ALJDEC decisions subject to certification as final
2022A-04951-CHC-ROC · Registrar of Contractors · 2022-12-29
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Kristine Rodgers,
COMPLAINANT,
v.
American Contracting Enterprises Inc.
ROC License No. 312414,
RESPONDENT.
No. 2022A-04951-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: October 03, 2022 & December 15, 2022.
APPEARANCES: Kristine Rogers (“Complainant”) appeared on her own behalf. John Peru appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Keith Korittky appeared on behalf of American Contracting Enterprises Inc. (“Respondent”). Tyler Rogers 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 April 17, 2017, the Registrar issued License No. 312414 General Residential B-3 Remodeling and Repair contracting license to Respondent. The license is currently active and renewed through April 30, 2023. Keith Alexander Korittky is listed as the Qualifying Party/Director on this license. Respondent’s address of record for the license is 515 Carefree Hwy #1259 Phoenix, AZ 85085. Respondent has an active $9,000.00 surety bond on the licensed issued by American Contractors Indemnity Company effective September 03, 2021. There is no prior discipline noted for the license, save one open complaint which is presumably related to this matter.
On or about February 11, 2022, Complainant and Respondent entered into a $3,850.00 contract to install a wooden barn door, including hardware, at Complainant’s residence.
Complainant paid $3,200.00 to Respondent towards the contract price.
On or about June 07, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 312414 alleging poor workmanship and abandonment of their project. The Registrar designated it Complaint No. 2022-04951 and assigned to John Peru (“Investigator Peru”) for investigation.
On June 21, 2022, Investigator Peru issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on July 06, 2022, at 9:30 a.m.
On October 19, 2021, Investigator Peru conducted a review of the estimate Respondent provided to Complainant and inspected the work that had been performed on the project to date. He also took 10 photographs of the project site. When he was finished, Investigator Peru drafted his Inspection Notes. Ultimately, Investigator Peru derived 6 complaint items from Complaint No. 2022-04951, of which, he substantiated 5 complaint items. Specifically, Investigator Peru determined that complaint items 1-2 and 4-6 failed to meet the Registrar’s minimum workmanship standards and required Respondent to perform corrective work to remediate the identified deficiencies. Investigator Peru also specifically notes as follows:
At the time of this Jobsite Inspection both parties are in dispute over whether the existing walls are out of square, or if the Barn Door is bowed. The Barn Door hits the wall/baseboard at the bottom left corner of the door, not allowing for normal operation. The Complainant states that the walls of the room and the Barn Door that the Respondent installed, were both looked at by the original Builder of the home (Fulton) and was determined to be the Bow in the Door causing this issue. The Respondent states that there is no warranty/standard on a custom ordered door of this size, and that in fact it is the” out of square” of the room creating all of the issues on this complaint. There is no disclaimer signed by the Complainant referencing any acceptance of the Barn Door being bowed and not functioning properly provided by the Respondent at this time. Furthermore, the Respondent altered the wall (built down the header) at the Installation location of the Barn Door, and proceeded to install the Barn Door onto the existing wall (Surface Acceptance). The Respondent states that the Complainant “modified the installation” by removing and re-installing the Barn Door. At the time of this Inspection, there is no evidence showing that the Barn Door was altered from its original installed location. At the time of this Inspection, there is no evidence indicating material modification, or damage to the Barn Door.
(Emphasis added.)
On July 11, 2022, Investigator Peru issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on July 28, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108(a), and Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22) and 32-1154(E).
On July 28, 2022, the Registrar received a Response to Written Directive from Respondent whereby Respondent alleged, in pertinent parts, that Respondent had intentionally not completed the project because Mr. Korittky believed the wall the barn door was supposed to be affixed to was “out of plumb” and that Complainant had “dismantled all hardware, removed door from the mounting rail, [and] re-installed a different door.”
On July 28, 2022, Investigator Peru forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On July 29, 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), 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until August 13, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.
On January 10, 2021, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted that “I made a mistake and I dropped the ball on this construction project. I truly am sorry for the homeowner and I take full responsibility. I am making it right by taking the necessary actions and correcting the things that were done wrong. It [is] not my intention to leave a job like that.” [sic] Respondent informed the Registrar that, “This project will be done by tomorrow [January 11, 2022].”
On January 14, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 11, 2022. Per the February 07, 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(a)
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 her own behalf, called Investigator Peru as a witness, and submitted Exhibits 1a, 2d, 2g, 3a, 3c, and 3e into the record. The Registrar’s 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 newly constructed residential property located at 15148 W. Linden St. Goodyear, AZ 85338.
Respondent began work on the project on or about February 12, 2022, and finished around May 07, 2022.
On May 19, 2022, the parties and the builder participated in the Registrar’s Building Confidence Program. At that time, Respondent opined that the wall the door was to be installed on was not to code (e.g. straight), the builder opined that the barn door had been improperly constructed, and Complainant opined that the barn door had been “twisted and bowed” preventing it from closing properly. The matter was not resolved.
Although Mr. Korittky was present for the subsequent jobsite inspection after the formal complaint was filed in this matter, he left between 30 and 45 minutes after it began. During the entirety of his walkthrough while Mr. Korritky was present, Investigator Peru perceived Mr. Korittky’s unsolicited commentary as “deflecting.”
Ultimately, Investigator Peru determined that Respondent had accepted the state of Complainant’s wall, as he had prepared the surface for installation and performed the install at issue. Investigator Peru did not find Mr. Korittky’s argument that the wall was “out of square” to be a viable justification or excuse for Respondent’s workmanship; particularly because he also determined that Complainant “had not materially modified” any of Respondent’s work.
Closing Arguments
In closing, Complainant argued that the state of her wall was not at issue, rather Respondent’s workmanship of both his construction and installation of the barn door was. To that end, Complainant argued that the barn door had been proven to be “twisted” on multiple occasions. Complainant also argued that there were no concerns regarding the hanging materials used on the project. Per Complainant, Respondent had been afforded sufficient time to address the Registrar’s Directive and had failed to do so. As such, Complainant requested that discipline be imposed against Respondent’s contracting license.
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 October 03, 2022, Further Hearing Order OAH mailed to Respondent’s address of record, as well as emailed to Respondent, is sufficient and Respondent is deemed to have received the correspondence. Because the Registrar also transmitted 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. Rev. Stat. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Failure in any material respect to comply with this chapter.”
Ariz. Rev. Stat. § 32-1158(A) provides that a contract between a contractor and property owner amounting to more than $1,000.00 must contain the following information in writing:
The name of the contractor and the contractor's business address and license number.
The name and mailing address of the owner and the jobsite address or legal description.
The date the parties entered into the contract.
The estimated date of completion of all work to be performed under the contract.
A description of the work to be performed under the contract.
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.
The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.
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.
That the property owner has the right to file a written complaint with the Registrar for an alleged violation of Ariz. Rev. Stat § 32-1154(A). The contract shall contain the Registrar's telephone number, website address, and shall state that complaints must be made within the applicable time period as set forth in Ariz. Rev. Stat § 32-1155(A). The information must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor.
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.”
Ariz. Rev. Stat. § 32-1154(E) provides, in pertinent parts, that the Registrar may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty.” It also provides that “[n]o future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.”
The material facts in this matter are clear.
It is clear that the parties had a custom barn door installation contract, on which Complainant substantially paid respondent. It is also clear from the record that Respondent work product on the project did not meet the Registrar’s minimum workmanship standard. Notably, the record also establishes that Respondent did not provide Complainant with a written contract in compliance with Ariz. Rev. Stat. §§ 32-1154(A)(12); 32-1158. It is further clear that although Respondent received the Registrar’s Directive, he failed to timely comply.
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 Tribunal is not at liberty to make presumptions in favor of Respondent or accept facts in mitigation on behalf of Respondent that are not supported by the evidence. Respondent’s absence from this administrative proceeding is, however, a factor in aggravation. The evidentiary record in this matter reflects that Respondent‘s work on the underlying project was poor, as Mr. Korittky assumed all conditions of the wall the barn door was to be installed on, and Respondent failed to adhere to the Registrar’s Directive without any affirmative defense(s) for doing so.
Thus, because Complainant successfully established violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 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 take disciplinary action against Respondent’s contractor’s license.
RECOMMENDED ORDER
In light of the foregoing,
IT IS RECOMMENDED that on the effective date of the Final Order in this matter, Respondent American Contracting Enterprises Inc., ROC License No. 312414, be suspended for eight (8) days based on its violations of §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(12); 32-1158, and 32-1154(A)(22).
IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $100.00 (one hundred dollars) in certified funds as a civil penalty in this matter.
IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s Final Order, the Registrar shall 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 Ariz. Rev. Stat. § 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 five days from the date of that certification.
Done this day, December 29, 2022.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
American Contracting Enterprises Inc., Respondent
515 E. Carefree Hwy #1259
Phoenix, AZ 85085
[email redacted]
Kristine Rodgers, Complainant
15148 W. Linden St.
Goodyear, AZ 85338
[email redacted]
By: Miranda Alvarez
Legal Secretary