ALJDEC decisions subject to certification as final
2022A-03916-CHC-ROC · Registrar of Contractors · 2022-11-21
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Lanse Delara
COMPLAINANT,
v.
The 9 Design Group, LLC
License No. ROC 326280,
RESPONDENT.
No. 2022A-03916-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: October 31, 2022
APPEARANCES: Gary Smith, Esq. appeared on behalf of Complainant Lanse Delara. Brett Markusen appeared on behalf of Respondent The 9 Design Group, LLC.
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
_____________________________________________________________________
FINDINGS OF FACT
1. On or about April 21, 2021, Respondent The 9 Design Group, LLC (Respondent) and Complainant Lanse Delara (Complainant) entered into a residential remodeling contract, for the amount of $66,535.50.
2. Brett Markusen is the qualifying party for Respondent.
3. Respondent did not provide Complainant with a written contract that advised Complainant of his right to file a complaint with the Arizona Registrar of Contractors (ROC or Registrar) against Respondent for an alleged violation of Arizona Revised Statutes (A.R.S.) § 32-1154(A), within the time allowed by A.R.S. § 32-1155(A).
4. In May of 2021, Respondent started work on the project.
5. Complainant paid Respondent timely progress payments under the contract that totaled $61,384. See the ROC’s administrative record at pgs. 43-64.
6. On or about May 13, 2022, the ROC received a complaint from Complainant alleging poor workmanship and abandonment on the part of Respondent.
7. The ROC assigned the complaint to Investigator David Fagerburg.
8. On July 18, 2022, Investigator Fagerburg conducted a job-site inspection.
9. On July 22, 2022, the ROC issued a Directive to Respondent.
10. The July 22, 2022 Directive provided, in relevant part, 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 Monday August 15, 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 reasons1, 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.
Investigator Notes: 1: In reviewing the contract submitted I am able to verify there is at least 1 of the 9 minimum elements of a contract missing violating ARS 32-1158(A).
..........................................................
DIRECTIVE REQUIREMENTS
You are directed to remedy the following violations by the appropriate means:
Compliant Item 1: Contractor verbally promised a 3-month construction time assuring Lanse the pool would be completed by summer of 2021, the pool remains an unfinished shell and no work has been performed for months even though Lanse has requested multiple times for work to resume and be completed.
Investigator’s Observation: Verified. I am able to verify the complainant has paid the progress payments per the written contract, work stopped in mid-March, 2022 and the pool project is not complete. The respondent is to complete the project per contract.
Governing Rule: ARS §32-1154 (A) (1) (Abandonment), ARS §32-1154 (A) (3) namely R4-9-108, Poor work not performed in accordance with professional industry standards.
..........................................................
11. Respondent failed to comply with the Directive by August 15, 2022.
12. On August 18, 2022, the ROC issued a Citation against Respondent’s license alleging that Respondent violated Arizona Revised Statutes (A.R.S.) § 32-1154(A)(3),(12), and (22); A.R.S. § 32-1158(12); Arizona Administrative Code (A.A.C.) R4-9-108(A).
13. The ROC received a timely answer to the Citation from Respondent’s subcontractor, Thomas Wilcoxson. Mr. Wilcoxson explained in the answer that Respondent stopped work because Complainant did not pay for the additional work that Respondent performed due to unforeseen circumstances.
14. Respondent did not issue written change orders to Complainant for the additional work.
15. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.
16. A hearing was held on October 31, 2022.
17. At hearing, Complainant testified on behalf of himself. Mr. Markusen
and Mr. Wilcoxson testified on behalf of Respondent. Investigator Fagerburg testified regarding his investigation of the complaint and the issuance of the Directive.
18. At hearing, Mr. Delara explained that Respondent performed poor work and failed to complete the project. Mr. Delara explained that Respondent did not issue written change orders for the additional work.
20. Mr. Markusen stated that Complainant owed Respondent $9,000 for work that was completed and Respondent is unable to move forward without receiving the payment.
21. Mr. Wilcoxson described himself as the “main line of contact” for the project. Mr. Wilcoxson had more contact with Complainant than Mr. Markusen.
Mr. Wilcoxson explained that Respondent encountered unforeseen conditions during construction. Respondent discovered an existing pool underground and an existing sewer line. Mr. Wilcoxson explained that the existing pool was larger than the new pool that Respondent planned to install. Respondent performed repair work to the sewer line. Mr. Wilcoxon stated that Respondent stopped work because Mr. Delara failed to pay for the additional work.
22. Based on Inspector Fagerburg’s testimony and the evidence of record, the Administrative Law Judge finds that the work identified in the Directive as requiring corrective action failed to meet the ROC’s minimum workmanship standards, and that no valid justification exists for Respondent’s failure to have complied with the Directive.
23. Administrative notice is taken of Respondent’s disciplinary history as shown on the Registrar’s public website on November 21, 2022. Respondent’s license record shows that its licensed was issued on September 20, 2019, and that there are three open complaints against Respondent’s license. Such prior license record shows that one complaint has resulted in discipline of Respondent’s license. Such prior license further shows that three complaints were resolved or settled by Respondent. Respondent’s disciplinary history is considered an aggravating factor in the imposition of discipline and penalties.
CONCLUSIONS OF LAW
This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.
The burden of proof at an administrative hearing falls to the party
asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119.
3. The Administrative Law Judge may consider ROC’s administrative record. See A.A.C. § R4-9-118.
4. 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).
5. The preponderance of the evidence shows that Respondent failed to perform the work within professional industry standards, which is a violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A).
6. The preponderance of the evidence shows that Respondent failed to
correct the items listed in the Registrar’s Directive without valid justification, which is a violation of A.R.S. § 32-1154(A)(22).
7. The undisputed evidence established that the contract did not include a statement that the property owner has the right to file a written complaint with the Registrar for alleged violations of A.R.S. § 32-1154(A).
8. The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(12), namely A.R.S. § 32-1158(A).
RECOMMENDED ORDER
Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend ROC License: No. 326280 held by The 9 Design Group, LLC, for five days.
IT IS FURTHER ORDERED that on or before thirty (30) days after the effective date of the final order, Respondent shall provide a sample contract to the Registrar to demonstrate that it has amended its contracts to include the nine terms required by A.R.S. § 32-1158(A). On or before thirty (30) days after the effective date of the final order, Respondent shall demonstrate to the Registrar that it is in compliance with the requirements of A.R.S. § 32-1124(B). If Respondent fails to establish to the Registrar that it has brought its contracts into compliance with A.R.S. § 32-1158(A) and that it is in compliance with A.R.S. § 32-1124(B), within thirty (30) days, its contractor’s license shall be suspended until it demonstrates that it has done so.
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 no future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A) (7), unless Respondent tenders payment of any outstanding prior civil penalty.
Done this day, November 21, 2022.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham
Director
Registrar of Contractors
c/o Legal Department
1700 W. Washington Street, Suite 105
Phoenix, AZ 85007
[email redacted]
David Fagerburg
[email redacted]
Gary Smith, Esq.
402 E. Southern Ave.
Tempe, AZ 85282
[email redacted]
Lanse Delara
5149 N. 34th St.
Phoenix, AZ 85018
[email redacted]
The 9 Design Group, LLC
2854 E. Ivanhoe St.
Gilbert, AZ 85295
[email redacted]
By Miranda Alvarez
Legal Secretary