ALJDEC decisions subject to certification as final

2022A-08966-CHC-ROC · Registrar of Contractors · 2023-02-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

William J Geltch,

COMPLAINANT,

Ground Game Flooring LLC

ROC License No. 316417,

RESPONDENT

No. 2022A-08966-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 07, 2023 at 1:00 PM.

APPEARANCES: William Geltch (“Complainant”) appeared on his own behalf with Janice Geltch as a witness. No appearance(s) by or on behalf of Ground Game Flooring LLC (“Respondent”). Chris Allison appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

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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 Arizona Registrar of Contractors (“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 November 09, 2017, the Registrar issued License No. 316417 Specialty Dual CR-8 Floor Covering contracting license to Respondent. The license is in good standing and has been renewed through November 30, 2023. Deirdre Lynn Yarbrough is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 216 N. Parkwood Rd. Payson, AZ 85541. Respondent has an active $10,000.00 surety bond on the license issued by RLI Insurance Company. The license has been previously disciplined by the Registrar on one occasion. There is one open complaint against the license which is presumably related to this matter.

On or about October 03, 2022, the Registrar received a 4-item complaint from Complainant against Respondent’s License No. 316417 that essentially alleged poor workmanship and abandonment of their flooring project. The Registrar designated it Complaint No. 2022-08966 and assigned to Chris Allison (“Investigator Allison”) for investigation.

On October 07, 2022, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by Investigator Allison on October 26, 2022, at 1:00 p.m.

On October 26, 2022, Investigator Allison inspected the work Respondent had performed on the project to date. Respondent was not present. Investigator Allison took 9 photographs of the project. When he was finished, Investigator Allison drafted Jobsite Inspection Notes. Ultimately, Investigator Allison substantiated 3 of 4 of complaint items. Specifically, Investigator Allison determined that complaint items 1-3 constituted abandonment and/or poor or incomplete work, and failed to meet the Registrar’s minimum workmanship standards.

On October 31, 2022, Investigator Allison issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated most of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on November 16, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to the Registrar.

On November 21, 2022, Investigator Allison escalated Complaint No. 2022-08966 to the Registrar’s legal department with citation recommendations for violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22).

On November 23, 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), and 32-1154(A)(22). Respondent was given until December 08, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1155.

On December 07, 2022, the Registrar received Respondent’s timely written Answer. In pertinent parts, Respondent alleged that Complainant’s home sustained post installation flood damage, and that Complainant had ignored recommendations to replace the subfloor prior to replacement of water-damaged flooring. Respondent also alleged manufacturer defects in flooring materials.

On December 09 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on February 07, 2023. Per the December 23, 2022, Notice of Hearing the issue to be determined is whether the Registrar has cause to discipline Respondent’s license based on the following charges:

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)(22)

Hearing Evidence

Complainant testified on his own behalf and called Investigator Allison and Janice Geltch as witnesses. The Registrar’s agency file (“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 newly constructed residential property located at 4321 N. Strawberry Hollow, Pine, Arizona 85544. Complainant took occupancy of the property on or about February 01, 2022, shortly after the close of escrow.

On or about June 03, 2021, the parties entered into a $15,572.50 flooring contract whereby Respondent agreed to install new flooring throughout most of Complainant’s home, save the bedrooms, including tile work in both bathrooms.

Complainant tendered $14,015.50 in payments to Respondent towards their contract.

After Respondent informed Complainant that the job was complete, Complainant expressed a number of dissatisfactions with Respondent regarding Respondent’s workmanship. As a result, Respondent agreed to return to the project site to perform corrective work.

Although Respondent made multiple promises to Complainant to perform corrective work, Respondent never did. Because Respondent failed to perform corrections of any kind, or issue a refund in whole or part to Complainant, Complainant submitted his complaint to the Registrar.

Respondent did not make contact of any kind with Investigator Allison during the course of the Directive’s compliance period, nor did Respondent make any attempts to perform corrective work at the project site during that time.

Additional Evidence

While Respondent’s Answer directly addresses alleged violation(s) of Ariz. Rev. Stat. § 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), Respondent did not address alleged violation(s) of §§ 32-1154(A)(1) or (A)(22).

Closing Argument

In closing, Complainant argued that he had suffered damage(s) to his property and suffered financial hardship as a direct result of Respondent’s workmanship on the underlying project. Complainant opined that Respondent’s license should be disciplined by the Registrar because Respondent conducted its business with Complainant in a dishonest manner.

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.

The Registrar 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(a) requires that “[a]ll work shall be performed 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.”

The material facts in the case at bar are not in dispute.

It is undisputed that the Complainant paid Respondent approximately 90% of the contract price for the underlying project. It is also undisputed that Respondent did not complete the project per the terms of its contract, and that most of the work Respondent performed did not satisfy the minimum standards set for workmanship by the Registrar. It is further undisputed that Respondent failed to address the Registrar’s Directive.

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. Respondent’s absence from this administrative proceeding is, however, a factor in aggravation. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project. Here, the record here reflects that Respondent‘s work on the underlying project was poor, and that Respondent had no acceptable reason for failing to address the Registrar’s Directive.

Based on the relevant and credible evidence of record, the undersigned concludes that no violation of Ariz. Rev. Stat. § 32-1154(A)(1) has been established, as Respondent did materially perform under the parties’ contract. However, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22) by a preponderance of the evidence, the undersigned finds that Complainant has established cause for the Registrar to discipline Respondent’s contractor’s license as a result of Complaint No. 2022-08966.

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 Ground Game Flooring LLC, ROC License No. 316417, be suspended for four (4) 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 $400.00 (four 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.

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, February 13, 2023.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Martín Quezada, Director

Registrar of Contractors

By: OAH Staff-54864001

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