ALJDEC - Licensing

2022A-10841-CHC-ROC · Registrar of Contractors · 2024-06-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Clifford Taylor,

COMPLAINANT,

v.

San Juan Iron LLC,

ROC License No. 309098,

RESPONDENT.

No. 2022A-10841-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 19, 2024 at 9:00 AM.

APPEARANCES: Clifford Taylor (“Complainant”) appeared on his own behalf. No appearance(s) by or on behalf of San Juan Iron LLC (“Respondent”) Michael Springer appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the attached agency file, and Hearing Order issued May 16, 2024, were admitted into the evidentiary record.

_____________________________________________________________________

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 Arizona Administrative Code (“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 02, 2016, the Registrar issued License No. 309098 Specialty Dual CR-24 Ornamental Metals contracting license to Respondent. Although the license had been renewed through November 30, 2024, it was voluntarily cancelled by Respondent on July 11, 2023. Maria Aguilera is listed as the Qualifying Party and Member on the license. Juan Pedro Arreola and Jose Ruiz are also listed as Members on the license. Respondent’s address of record for the license is 8707 W. Stanley A Goff Dr. Tolleson, Arizona 85353. Respondent had an $11,250.00 surety bond on the license, but it was cancelled effective September 09, 2021. The license has no prior disciplinary record. Currently, there is one (1) open complaint against the license which is presumed to be related to this matter.

On or about November 29, 2022, the Registrar received a one-line narrative complaint from Complainant against Respondent’s License No. 309089 alleging abandonment and poor work of a residential remodeling project. The Registrar designated it Complaint No. 2022-10841 and assigned to Michael Springer (“Investigator Springer”) for investigation.

On December 27, 2022, Investigator Springer issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 18, 2023, at 2:30 p.m. Correspondence was not returned as undeliverable to Respondent.

On January 18, 2023, Investigator Springer inspected the work that had been performed on the project by Respondent. Respondent was present. Investigator Springer also reviewed the contract-related correspondence between the parties. Ultimately, Investigator Springer substantiated Complainant’s sole complaint item based on his firsthand observations. However, Complainant agreed to close Complaint No. 2022-10841 because the parties entered into a settlement agreement. As such, Investigator Springer issued a Dismissal Letter to the parties since the parties had “agreed to work together and fix the items” in the underlying complaint.

On January 18, 2024, Complaint No. 2022-10841 was reopened by the Registrar because Complainant alleged that Respondent had not performed any corrective work over the course of the prior year, in adherence with the parties’ settlement agreement.

On January 18, 2024, Investigator Springer issued a second Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on March 11, 2023, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On March 11, 2024, Investigator Springer re-inspected Respondent’s work on the project. Respondent was not present. When he was finished, Investigator Springer drafted his Inspection Notes. Ultimately, Investigator Springer affirmed his prior determination and noted that the “doors are difficult to open” and that the support beams were “sagging.” He also determined that “no [corrective] work has been attempted” by Respondent. Investigator Springer concluded that Respondent’s workmanship failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.

On March 11, 2023, Investigator Springer issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated the underlying complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on March 27, 2023, 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 Respondent.

On March 29, 2024, Investigator Springer forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On April 08, 2024, 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 April 23, 2024, to respond with its 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 April 21, 2024, the Registrar received Respondent’s timely Answer whereby Respondent failed to address the alleged statutory violations identified in the Citation or raise any affirmative defenses. Notably, the Answer is dated April 17, 2023, and referenced intended action Respondent planned to take in January 2024.

On April 22, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on June 19, 2024. Per the May 15, 2024, 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)(12) – A.R.S. § 32-1158

Charge 3: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on his own behalf and called Investigator Springer as a witness. Although afforded a ten (10) minute grace period, there was no appearance(s) by or on behalf of Respondent. The substantive evidence of record is as follows:

Complainant owns residential property located at 2166 E. Saddie Bronc Trl. Sierra Vista, Arizona 85650.

On or about July 09, 2020, the parties entered into a $13,500.00 construction agreement for the installation of large metal bi-fold doors on Complainant’s rear patio.

Complainant paid Respondent in full for their agreement.

Work on the project commenced in mid-July 2020, and continued through October 19, 2020.

After the parties entered into their settlement agreement in January 2023, Respondent failed to perform any corrective work.

At no point in time during the Directive’s compliance period did Respondent allege a denial of access to the project site to the Registrar, or request an extension thereof to the agency.

In March 2024, Respondent obtained structural engineering for Complainant’s beam construction, which were approved by the local building authority in April 2024.

Additional Evidence

Investigator Springer testified that Respondent’s voluntary license cancellation did not alleviate its duty to comply with the Directive. Specifically, Respondent could have placed the license back in active status to address the Directive or enter into a financial settlement agreement with Complainant prior to the expiration of the Directive’s compliance period.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.

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.

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 clear.

It is clear from the record that the parties had a door installation project agreement, and that Complainant paid Respondent in full for work on said project. It is also clear from the record that there were several deficiencies in Respondent’s work that required correction, and that Respondent did not fully comply with the Registrar’s Directive, or request an extension thereof.

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 the deficiencies identified in the underlying project and complete the job. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain its burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project. 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’s performance on the underlying project failed to meet the Registrar’s minimum workmanship standards, 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), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

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

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent San Juan Iron LLC, ROC License No. 309098, 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 Order will be forty (40) days from the date of that certification.

Done this day, June 24, 2024.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Clifford Taylor, Complainant

830 Arizona Street

Huachuca City, AZ 85616

[email redacted]

San Juan Iron LLC

c/o Maria Aguilera, Agent

8707 W. Stanley A Goff Dr.

Tolleson, AZ 85353

[email redacted]

By: OAH Staff