ALJDEC - Licensing

2022A-09083-CHC-ROC · Registrar of Contractors · 2023-05-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jesus Tarango,

COMPLAINANT,

v.

Arizona Drying and Restoration LLC

ROC License No. 323191,

RESPONDENT.

No. 2022A-09083-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 22, 2023 at 9:00 AM.

APPEARANCES: Jesus Tarango (“Complainant”) appeared on his own behalf. Jason Simpson appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of Arizona Drying and Restoration LLC (“Respondent”). Karlee Swaim 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 January 10, 2019, the Registrar issued License No. 323191 General Dual KB-2 Residential and Small Commercial contracting license to Respondent. The license is active and has been renewed through January 31, 2025. Fred Marvin Martin is listed as the Qualifying Party on the license, and Daniel James Rooney is listed as a Member on the license. Respondent’s address of record for the license is 411 E. Fiesta Del Sol Florence, AZ 85132. Respondent has an active $14,000.00 surety bond on the license, effective January 07, 2019. The license no prior disciplinary record. There are two (2) open complaints listed against the license; one of which is presumed to be related to this matter.

On or about October 06, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 323191 alleging abandonment and poor workmanship of their new residential construction project. The Registrar designated it Complaint No. 2022-09083 and assigned to Jason Simpson (“Investigator Simpson”) for investigation.

On October 17, 2022, Investigator Simpson issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 16, 2022, at 10:30 a.m. Correspondence was not returned as undeliverable to Respondent.

On November 16, 2022, Investigator Simpson inspected the work that had been performed on the project to date. He also reviewed the Construction Contract and Residential Buyer’s Inspection Notice and Seller’s Response (“BINSR”) provided by Complainant, and took 8 photographs of the project site. Mr. Welch was present. When he was finished, Investigator Simpson drafted his Inspection Notes. Ultimately, Investigator Simpson derived 20 complaint items from the narrative complaint submitted to the Registrar, of which he was able to substantiate 11 complaint items based on his firsthand observations. Specifically, Investigator Simpson concluded that Respondent’s workmanship on complaint items 1, 3-7, 9-10, 16-17, and 19 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.

On December 12, 2022, Investigator Simpson issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated just over half of Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on January 11, 2023, 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). Correspondence was not returned as undeliverable to Respondent.

On January 20, 2023, Investigator Simpson issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on February 07, 2023, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On February 07, 2023, Investigator Simpson inspected the corrective work that had been performed on the project. When he was finished, Investigator Simpson drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Simpson determined that Respondent had satisfactorily remediated complaint all previously substantiated items, save substantiated complaint items 1, 7, and 19.

On March 06, 2023, Investigator Simpson forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On March 08, 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 March 23, 2023, to respond with his Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. Correspondence was not returned as undeliverable to Respondent.

On or about March 21, 2023, the Registrar received Respondent’s timely Answer whereby Mr. Rooney responded to complaint items 1, 3-10, 16-17, and 19, and argued that although Complaint No. 2022-09083 was Mr. Rooney’s first in his 40 year construction career, he would nonetheless “continue attempts to satisfy the customer fling this complaint.”

On March 24, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on May 22, 2023. Per the April 12, 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 Simpson as a witness. 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:

On or about September 20, 2021, the parties entered into an agreement for Respondent to construct residential property at 21144 E. Leavitt Ln. Florence, AZ 85132 for $374,900.00, which Complainant paid in full.

On January 20, 2023, after receiving sufficient additional information from Complainant to substantiated complaint item 8, Investigator Simpson issued an Amended Directive to Respondent. Respondent was put on notice that it had until 5:00 p.m. on February 01, 2023, 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). Correspondence was not returned as undeliverable to Respondent.

Between December 12, 2022, and February 01, 2023, nor any time thereafter, did the parties enter into a settlement agreement regarding substantiated complaint items 1, 7, and 19.

Closing Arguments

Complainant declined to provide a closing argument.

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.

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 $374,900.00 residential construction contract, which Complainant paid in full. It is also undisputed that Investigator Simpson determined that some of the work Respondent performed on the project did not satisfy the Registrar’s minimum standards. It is further undisputed that Respondent failed to fully comply with 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 timely remediate Complainant’s project. This is an affirmative defense that Respondent bears the burden to establish. 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. The evidentiary record in this matter reflects that Respondent failed to complete corrective work necessary to satisfy the Registrar’s Directive, never returned any portion of Complainant’s payments, and had no affirmative defense(s) for doing so.

Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established grounds for the Registrar to take disciplinary action against ROC License No. 323191.

Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that on the effective date of the Final Order in this matter Respondent Arizona Drying and Restoration LLC, ROC License No. 323191, be suspended for three (3) days based on its violation(s) 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 in certified funds as a civil penalty.

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 31, 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]

Arizona Drying and Restoration LLC, Respondent

411 E. Fiesta Del Sol

Florence, AZ 85132

Jesus Tarango, Complainant

21144 E. Leavitt Ln.

Florence, AZ 85132

By: OAH Staff