ALJDEC decisions subject to certification as final
2022A-03781-CHC-ROC · Registrar of Contractors · 2022-10-27
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
James Yager,
COMPLAINANT,
v.
ARIZONA OVERLAY'S LLC
ROC License No. 327799,
RESPONDENT.
No. 2022A-03781-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: October 05, 2022 at 1:00 PM.
APPEARANCES: James Yager (“Complainant”) appeared on his own behalf. No appearance(s) by or on behalf of Arizona Overlay’s LLC (“Respondent”). Mike Springer appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). David Floyd and Richard Jukes observed.
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 February 20, 2020, the Registrar issued License No. 327799 Specialty Dual CR-8 Floor Covering contracting license to Respondent. Although the license was renewed through February 29, 2024, on October 24, 2022, the license was suspended by the Registrar for lack of bond. Daniel Hernandez Yanez is the Qualifying Party/Member on this license. Respondent’s address of record for the license is 1258 W. Allegheny St. Tucson, AZ 85705. There is no prior discipline noted for the license, save one open complaint which is presumably related to this matter.
On May 10, 202, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 327799 alleging poor workmanship of their project. Attached to the complaint was a 3-page “timeline” from Complainant, contract, invoice, and proof of payment. The Registrar designated it Complaint No. 2022-03781 and assigned to Mike Springer (“Investigator Springer”) for investigation.
On May 11, 202, Investigator Springer issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in his contracts, including his contract with Complainant.
On May 11 2022, Investigator Springer issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on June 22, 2022, at 10:00 a.m.
On June 22, 2022, Investigator Springer conducted an additional review of the contract executed between the parties and inspected the work that had been performed on the project to date. He also took 26 photographs of the project site. When he was finished, Investigator Springer drafted his Inspection Notes. Ultimately, Investigator Springer determined that Complainant’s narrative constituted a single complaint item, which he substantiated as failing to meet the Registrar’s minimum workmanship standards. Investigator Springer determined that Respondent’s workmanship required corrective work to remediate the identified deficiency.
On June 22, 2022, Investigator Springer 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 08, 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 July 11, 2022, Investigator Springer issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on July 21, 2022, at 10:30 a.m.
On July 21, 2022, Investigator Springer inspected Respondent’s corrective work on the project and took 3 photographs. When he was finished, Investigator Springer drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Springer determined that Respondent had not performed corrective work necessary to remediate complaint item 1.
On July 21, 2022, Investigator Springer forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On December 28, 2021, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until August 09, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.
On August 09, 2022, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted the following:
I began the process on doing the repair work June 2nd. In order for us to complete a good repair work, we needed for our epoxy treatments and other materials to dry and cure. There were many days I would try to go over and complete repair but [Complainant] would have gates locked and I wouldn’t have access. [Complainant] would then try and force me to be at his house at times he would say, very difficult to schedule with. We then managed to treat cracks and fix other details by June 20th. By June 27th we had completed this repair. [Complainant] then calls me saying the old and new colors do not look alike. We then tried to go and correct the color since it is a completely custom color, but [Complainant] would not answer text or calls. I am still willing to fix the color on the 10 linear feet by 1 inch grout line. Other than that the cracks have been sealed and repaired since June 10, 2022.
(All errors in original.)
On August 10, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on October 05, 2022. Per the August 29, 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
Charge 2: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158
Charge 3: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on his own behalf and called Investigator Springer as a witness. The substantive evidence of record is as follows:
Complainant owns residential property located at 6316 N. Camino Miraval Tucson, AZ 85718.
On or about March 28, 2021, Complainant and Respondent entered into a $6,800.00 pool resurface contract to install flagstone around Complainant’s existing in-ground pool, including drain replacement.
Complainant paid the contract in full.
Mr. Yanez made and missed several corrective work appointments. Ultimately, Respondent only presented to the project site on one occasion during the Directive compliance period, on June 27, 2022, to perform corrective work. Mr. Yanez did not return on any subsequent date.
Additional Evidence
Complainant testified that he asked Mr. Yanez to set corrective work appointments so that he could be present to observe, but denied denying Respondent access to the project site during the Directive compliance period. Per Complainant, he only locked the access gate to the project site prior to filing the underlying claim, and again after the expiration of the Directive compliance period.
Investigator Springer testified that he was never able to reach Mr. Yanez during the course of his investigation. Per Investigator Springer, Respondent’s contract with Complainant did not contain an anticipated date of completion nor did it include a brief description regarding the Registrar’s complaint process.
The parties were never able to settle their dispute.
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 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)(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. Admin. Code R4-9-108(b) requires that “[a] contractor shall perform all work in accordance with any applicable building codes and professional industry standards.”
Ariz. Rev. Stat. § 32-1154(A)(12) holds, in pertinent part, that among the grounds for suspension or revocation of a contractor’s license is a “[f]ailure in any material respect to comply with this chapter.” Specifically, Ariz. Rev. Stat. § 32-1158 provides that “Any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:
1. The name of the contractor and the contractor's business address and license number.
2. The name and mailing address of the owner and the jobsite address or legal description.
3. The date the parties entered into the contract.
4. The estimated date of completion of all work to be performed under the contract.
5. A description of the work to be performed under the contract.
6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.
7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.
8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.
9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection.
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 this matter are not in dispute.
It is undisputed that the parties had a pool resurfacing contract, for which Complainant paid the price in full. It is further undisputed that Respondent failed to include statutorily required elements in the underlying contract in violation of Ariz. Rev. Stat. §§ 32-1154(A)(12); 32-1158(4) and (9), for which a Warning Letter was issued. It is further undisputed that the sole complaint item in Complaint No. 2022-03781 was substantiated as failing to meet the Registrar’s minimum workmanship standards, and that Respondent failed to perform corrective work sufficient to remediate the project per the Registrar’s Directive in violation of Ariz. Rev. Stat. §§ 32-1154(A)(3) and (A)(22).
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 deficient and/or substandard performance on this project. Respondent’s “denial of access” allegation is not supported by the record. Moreover, Respondent’s absence from these proceedings is a factor in aggravation.
Therefore, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(12); 32-1158, and 32-1154(A)(22) by a preponderance of the evidence, 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 Arizona Overlay’s LLC, ROC License No. 327799, be suspended for five (5) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(12), 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 27, 2022.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
Registrar of Contractors
James Yager, Complainant
6316 N Camino Miraval
Tucson, AZ 85718
[email redacted]
Arizona Overlay's LLC
1258 W Allegheny St
Tucson, AZ 85705
[email redacted]
By Miranda Alvarez
Legal Secretary