ALJDEC - Licensing

2022A-11388-CHC-ROC · Registrar of Contractors · 2023-08-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Laurence Albert Fuller,

COMPLAINANT,

v.

Barron Backhoe Service LLC

ROC License No. 331915,

RESPONDENT.

No. 2022A-11388-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 24, 2023 at 1:00 PM.

APPEARANCES: William O’Leary, Esq. appeared on behalf of Laurence Fuller (“Complainant”) with Complainant as a witness. Chris Allison appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Jeremiah Barron appeared on behalf of Barron Backhoe Service 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 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 January 12, 2021, the Registrar issued License No. 331915 Specialty Dual CR-2 Excavating Grading and Oil contracting license to Respondent. The license is renewed through January 31, 2025. Jeremiah Denton Barron is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 13900 E. Ridge Way Dewey, AZ 86327. Respondent has an active $6,750.00 surety bond on the license issued by RLI Insurance Company. The license no prior disciplinary record, save one (1) complaint that has been settled or otherwise resolved against it. There is one (1) open complaint listed against the license; which is presumed to be related to this matter.

On December 09, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 331915 alleging poor work of their residential retaining wall project. The Registrar designated it Complaint No. 2022-11388 and assigned to Chris Allison (“Investigator Allison”) for investigation.

On December 13, 2022, the Registrar requested additional information from Complainant, which Complainant provided December 18, 2022.

On December 15, 2022, Investigator Allison issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 11, 2023, at 11:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On January 11, 2023, Investigator Allison inspected the work that had been performed on the project to date. Respondent was present. Investigator Allison also reviewed the contract-related correspondence between the parties, and took 5 photographs of the project site. When he was finished, Investigator Allison drafted his Inspection Notes. Investigator Allison determined that Complainant was the General Contractor on the underlying project, as he purchased a majority of materials and paid Respondent hourly for work. Ultimately, Investigator Allison derived five (5) separate and distinct complaint items from Complainant’s narrative submission to the Registrar, of which, he substantiated 3 based on his firsthand observations. Specifically, Investigator Allison determined Respondent’s workmanship on complaint items 1-3 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies. Investigator Allison also specifically concluded that the project required a building permit, which Complainant needed to obtain prior to the commencement of corrective work, and that Respondent would not be held responsible for any additional work, if any, required in approved plans from the local building authority – save the inclusion of geotextile fabric, if required.

On January 25, 2023, Investigator Allison issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on February 24, 2023, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

Investigator Allison also included the following advisement to Complainant:

*** Complainant will be responsible for updating the investigator on the progress of the permit. If no progress has been made by the due date above the complaint will be closed.

Once the permit has been issued the investigator will revise this document with a new date for the corrective work to be completed. ***

(Emphasis in original.)

On February 20, 2023, the Registrar received a narrative addendum complaint from Complainant.

On an unknown date, Investigator Allison issued an Addendum Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on March 16 2023.

On March 17, 2023, due to safe access concerns related to inclement weather, the addendum jobsite inspection was rescheduled to 1:00 p.m. on March 23, 2023. Correspondence was not returned as undeliverable to Respondent.

On March 21, 2023, due to a conflict in one of the party’s schedules, the addendum jobsite inspection was reset to 12:00 p.m. on April 03, 2023. Correspondence was not returned as undeliverable to Respondent.

On April 04, 2023, Investigator Allison inspected the three (3) addendum complaint items he derived from Complainant’s narrative addendum submission to the Registrar, of which, he substantiated all. Specifically, Investigator Allison determined Respondent’s workmanship on addendum complaint items 6-8 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies. Respondent was present. Investigator Allison took 8 photographs.

On April 19, 2023, Investigator Allison issued an Amended Written Directive from the Registrar (“Amended Directive”) regarding the substantiation of Complainant’s addendum workmanship allegation(s) against Respondent. However, the parties were also placed on notice of the following:

*** Respondent was contracting out of scope with their license. Respondent’s license scope does not allow them to do or subcontract the corrective work. Complaint may only be remedied through financial resolution with the Complainant. ***

(Emphasis in original.)

Respondent was put on notice that it had until 5:00 p.m. on May 04, 2023, to notify the Registrar of its compliance with the Amended Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

On May 10, 2023, Investigator Allison forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On May 11, 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), 32-1154(A)(16), and 32-1154(A)(22). Respondent was given until May 26, 2023, 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 May 23, 2023, the Registrar received Respondent’s timely Answer whereby Respondent essentially argued that he had performed the underlying work as a “guinea pig” for Complainant, both as a new contractor and friend. Per Respondent, the parties had “several different items going on at one time” at Complaint’s property, and in their failure Complainant was “pointing blame” at Respondent.

On May 26, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on July 24, 2023. Per the June 05, 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 3: A.R.S. § 32-1154(A)(16)

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on his own behalf, called Investigator Allison as a witness, and submitted Exhibits 2 & 7. Respondent called Jeremiah Barron 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:

Complainant owns a residential property located at 1685 N. Amethyst hills Dr. Prescott, AZ 86303.

On an unknown date the parties entered into a verbal contract for excavation and the construction of multiple retaining walls on Complainant’s property. Respondent was paid hourly for work on the project, which varied depending on the task and equipment used. A cash discount was also offered for payments made to Respondent.

Work on the project commenced in February 2022, and stopped or was otherwise completed in September 2022.

Respondent was paid over $100,000.00 by Complainant towards the project.

Between January 25, 2023, and February 24, 2023, Complainant did not obtain a building permit for the underlying project, as required by the Directive.

Between April 19, 2023, and May 04, 2023, the parties did not settle their dispute, which was the only means by which Respondent could satisfy the Amended Directive.

Additional Evidence

Complainant’s property is on a steeply sloped plot of land.

One of the walls Respondent constructed completely collapsed. Attempts to rebuild were unsuccessful.

On February 13, 2023, structural engineering firm Core Structure Group, LLC (“CSG”) performed an inspection of the retaining walls Respondent built. In a subsequent report dated February 16, 2023, CSG structural engineer Jacob Vinton, Cert. No. 58976, noted the following:

One of the walls at issue is located on the south side of the property, which provides support for greenhouse pad, and another wall is located on the north side of the property around an accessory structure and up the driveway. Some walls are incomplete. Additionally –

The tops of the walls are not level.

The tops of the walls are not consistently straight or curved.

There are bulges in the wall.

There are gaps between blocks in the same course.

There are blocks that are removable by hand.

The blocks were not properly embedded in some locations.

The leveling pad did not appear to be in accordance with the manufacturer’s requirements.

Based on the deficiencies observed during their visit, CSG concluded that it had no confidence in the structural integrity of the walls Respondent constructed. CSG opined that all walls necessitated demolition and reconstruction in accordance with designs from a structural engineer, manufacturer’s requirements, and a special inspection for soil materials and compaction.

Closing Arguments

In closing Respondent argued that its license should not be disciplined by the Registrar because Mr. Barron had tried to help Complainant, who he thought was friend, and that Mr. Barron had been reluctant to perform the work due to his lack of experience but Complainant insisted. Mr. Barron admitted that he had performed work out of scope, but argued that had Complainant timely obtained a building permit that Respondent would have performed corrective work in adherence with the Directive. Mr. Barron also opined that his attempts to settle with Complainant were reasonable, so Respondent should not be held in violation of the Amended Directive.

In closing, Complainant argued that it had sustained its burden of proof in the matter, and as such, the Registrar should issue the harshest discipline possible against Respondent’s contracting license.

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.

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)(16) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.”

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.

While the exact terms and conditions of the parties’ verbal agreement are unclear, the record does establish that there was an agreement for Respondent to perform excavation and construct several retaining walls on Complainant’s property using Complainant’s materials and equipment. Both parties agree that Respondent received over $100,000.00 in payments for this work. It is also undisputed that some of Respondent’s workmanship on the project did not satisfy the Registrar’s minimum standards. It is further undisputed that Complainant failed to obtain a building permit in compliance with the Directive, and that Respondent could not perform corrective work under the Directive or Amended Directive due to its insufficiency of its license.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to settle its underlying dispute with Complainant in compliance with the Registrar’s Amended Directive. 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. Here, a detailed analysis is not necessary. The question of whether Mr. Barron’s settlement offer to Complainant is an irrelevant red herring fallacy. While it may be true that Complainant persuaded Respondent to accept the underlying project, Respondent was not forced or otherwise coerced or tricked into accepting and/or performing the work at issue. By Mr. Barron’s own admissions, he was inexperienced with the construction of retaining walls; as evidenced by the fact that a wall he constructed on Complainant’s property collapsed. Respondent’s lack of performance due to its license being out of scope, and Mr. Barron’s failure to settle with Complainant, are not excuses that justify its failure to comply with the Registrar’s Amended Directive. Thus, Respondent has failed to sustain his burden of persuasion in this matter.

Therefore, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(16), 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 Barron Backhoe Service LLC, ROC License No. 331915, be suspended for three (3) days.

IT IS FURTHER RECOMMENDED that the Registrar forgo the imposition of a civil penalty in this matter.

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, August 02, 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]

Barron Backhoe Service LLC, Respondent

13900 E. Ridge Way

Dewey, AZ 86327

[email redacted]

William O’Learly, Esq.

O’Leary Eaton PLLC, Counsel for Complainant

115 N. Grove Ave.

Prescott, AZ 86301

[email redacted]

[email redacted]

By: OAH Staff