ALJDEC - Licensing
2022A-07976-CHC-ROC · Registrar of Contractors · 2023-05-18
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Bernard Armond Laurence,
COMPLAINANT,
v.
MFC Enterprises LLC
ROC License No. 293713,
RESPONDENT.
No. 2022A-07976-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: May 04, 2023 at 1:30 PM.
APPEARANCES: Bernard Laurence (“Complainant”) appeared on his own behalf. William Monroe appeared on behalf of MFC Enterprises LLC (“Respondent”). Steve Klein appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).
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 01, 2014, the Registrar issued License No. 293713 B General Residential contracting license to Respondent. The license was renewed through August 31, 2022, and was automatically suspended by operation of law for non-renewal on September 01, 2022. William Gale Monroe is the Qualifying Party and Member on this license. Respondent’s address of record for the license is 5742 E. Paseo Dulce Cave Creek, AZ 85331. Respondent had a $9,000.00 surety bond on the licensed issued by Merchants Bonding Company, effective July 01, 2014, that was cancelled on an unknown date. The license no prior disciplinary record. There is one open complaint listed which is presumed to be related to this matter.
On September 12, 2022, the Registrar received an 8-item complaint from Complainant against Respondent’s License No. 293713 alleging abandonment and poor workmanship of their residential room addition and extension project. Attached to the complaint was a copy of the parties’ underlying contract, and proof of Complainant’s payments to Respondent. The Registrar designated it Complaint No. 2022-07976 and assigned to Steve Klein (“Investigator Klein”) for investigation.
On September 13, 2022, Investigator Klein issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 08, 2022, at 10:00 a.m.
On November 08, 2022, Investigator Klein inspected the work that had been performed on the project to date. He also took 3 photographs of the project site. Respondent was not present. Respondent was present. When he was finished, Investigator Klein drafted his Inspection Notes. Ultimately, Investigator Klein substantiated 7 complaint items. Specifically, Investigator Klein determined that work Respondent performed on complaint items 1-2 and 4-8 failed to meet the Registrar’s minimum workmanship standards, and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.
On November 08, 2022, Investigator Klein issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated most of Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on December 08, 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 an unknown date, Investigator Klein issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on December 22, 2022, at 2:30 p.m.
On December 22, 2022, Investigator Klein inspected the corrective work that had been performed on the project and took 3 photographs. When he was finished, Investigator Klein drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Klein determined that Respondent had satisfactorily remediated complaint items 4-5 and8, but that Respondent had not performed corrective work necessary to remediate complaint items 1-2 and 6-7.
On December 22, 2022, Investigator Klein forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On December 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), and 32-1154(A)(22). Respondent was given until January 13, 2023, to respond with his Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.
On January 13, 2023, the Registrar received Respondent’s Answer whereby Respondent noted, in pertinent parts, that on November 09, 2022, Respondent’s bond company tendered a $9,000.00 payment to Complainant to cover the cost of repairs for their project, that the City of Phoenix re-inspected the project and issued a Certificate of Occupancy on December 02, 2022, and that Complainant owed Respondent an outstanding balance of $9,400.00 on the project.
On January 13, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 14, 2023. Per the February 07, 2023, 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)(22)
Hearing Evidence
Complainant testified on his own behalf and called Investigator Klein as a witness. William Monroe testified on behalf of Respondent. The Registrar’s agency file, including the Notice of Hearing, was admitted into the record as its own exhibit. The substantive evidence of record is as follows:
Complainant owns residential property located 4049 E. Pershing Ave. Phoenix, AZ 85032.
On or about June 16, 2021, the parties entered into a $75,000.00 residential remodeling contract for the additional of a bedroom and bathroom, and extension of Complainant’s kitchen.
Complainant paid Respondent $67,266.54 towards the contract.
The project commenced in August 2021. Work stopped on the project in March 2022.
The Registrar’s Directive notes, in pertinent part, as follows:
If your license is currently suspended for administrative reasons, or is inactive, expired, or cancelled, you may not perform any corrective work nor contract in any manner, which includes hiring other contractors to perform work, until the suspension of your license(s) has been lifted or your license(s) has been reactivated.
(Emphasis added.)
Therefore, the only means Respondent had to satisfy the Directive was to enter into a settlement agreement with Complainant.
On an unknown date, Complainant submitted remediation bids for complaint items 1-2 and 6-7 to Respondent’s bond company. On November 09, 2022, Complainant was awarded a $9,000.00 payout from Respondent’s bond.
Over the course of 3 days between November 08, 2023, and December 08, 2023, despite Respondent’s license being suspended at the time, Mr. Monroe performed corrective work on the project.
On November 12, 2022, Complainant advised Investigator Klein that Mr. Monroe had performed corrective work but had not yet finished.
Respondent did not place the license back in active status or ask for the Directive’s compliance period to be extended.
Because no additional corrective work was performed past December 08, 2022, a prehearing jobsite inspection was not conducted in the matter.
Closing Arguments
Both parties declined to present closing argument before the Tribunal.
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 for the Registrar 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] contractor shall perform all work in a professional and workmanlike manner.”
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) provides, in pertinent parts, that the Registrar may “[i]mpose 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 provides that “[n]o 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.”
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.”
Statutes should be interpreted to provide a fair and sensible result. “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.
The material facts in the case at bar are not in dispute.
It is undisputed that the parties had a $75,000.00 residential addition/extension contract, which Complainant paid $67,266.54 towards. It is also undisputed that some of the work Respondent performed did not satisfy the minimum standards set for workmanship by the Registrar. It is further undisputed that Respondent did not completely address the Registrar’s Directive to correct the underlying work at issue.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and complete Complainants’ project per contract. This is an affirmative defense that Respondent bears the burden to establish by a preponderance of the evidence. 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. Here, the record here reflects that Respondent‘s work on complaint items 1-2 and 6-7 were poor, and that Respondent had no acceptable reason for failing to address them per Registrar’s Directive. Contrary to Respondent’s contention, the City of Phoenix’s issuance of the Certificate of Occupancy for the project site does not excuses or otherwise justifies Respondent’s inaction and/or lack of performance on the complaint items at issue on this project. Nor does the $9,000.00 bond payout from Merchants Bonding Company to Complainant.
Based on the relevant and credible evidence of record, the undersigned concludes that violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22) have been established by a preponderance of the evidence. As such, Complainant has established cause for the Registrar to discipline Respondent’s contractor’s license as a result of Complaint No. 2022-07976.
Complainant may petition the Registrar’s Recovery Fund for financial recompense.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent MFC Enterprises LLC, ROC License No. 293713, be suspended for two (2) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).
IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $100.00 (one hundred) in certified funds as a civil penalty in this matter.
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 Final 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.
NOTICE
Pursuant to Ariz. Rev. Stat. § 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 Final Order will be forty (40) days from the date of that certification.
Done this day, May 18, 2023.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted electronically to:
Martín Quezada, Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
MFC Enterprises LLC, Respondent
c/o William Monroe
5742 E. Paseo Dulce
Cave Creek, AZ 85331
[email redacted]
Bernard Armond Laurence, Complainant
4049 E. Pershing Ave.
Phoenix, AZ 85032
[email redacted]
By: OAH Staff