ALJDEC - Licensing
2022A-10161-CHC-ROC-RES · Registrar of Contractors · 2023-05-03
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Robert C Walker,
COMPLAINANT,
v.
C B E General Contractors LLC
ROC License No. 209120,
RESPONDENT.
No. 2022A-10161-CHC-ROC-RES
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: April 21, 2023 at 9:00 AM.
APPEARANCES: Robert Walker (“Complainant”) appeared with Loretta Walker as a witness. Miles Crosby appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of C B E General Contractors LLC (“Respondent”).
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 June 25, 2005, the Registrar issued License No. 209120 General Dual KB-2 Residential and Small Commercial contracting license to Respondent. Although the license had been renewed through June 30, 2023, on December 09, 2022, the license was voluntarily withdrawn by Respondent. Richard Lee Koberna is the Qualifying Party and Member on this license. Respondent’s address of record for the license is 1002 N. Gull Haven Ct. Gilbert, AZ 85234. There is no active bond for the license. There is no prior disciplinary history for the license, save one open complaint which is presumably related to this matter.
On or about November 03, 2022, the Registrar received a 13-item complaint from Complainant against Respondent’s License No. 209120 alleging poor workmanship of their cabin renovation project. The Registrar designated it Complaint No. 2022-10161 and assigned to Miles Crosby (“Investigator Crosby”) for investigation.
On November 04, 2022, Investigator Crosby issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 22, 2022, at 11:00 a.m. Correspondence issued to Respondent was not returned as undeliverable.
On November 22, 2022, Investigator Crosby reviewed proof of payment and project-related correspondence exchanged between the parties and inspected the work that had been performed on the project to date. He also took 62 photographs of the project site. Respondent was present. When he was finished, Investigator Crosby drafted his Inspection Notes. Investigator Crosby determined that, “Overall[,] the workmanship was very poor” on the project. As a result, Investigator Crosby substantiated 11 complaint items, one of which was added during the inspection. Specifically, Investigator Crosby determined that complaint items 1-7, 9-10, and 13-14 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 December 07, 2022, Investigator Crosby issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. §§ 32-1154(A)(12); 32-1158(A) for Respondent’s failure to provide Complainant with a contract for their project. Correspondence was not returned as undeliverable to Respondent.
On December 07, 2022, Investigator Crosby issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated 11 of Complainant’s workmanship allegations against Respondent. The Directive notes, in pertinent part:
After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00.
(Emphasis added.)
Respondent was put on notice that he had until 5:00 p.m. on December 30, 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). Correspondence issued to Respondent was not returned as undeliverable.
On January 04, 2023, Investigator Crosby forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On January 12, 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(b), and 32-1154(A)(12); 32-1158. Respondent was given until January 27, 2023, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. Correspondence issued to Respondent was not returned as undeliverable.
On January 31, 2023, the Registrar received Respondent’s untimely Answer whereby Mr. Koberna asked for “leniency” from the Registrar, and offered to “perform the request by complainant in a timely manner.” Mr. Koberna did not address either alleged statutory violation outlined in the Citation.
On March 01, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 21, 2023. Per the March 15, 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(b)
Charge 2: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158
Hearing Evidence
Complainant testified on his own behalf and called Investigator Crosby as a witness. Respondent failed to appear. 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 at 2710 Desert Breeze Ln. Overgard, AZ 85933.
On or about June 11, 2022, Complainant and Respondent entered into a verbal $50,000.00 contract for the renovation of Complainant’s residence, including but not limited to, metal roofing, siding, concrete, decking, trim, paint, and 2 glass doors. On an unknown date, an additional $10,000.00 verbal Change Order was executed for work in Complainant’s kitchen.
Complainant paid Respondent $61,350.00 for the project.
Between December 07, 2022, and December 30, 2022, Respondent did not make any attempt to perform corrective work on the project per the Registrar’s Directive, or settle with Complainant. As such, neither a compliance jobsite inspection nor a prehearing jobsite inspection were conducted in the matter.
Due to an oversight, Respondent was not cited for an alleged violation of Ariz. Rev. Stat. §§ 32-1154(A)(22).
Closing Argument
In closing, Complainant argued that his burden of proof had been met, and that as a result he should be permitted to access the Registrar’s Recovery Fund for financial recompense in the matter. Complainant also noted that he had been exceptionally “lenient” with Respondent, and extended grace for Mr. Koberna to perform corrective work, but instead was informed that he had voluntarily cancelled his license and bond instead of remediating their project. Complainant offered that he had been “taken advantage of” by Respondent, and asked the Registrar to make him whole and account for their licensee’s poor work.
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(b) requires that “[a] contractor shall perform all work in accordance with any applicable building codes and professional industry standards.”
Ariz. Rev. Stat. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Failure in any material respect to comply with this chapter.”
Ariz. Rev. Stat. § 32-1158(A) provides that a contract between a contractor and property owner amounting to more than $1,000.00 must contain the following information in writing:
The name of the contractor and the contractor's business address and license number.
The name and mailing address of the owner and the jobsite address or legal description.
The date the parties entered into the contract.
The estimated date of completion of all work to be performed under the contract.
A description of the work to be performed under the contract.
The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.
The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.
The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.
That the property owner has the right to file a written complaint with the Registrar for an alleged violation of Ariz. Rev. Stat § 32-1154(A). The contract shall contain the Registrar's telephone number, website address, and shall state that complaints must be made within the applicable time period as set forth in Ariz. Rev. Stat § 32-1155(A). The information must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor.
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 an unwritten $60,000.00 residential remodeling contract, which Complainant paid in full. It is also undisputed that Investigator Crosby determined that the work Respondent performed on the project did not satisfy the Registrar’s minimum standards. It is further undisputed that Respondent failed to timely comply with the Registrar’s Directive, and that Respondent voluntarily cancelled his license with the Registrar nearly immediately after the Directive was issued.
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 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 the underlying project at issue and never returned any portion of Complainant’s payments, and had no affirmative defense(s) for doing so. Thus, a violation of Ariz. Rev. Stat. § 32-1154(A)(22) exists. However, because Respondent was not cited for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(22), discipline under this statutory provision and Ariz. Rev. Stat. § 32-1154(E) are prohibited.
Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(b) and 32-1154(A)(12); 32-1158 by a preponderance of the evidence, Complainant has also established grounds for the Registrar to take disciplinary action against ROC License No. 209120.
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 C B E General Contractors LLC, ROC License No. 209120, be revoked.
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 03, 2023.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted electronically to:
Martín Quezada, Director
Registrar of Contractors
c/o Legal Department
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
C B E General Contractors, LLC
1002 N. Gull Haven Ct.
Gilbert, AZ 85234
[email redacted]
Robert C. Walker
P.O. Box 3248
Chandler, AZ 85244
[email redacted]
By: OAH Staff