ALJDEC - Licensing

2023A-01712-CHC-ROC · Registrar of Contractors · 2023-11-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Michael Sasse,

COMPLAINANT

v.

R.P.W. Creative Contracting LLC

License No. ROC 334678,

RESPONDENT

No. 2023A-01712-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 23, 2023, July 17, 2023, and September 20, 2023

APPEARANCES: Pierce Sargent IV, Esq., represented R.P.W. Creative Contracting LLC. Ellen Davis, Esq., represented Michael Sasse.

ADMINISTRATIVE LAW JUDGE: Brian Del Vecchio

FINDINGS OF FACT

R.P.W. Creative Contracting LLC (Respondent) is the holder of License No. 334678 issued by the Arizona Registrar of Contractors (Registrar). The qualifying party and owner of Respondent is Richard Patrick Whitlock.

On or about October 28, 2021, Michael Sasse (Complainant) entered into a contract with Respondent for a large scale renovation of Complainant’s home.

On or about February 10, 2023, the Registrar received a Complaint against Respondent from Complainant alleging abandonment of the project.

The Registrar assigned the complaint to Investigator Brandon Smith. After a jobsite inspection, Investigator Smith issued a written directive that provided, in pertinent part, as follows:

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. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on April 10, 2023.

RESTRICTIONS

• You may not perform or hire other contractors to perform work that is outside the scope of your license.

• If your license is currently suspended for administrative reasons, or is inactive, expired, or cancelled, you may not perform any corrective work nor contract in any manner, which includes hiring other contractors to perform work, until the suspension of your license(s) has been lifted or your license(s) has been reactivated.

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

Compliance Item: 1 - Contractor Abandoned project, left project uncompleted.

Investigator’s Observation: VERIFIED: I inspected and documented the project. I appears that the project is in midstream. Both parties agree that work halted in early to mid-November 2022. Contract remains unfulfilled by respondent.

Governing Rule: Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

Following the issuance of the written directive, Respondent did not perform any additional work on the project. After the deadline in the directive expired, Investigator Smith was notified no corrective work had been performed.

The Registrar issued a Citation against Respondent, charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(1) and Ariz. Rev. Stat. § 32-1154(A)(22).

At hearing, Complainant’s exhibits 1 through 79 were admitted and Michael Sasse, Joanie Sasse, and Greg Good testified on Complainant’s behalf. Respondent’s exhibits 1 through 59 were admitted and Richard Whitlock testified on behalf of Respondent.

Investigator Smith testified consistently with his jobsite inspection notes and written directive. During Investigator Smith’s initial jobsite inspection he confirmed there were numerous areas of Complainant’s home which were incomplete; as a result Investigator Smith chose to video record each room to expedite the inspection. Upon completion of the investigation, Investigator Smith issued a written directive and gave Respondent 47 days to return to the project. A compliance jobsite inspection was not completed because both parties advised no work had been completed since the written directive. Investigator Smith testified the intention of the directive was to get Respondent to reengage in the project because the number of uncompleted items would have numbered into the hundreds. Investigator Smith testified he estimated about 50% of the work was completed and therefore the project was not substantially completed.

Complainant testified he and his wife previously hired Respondent to complete several other jobs around their home before Respondent submitted a bid to be the general contractor. Prior to contracting for the large renovation, Complainant had a good working relationship with Mr. Whitlock. Complainant was aware Mr. Whitlock recently obtained his general contractor license, but he was willing to take a chance on him. Nevertheless, Complainant contracted with Respondent and from the start of the project there were issues with cost overruns, excessive labor, pace issues, missed deadlines, and a general lack of accountability and communication between the parties. As the project began to spiral out of control, Complainant demanded Respondent provide a detailed accounting of the monies spent, percentage of work completed, and a status update on the overall project. On July 17, 2022, the parties modified the original contract to include some major redesigns totaling nearly $153,000.00. Complainant admitted the changes to the original contract and the July addendum were verbal agreements, no change orders were drafted or signed. Complainant paid Respondent over $689,000.00 for work promised but not delivered. Mr. Whitlock’s written accounts to detail completed work painted a different reality than the actual completed work. Complainant demanded a progress report on the status of the overall completion of the project. Mr. Whitlock apologized for the lack of progress and demanded nearly $300,000.00 to complete the project. Complainant then halted Respondent’s involvement with the project. Complainant then spoke with Greg Good, a general contractor, who assessed the percentage of completion of the project. Mr. Good estimated about 25% of the project had been completed.

Mr. Whitlock testified he never abandoned the job, rather, he was fired by Complainant in the middle of the project. Mr. Whitlock admitted he struggled with the administrative and accounting side of the project. Mr. Whitlock admitted his inexperience caused the bid to be significantly lower than the reality of what the project entailed. Mr. Whitlock was plagued by a lack of skilled workers, increased cost of materials and delays caused by an ever-changing design. As the project spiraled and progress crawled, Complainant put increased pressure on Mr. Whitlock to provide status updates which caused more delays. Mr. Whitlock attempted to fulfill Complainant’s request for detailed accountings, however, due to Mr. Whitlock’s inexperience, he was unable to satisfy Complainant’s demands. On or about November 4, 2022, Mr. Whitlock attempted to salvage the contract and informed Complainant of project cost overruns. When Complainant read Mr. Whitlock’s letter he fired Respondent from the project. Mr. Whitlock admitted neither of the contracts were fully completed.

Administrative notice is taken of Respondent’s License record on November 9, 2023. Respondent’s License No. 334678 was first issued on September 2, 2021, and is active. Respondent’s License record also reflects that there were no other open or prior complaints against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears 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 evidence established that Respondent abandoned the construction project. Mr. Whitlock admitted he completed neither the October 2021 contract, nor the July 2022 contract. Respondent’s lack of accounting, detailed progress reports, and ultimately lack of progress on the contracts caused Complainant to fire Respondent. Even if Mr. Whitlock’s percentages of completed work were taken as true, none of the items were fully completed. Therefore, Complainant established that Respondent abandoned or refused to perform after submitting a bid on work without legal excuse for the abandonment or refusal in violation of Ariz. Rev. Stat. § 32-1154(A)(1).

The evidence established that Respondent failed to take appropriate corrective actions to comply with the written directive. Investigator Smith confirmed no work had been attempted after the written directive was issued. Therefore, Complainant established that Respondent failed to take appropriate corrective actions to comply with the written directive in violation of Ariz. Rev. Stat. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall revoke Respondent’s License No. 334678.

No civil penalty for the violation of Ariz. Rev. Stat. § 32-1154(A)(22).

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, November 13, 2023.

/s/ Brian Del Vecchio

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

Registrar of Contractors

Michael Sasse

[email redacted]

Ellen B. Davis

HENZE COOK MURPHY, PLLC

[email redacted]

[email redacted]

W. Pierce Sargeant IV, Esq

[email redacted]

By: OAH Staff