ALJDEC decisions subject to certification as final

2022A-04949-CHC-ROC · Registrar of Contractors · 2022-12-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ricky Wheelington,

COMPLAINANT

MH Project Consultancy LLC

License No. ROC 326537,

RESPONDENT

No. 2022A-04949-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 8, 2022

APPEARANCES: Complainant Richard Wheelington appeared on his own behalf and was represented by Maxwell T. Riddiough. Hassan Nasr, Qualifying Party and Member, appeared on behalf of Respondent MH Project Consultancy LLC.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

MH Project Consultancy LLC (Respondent) is the holder of a CR61 License No. 326537 issued by the Arizona Registrar of Contractors (Registrar). The CR61 License allowed Respondent to enter into contracts for carpentry, remodel, and repair with a total cost up to $50,000.00.

On or about September 8, 2021, Richard Wheelington (Complainant) entered into a contract with Respondent for an addition and remodel of his existing home for a total contract price of $153,672.00. The contract provided that the project would reach substantial completion in 60 to 90 days after the project began. The contract did not include an advisement that Complainant had the right to file a complaint with the Registrar.

The permit for the project was issued on September 24, 2021.

Respondent started work on the project on October 20, 2021.

In January 2022, Respondent performed little work on the project.

During the first week of February 2022, work on the project stopped completely.

In February 2022, Complainant requested a meeting with Respondent to discuss the timeline for completion.

On or about February 13, 2022, Enrique Zamora, Qualifying Party and Member of Alternative Custom Remodeling LLC, emailed Complainant regarding the project. Mr. Zamora’s company had performed work on the project as a subcontractor for Respondent. The email provided as follows:

I went out to speak to Bara this afternoon, and after a lengthy discussion, we are in agreement that he will assume control of the project. Per your request, we feel it is best for ACR to relinquish control of the project over to Bara. He will be working directly with you guys through the completion of the project. To simplify the process, Qualizona is still the overall contractor and ACR will remain as the subcontractor on paperwork and all checks will be issued to ACR.

From the funds obtained from the draws, Bara agreed that ACR is to receive the check and disburse the funds to him to be able to pay for the materials and labor. If we can agree to the contract that was sent and the disbursement of the funds as stated on the most recent email, we can proceed with Bara as your contractor and point of contact through the duration and completion of your project.

Thank you both for considering this offer as it will serve the best interest for all involved and minimize the complication of reaching the common goal of completing this project ASAP.

Please let us know that we are all ( Mohammed, Wellingtons’, Bara & ACR) in agreement to proceed to completion of the project. This will take effect immediately after the signing of the new document as the guiding document to completion.

On the same day, Complainant responded the following:

We ask that all work regarding the project at 6759 E Hayne St., Tucson, AZ (Nemer/Wheelington) cease until we speak with legal counsel. All parties will be informed when work can resume. There will be no further communication between the parties until advised by legal counsel.

On or about March 3, 2022, Complainant’s legal counsel sent a certified letter to Respondent regarding the project designated as a Notice Under A.R.S. § 12-1363. In the letter, Respondent was notified of existing construction defects and work done beyond what the approved plans for the project contemplated without written change orders.

The certified letter was returned to Complainant’s legal counsel unclaimed.

On or about May 31, 2022, Mr. Nasr reached out to Complainant’s counsel. Counsel advised Mr. Nasr of the March 3, 2022 letter that was returned and emailed it to Mr. Nasr on that day. Counsel requested that Mr. Nasr respond to the issues raised in the letter within seven days. Mr. Nasr did not respond to the letter.

Complainant paid a total of $107,869.00 towards the project.

On or about June 17, 2022, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the project.

The Registrar assigned the complaint to Investigator Manuel Bermudez. After a jobsite inspection, Investigator Bermudez issued a written directive to Respondent that provided 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 August 23, 2022.

. . . .

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

Compliance Item: 2 - Deterioration and yellowing of the lathing work that Respondent performed. Specifically, on the north side exit door and yellowing of all foam throughout the east side of the residence.

Investigator’s Observation: Verified: at time of inspection, I observed yellowing and possible material breakdown of lathing material on the East and North sides of the residence.

Governing Rule: Violation of any rule adopted by the Registrar;

Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 3 - The 25 square feet of cement that Respondent poured on the foundation for the addition in excess of what the approved plans contemplated.

Investigator’s Observation: Verified: at time of inspection, I observed an area of concrete in the entry door for carport area of the new edition, which was not listed in the building plans.

Governing Rule: Violation of any rule adopted by the Registrar;

Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Following the issuance of the written directive, Respondent made no attempt to contact Complainant regarding the written directive. After the deadline in the directive expired, Investigator Bermudez was notified no corrective work had been performed.

The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(2)(a); A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A); A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158; A.R.S. § 32-1154(A)(16); and A.R.S. § 32-1154(A)(22).

On or about September 19, 2022, Respondent submitted an answer to the citation in which Respondent admitted that it had committed the charged violations of A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158; and A.R.S. § 32-1154(A)(16).

Investigator Bermudez testified as to his observations of the project during the jobsite inspection. Investigator Bermudez also detailed the scope of Respondent’s license.

Ana Nemer, Complainant’s wife, testified as to her interactions with Respondent during the project. Ms. Nemer stated she did not execute any written change orders on the project. Ms. Nemer testified that Respondent never achieved substantial completion on the project. Ms. Nemer provided an estimate from a different contractor for the repairs to the lathing indicating that the lathing would need to be demoed due to deterioration and new foam and mesh installed.

Complainant testified that Respondent stopped work on the project on February 4, 2022, and he had received no contact from Respondent since February 13, 2022. As to the additional concrete, Complainant indicated Respondent advised him that the additional lip was required per code, but he did not sign a written change order with respect to the change.

Mr. Zamora testified that the project was delayed because of Complainant’s separate contracts for the installation of an instant water heater. Mr. Zamora stated that the stucco could not proceed until the drywall was done, which could not be done until the HVAC was done.

Mr. Nasr testified that the project was “under roof” in early December, which would have triggered an additional progress payment under the contract that was never paid. Mr. Nasr stated that there was no yellowing of the lathing in February 2022 when Respondent was told to stop work on the project. Mr. Nasr asserted that the yellowing was the result of exposure to UV rays was and did not affect the integrity of the project. Mr. Nasr admitted he had not been to the property since February 2022 to see the condition of the lathing. Mr. Nasr acknowledged he had no contact with Complainant after the directive was issued.

Administrative notice is taken of Respondent’s prior License record on December 28, 2022. Such prior License record reflects that Respondent’s License No. 326537 was first issued on October 16, 2019, and was active. Such prior License record also reflects that there were no other open or prior complaints against Respondent’s license.

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 Vazzano 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 evidence established that Respondent did not complete the project in accordance with the plans without Complainant’s consent in a manner that was prejudicial to Complainant. Therefore, Complainant established that Respondent departed from or disregarded the plans in violation of A.R.S. § 32-1154(A)(2)(a).

The evidence established that Respondent’s work was not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A).

The evidence established that Respondent’s contract failed to include the required elements of a contract set forth in A.R.S. § 32-1158(A). Therefore, Complainant established that Respondent failed to comply with the Registrar’s statute in violation of A.R.S. § 32-1154(A)(12).

The evidence established that Respondent knowingly entered into a contract with a total cost of $153,672.00. Respondent’s license type allows it to enter into contracts with a total cost of $50,000.00 or less. Respondent’s understanding that it could subcontract work to a B1 or B2 license would allow it contract for more than $50,000.00 was not an excuse for its contract with Complainant. Therefore, Complainant established that Respondent knowingly contracted beyond the scope of its license in violation of A.R.S. § 32-1154(A)(16).

The evidence established that Respondent did not attempt to complete the corrective work following the Directive being issued. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 326537 for a period of five.

It is further recommended 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). If Respondent fails to establish to the Registrar that it has brought its contracts into compliance with A.R.S. § 32-1158(A) within thirty 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 if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

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.

-54864001

001

-137160-45720000Done this day, December 28, 2022.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically or by mail to:

Jeffrey Fleetham, Director

Registrar of Contractors

Manny Bermudez

[email redacted]

Maxwell T. Riddiough

Thompson Krone PLC

3430 East Sunrise Drive, Suite 110

Tucson, AZ 85718

[email redacted]

MH Project Consultancy LLC

901 N 13th Ave

Tucson, AZ 85705

[email redacted]

By-54864001

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-137160-45720000 Miranda Alvarez

Legal Secretary