ALJDEC decisions subject to certification as final

2022A-07969-CHC-ROC · Registrar of Contractors · 2023-01-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Cynthia K Harris,

COMPLAINANT,

v.

Montelongo-RDZ Masonry Inc.

ROC License No. 210565,

RESPONDENT.

No. 2022A-07969-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 27, 2022 at 1:00 PM.

APPEARANCES: Cynthia Harris (“Complainant”) appeared on her own behalf. Jim Dimond appeared on behalf of the Arizona Registrar of Contractors (Registrar”). Jenille Montelongo-Rodriguez appeared on behalf of Montelongo-RDZ Masonry Inc. (“Respondent”). J Refugio Montelongo Rodriguez 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 August 19 2005, the Registrar issued License No. 210565 Specialty Dual CR-31 Masonry contracting license to Respondent. The license is currently active and renewed through August 31, 2023. J Refugio Montelongo Rodriguez is listed as the Qualifying Party/Vice President on this license, and Janille Montelongo Rodrguez is listed as the Officer. Respondent’s address of record for the license is 3442 N. Dryer St. Flagstaff, AZ 86004. Respondent has an active $6,750.00 surety bond on the licensed issued by Platt River Insurance Company effective April 01, 2022. The license has been disciplined on one prior occasion, and there is one open complaint against the license that is presumed to be related to this matter.

On July 28, 2020, the Registrar also issued License No. 329927 Specialty Dual CR-9 Concrete contracting license to Respondent. The license is currently active and renewed through July 31, 2024. J Refugio Montelongo Rodriguez is listed as the Qualifying Party/Vice President on this license, and Janille Montelongo Rodrguez is listed as the Officer. Respondent’s address of record for the license is 3442 N. Dryer St. Flagstaff, AZ 86004. Respondent has an active $6,750.00 surety bond on the licensed issued by Platt River Insurance Company effective July 09, 2020. The license has been disciplined on one prior occasion, and has settled or otherwise resolved 3 other complaints against it. There is also one open complaint against the license that is presumed to be related to this matter.

On or about July 21, 2021, Complainant and Respondent entered into a $3,300.00 contract to remove and replace an existing porch and stairs at Complainant’s commercial duplex. Complainant paid the contract price in full to Respondent.

On September 12, 2022, the Registrar received an 8-item complaint from Complainant against Respondent’s License No. 210565 alleging poor workmanship of their project. Attached to the complaint were text messages exchanged between the parties. The Registrar designated it Complaint No. 2022-07969 and assigned to Sheldon White (“Investigator White”) for investigation.

On September 16, 2022, Investigator White issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on September 23, 2022, at 10:00 a.m.

On October 19, 2021, Investigator White reviewed the parties’ agreement and inspected the work that had been performed on the project to date. He also took 18 photographs of the project site. When he was finished, Investigator White drafted his Inspection Notes. Ultimately, Investigator White derived 5 separate and distinct complaint items from Complaint No. 2022-07969, of which, he substantiated all 5 complaint items. Specifically, Investigator White determined that complaint items 1-5 failed to meet the Registrar’s minimum workmanship standards and required Respondent to perform corrective work to remediate the identified deficiencies. Investigator White also specifically notes as follows:

In the course of investigating this complaint, I uncovered Respondent’s proposal—which became the parties’ contract upon Complainant’s acceptance— calls for payment in excess of $1,000, but does not contain all the elements of a contract required by A.R.S. § 32-1158(B). Respondent’s proposal had to comply with A.R.S. § 32-1158(B), but failed to do so. This failure constitutes a violation of A.R.S. § 32-1154(A)(12).

(Emphasis added.)

On September 23, 2022, Investigator White issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated all of Complainant’s workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on October 12, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108(a), and Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22) and 32-1154(E).

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

On July 29, 2022, 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-b), 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until October 29, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On October 28, 2022, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted as follows:

“We are going to cooperate with fixing and repairing the issues mentioned in the citation. We would like to request additional time to complete these issues due to financial strain from an accident that left J Refugio Montelongo-Rodriguez, vice-president, unable to work for 2 months. Our license should NOT be suspended or revoked because we will get these issues taken care of and repaired. The only thing we ask is for a little more time so we are able to have the financial means to do so.”

(Emphasis in original.)

On November 02, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on December 27, 2022. Per the November 23, 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)(3) – A.A.C. R4-9-108(a)

Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(b)

Charge 3: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158

Charge 4: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf, called Registrar investigator Jim Dimond (“Investigator Dimond”) as a witness. The Registrar’s agency file, including the Notice of Hearing, was admitted into the record as its own exhibit. Janille Montelongo Rodrguez testified on behalf of Respondent. The substantive evidence of record is as follows:

Complainant owns commercial property located at 214 & 216 N. Birch Ave. Flagstaff, AZ 86001.

On July 17, 2021, Respondent provided Complainant a $3,300.00 invoice for “Concrete stairs repair,” noted as paid.

Between July 2021 and May 2022, Respondent, by and through its crew of 3 employees, performed the porch and stair work on the underlying complaint at issue.

Neither the Jobsite Inspection Notification Letter nor Directive issued to Respondent as returned to the Registrar as undeliverable.

Respondent was present for Investigator White’s jobsite inspection.

In late-August 2022, Mr. Montelongo Rodriguez fell off of a roof while working on another project. He was seriously injured and placed on bedrest for 4-6 weeks.

Mr. Montelongo Rodriguez did not inform Mrs. Montelongo Rodriguez about the Registrar’s Directive until sometime in October 2022. Mrs. Montelongo Rodriguez asked the Registrar for an extension of the Directive’s compliance period in Respondent’s Answer.

A compliance jobsite inspection was not performed because Respondent did not address the Registrar’s Directive.

On November 23, 2022, a prehearing jobsite inspection was conducted by Investigator Dimond. Respondent was not present. Investigator Dimond observed that Respondent had performed corrective work, but determined that failed to meet the Registrar’s minimum workmanship standards.

Closing Arguments

In closing, Respondent argued that discipline of its license was not warranted because it remained intent on rectifying the deficiencies in its workmanship, per Investigator White’s findings.

In closing, Complainant argued that Respondent was afforded a second chance to address its workmanship issues, and failed to perform corrective work properly. Complainant alleged that she was never advised of Mr. Montelongo Rodriguez’s injury, as he did not mention it during the underlying jobsite inspection, and opined that she would have been amenable to having a properly licensed subcontractor perform the necessary repairs.

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)(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(a) requires that “[a]ll work shall be performed in a professional and workmanlike manner.”

Ariz. Admin. Code R4-9-108(b) requires that a contractor “perform all work in accordance with any applicable building codes and professional industry standards.”

Ariz. Rev. Stat. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Failure in any material respect to comply with this chapter.”

Ariz. Rev. Stat. § 32-1158(A) provides that a contract between a contractor and property owner amounting to more than $1,000.00 must contain the following information in writing:

The name of the contractor and the contractor's business address and license number.

The name and mailing address of the owner and the jobsite address or legal description.

The date the parties entered into the contract.

The estimated date of completion of all work to be performed under the contract.

A description of the work to be performed under the contract.

The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.

The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.

The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.

That the property owner has the right to file a written complaint with the Registrar for an alleged violation of Ariz. Rev. Stat § 32-1154(A). The contract shall contain the Registrar's telephone number, website address, and shall state that complaints must be made within the applicable time period as set forth in Ariz. Rev. Stat § 32-1155(A). The information must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor.

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.”

The material facts in this matter are clear.

It is clear that the parties had a porch/stair removal and installation contract, on which Complainant paid Respondent in full. It is also clear from the record that Respondent work product on the project did not meet the Registrar’s minimum workmanship standard, which resulted in the issuance of a Directive by the Registrar. Notably, the record also establishes that Respondent did not provide Complainant with a written contract in compliance with Ariz. Rev. Stat. §§ 32-1154(A)(12); 32-1158. It is further clear that although Respondent received the Registrar’s Directive, Respondent failed to timely comply.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to complete Complainant’s project in a workmanlike manner per contract and/or timely comply with the Registrar’s Directive. These are affirmative defenses that Respondent bears the burden to establish. Here, Mrs. Montelongo Rodriguez’s defense regarding Mr. Montelongo Rodriguez’s August 2022 injury does not satisfy Respondent’s burden. Mr. Montelongo Rodriguez was present for the September 2022 jobsite inspection, after sustaining his injury, and neither Mr. nor Mrs. Montelongo Rodriguez beseeched the Registrar for an extension of time prior to October 12, 2022, though Respondent timely received the Registrar’s Directive. Additionally, the seriousness of Mr. Montelongo Rodriguez’s injuries are contradicted by the fact that he himself performed corrective work on the project. Though his accident was serious, the record does not reflect that he was incapable of performing competent work, submitting an extension request to the Registrar, or settling with Complainant.

Thus, because Complainant successfully established violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a-b), 32-1154(A)(12); 32-1158, and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established cause for the Registrar to take disciplinary action against Respondent’s contractor’s license.

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 Montelongo-RDZ Masonry Inc., ROC License No. 210565, be suspended for thirty (30) days.

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 06, 2022.

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]

Montelongo-RDZ Masonry Inc., Respondent

3442 N. Dyer St.

Flagstaff, AZ 86004

[email redacted]

Cynthia K. Harris, Complainant

214 N. Sitgreaves St.

Flagstaff, AZ 86001

[email redacted]

By Miranda Alvarez

Legal Secretary