ALJDEC decisions subject to certification as final

2022A-05346-CHC-ROC · Registrar of Contractors · 2023-01-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Stephen Cotton ,

COMPLAINANT

On Demand Construction And Building Services Inc

License No. ROC 318702,

RESPONDENT

No. 2022A-05346-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: January 10, 2023, 9:00 A.M.

APPEARANCES: Joseph Urtuzuastegui, Esq., appeared on behalf of Complainant; Gerald Daniels, owner of Respondent, appeared on behalf of Respondent

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

1. On Demand Construction and Building Services, Inc. (Respondent), is the holder of License Number 318702 issued by the Registrar of Contractors (Registrar).

2. On or about June 30, 2022, Stephen Cotton (Complainant) filed a Complaint against Respondent with the Registrar alleging abandonment and poor work in connection with the renovation by Respondent of a residence in Phoenix, Arizona (“project”).

3. The Registrar performed an inspection of the project on September 9, 2022. Thereafter, the Registrar issued a Directive, dated September 26, 2022, requiring Respondent to correct the alleged deficiencies on the project by completing the following items by October 13, 2022, by appropriate means:

Complaint Item 1: all new materials including proper beams in master bedroom

Were to be used. what shows now is used materials. ;

Investigator’s Observation: This complaint item is relative to raising the ceiling in the back portion of this structure. Existing and new beams are visible. This structural work requires permitting and inspection. The Registrar does not inspect for poor workmanship on work which requires permitting and inspection. Respondent should comply with all requirements of the local building authority relative to the work they performed and provide copies of passed inspection to this Investigator.

Compliance Item 2: All new HVAC was to be run throughout the home- some areas are still missing rough ins; we were told work was being completed when it was not.;

Investigator’s Observation: This complaint item is relative to installation of new duct. Unable to determine what areas are “missing” as there are no mechanical drawings and the interior floor plan has been altered. Complainant provided drawings for the project which consist of a one page floor plan. This mechanical work requires permitting and inspections. The Registrar does not inspect for poor workmanship on work which requires permitting and inspection. Respondent should comply with all requirements of the local building authority relative to the work they performed and provide copies of passed inspection to this Investigator.

Compliance Item 3: Pex material was used outside to connect master bathroom and guest house to the main water line- copper should've been used. ;

Investigator’s Observation: This complaint item is relative to installation of new waterline connecting a detached building which is being converted to a quest house. Drawings for this project consist of a one page floor plan which shows only a footprint for this detached structure. This work (install of new waterline) requires permitting, and inspections. The Registrar does not inspect for poor workmanship on work which requires permitting and inspection. Respondent should comply with all requirements of the local building authority relative to the work they performed and provide copies of passed inspection to this Investigator.

4. Upon being informed that no corrective action was performed, the Registrar then issued a Citation to Respondent, dated November 9, 2022, for the alleged violation of the following:

a. A.R.S. § 32-1154(A)(2) (departure from or disregard of plans or specifications or any building code standards);

b. A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108(b)) for failure to perform work in accordance with applicable building codes and professional industry standards;

c. A.R.S. § 32-1154(A)(22) (failure to perform corrective action without valid justification).

5. The Registrar issued a Notice of Hearing, dated December 5, 2022, that set a hearing for January 10, 2023, at 9:00 A.M. The Registrar mailed a copy of the Notice of Hearing to Respondent on or about December 5, 2022, at its address of record.

6. A hearing was held on January 10, 2023, at 9:00 A.M. Complainant Stephen Cotton testified on his own behalf. Lea Tallo and Karla Foltz appeared on behalf of Complainant but did not testify. Gerald Daniels, owner of Respondent, testified on behalf of Respondent. Lisa Melton, the Registrar Investigator (Investigator) testified on behalf of the Registrar. The Tribunal received and admitted Complainant’s exhibit numbers 1 - 6. No exhibits were submitted on behalf of Respondent.

7. Complainant testified that Blue Sonoran Homes, LLC, purchased the subject property on Feb 4, 2022, and that on February 25, 2023, Blue Sonoran Homes, LLC, and Respondent entered into an Independent Contractor Services Agreement for a remodeling project (Complainant’s Exhibit No. 1) and began work on February 28, 2023. He stated that during the inspection period, it was discussed that Respondent was to work with Complainant’s architect to obtain permits but that Respondent refused to do any work unless the Complaint was dismissed.

8. Gerald Daniels testified on behalf of Respondent that the scope of the project was constantly changing and that there were no construction plans. He said that Complainant wanted to flip the subject property and that Leah Tallow, Complainant’s partner, indicated to him that the city was not to be involved in the project and that she did not want the project permitted because of time constraints On May 10, 2022, he received a stop notice from the city of Phoenix due to the lack of permitting on the project. He further testified that he had done a dozen projects with Complainant and several with Ms. Tallow, including a project at her home.

9. Administrative notice is taken of Respondent’s prior license record. Such record reflects that Respondent’s License No. 277614 was first issued on April 18, 2018. Such prior license record also reflects disciplinary action in the form of a suspension imposed for two days by the Registrar for a violation of A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108(b)) and A.R.S. § 32-1154(A)(22). (See Final Administrative Decision and Order, dated June 16, 2022 (Case No. 2021A-03028-CHC-ROC)).

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154.

2. The burden of proof at an administrative hearing fall to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119.

3. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” BLACK’S LAW DICTIONARY 1182 (Rev. 6th ed. 1990).

4. 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 hearing. A.R.S. §§ 41-1092.4 and 41-1092.05(D).

5. A.R.S. § 32-1154(A) includes in pertinent part among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, any of the following acts:

...

2. Departure from or disregard of: (a) Plans or specifications in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code. (b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

3. Violation of any rule adopted by the registrar.

...

22. Failure to take appropriate corrective action to comply with his chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.....

6. With regard to the “violation of any rule adopted by the registrar” under A.R.S. § 32-1154(A)(3) referenced in the Citation, the rule allegedly violated in this case is Arizona Administrative Code Rule 4-9-108(B) which requires that “[a] contractor shall perform all work in accordance with any applicable building codes and professional industry standards. For work to be performed in accordance with professional industry standards, a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.”

7. The matter now before this Tribunal appears to be one small component of a larger contract dispute between the parties that is presently the subject of civil litigation. The parties evidently are well-acquainted as the evidence reflected that Respondent had done a dozen projects for Complainant in the past as well as many for one of Complainant’s partners. There is no dispute that Respondent performed work without required building permits and was aware of it. There also appears to be no dispute that Respondent was told by Complainant’s partner, Lea Tallo, not to obtain permits, as Ms. Tallo appeared at the hearing and did not take the opportunity to deny Respondent’s assertion that she told him such. It is apparent that Complainant or his partners did not want permitting to slow the project down so that the property could be flipped as quickly as possible and that Respondent acquiesced. However, the Tribunal is persuaded that as much as the directions or instructions from Complainant or his partners was the reason Respondent did not obtain permits, that does not absolve Respondent from the consequences of proceeding with contracting work without the required permits. Respondent’s choice at that point should have been to refuse to go forward with the work and to refuse to participate with Complainant or his partners in attempting to circumvent the applicable building codes.

8. A.R.S. § 32-1154(A)(2)(b). Complainant has presented sufficient evidence to establish that Respondent departed from or disregarded a building code of this state or any political subdivision of this state in any material respect that is prejudicial to another and consequently should be disciplined for a violation of A.R.S. § 32-1154(A)(2)(b). The evidence presented reflected that Respondent was aware, and in fact admitted it was aware, that it was proceeding with the project without the required building permits.

9. A.R.S. § 32-1154(A)(3). Complainant has presented sufficient evidence to establish that Respondent’s work failed to perform work in accordance with any applicable building codes and professional industry standards and did not comply with Arizona Administrative Code Rule 4-9-108(b) and consequently should be disciplined for a violation of A.R.S. § 32-1154(A)(3). As referenced, the evidence presented reflected that Respondent had knowingly proceeded with work without the required building permits.

10. A.R.S. § 32-1154(A)(22). Complainant has not presented sufficient evidence to establish that Respondent failed to perform any corrective action without a valid justification; consequently, Respondent should not be disciplined for a violation of A.R.S. § 32-1154(A)(22). The evidence presented demonstrated that Respondent requested construction documents and plans from Complainant apparently to obtain permits and that Complainant either refused or was unable to provide such documents and plans. The Tribunal considers this failure of Complainant to be a valid justification for Respondent not proceeding with corrective action.

11. In conclusion, the Tribunal finds that Complainant has presented sufficient evidence to establish cause to discipline Respondent’s license for a violation of A.R.S. § 32-1154(A)(2) and § 32-1154(A)(3).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of this Order, On Demand Construction and Building Services, Inc., License Number 318702 is suspended for seven (7) days.

. In the event of certification of this 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 the certification.

Done this day, January 30, 2023.

/s/ Roger Geddes

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

Respondent(s)

On Demand Construction and Building Services

8311 W. Aster Dr.

Glendale, AZ 85381

[email redacted]

Complainant(s)

Joseph Urtuzuastegui, Esq.

1237 S. Val Vista Dr.

Mesa, Arizona 85204

[email redacted]

Stephen Cotton

262 S. 167th Lane

Goodyear, Arizona 85338

[email redacted]-54864001

001

-137160-45720000-54864001

001

-137160-45720000