ALJDEC decisions subject to certification as final

2022A-04735-CHC-ROC · Registrar of Contractors · 2022-11-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Brandon Nelson,

COMPLAINANT,

Barrier Insulation & Energy LLC

dba Barrier Insulation

ROC License No. 331841,

RESPONDENT.

No. 2022A-04735-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: November 30, 2022 at 1:00 PM.

APPEARANCES: Brandon Nelson (“Complainant”) appeared on his own behalf. Jeremiah Schoneberg appeared on behalf of Barrier Insulation & Energy LLC (“Respondent”). Steve Klein appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Arix Medinaku observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the Arizona Registrar of Contractors (“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 January 04, 2021, the Registrar issued License No. 331841 General Dual KB-2 Residential and Small Commercial contracting license to Respondent. The license is in good standing and has been renewed through January 31, 2023. Jay Jeff Clark is listed as the Qualifying Party/Other on the license, while Martha Jo Gee and Arix Stephen Angelo Medinaku Dubois are both listed as the Manager. Respondent’s address of record for the license is 4621 N. 8th Pl. Phoenix, AZ 85014. Respondent has an active $20,000.00 surety bond on the license, effective December 25, 2020. The license has not been previously disciplined by the Registrar. There is 1 open complaint against the license which is presumably related to this matter.

On or about June 10, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 331841 alleging poor workmanship regarding an insulation project. The Registrar designated it Complaint No. 2022-04735 and assigned to Steve Klein (“Investigator Klein”) for investigation.

On June 13, 2022, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by Investigator Klein on August 12, 2022, at 10:00 a.m.

On August 22, 2022, Investigator Klein inspected the work that had been done on the project to date. He also took 9 photographs of the project. When he was finished, Investigator Klein drafted Jobsite Inspection Notes. Ultimately, Investigator Klein determined that Complaint No. 2022-04735 contained 6 separate and distinct complaint items, and of those, he substantiated 4 of them. Specifically, Investigator Klein determined that complaint items 2-4 constituted poor or incomplete work, and failed to meet the Registrar’s minimum workmanship standards. Because Investigator Klein received manufacturer information from Complainant regarding complaint item 1, Investigator Klein substantiated it for remediation by Respondent as well.

On August 15, 2022, Investigator Grimm issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on September 05, 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 September 06, 2022, Investigator Klein escalated Complaint No. 2022-04735 to the Registrar’s legal department with citation recommendations for violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22).

On September 08, 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 September 23, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1155.

On September 23, 2022, the Registrar received Respondent’s timely written Answer.

On October 17, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on November 30, 2022. Per the October 26, 2022, Notice of Hearing the issue to be determined is whether the Registrar has cause to discipline Respondent’s license based on the following charges:

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 his own behalf and called Investigator Klein as a witness. Respondent called Mr. Schoneberg as a witness and submitted Exhibit A. The Registrar’s agency file (“Agency File”), including the Notice of Hearing, was admitted into the record as its own exhibit. The substantive evidence of record is as follows:

Complainant owns residential property located at 13621 N. 51st Way Scottsdale, Arizona 85254.

On or about March 29, 2022, the parties entered into a $7,524.40 contract whereby Respondent agreed to remove 1,200 square feet of Complainant’s existing insulation and replace it with 1,800 square feet of new insulation materials.

Work on the project commenced on or about April 12, 2022, and concluded on or about April 20, 2022.

Complainant did not tender any payments to Respondent towards their contract.

Although Respondent did not participate in the Registrar’s jobsite inspection, Mr. Schoneberg reached out to Complainant nearly immediately after the Directive was issued.

No corrective work was performed by Respondent between August 18, 2022, and September 05, 2022. Neither party asked the Registrar for an extension of the Directive’s compliance deadline.

On or about October 04, 2022, the parties entered into a settlement agreement by executing a Mutual Release of Contract Claims whereby the parties agreed that Respondent would remove the insulation and reinstall it with new product, as well as tender Complainant $2,800.00 to legally absolve each party from any and all causes of action, liabilities, and/or charges stemming from their original agreement.

By October 09, 2022, all terms of the parties’ settlement agreement were fulfilled.

Closing Arguments

Both parties declined to provide closing arguments.

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 requires that “a contractor shall perform all work in a professional and workmanlike manner, and that a contractor shall perform all work in accordance with any applicable building codes and professional industry standards.”

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 case are clear.

It is clear from the record that the parties had a foam insulation contract, and that some of Respondent’s work product on the underlying project failed to meet the Registrar’s minimum workmanship standards for which a written Directive was issued. It is also clear that Respondent failed to timely comply with the Registrar’s Directive.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to complete Complainant’s project in a workmanlike manner per contract and/or timely comply with the Registrar’s Directive. These are affirmative defenses that Respondent bears the burden to establish by a preponderance of the evidence. Here, the record is devoid of any evidence that would tend to establish Respondent performed its work on complaint items 2-4 at or above the Registrar’s minimum workmanship requirements. Investigator Klein’s testimony regarding his uncertainty with requiring Respondent to address complaint item 1 is ultimately rendered moot, because the parties were able to settle their dispute by entering into a binding agreement that was fully executed by October 09, 2022.

Thus, although Complainant established violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22), it is the position of this Tribunal that no discipline is warranted as the parties have since settled their underlying dispute in this matter. No grounds exist for the Registrar to take any disciplinary action against Respondent’s license.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that Complainant’s appeal be dismissed.

IT IS FURTHER RECOMMENDED that Complaint 2022-04735 be closed.

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, December 01, 2022.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

c/o Legal Department

Registrar of Contractors

Arizona Registrar of Contractors, Complainant

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Barrier Insulation & Energy LLC, Respondent

dba Barrier Insulation

4621 N. 8th Pl.

Phoenix, AZ 85014

[email redacted]

Brandon Nelson, Complainant

13621 N. 51st Way

Scottsdale, AZ 85254

[email redacted]

By Miranda Alvarez

Legal Secretary

-54864001

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-137160-45720000