ALJDEC - Licensing
2022A-09155-CHC-ROC · Registrar of Contractors · 2023-03-14
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Natalie Rathman and
Brad Rathman,
COMPLAINANTS,
v.
Modern Garden, LLC
License No. ROC 321204,
RESPONDENT.
No. 2022A-09155-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: March 3, 2023
APPEARANCES: Complainants Natalie and Brad Rathman appeared on their own behalf. Respondent Modern Garden, LLC failed to appear. Arizona Registrar of Contractors Investigator David Fagerburg appeared as a witness.
ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella
FINDINGS OF FACT
Modern Garden, LLC (“Respondent”) is the holder of License No. 321204 issued by the Arizona Registrar of Contractors (“Registrar”).
On or about August 23, 2021, Natalie and Brad Rathman (“Complainants”) contracted with Respondent for Respondent to construct a pool at their residence. The contract price was $48,759.00. Complainants have paid Respondent a total of $29,255.40, comprised of two payments each in the amount of $14,627.70.
On or about October 31, 2022, the Registrar received a Complaint against Respondent from Complainants alleging abandonment of the project.
The Registrar assigned the Complaint to Investigator David Fagerburg. On December 13, 2022, Investigator Fagerburg conducted a Jobsite Inspection, at which Respondent was not present. Investigator Fagerburg authored Jobsite Inspection Notes that state the following:
Investigator Notes:
1: In reviewing the documents submitted I am able to verify the respondent did not provide a written contract for the pool project violating A.R.S. § 32-1158.01(A) Swimming pool; spa; construction contracts.
Compliant Item 1: -Contractor has not maintained open & consistent communication-has provided dishonest information-claiming project costs are significantly higher than proposal & cannot continue to pay his subs, requests we pay his subs directly despite having paid him 60% of the proposal costs to date.
Investigator’s Observation: Verified. At this jobsite investigation I observed a pool in the backyard of the home with shotcrete installed. See P (3) and P (4). The complainant stated that after making a 2nd payment prior to shotcrete the respondent never continued the project, another contractor was hired to move forward with the project and the last communication from the respondent was October 8, 2022 when the respondent text the complainant requesting more money. During this jobsite investigation the complainant stated that the work stopped May 18, 2022. In reviewing copies of the checks submitted by the complainant, I am able to verify the respondent received 2 payments in equal amounts of $14,627.70 for a total of $29,255.40, which is 60% of the total contract cost of $48,759 and did not continue with the project.
Governing Rule: ARS §32-1154 (A) (1) (Abandonment)
Compliant Item 2: -sold us an incomplete pool, we later found out he expected us to hire another contractor to design & construct the water feature connected & plumbed to our pool which was apart of our original design submitted for bid.
Investigator’s Observation: Not Verified. At this jobsite investigation I observed a pool in the backyard of the home with shotcrete installed. See P (3) and P (4). During this jobsite investigation the complainant showed me a concept drawing of the proposed pool with a water feature. See P (5). I am unable to verify whether or not the concept drawing titled, Rathman Residence Outdoor Living, was provided by the respondent as part of the proposal or if the rendering was provided by another designer. In reviewing the documents submitted I am able to verify the respondent did not provide a written contract and the payment schedule for pool contracts was not adhered to.
Governing Rule: A.R.S. § 32-1158.01(A) Swimming pool; spa; construction contracts.
Compliant Item 3: -because he has allowed our project to sit for so long the rebar has begun to warp & rust. - he has continually claimed we are on scheduling lists, but somehow that has constantly changed. - Friday, Oct 7, 2022 - he assured us we were getting gunite/shotcrete Sat Oct 8th. We found out the evening of the 7th from our neighbors (using Modern Garden LLC too) who had contacted the shotcrete company that they had no one scheduled for the 8th, no shotcrete was ordered for projects. No one showed up Oct 8, including Neal despite telling us he would be here.
Investigator’s Observation: Verified. At this jobsite investigation I observed a pool in the backyard of the home with shotcrete installed. See P (3) and P (4). I am unable to verify how long the respondent allowed the pool project to sit or if the rebar has begun the warp and rust as there is shotcrete installed. During this jobsite investigation the
complainant stated that after making a 2nd payment prior to shotcrete the respondent never continued the project and another contractor was hired to move forward with the project.
Governing Rule: ARS §32-1154 (A) (1) (Abandonment)
Compliant Item 4: - In a nutshell, Neal appears to be dishonest in his claims. It appears that he has repeatedly dropped the ball & continually is trying to cover his tracks. –October 8th, 2022 we informed Neal that he had until close of business Monday Oct 10, 2022 to send us invoices for the project to date, and a refund of remaining funds or we would be contacting the necessary authorities. As anticipated we have not heard a word from him & believe the funds to be stolen.
Investigator’s Observation: Not Verified. This is a statement made by the complainant that does not imply poor workmanship.
Governing Rule: No Action
Compliant Item 5: -While we do not have an attorney at this moment, we are seeking legal support.
Investigator’s Observation: Not Verified. This is a statement made by the complainant that does not imply poor workmanship.
Governing Rule: No Action
All errors in original.
Investigator Fagerburg did not issue a Written Directive to Respondent as Respondent had not performed any work on the project since May 2022, and due to the length of time that had transpired, Complainants hired another contractor to complete the project.
Investigator Fagerburg forwarded the matter to the Registrar’s Legal Department. The Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(1) and A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158.01.
The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.
The hearing was scheduled to convene on March 3, 2023, at 9:00 a.m., pursuant to the Notice of Hearing issued by the Registrar on January 25, 2023. Also, on January 25, 2023, the Office of Administrative Hearings issued to the parties at their respective email addresses of record, an Order Setting Hearing Via Google Meet. That Order contained the Google Meet link to join the hearing by video or by telephone. Complainants appeared on their own behalf. Investigator Fagerburg was also present. Respondent did not appear through an authorized member, employee, or attorney. Respondent did not request that the hearing be continued. Because Respondent failed to appear, Respondent did not present any evidence to defend its license.
Investigator Fagerburg testified consistently with his findings contained in the Jobsite Inspection Notes. Investigator Fagerburg testified that he spoke with Respondent’s representative and was told that because of the increased cost of shotcrete, Respondent could not afford to order it unless Complainants paid for the difference in the cost. Complainants would not agree to pay additional monies, and Respondent did not order the shotcrete.
Investigator Fagerburg further testified that there was no written contract for the pool construction as Respondent only provided a proposal/estimate for the project which did not follow required statutory specifications. Investigator Fagerburg explained that statute requires a payment schedule of a down payment of fifteen percent, three payments of twenty-five percent of the contract price after certain work is performed, and then a final payment of ten percent of the contract price. In this case, Complainants paid thirty percent as a down payment and then a progress payment of thirty percent, which is in excess of what statute requires.
Investigator Fagerburg referenced the photographs he took at the Jobsite Inspection that depict the incomplete work.
Natalie Rathman testified that Respondent requested additional monies for the shotcrete and requested that Complainants pay for the shotcrete directly. Ms. Rathman testified that she refused to pay additional monies because Complainants had already paid more than half of the contract price at that time. Thereafter, Complainants did not hear further from Respondent.
Administrative notice is taken of Respondent’s prior License record on March 14, 2023. Such prior License record reflects that Respondent’s License No. 321204 was first issued on August 24, 2018, and is active. Such prior License record also reflects that there is only the instant open complaint, no resolved/settled complaints, and no discipline against Respondent’s license.
CONCLUSIONS OF LAW
This matter lies within the Registrar’s jurisdiction.
Complainants bear the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”
The uncontroverted and credible evidence established that Respondent abandoned its contract with Complainants without legal excuse for doing so. Therefore, Complainants established that Respondent violated A.R.S. § 32-1154(A)(1).
The uncontroverted and credible evidence established that the payment schedule implemented by Respondent failed to comply with statutory requirements resulting in Complainants paying monies in excess of what was statutorily required. Therefore, Complainants established that Respondent violated A.R.S. § 32-1158.01.
RECOMMENDED ORDER
Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 321204 for a period of seven (7) days.
It is further recommended that, on or before thirty (30) days after the effective date of the final order, Respondent shall provide a sample contract to the Registrar to demonstrate that it has amended its contracts to include the terms required by A.R.S. § 32-1158.01. If Respondent fails to establish to the Registrar that it has brought its contracts into compliance with A.R.S. § 32-1158.01 within thirty (30) days, its contractor’s license shall be suspended until it demonstrates that it has done so.
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, March 14, 2023.
/s/ Sondra J. Vanella
Administrative Law Judge
Transmitted electronically to:
Martín Quezada, Director
Registrar of Contractors
[email redacted]
David Fagerburg
[email redacted]
Natalie and Brad Rathman
[email redacted]
Modern Garden, LLC
[email redacted]
By: OAH Staff