ALJDEC decisions subject to certification as final
2022A-05808-CHC-ROC · Registrar of Contractors · 2023-01-05
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Patricia Butkus,
COMPLAINANT,
v.
M&N REMODELING LLC
dba Patch Master
ROC License No. 334823,
RESPONDENT.
No. 2022A-05808-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: December 16, 2022, at 9:00 AM.
APPEARANCES: Patricia Butkus (“Complainant”) appeared on her own behalf. Jason Simpson appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Mark Saric, Esq. appeared on behalf of M&N Remodeling LLC (“Respondent”). Michael Sabato 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 September 17, 2021, the Registrar issued License No. 334823 Specialty Dual CR-61 Carpentry, Remodeling and Repair contracting license to Respondent. The license is currently active and renewed through September 30, 2023. Michael John Sabato is listed as the Qualifying Party/Member on this license. Nicholas Vincent Sabato is also listed on the license as a Member. Respondent’s address of record for the license is 7136W. Waterfowl Way, Queen Creek, AZ 85143. Respondent has an active $6,750.00 surety bond on the licensed issued by RLI Insurance Company effective September 13, 2021. There is no prior discipline noted for the license, save one open complaint; which is presumed to be related to this matter.
On or about April 07, 2022, Complainant and Respondent entered into a written $7,925.00 remodeling contract to install flooring and paint at Complainant’s residence.
Complainant paid $5,500.00 to Respondent towards the contract price.
On or about July 17, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 334823 alleging abandonment and poor workmanship of their project. The Registrar designated it Complaint No. 2022-05808 and assigned to Jason Simpson (“Investigator Simpson”) for investigation.
On July 25, 2022, Investigator Simpson issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on August 23, 2022, at 9:00 a.m.
On August 23, 2022, Investigator Simpson inspected the work that had been performed on the project to date. He also took 14 photographs of the project site. When he was finished, Investigator Simpson drafted his Inspection Notes. Ultimately, Investigator Simpson derived 9 complaint items from Complaint No. 2022-05808, of which, he substantiated 7 complaint items. Specifically, Investigator Simpson determined that complaint items 2-8 failed to meet the Registrar’s minimum workmanship standards and required Respondent to complete and/or perform corrective work to remediate the identified deficiencies.
On or about September 06, 2022, Investigator Simpson issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in his contracts, including his contract with Complainant.
On or about September 06, 2022, Investigator Simpson issued a Warning Letter to Respondent for issued a Warning Letter to Respondent to advise that work Respondent may have operated beyond the scope of Respondent’s license, as his contract with Complainant exceeded $50,000.00, in violation of Ariz. Rev. Stat. § 32-1154(A)(16).
On September 06, 2022, Investigator Simpson issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated most of Complainant’s complaint allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on September 23, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A), 32-1154(A)(22) and 32-1154(E).
The Directive noted the following restriction:
Any and all Permits must be obtained before start of work.
(Emphasis in original.)
On September 30, 2022, Investigator Simpson forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On October 04, 2022, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(8), and 32-1154(A)(22). Respondent was given until October 19, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.
On October 19, 2022, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted the following:
On April 7, 2022, Respondent forwarded an estimate to Complainant, which outlined the scope of work, as follow: tie downs, flooring install, seal cracks and paint, and insulation repair for $7,925.00. Work then proceeded on the project, accordingly, where Complainant elected and purchased her own materials. On June 7, 2022, work was then substantially completed. Complainant now owes a balance of $2,400.00 to Respondent, notwithstanding punch-list items.
On October 21, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on December 16, 2022. Per the November 16, 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)(1)
Charge 2: A.R.S. § 32-1154(A)(8)
Charge 3: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on her own behalf and called Investigator Simpson as a witness. The Registrar’s agency file, including the Notice of Hearing, and supplemental agency file were admitted into the record as their own exhibits. The substantive evidence of record is as follows:
Complainant owns residential property located at 8717 N. Palo Verde Rd. Florence, AZ 85132.
On or about March 31, 2022, Complainant closed escrow on the property.
Work on the underlying project commenced at Complainant’s residence on or about April 13, 2022, and concluded on or about May 19, 2022.
Between September 06-23, 2022, Respondent did not attempt to perform any corrective work on the project per the Registrar’s Directive. Neither Complainant nor Investigator Simpson had any contact with Respondent during this time period.
No request to extend the Directive’s compliance deadline was received by the Registrar by or on behalf of Respondent prior to September 30, 2022.
Investigator Simpson did not conduct a compliance jobsite inspection or prehearing jobsite inspection in this matter, as Respondent did not perform any work on the project after the initial jobsite inspection took place.
Closing Argument
In closing, Complainant opined that she had sustained her burden of proof, and argued that as a result Respondent should be subject to a civil penalty and revocation of its contracting license by the Registrar.
Respondent declined to provide a closing argument.
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)(1) holds, in pertinent part, that that among the grounds for suspension or revocation of a contractor’s license is “[A]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”
Ariz. Rev. Stat. § 32-1154(A)(8) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.”
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) holds, in pertinent parts, that the Registrar may impose 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 holds that no 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 are not in dispute.
It is undisputed that the parties had a $7,925.00 contract, and that Complainant substantially paid Respondent towards said contract. It is also undisputed that Investigator Simpson substantiated 7 of Complainant’s 9 complaint items, because he determined that Respondent’s work did not satisfy the minimum standards set for workmanship by the Registrar. It is further undisputed that although a Directive was issued which required Respondent to perform corrective work by September 23, 2022, Respondent made no attempt comply.
Therefore, the only remaining issue to address is whether Respondent raised a sufficient justification or excuse for failing to timely complete or remediate Complainant project. These are affirmative defenses that Respondent bears the burden to establish. While Respondent’s refusal to present a defense is not a factor in aggravation, 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. The evidentiary record in this matter reflects that some of Respondent‘s work on the underlying project was poor, that a Directive was issued as a result, and that Respondent failed to comply with the Registrar’s Directive without any affirmative defense(s) for doing so. Thus, Respondent did not sustain its burden of proof in this matter.
Because Complainant established violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(8), and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established grounds for the Registrar to discipline Respondent’s license and assess a civil penalty against Respondent.
Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter, as the Tribunal has no jurisdiction to award a refund of the underlying amount contracted between the parties.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that on the effective date of the Final Order in this matter Respondent M&N REMODELING LLC (dba Patch Master), ROC License No. 334823, be suspended for thirty (30) days.
IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $500.00 in certified funds as a civil penalty.
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 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 40 days from the date of that certification.
Done this day, January 05, 2023.
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]
Mark G. Saric, Esq.
Resolvere Law PLLC, Counsel for Respondent
3101 N. Central Ave., Ste. 304
Phoenix, AZ 85012
[email redacted]
Patricia Butkus, Complainant
8717 N. Palo Verde Rd.
Florence, AZ 85132
[email redacted]
By