ALJDEC - Licensing

2022A-05866-RFA-LS-ROC · Registrar of Contractors · 2025-06-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jay Thomas Bushong & Peggy Sue Bushong,

COMPLAINANTS,

v.

Elite Rooter Phoenix Inc.

dba Elite Rooter,

ROC License No. 316232,

RESPONDENT.

No. 2022A-05866-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 20, 2025 at 9:00 AM.

APPEARANCES: Assistant Attorney General Mona Baskin, Esq. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with Shaquira Adebule as a witness. Jay Thomas Bushong and Peggy Sue Bushong (“Complainants”) appeared on their own behalf. Alice Olivas appeared on behalf of Elite Rooter (“Respondent”). Suzanne Bushong and Jon Fulford observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: Registrar Exhibits 1-10, including the Notice of Hearing on Appealable Agency Action (“Notice of Action”), were admitted into the evidentiary record.

_____________________________________________________________________

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 Arizona Administrative Code (“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 November 02, 2017, the Registrar issued ROC License No. 316232 to Respondent for Specialty Dual CR-37 Plumbing contracting. Although the license was renewed through November 30, 2025, on June 03, 2024, the license was revoked by the Registrar. Pratik Patel, who was listed as the Qualifying Party and Control Person on the license, disassociated effective March 15, 2024, but remained listed on the license as Other. Respondent’s address of record for the license is 3000 Bunsen Ave. Ste. B Ventura, California 93003. Respondent’s $6,750.00 surety bond from Merchants Bonding Company, effective November 12, 2021, and $14,500.00 bond from RLI Insurance Company, effective December 15, 2023, have both been cancelled. The license reflects discipline by the Registrar on two (2) prior disciplinary occasions, one of which is presumed to be related to this matter.

On or about July 18, 2022, the Registrar received a narrative complaint from Complainants’ daughter, Suzanne Bushong, on her parents’ behalf against Respondent’s ROC License No. 316232 alleging poor workmanship of a $13,681.00 whole home plumbing replacement project. The Registrar designated it Complaint No. 2022-05866 and assigned to Christopher Fultz (“Investigator Fultz”) for investigation.

On August 22, 2022, Investigator Fultz conducted a review of the contract executed between the parties, took 15 photographs, and inspected the work that had been performed on the project to date. Respondent was not present. When he was finished, Investigator Fultz drafted his Jobsite Inspection Notes. Ultimately, Investigator Fultz derived two (2) separate and distinct complaint items from Complaint No. 2022-05866, both of which he was able to substantiate based on his firsthand observations. Specifically, Investigator Fultz concluded that the work Respondent had performed on the project failed to meet the Registrar’s minimum workmanship standards, and specifically noted the following:

During the inspection, I noted that the concrete finishing completed by Elite was not to any standard. It wasn’t completed in a manner that would allow for the floors to be finished. Also the hall bathroom tub and Master bathroom sink do not drain properly.

A directive will be issued to fix these items by approprite [sic] means.

On August 29, 2022, Investigator Fultz issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated both of Complainants’ workmanship allegations against Respondent. Investigator Fultz included the following observations from his jobsite inspection:

Compliance Item: 1 – The concrete in the areas that was cut up and redone by the contractor was not finished properly. All of the areas are not level or finished in a manner that would allow for the repairs to be finished.

Compliance Item: 2 – The shower in the hall bath and the sink in the master bath do not drain properly. These items need to be completed.

The Directive further put Respondent on notice that the licensee had until 5:00 p.m. on September 19, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A), 32-1154(A)(22), and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

On an unknown date, Investigator Fultz forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On October 12, 2022, the Registrar issued a Citation to Respondent for an 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 October 27, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On November 02, 2022, because Respondent failed to submit a timely Answer to the aforementioned Citation, the Registrar issued a Final Administrative Decision and Order (Default) (“Default Order”) to Respondent which suspended ROC License No. 316232 pursuant to Ariz. Rev. Stat. §§ 32-1154 and 32-1155 for one (1) day, effective November 09, 2022, and assessed a $250.00 civil penalty.

On November 04, 2022, the Registrar received a Request to Set Aside Default Order from Mr. Patel on behalf of Respondent. Respondent’s motion noted the following, in pertinent part:

[Respondent] was contacted by [Complainants] to inspect bathrooms that had been backing up back to back. Upon arrival, [Respondent] determined that the issue was more severe than a toilet back up so they presented [Complainants] an estimate for the cost to repair the plumbing issues. The estimate detailed that [Respondent] would jackhammer and remove a section of concrete in their master bedroom in order to gain access to all necessary plumbing connections for both of the bathrooms, kitchen and laundry which in return would eliminate all issues that had arisen in the home.

The complaint presented by [Complainants] is not one that can be addressed by [Respondent]. [Respondent] completed all necessary plumbing work to resolve the issues that had been present. [Respondent] is not responsible for the construction aspect of putting the restroom back together, as that is a Restoration issue and not a plumbing issue.

(Emphasis in original.)

On November 15, 2022, the Registrar issued an Order Denying Request to Set Aside [Default Order]. The Registrar noted that no good cause existed to grant Respondent’s request, as Respondent failed to establish that it had not received the Registrar’s Citation and/or had timely submitted an Answer thereto.

On October 08, 2023, Complainants’ daughter submitted their petition for payment from the Residential Contractors’ Recovery Fund (“Fund”) to the Registrar, pursuant to Ariz. Rev. Stat. §§ 32-1132(A) and 32-1154(G).

On November 01, 2023, the Registrar issued a 3-part request for additional information to Complainants. Complainants were given until December 21, 2023, to comply.

On November 21, 2023, the Registrar informed Respondent that a claim for payment against ROC License No. 316232 had been filed.

On December 21, 2023, Complainants’ daughter submitted a Fund claim extension request to the Registrar. On January 17, 2024, the Registrar granted Complainants’ request and extend their deadline to provide additional information to February 16, 2024.

On an unknown date, the Registrar received copies of Complainants’ Deed of Trust and Warranty Deed.

On an unknown date, the Registrar received copies of Complainants’ contract with Respondent and proof of payment.

On an unknown date, the Registrar received three (3) repair bids from Complainants: a $35,333.00 bid from Top Notch Plumbing LLC (ROC License No. 325039) dated November 01, 2024, a $38,097.63 bid from Christian Brothers (ROC License No. 044475) dated October 24, 2024, and another $39,897.63 Christian Brothers bid dated October 24, 2024.

On November 04, 2024, the Registrar received an amended Fund petition from Complainants.

On November 03, 2024, and November 06, 2024, Complainants’ daughter submitted a claim on their behalf against Respondent’s bond, AZ5734306, to Merchants Bond Company. On November 08, 2024, Merchants Bond Company issued correspondence to Complainants which acknowledged receipt of their bond claim, provided notice of its investigation, and requested additional information.

On February 26, 2025, the Registrar issued a Notice of Administrative Award (“Notice of Award”) to the parties which held that Complainant was awarded $30,000.00 from the Fund.

On March 13, 2025, the Registrar received an appeal letter from Respondent which alleged, overall, that the Notice of Award was issued in error because Complainants’ Fund claim was filed outside the “statute of limitations.”

On March 28, 2025, the Registrar referred 2022A-05866-RFA-LS-ROC to OAH for an independent evidentiary hearing. Per the Notice of Action sent to the parties on April 10, 2025, the issues for hearing are to determine whether Complainants’ award from the Fund was properly calculated and appropriately issued pursuant to Ariz. Rev. Stat. §§ 32-1132 to 32-1133.01 and 32-1154(F), as justified by the evidence.

On May 20, 2025, an administrative evidentiary hearing took place before OAH.

Hearing Evidence

At the hearing, the Registrar called Shaquira Adebule as a witness. Jay Complainants testified on their own behalf. Alice Olivas testified on behalf of Respondent. The substantive evidence is as follows:

Complainants, husband and wife, own single family residential property located at 5023 N. 61st Ave. Glendale, Arizona 85301. The property was granted to them by their daughter, Suzanne Bushong, and Jonathon P. Fulford. The property is held as community property with full rights of survivorship.

On or about July 11, 2020, the parties entered into a $13,681.00 plumbing replacement contract.

Work on the project took place from July 11, 2020, through July 20, 2020.

On July 11, 2020, Complainants tendered a $600.00 down payment to Respondent for the project. On July 20, 2020, using financing through Synchrony Bank, Complainants tendered the remaining balance of $13,081.00 to Respondent.

Although ROC License No. 316232 was active and in good standing with the Registrar from August 29, 2022, to September 19, 2022, Respondent did not perform any corrective work on substantiated complaint items 1-2, or enter into a settlement agreement with Complainants. At no point in time prior to the expiration of the Directive’s compliance period, or anytime thereafter, did Respondent request an extension thereof.

Ms. Olivas testified that Respondent appealed the underlying Notice of Award because (1) it believed that the award amount was “excessive,” and (2) Complainants’ claim was “outside the Statute of Limitations.” Ms. Olivas opined that the Top Notch bid exceeded the scope of the parties’ contract and Directive, and argued that because Complainants filed a claim against its bond two (2) years after the project was completed that their Fund claim was barred by an unidentified Statute of Limitations. Ms. Olivas also alleged that Complainants’ had been “refunded” by their homeowner’s insurance company for the cost of the contract.

Additional Evidence

Ms. Adebule is a Legal Assistant II for the Registrar. Ms. Adebule made the determination that Complainants were eligible to access the Fund, and also eligible to receive an administrative payout from the Fund, because they satisfied all statutory requirements for an award. Specifically, Ms. Adebule determined the following:

Complainants own and occupy the residential property at issue.

Respondent’s license was active and in good standing with the Registrar when the underlying contract was entered into, as well as when Respondent first received payment from Complainants for the project.

Complainants paid the contract in full. As such, there was no unpaid remaining balance between the parties.

As a result of Complaint No. 2022-05866 being filed with the Registrar, ROC License No. 316232 was disciplined by the Registrar and assessed a civil penalty.

Though they applied, Complainants never received a bond payout for the underlying project from Respondent’s insurance company.

On February 18, 2025, Ms. Adebule conferred with Investigator Fultz regarding the repair bids submitted by Complainants. Investigator Fultz noted that Respondent’s work on the underlying project was “so bad” and that Respondent’s improper work caused “the foundation to sink.” Investigator Fultz determined that all of the bids were reasonable, but that the original scope of work between the parties had not included drywall repair.

On March 01, 2024, Complainants’ petition to the Fund was closed, and subsequently reopened on December 20, 2024.

Ultimately, Ms. Adebule calculated Complainants’ compensable damages by subtracting their full payment from the original contract price, and then adding the amount of the lowest priced bid from Top Notch Plumbing LLC. Thus, Ms. Adebule deduced that Complainants’ compensable damages totaled $35,333.00, but were capped at $30,000.00 in actual damages per Ariz. Rev. Stat. § 32-1132.01(C).

Ms. Adebule testified that the purpose of the Fund was to make homeowners aggrieved by licensees “whole,” and that Ariz. Rev. Stat. § 32-1131 et seq. was specifically limited to the cost of actual construction work, labor and materials.

Closing Arguments

In closing, the Registrar opined that Respondent failed to sustain its burden of proof in the matter, and that no facts whatsoever had been presented by Respondent to rebut the Registrar’s credible evidence. The Registrar argued that Complainant met every statutorily mandated requirement for payout from the Fund, and, per administrative calculations, was eligible for a $30,000.00 payout from the Fund. Per the Registrar, Respondent’s general assertions that Complainant was ineligible to access the Fund because the Top Notch bid exceeded their contract and Directive and/or that Complainants were required to file their Fund claim within two (2) years of the underlying project’s completion were both false. The Registrar argued that additional remediations were necessarily considered due to the damage Respondent’s workmanship cause, which went unrepaired and unaddressed by Respondent, and that the only Statute of Limitation that pertained to the matter was Ariz. Rev. Stat. § 32-1133.01(G) that required a Fund claim be filed within two (2) years after final judgment. Ultimately, the Registrar opined that it had satisfied its fiduciary duty to comply with the pertinent sections of the law and protect the purpose of the Fund.

Complainants declined to provide a closing argument.

In closing, Respondent argued that “bad” and “poor work” were subjective, and that an administrative award of $30,000.00 was unjust.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

Respondent bears the burden of establishing by a preponderance of the evidence that the Registrar’s Recover Fund claim award was incorrect and/or improperly issued. The Registrar bears the burden to establish factors in mitigation 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.”

Pursuant to Ariz. Rev. Stat. § 32-1131 et seq., in order to be eligible to access the Recovery Fund an applicant must meet specific eligibility criteria. An individual is eligible for an award from the residential contractors’ recovery fund if they both: (1) own residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance, and (2) actually occupy or intend to occupy the residential real property as the individual’s primary residence. Additionally, the applicant must have contracted with a residential contractor who was appropriately licensed either at the time of contract execution, when the first payment on the project was made, or when the work on the project first began.

Ariz. Rev. Stat. § 32-1154(F) provides that “if a contractor’s license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter the registrar may order payment from the residential contractors’ recovery fund to remedy the violation.”

Ariz. Rev. Stat § 32-1132.01 provides, in pertinent part, that an award from the Recovery Fund “[m]ay not exceed the actual damages suffered” and also “[m]ay not exceed an amount necessary to complete or repair a residential structure.” “Actual damages” means the reasonable cost of completing the contract and repairing the contractor’s defective performance, minus the part of the contract price still unpaid. The maximum individual award from the Recovery Fund is $30,000.00.

Statutes should be interpreted to provide a fair and sensible result. Statutes shall be liberally construed to affect their objects and to promote justice. In interpreting a statute, “[w]e first consider the language of the statute and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter, historical background, effects, consequences, spirit, and purpose.” “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”

The Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.

In the case at bar, however, a detailed factual analysis is not necessary because Respondent failed to present any compelling evidence at hearing. The Default Order against ROC License No. 316232 became effective on November 09, 2022, making Complainant’s October 13, 2023, Fund claim submission timely. There is not statute in existence that bars a homeowner from being eligible to access the Fund if they fail to file against a licensee’s bond within two (2) years from the final day of their project. Nor is there a statute that mandates a specified period of time that the Registrar has to issue a determination regarding a timely submitted petition to the Fund. Additionally, Respondent’s general arguments that Complainants’ proposed award amount was “excessive” are rebutted by Investigator Fultz’s firsthand observations that the licensee’s work caused damage throughout their home and its foundation. Moreover, Respondent’s opinion that Complainant is ineligible to access the Fund because of an alleged homeowner’s insurance refund, without providing an indicia of evidence to support its contention, is irrelevant. Notably, Ms. Olivas did not dispute Ms. Adebule’s testimony regarding the calculation of Complainants’ actual damages. As such, it must be held that Respondent failed to sustain its burden of proof in this matter.

Therefore, the undersigned Administrative Law Judge must conclude that Complainants were properly awarded an administrative payout from the Fund.

Thusly, Respondent’s appeal must be denied.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that the Registrar affirm the Fund’s February 26, 2025, $30,000.00 Notice of Award.

IT IS FURTHER RECOMMENDED that the Registrar dismiss Respondent’s appeal.

NOTICE

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 forty (40) days from the date of that certification.

Done this day, June 06, 2025.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

c/o Legal Department: Shaquira Adebule

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

[email redacted]

Mona Baskin, Esq., Assistant Attorney General

Office of the Attorney General, Counsel for the Registrar

2005 N. Central Ave.

Phoenix, AZ 85004

[email redacted]

Jay and Peggy Bushong, Complainants

c/o Susanne Bushong

5339 N. 61st Ave.

Glendale, AZ 85301

[email redacted]

Elite Rooter Phoenix Inc., Respondent

dba Elite Rooter

c/o Alice Olivas, Operations Manager

4893 McGrath St., Ste. 100

Ventura, CA 93003

[email redacted]

[email redacted]

By: OAH Staff