May 02, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 320679 alleging poor workmanship of their project. The Registrar designated it Complaint No. 2022-03557 and assigned to Chris Fultz (“Investigator Fultz”) for investigation.

On May 17, 2022, Investigator Fultz issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on May 31, 2020, at 10:00 a.m.

On May 03, 2022, Investigator Fultz performed his jobsite inspection. Respondent was not present. 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 12 photographs of the project site. When he was finished, Investigator Fultz drafted his Inspection Notes. Ultimately, Investigator Fultz determined that there was a single complaint item contained within the underlying complaint, and he substantiated it. Specifically, Investigator Fultz determined that tiling and grouting had been poorly done between Complainant’s bathtub and shower. Investigator Fultz concluded that Respondent’s work on the project failed to meet the Registrar’s minimum workmanship standards.

On June 10, 2022, Investigator Fultz issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(16) because he believed the work on the underlying project required possession of a R-48 or R-61 contracting license that Respondent did not possess during the relevant time period.

On June 10, 2022, Investigator Fultz issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on July 01, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22) and 32-1154(E).

On July 12, 2022, Investigator Fultz forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On July 13, 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 28, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On July 26, 2022, the Registrar received Respondent’s Answer. In pertinent parts, Mr. Markzon alleged that his contract with Complainant was for “labor and rough building supplies only” and that Complainant supplied all materials for the project. To that end, Mr. Markzon admitted that Complainant asked if she had supplied appropriate materials for the job, and he had agreed. Later, however, Mr. Markzon determined that the grout Complainant purchased did not contain sealer. Although Mr. Markzon further admitted to observing cracks and discoloration, he declined to seal the grout as it was out of the scope of his contract with Complainant. Mr. Markzon opined that Complainant had been happy with his final work, after multiple corrective visits, because she paid him in full. Mr. Markzon noted that he would have attempted further corrective work had Complainant not ceased accessed in lieu of participating in the Registrar’s Building Confidence Program. Mr. Markzon did not address Respondent’s lack of adherence with the Registrar’s Directive.

On July 27, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on September 23, 2022. Per the August 10, 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. Martin Markzon testified on behalf of Respondent. The Registrar’s agency file, including the Notice of Hearing, and supplemental agency file were admitted into the record as their own exhibits. The substantive evidence of record is as follows:

Complainant owns residential property located at 2256 E. Williams Dr. Phoenix, AZ 85024.

On April 07, 2021, Complainant and Respondent entered into a $9,605.00 agreement for a bathroom remodel; including demolition, plumbing, tile, flooring, shower, light fixture, mirror, and paint at Complainant’s residence. On April 07, 2021, a $250.00 Change Order was executed for a bathtub trim kit.

Complainant paid $9,855.00 in full for project.

Work commenced on the project August 04, 2021, and stopped April 22 2022.

On February 17, 2022, a Building Confidence Program inspection took place in Case No. 2022-02580.

Mr. Markzon shuttered Respondent’s doors on December 31, 2021, and relocated to Florida on Monarch 01, 2022.

On an unknown date in April 2022, Mr. Markzon submitted an inactive license status request to the Registrar, which was approved June 28, 2022.

A compliance jobsite inspection was not performed in this matter because on or about May 18 2022, Respondent informed Investigator Fultz that the business was closed, as Mr. Markzon had suffered health issues and retired. Mr. Markzon had also advised Investigator Fultz that no corrective work would be performed in accordance with the Registrar’s Directive on the underlying project.

Mr. Markzon did not read and/or understand Respondent’s duties and obligations under the Directive.

As of the date of the hearing, complaint items 1, 3, and 5-8 remained unrepaired and unaddressed by Respondent.

In closing, Complainant argued that her burden of proof had been sustained, as the record reflected that Respondent poorly performed work on the underlying project and failed to remediate deficiencies per the Registrar’s Directive.

Respondent 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 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.”

The material facts in the case are not in dispute.

It is undisputed that the parties had a multi-part contract, whereby Complainant paid the contract in full and Respondent’s work on the project failed to meet the Registrar’s minimum standards for which a Directive was issued. It is also undisputed that Respondent failed to address the 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 this project. Mr. Markzon’s assertion that he “closed” his business and “retired” does not absolve his duty to perform corrective work, and Mr. Markzon’s belief that the Registrar lacks the authority over License No. 320679 because it was voluntarily cancelled is incorrect. Moreover, any attempts Respondent made to settle the matter with Complainant are irrelevant.

Therefore, because Complainant has established Respondent’s violations 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 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 Statewide Property Inspections Inc. dba M & M Renovations, ROC License No. 320679, be suspended for five (5) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

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, October 06, 2022.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

Statewide Property Inspections Inc

DBA: M & M Renovations

3808 E Daley Ln

Phoenix, AZ 85050

[email redacted]

Sarah Mobley

2256 E Williams Dr

Phoenix, AZ 85024

[email redacted]

By Miranda Alvarez

Legal Secretary