ALJDEC - Licensing
2022A-07853-RFA-LS-ROC · Registrar of Contractors · 2023-11-13
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Benjamin and Meredith Gammon,
COMPLAINANTS,
v.
Southwest Roofing & Cooling LLC,
ROC License No. 305806,
RESPONDENT.
No. 2022A-07853-RFA-LS-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: October 25, 2023 at 9:00 AM.
APPEARANCES: Assistant Attorney General Mona Baskin, Esq. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with Katelyn Rolling as a witness. Meredith Gammon and Benjamin Gammon (“Complainants”) were represented by Meredith Gammon. Erick Solis appeared on behalf of Southwest Roofing & Cooling LLC (“Respondents”) with Gabriel Solis as a witness.
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
_____________________________________________________________________
Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following 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 for ROC License No. 305806, as reflected on the Registrar’s public website. On June 14, 2016, the Registrar issued ROC License No. 328234 for Specialty Dual CR-42 Roofing contracting to Respondent. The license has been renewed through June 30, 2024. Erick Alonso Solis is listed as the Qualifying Party and Member on the license. Gabriel Quijada Solis is also listed as a Member on the license. Respondent’s address of record for the license is 1107 S. 5th St. PMB 80 Yuma, AZ 85364.
On February 08, 2021, the Registrar received a 10-item complaint filed by Complainants alleging poor work performance. The Registrar designated it Complaint No. 2022-07853 and assigned Ruben Perez, Sr. (“Investigator Perez”) for investigation.
Shortly thereafter, on an unknown date, Complainants submitted a 9-item addendum complaint to the Registrar for Complaint No. 2022-07853.
On October 13, 2021, Investigator Perez inspected the work that had been performed on the project to date and took 21 photographs of the project. When he was finished, Investigator Perez drafted Jobsite Inspection Notes. Ultimately, Investigator Perez determined that 4 complaint items; specifically complaint items 2, 8-9, and 15, constituted poor or incomplete work, and failed to meet the Registrar’s minimum workmanship standards.
On October 20, 2022, Investigator Perez issued a Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainants’ allegations that the work Respondent had done on the project failed to meet minimum workmanship standards. Respondent was put on notice that it had until 5:00 p.m. on November 04, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22), and 32-1154(E).
On December 06, 2022, Investigator Perez issued an Updated Directive from the Registrar (“Updated Directive”) to the parties that removed substantiated complaint items 2 and 15 for correction, and also extended Respondent’s compliance deadline to 5:00 p.m. on December 23, 2022.
On January 23, 2023, Investigator Perez conducted a compliance jobsite inspection and took 12 photographs of the project. When he was finished, Investigator Perez drafted Compliance Jobsite Inspection Notes whereby he concluded that complaint items 8-9 had not satisfactorily been corrected and/or completed by Respondent. Specifically, Investigator Perez observed that Respondent had attempted to repair Complainants’ metal roof with foam, which he concluded was not an appropriate means of correction.
On February 02, 2023, 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), and 32-1154(A)(22). Respondent was given until February 17, 2023, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.
On February 22, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for adjudication. Per the Notice of Hearing the issue(s) to be determined were whether the Registrar had cause to discipline Respondent’s license based on the following charges:
Charge: 1 A.R.S. § 32-1154(A)(3) – R4-9-108(a)
Charge: 2 A.R.S. § 32-1154(A)(22)
On April 19, 2023, an administrative evidentiary hearing took place at OAH before ALJ Eigenheer.
On May 08, 2023, ALJ Eigenheer issued a Recommended Decision suggesting that the Director of the Registrar suspend Respondent’s contracting license for one (1) day, and that the Director also impose a $500.00 civil penalty against License No. 305806.
On May 22, 2023, the Registrar issued a Final Administrative Decision and Order to the parties which affirmed the Administrative Law Judge’s Recommended Decision. Respondent was held to be in violation Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). As such, the Registrar suspended Respondent’s license for 1 day and imposed a $500.00 civil penalty against Respondent’s license per Ariz. Rev. Stat. § 32-1154. On July 01, 2023, the Final Administrative Decision and Order became effective.
On or about July 03, 2023, the Registrar received Complainants’ petition for payment from the Residential Contractors’ Recovery Fund (“Fund”), pursuant to Ariz. Rev. Stat. §§ 32-1132(A) and 32-1154(G), for $30,000.00. Attached was a June 06, 2023 bond denial letter, Warranty Deed, a copy of the underlying contractual agreement between the parties, Complainants’ proof of payments to Respondent, and two repair bids from Lines & Lundgreen, LLC: for $38,400.00 dated June 15, 2023, and $35,500.00, dated October 12, 2022.
On July 27, 2023, the Registrar issued a request for a repair bid from a different licensed contractor to Complainants.
On August 25, 2023, Complainants provided the Registrar with a $45,100.00 repair bid from EcoEnergy Solutions.
On August 28, 2023, the Registrar issued a Notice of Administrative Award to the parties which held Complainants were eligible for a payout from the Fund, and awarded $30,000.00 for actual damages sustained under Ariz. Rev. Stat. § 32-1132.01(B).
On September 06, 2023, the Registrar received a timely appeal request for hearing from Respondent.
On September 08, 2023, the Registrar again referred the matter to the Office of Administrative Hearings for an independent evidentiary hearing. Per the Notice of Hearing on Appealable Agency Action (“Notice of Hearing“) sent to the parties on September 14, 2023, the issue(s) for hearing are to determine if the Registrar’s Fund determination was properly made pursuant to Ariz. Rev. Stat. §§ 32-1132 to 32-1133.01, based on the evidence.
On October 25, 2023, an administrative evidentiary hearing took place at OAH.
Hearing Evidence
At the hearing, the Registrar called Katelyn Rolling as a witness and submitted Exhibits 1-4. Erick Solis appeared on behalf of Respondent with Gabriel Solis as a witness. Meredith Gammon testified on behalf of Complainants. The Notice of Hearing was also admitted into the record as its own exhibit. The substantive evidence is as follows:
Complainants own residential property located at 1917 S. Parkway Dr. Yuma, AZ 85364, which was the site of the underlying project at issue.
On or about April 22, 2021, the parties entered into a $23,000.00 residential roof replacement agreement.
Complainants paid Respondent in full on their contract.
Work on the project commenced in March 2021, and stopped or was otherwise completed in April 2021.
Ms. Rolling is a Legal Assistant for the Registrar. Ms. Rolling made the determination that Complainants were eligible for an administrative payout from the Fund because she satisfied all statutory requirements for an award. Specifically, Ms. Rolling determined the following:
Complainants paid the underlying contract in full. Thus, there is no unpaid balance owed.
As a result of Complaint No. 2022-07853being filed with the Registrar, Respondent’s license was suspended for one (1) day and assessed a $500.00 civil penalty.
Ms. Rolling was also able to confirm with Investigator Perez that “it seems the first estimate by Lines & Lundgreen dated 10/12/2022 is the most appropriate bid.” So too did the Assistant Chief of Investigations for the Registrar agree that he was “fine with all 3” repair bids provided by Complainants.
Ultimately, Ms. Rolling determined that the $35,500.00 bid from Lines & Lundgreen was reasonable and within the scope of corrective work ordered by the Updated Directive. And because Complainants did not receive a payout from Respondent’s bond, or owe Respondent an outstanding balance on their underlying contract, no additional deductions were made. Therefore, Ms. Rolling concluded that Complainants’ compensable damages totaled $35,500.00, for compensable damages sustained as a result of Respondent’s poor workmanship.
Additional Evidence
Ms. Gammon testified that the eight (8) photographs included in the EcoEnergy Solutions bid correctly depict the state of her roof and residence as of the date of the hearing.
Erick Solis testified that, to his knowledge, Respondent had repaired all outstanding issues with the underlying roofing project, and opined that any remaining work could be addressed for at or under $2,000.00.
Respondent never appealed the Registrar’s Final Administrative Decision and Order.
Closing Arguments
In closing, the Registrar opined that Respondent failed to sustain its burden of proof in the matter, and that no facts had been presented by Respondent to rebut the Registrar’s credible evidence. The Registrar argued that Complainants met every statutorily mandated requirement for payout from the Fund, and, per administrative calculations, were eligible for a $30,000.00 payout from the Fund. The Registrar also argued that Respondent’s general description of the Lines & Lundgreen bid as “excessive” was baseless and immaterial. Per the Registrar, it has satisfied its fiduciary duty to comply with the pertinent sections of the law.
Complainants declined to provide a closing argument.
In closing, Respondent vehemently denied any poor workmanship associated with the underlying complaint, and offered to perform whatever outstanding corrections needed to be made on the project.
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. Here, Respondent’s general arguments that Complainants’ proposed award amount was “excessive,” and that remediations to Complainants’ project could have been completed for “less” or by Respondent do not sustain Respondent’s evidentiary burden of proof by a preponderance of the evidence. Respondent’s irrelevant opinions that Complainants were ineligible to access the Fund without providing an indicia of evidence to support its contention. As such, it must be held that Respondent failed to sustain its burden of proof in this matter.
Based on the credible and relevant evidence of record, the Tribunal concludes that the Registrar soundly established Complainants’ eligibility to access the Recovery Fund, also correctly determined that Complainants are legally eligible for an administrative awarded from the Recovery Fund, and also properly calculated said award amount.
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 August 28, 2023, $30,000.00 Notice of Administrative Award.
IT IS FURTHER RECOMMENDED that the Registrar dismiss Respondent’s appeal.
NOTICE
Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.
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, November 13, 2023.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
Mona Baskin, Esq., Assistant Attorney General
Office of the Attorney General
2005 N. Central Ave.
Phoenix, AZ 85004
[email redacted]
Southwest Roofing & Cooling LLC, Respondent
c/o Erick Solis, Agent
1107 S. 5th Ave. PMB 80
Yuma, AZ 85364
[email redacted]
[email redacted]
Benjamin Gammon & Meredith Gammon, Complainants
1917 S. Parkway Dr.
Yuma, AZ 85364
[email redacted]
By: OAH Staff