ALJDEC decisions subject to certification as final

2022A-04073-CHC-ROC · Registrar of Contractors · 2022-09-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Joy Ritchie,

COMPLAINANT

Hudson Construction AZ LLC

License No. ROC 322268,

RESPONDENT

No. 2022A-04073-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 15, 2022

APPEARANCES: Complainant Joy Ritchie appeared via Google Meet on her own behalf. Wes Ellington, Registrar of Contractors Investigator, appeared via Google Meet.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

FINDINGS OF FACT

Hudson Construction AZ LLC (Respondent) is the holder of License No. 322268 issued by the Arizona Registrar of Contractors (Registrar).

On or about August 2, 2021 Joy Ritchie (Complainant) signed a contract with Respondent for repair of her roof. The contract amount was for $4,423.46.

On or about May 19, 2022, the Registrar received a Complaint alleging abandonment of the project.

The Registrar assigned the complaint to Investigator Wes Ellington. The jobsite inspection was performed on June 28, 2022. The Jobsite Inspection Notes state the following:

After a storm in the summer of 2021, the Complainant filed a claim with her insurance company and received money for repair of her roof. The Respondent was paid the insurance amount of $4,423.46 to replace the roof. The job has not been started since that time.

On 6/24/2022, The Respondent (Marily Matthews) emailed,

“We are going to have to probably declare bankruptcy, things are that bad. However, we are concerned with the homeowners. I have been contacting the insurance companies to add to the claims to see if we can get them enough to do the roofs.”

On 6/28/2022 at 10:00 AM, a jobsite inspection was conducted with both parties present. The inspection confirmed that no work had been done on the roof. Both parties agreed that they entered a verbal contract to completely replace the roof including any damaged sheathing for the insurance amount ($4,423.46) that had been paid and signed over to the Respondent, plus an additional $1,800. The Complainant stated that she did not have the additional $1,800 and has requested that the $4,423.46 be refunded. The Respondent (Marily Matthews), stated that if the Complainant would allow her to contact her insurance company, she feels she could get them to increase the amount paid to cover the $1,800. The Complainant and her daughter (authorized representative) both have indicated that they do not trust the Respondent (Marily Matthews) with any additional money up front.

The Respondent (Marily Matthews) said that they want to complete the job, but has also made it clear that they do not have the funds to settle the matter financially by returning the money obtained from the Complainant. Nor does the Respondent have funds to obtain the materials needed to complete the job unless the Complainant allows her to negotiate with her insurance company for additional money which would be given to the Respondent Prior to the work commencing. Additionally, the Respondent (Marily Matthews) stated that they have had a labor shortage, which would further prevent their ability to complete the roof. To issue a written directive to the Respondent at this point would only prolong the inevitable, and continue what has gone on for almost a year for the Complainant. The Respondent has clearly abandoned this job and has an additional nine jobs that leave even more victims without their insurance claims to repair their roofs.

Complaint Item: Our roofing was supposed to be removed and replaced. Plywood replaced in weak/damaged areas. All damage on our front porch roof, including plywood, drywall and roofing replaced.

Investigator’s Observation: The jobsite inspection confirmed that no roof work had been started on the Complainant’s home. The Respondent does not have the means to complete the job or settle with the Complainant by returning her money. The Respondent has abandoned this job for almost a year. This complaint will be referred to the ROC legal department for abandonment.

Governing Rule: Workmanship Rule: ARS §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.

(All errors contained in the original)

On July 1, 2022, the Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(1).

On or about July 15, 2022, Respondent e-mailed an Answer to the Registrar. The Answer contained the following:

Please accept this response regarding the above named case.

Regretfully, due to the extreme increase in materials and labor, we have found it impossible to continue with roofing. Like many small businesses, the problems caused by Covid and rapidly escalating material costs, has created a situation which forces us to declare bankruptcy. We have been upfront and honest with the insurance companies and made them aware of our dilemma. We will vigorously defend any accusations of fraud. Never was our intent to do anything but help this homeowner.

On or about August 4, 2022, a Notice of Hearing was issued setting a hearing on September 15, 2022 at the Office of Administrative Hearings, an independent state agency.

At hearing, Complainant testified that the roof to her home was damaged due to a storm, and she received funds from Allstate Insurance Company to repair the same.

Complainant testified further that Marily Matthews was canvassing her neighborhood on behalf of Respondent, and informed Complainant that Respondent would repair the roof for the cost of the insurance proceeds.

In addition, Complainant testified that while work was to begin in October 2021, Ms. Matthews informed her work would not commence until November. From November to early April, 2022, there was no communication from Respondent as to when the work would commence. On April 5, 2022, Ms. Matthews requested additional funds as the original estimate would not cover the work to be performed. Complainant testified that she refused to provide additional funds and requested her money back. Ms. Matthews informed Complainant to provide a cancellation notice and upon receipt of the same, the money would be refunded. Complainant testified that she sent a cancellation notice on April 7, 2022, and to date has yet to receive her refund.

Finally, Complainant testified that she is seeking discipline to ensure that other consumers are not taken advantage of by Respondent.

Investigator Ellington testified that it seemed as if Respondent was involved in a scheme were it would collect insurance monies from unsuspecting homeowners and never follow through with the work.

In addition, Investigator Ellington testified that he did not issue a written directive based upon Ms. Matthews statements at the jobsite inspection, thus he just proceeding with forwarding the case to the legal department for a formal complaint.

Although the start of the hearing was delayed approximately 20 minutes, Respondent did not appear through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license.

The copy of the Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable and Respondent is deemed to have received notice of the hearing. A.R.S. §§ 41-1092.04 and 41-1092.05(D).

Administrative notice is taken of Respondent’s prior License record on September 29, 2022. Such prior License record reflected that Respondent’s License No. 322268 was first issued on October 10, 2018, and reflects that there were 3 open complaints, including the present complaint. The license was also revoked as of August 5, 2022 due to previous complaints.

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 Vazanno 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 preponderance of the evidence established that Respondent accepted the insurance proceeds and failed to perform any work on the project. Further, Respondent failed to refund the monies to Complainant as promised. Therefore, Complainant established that Respondent abandoned in violation of A.R.S. § 32-1154(A)(1).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall revoke Respondent’s License No. 322268.

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 30 days from the date of that certification.

-54864001

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-137160-45720000Done this day, September 29, 2022.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

Joy Ritchie

[email redacted]

Hudson Construction AZ LLC

[email redacted]

By Miranda Alvarez

Legal Secretary -54864001

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-137160-45720000