ALJDEC - Licensing
2022A-08490-CHC-ROC · Registrar of Contractors · 2023-09-18
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Steven Vogel
COMPLAINANT,
v.
O'Brien Luxury Homes LLC
License No. ROC 286797,
RESPONDENT.
No. 2022A-08490-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: August 29, 2023
APPEARANCES: Ryan Dailey, Esq. represented Complainant Steven Vogel. Patrick O’Brien represented Respondent O’Brien Luxury Homes, LLC.
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
_____________________________________________________________________
FINDINGS OF FACT
On April 11, 2023, the Registrar of Contractors, (ROC),
issued a Notice of Hearing setting the above-captioned matter for hearing on May 18, 2023, by the Office of Administrative Hearings (OAH) in Phoenix, Arizona.
Respondent O’Brien Luxury Homes, LLC holds license number
286797 issued by the ROC. Patrick O’Brien is Respondent’s qualifying party.
The Notice of Hearing shows that the hearing was set to consider the
charges made in the Citation and Complaint. Through the Citation, the ROC alleges that Respondent may have violated Ariz. Rev. Stat. § 32- 1154(A)(1).
4. The Citation shows that if the Administrative Law Judge finds that the alleged charges are valid, the ROC may suspend or revoke Respondent’s license.
5. On or about October 17, 2020, Complainant Steven Vogel and Respondent entered into a new home construction contract for the amount of $2,070,351.54. Complainant paid Respondent $686,424.52 for the project.
6. On or about October 17, 2020, Respondent started work on the project.
7. On or about September 14, 2022, Respondent stopped work.
8. On September 29, 2022, Mr. O’Brien notified Complainant via text message that he was closing his construction company. The September 29, 2022 text message provided:
Steve.
I’m sorry about what’s happening, but I have a something going on that needs all my attention. So I’m closing down my construction company. I will not leave you hanging. Natascha is handling everything, Laz is a good friend and a great person to work with. Once I have this under control I will talk to you.
9. On October 26, 2022, Respondent resigned from its contract with Complainant. The contract release provided, in relevant part, as follows:
Home construction is not complete and has only progressed to the point of stem walls but not finished floors.
OLH is resigning due to no fault of the Vogels and I certify that all monies owed have been paid in full to all suppliers and subcontractors for the work done on this project.
10. On or about September 23, 2023, Complainant filed a complaint with the ROC alleging abandonment on the part of Respondent.
11. On or about October 28, 2023, ROC Investigator Mark Nipp conducted a job-site inspection. Investigator Nipp substantiated Complainant’s claim of abandonment. Investigator Nipp’s notes regarding his job-site inspection provided, in relevant part, as follows:
This complaint was received in narrative format and simplified for ease of use. The complaint, as originally written, is below.
GC does not pay sub-contractors and suppliers on a timely basis. Owner has paid GC same day as invoiced but subs wait weeks and months to get paid. They therefore refuse to work or delay work or assign very low priority to our job. Ultimately this has caused very significant delays in the construction of the new home. We are now just short of 2 years into the project and all we have are foundation stem walls on the main structure. Fraudulent invoicing by GC. GC has used proposals and estimates to invoice homeowner rather than official supplier invoices. They have thereby collected monies for work not yet charged by the supplier or begun. OLH has thousands of our dollars that should have been immediately paid to suppliers and subs and has been using that money on their personal agenda rather than their responsibility to use it only on my job.
Complaint Item #1: We are now just short of 2 years into the project and all we have are foundation stem walls on the main structure.
Investigator’s Observation: Verified. When I arrived at the Jobsite Inspection, I saw there was a person working on the swimming pool. The complainant later said that person was trespassing because he had locked the gates and the worker circumvented the secure access. The respondent explained that this project began just prior to the COVID-19 pandemic. Once the pandemic arrived, this project was significantly impacted by it. The respondent stated they had a 6-month delay when they were forced to redesign the retaining wall as required by the HOA. They had a difficult time getting material, specifically concrete, and could only get certain materials in lower than needed quantities. The respondent stated that all sub-contractors are paid current and he believed they could complete the project within 15-months. I also spoke with the respondent after the Jobsite Inspection and asked who owned the property. The respondent told me the complainant 100% owned everything. The respondent also told me the complainant had recently fired them and they had agreed to the terms and were going to refund a portion of the funds that had been paid to date. I saw that the stem wall and retaining walls had been completely and the swimming pool was being plumbed (during the JSI). I construction fencing, porta-potty, construction materials, and tools were on-site. The complainant did not present any evidence that the respondent was misappropriating funds. The respondent should correct by appropriate means, pursuant to the contract, applicable building codes, and within the scope of their license. Reference Picture(s) 1-7
Governing Rule: A.R.S. § 32-1154(A)(1) Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.
12. On March 10, 2023, the ROC issued a Citation against Respondent’s license for an alleged violation of Ariz. Rev. Stat. section 32-1154(A)(1).
13. Respondent filed a timely answer to the Citation.
14. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.
15. A hearing was held on August 29, 2023.
16. At hearing, Mr. Vogel testified on behalf of himself and submitted exhibits 3 through 5, and 11 through 12. Investigator Nipp testified regarding his investigation of the complaint. Mr. O’Brien testified on behalf of himself.
17. Investigator Nipp testified consistently with his job site inspection notes.
18. Mr. Vogel explained that he timely paid construction payments to
Respondent, however, Respondent delayed in paying its subcontractors. Mr. Vogel
explained that as a result, the project was delayed. Mr. Vogel did not deny Respondent
access to his home until after Mr. Vogel informed him that he was closing his company.
Mr. Vogel did not fire Respondent.
19. Mr. O’Brien explained that some of the delays in the project occurred because Complainant was waiting on approval from his homeowner’s association for specific changes. Mr. O’Brien testified to the effect that there were several delays due to the COVID-19 pandemic. Mr. O’Brien stated that before the pandemic, it took two days to perform concrete work and after the pandemic began, it took four to five weeks to perform concrete work. Additionally, pours were limited to hundred yards.
20. Mr. O’Brien stated that he paid all of his subcontractors. Mr. O’Brien stated that he pays his subcontractors when he feels that it is a proper time to pay them.
Mr. O’Brien stated that he has a good relationship with his subcontractors.
Mr. O‘Brien stated that Mr. Vogel became frustrated and would not allow Respondent to complete the job.
21. Mr. O’Brien denied that Respondent abandoned the job. Mr. O’Brien stated that he never left a job since he started construction work in the 1980s. Mr. Brien stated that he would have filed a 10 day stop notice if he had plans to abandon the job. Regarding the September 28, 2022 text, Mr. O’Brien stated that he was closing his company but he was not closing Complainant’s project. Mr. O’Brien stated that he would never leave anyone “hanging.” Mr. O’Brien also commented, “men say stuff when they’re upset in the field.” Mr. O’Brien explained that he tells his clients whatever he wants to tell them. Mr. O’Brien stated that when he told Complainant that he was closing down his company, he meant that he was not bidding on projects or taking on new clients.
22. Regarding his resignation letter, Mr. O’Brien stated that he did not want to blame people and that he just wanted to move on. Mr. O’Brien sated that the Vogels didn’t “do anything” and paid on time. However, Mr. O’Brien stated that things happened “on their side” that caused delays that affected materials.
23. Administrative notice is taken of the ROC’s public website. According to the information available on the website on September 18, 2023, Respondent’s license was first issued on August 12, 2013, and is suspended. Such prior License record also shows that there are two open complaints against Respondent. Respondent’s license has never been disciplined. Such prior License record shows that one complaint was resolved or settled by the contractor.
CONCLUSIONS OF LAW
This matter lies within the ROC’s jurisdiction. See A.R.S. § 32-1101 et seq.
The suspended status of ROC’s license does not deprive
Complainant of his right to prosecute his complaint against Respondent or prevent the ROC from determining the merits of Complainant’s complaint. This matter lies within the ROC’s jurisdiction.
The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119.
A preponderance of the evidence is “such proof as convinces the trier of
fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).
4. The Administrative Law Judge may consider the ROC’s administrative record. See Ariz. Admin. Code § R4-9-118.
5. The preponderance of the evidence shows that Respondent abandoned the project, which is a violation of Ariz. Rev. Stat. section 32-1154(A)(1).
RECOMMENDED ORDER
Based on the foregoing, it is recommended that on the effective date of the Order, the ROC shall suspend O'Brien Luxury Homes LLC license number 269649 for three days.
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, September 18, 2023.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Cindy Casaus, Interim Director
Registrar of Contractors
[email redacted]
Ryan Bailey
[email redacted]
Steven Vogel
15452 E. Chicory Dr.
Fountain Hills, AZ 85268
[email redacted]
Mark Nipp
[email redacted]
O'Brien Luxury Homes LLC
515 E Carefree Hwy
Phoenix, AZ 85085-8839
[email redacted]
By: OAH Staff