ALJDEC decisions subject to certification as final

2022A-05867-CHC-ROC · Registrar of Contractors · 2023-01-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Rebecca R. Stanke,

COMPLAINANT,

v.

AMERICA RECYCLEAN, LLC

dba America Remodel

ROC License No. 327603,

RESPONDENT.

No. 2022A-05867-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 19, 2022 at 1:00 PM.

APPEARANCES: Rebecca Stanke (“Complainant”) appeared on her own behalf. Jason Simpson appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf America Recyclean LLC (“Respondent”).

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 February 03, 2020, the Registrar issued License No. 327603 Specialty Dual CR-61 Carpentry, Remodeling and Repair contracting license to Respondent. The license is currently active and renewed through February 29, 2024. Justin Jean La Porte is listed as the Qualifying Party/Member on this license. Respondent’s address of record for the license is 390 W. Palomino Ct. San Tan Valley, AZ 85143. Respondent has an active $6,750.00 surety bond on the licensed issued by RLI Insurance Company effective January 31, 2020. There is no prior discipline noted for the license, save two open complaints; one of which is presumably related to this matter.

On or about February 07, 2022, Complainant and Respondent entered into an unwritten $65,000.00 contract to build a deck, install a pergola, and perform landscaping at Complainant’s residence.

Complainant paid $49,197.06.00 to Respondent towards the contract price.

On or about July 18, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 327603 alleging abandonment of their project. The Registrar designated it Complaint No. 2022-05867 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 10:30 a.m.

On August 23, 2022, Investigator Simpson inspected the work that had been performed on the project to date. He also took 6 photographs of the project site. When he was finished, Investigator Simpson drafted his Inspection Notes. Ultimately, Investigator Simpson derived 8 complaint items from Complaint No. 2022-05867, of which, he substantiated 6 complaint items. Specifically, Investigator Simpson determined that complaint items 1-3 and 5-7 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 August 23, 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 August 23, 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 12, 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 28, 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).

On September 30, 2022, Investigator Simpson forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On October 06, 2022, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(8), and 32-1154(A)(22). Respondent was given until October 21, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On October 20, 2022, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted the following:

[Respondent] was hired to build a deck around a newly added pool. [Complainant] was not aware that she was unable to get a permit approved due to the fact that her lot was undersized and she needed to wait for an RU1.25 variance to be put in place before they would approve the new drawings. [Complainant] continued to insist not only on my end but all the way up to the director of engineering of pinal county and was very rude in her communication and very unprofessional. [Complainant] was very impatient and continued to poke and pry to the point that she was told that she needed to wait for the variance on all parts. The meeting was set for a date and got pushed and [Complainant] was never able to get the needed permits. [Complainant] was also informed during that time that she had other unpermitted items on her property and those items would also need to be brought up to code before building of the deck would get approved. [Complainant] continued to badger all parties but not want to follow the needed steps to get the needed permit, which [Complainant] insisted she did not .... Which is why she purchased materials and expects me to build without approved permits... [Complainant] then filed with the ROC about her cabin I was working on back and forth when the weather was good to get her other items like a water tank put in place and irrigation lines... since [Complainant] did not follow my recommendations and claiming the work was unfit but she was unable to proceed due to permitting and now being out of scope due to the amount the job was quoted. I have decided to step completely away from this customer and this project was put on hold due to permits. [H]owever at this point she needs to also talk to a B3 contractor.

(All errors in original.)

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 19, 2022. Per the November 17, 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)(3) – A.A.C. R4-9-108(a)

Charge 3: A.R.S. § 32-1154(A)(8)

Charge 4: 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 1720 E. McKellips Blvd. Apache Junction, AZ 85119.

Because Complainant had been satisfied with work Respondent had begun at her secondary residence, Complainant hired Respondent to perform a backyard project at her primary residence in Apache Junction, AZ.

Respondent did not provide a written contract for Complainant’s project, which exceeded $50,000.00.

Respondent ordered the materials from a local hardware retailer, and Complainant paid for them.

Part of the parties’ agreement was that Complainant pay for the required permits for the project, which she did, and Respondent submit them to the local governing authority.

The local governing authority “red lined” Complainant’s variance request, in part, because Respondent failed to submit the permit requests he was supposed to.

Work on the underlying project began fall of 2021 and stopped spring of 2022.

Although Respondent did not perform any corrective work in adherence to the Registrar’s Directive, Mr. La Porte would have been required to obtain a permit prior to addressing substantiated complaint items 1 and 6.

On July 25, 2022, Mr. La Porte replied to Investigator Simpson’s correspondence as follows:

Customer was unable to get permits approved due to delay from a variance put on her property and she had several non permitted structures. Contract was dependent on permit approval. Customer already purchased materials before getting permits and tried to have me start the build without permits before the job was shutdown by the county. No work was done on the walk deck portion of the project due to county ordinances. I completed her flood irrigation and did a lot of dirt work and planning on the project. Customer remains with all materials that were purchased. Please let me know if you have any questions.

(All errors in original.)

Closing Argument

In closing, Complainant argued that her burden of proof had been met. Per Complainant, Respondent had been substantially paid for a job he started and subsequently abandoned, and that the work Respondent had performed on the project was poor. Complainant opined that Respondent lacked justification or excuse for his actions, and further argued discipline was warranted as Respondent had contracted beyond the scope of the license at issue, Mr. La Porte had damaged Complainant’s project materials, and because Respondent failed to obtain the requisite permits necessary to perform the contract’s scope of work.

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 Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar mailed 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)(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)(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 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

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 clear.

The evidence of record establishes that Complainant substantially paid Respondent on their contract. The record also establishes that Respondent failed to obtain a permit, and/or ensure permit(s) had been obtained, prior to commencing work on the underlying project. The record further establishes that Respondent did not complete the project per the terms of his verbal contract with Complainant, and that the work that Respondent did perform did not satisfy the minimum standards set for workmanship by the Registrar. It is also undisputed that Respondent failed to timely comply with the Registrar’s Directive.

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. 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, and that Respondent failed to adhere to 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)(3); Ariz. Admin. Code R4-9-108(a), 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 AMERICA RECYCLEAN, LLC (dba America Remodel), ROC License No. 327603, be suspended for ten (10) 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 03, 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]

Rebecca R Stanke, Complainant

1720 E. McKellips Blvd.

Apache Junction, AZ 85119

[email redacted]

America Recyclean, LLC, Respondent

dba American Remodel

390 W. Palomino Ct.

San Tan Valley, AZ 85143

[email redacted]

By Miranda Alvarez

Legal Secretary