ALJDEC - Licensing

2023A-02924-CHC-ROC · Registrar of Contractors · 2023-11-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Sofia and Daniel Nuzzo,

COMPLAINANTS

1st Class Construction AZ, LLC

License No. ROC 340408,

RESPONDENT.

No. 2023A-02924-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: November 7, 2023

APPEARANCES: Complainants Sofia and Daniel Nuzzo appeared on their own behalf. Randy Taylor appeared on behalf of Respondent 1st Class Construction AZ, LLC. Arizona Registrar of Contractors Investigator Lisa Melton appeared as a witness. Tim Kelly also appeared as a witness.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

1st Class Construction AZ, LLC (“Respondent”) is the holder of License Number 340408 issued by the Arizona Registrar of Contractors (“Registrar”). Randy Taylor is Respondent’s Qualifying Party, Chief Executive Officer, Member, and owner.

In or about July 2022, Sofia Nuzzo and her husband, Daniel Nuzzo (“Complainants”), contracted with Respondent for Respondent to perform remodeling work to their home. There were seven proposals provided to Complainants by Respondent prior to the execution of the contract, and approximately nine (9) amendments/change orders executed by the parties.

On or about March 9, 2023, the Registrar received a Complaint against Respondent from Complainants alleging poor work with respect to the project.

The Registrar assigned the Complaint to Investigator Lisa Melton. After a May 3, 2023 Jobsite Inspection, at which both parties were present, Investigator Melton issued a Written Directive to Respondent that provided 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 June 5, 2023.

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

Compliance Item 3: Non properly installed aluminum windows very poor workmanship. Not properly installed Excessive charges Removed window security bar and took them! Along with previous aluminum window.

Investigator’s Observation: The windows installed by Respondent have failed inspection by the building official (4/13/23). Respondent should correct window installation per building official and obtain a passed inspection of that work from the building official. Respondent should provide documentation of passed inspection to this Investigator. Registrar has no authority over construction spoils

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Compliance Item 1: Poor workmanship

Investigator’s Observation: Not an allegation that can be inspected and/or evaluated. Specific workmanship allegations are provided in subsequent Complaint items.

Compliance Item 2: use non-qualifyed help

Investigator’s Observation: Not an allegation that can be inspected and/or evaluated.

Compliance Item 4: Door in master bedroom (French door) asked for opaque glass/clear glass came with new door.

Investigator’s Observation: Contract/change orders do not specify glass type.

Compliance Item 5: Front bathroom overhead fan was not installed but charged for

Investigator’s Observation: The Registrar has no authority over financial matters. Unable to direct completion as Respondent was fired by Complainant.

Compliance Item 6: Main bathroom. Removed overhead fan and it has never been replaced.

Investigator’s Observation: Unable to direct completion as Respondent was fired by Complainant.

Compliance Item 7: Kitchen cabinet. All the draws have no design like the schematic shows.

Investigator’s Observation: Nothing on the drawings indicate that they depict anything other than dimensions/layout for the cabinetry.

Compliance Item 8: Buffet cabinets charged for 9 feet six inches and I got only six feet 3 inches.

Investigator’s Observation: Buffet and shelves on one side have been installed. The other side is not complete. Unable to direct completion as Respondent was fired by Complainant. The Registrar has no authority over financial matters

Compliance Item 9: Desk I asked for bottom draw to be 12” deep for files and I received 10” deep can not pull files in.

Investigator’s Observation: Contract does not identify the inside dimension of this drawer.

Compliance Item 10: Charged for extra outdoor light and received one.

Investigator’s Observation: The Registrar has no authority over financial matters. Unable to direct completion as Respondent was fired by Complainant.

Compliance Item 11: Drawwall. Charged for 10 sheet extra

Investigator’s Observation: The Registrar has no authority over financial matters.

All errors in original.

Investigator Melton conducted a second Jobsite Inspection on June 14, 2023, to inspect addendum items to the Complaint filed by Complainants. Both parties were present for this inspection as well. On June 16, 2023, Investigator Melton issued an Amended Written Directive to Respondent that provided as follows:

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

Compliance Item 3 (Original Complaint): Non properly installed aluminum windows very poor workmanship. Not properly installed Excessive charges Removed window security bar and took them! Along with previous aluminum window

Respondent should provide documentation of passed inspection to this Investigator.

Registrar has no authority over construction spoils work to be performed in accordance with professional industry standards, a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.

Compliance Item 13 (Addendum Complaint): (2)-Relocate Dryer outlet-out from under drain.

Investigator’s Observation: Respondent acknowledges that there were only wires at this location and he installed outlet that is currently under drain. Respondent should correct by appropriate methods. (See JSI Photos #2)

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Compliance Item 1 (Original Complaint): Poor workmanship

Investigator’s Observation: Not an allegation that can be inspected and/or evaluated.

Specific workmanship allegations are provided in subsequent Complaint items.

Compliance Item 2 (Original Complaint): use non-qualifyed help

Investigator’s Observation: Not an allegation that can be inspected and/or evaluated.

Compliance Item 4 (Original Complaint): Door in master bedroom (French door) asked for opaque glass/clear glass came with new door.

Investigator’s Observation: Contract/change orders do not specify glass type.

Compliance Item 5 (Original Complaint): Front bathroom overhead fan was not installed but charged for

Investigator’s Observation: The Registrar has no authority over financial matters.

Unable to direct completion as Respondent was fired by Complainant.

Compliance Item 6 (Original Complaint): Main bathroom. Removed overhead fan and it has never been replaced.

Investigator’s Observation: Unable to direct completion as Respondent was fired by Complainant.

Compliance Item 7 (Original Complaint): Kitchen cabinet. All the draws have no design like the schematic shows.

Investigator’s Observation: Nothing on the drawings indicate that they depict anything other than dimensions/layout for the cabinetry.

Compliance Item 8 (Original Complaint): Buffet cabinets charged for 9 feet six inches and I got only six feet 3 inches.

Compliance Item 9 (Original Complaint): Desk I asked for bottom draw to be 12” deep for files and I received 10” deep can not pull files in.

Investigator’s Observation: Contract does not identify the inside dimension of this drawer.

Compliance Item 10 (Original Complaint): Charged for extra outdoor light and received one.

Investigator’s Observation: The Registrar has no authority over financial matters.

Unable to direct completion as Respondent was fired by Complainant.

Compliance Item 11 (Original Complaint): Drawwall. Charged for 10 sheet extra

Investigator’s Observation: The Registrar has no authority over financial matters.

Compliance Item 12 (Addendum Complaint): (1)-South door in s/e bedroom- Does not lock-Adjust door.

Investigator’s Observation: Unable to direct completion as Respondent was fired by Complainant. (No Photo)

Compliance Item 14 (Addendum Complaint): (3)-Extend handrail to top of stairs.

Investigator’s Observation: Insufficient evidence to substantiate. Respondent denies that they installed handrail. (See JSI Photos #3)

Compliance Item 15 (Addendum Complaint): (4)-GFI-All basement receptacle-Add smoke detectors.

Investigator’s Observation: Unable to direct completion as Respondent was fired by Complainant. (No Photo)

Compliance Item 16 (Addendum Complaint): (6)-Protect all loose romex in upstairs storage area

Investigator’s Observation: Insufficient evidence to substantiate. Respondent denies that they installed electrical that is hanging. (See JSI Photos #4)

Compliance Item 17 (Addendum Complaint): (7)-Install kitchen sink, When countertops are installed.

Investigator’s Observation: Unable to direct completion as Respondent was fired by Complainant. (No Photo)

Compliance Item 18 (Addendum Complaint): (8)-Adjust Cabinets.

Investigator’s Observation: Unable to direct completion as Respondent was fired by Complainant. (No Photo)

All errors in original.

Investigator Melton testified that on July 4, 2023, Mr. Nuzzo emailed her stating that he did not want Respondent at the jobsite “until her assessment was reached.”

Investigator Melton received an email from Respondent on July 5, 2023, stating that Mr. Taylor had been to the jobsite and Mr. Nuzzo directed him to leave “because of the red tag.” Mr. Nuzzo told Mr. Taylor that Respondent could not perform any work on the project due to the red tag. Mr. Taylor attempted to explain to Mr. Nuzzo the meaning of the red tag, however, Mr. Nuzzo told him to leave.

On July 10, 2023, Investigator Melton conducted a Compliance Inspection at which both parties were present. Investigator Melton’s Compliance Jobsite General Notes state the following:

Compliance Findings:

Investigator’s Observation: NOT COMPLETE. Correction to windows is not complete. Windows have not been passed by building official. Respondent was denied access by Complainant on and after July 4, 2023. Written Directive allowed for correction until July 7, 2023. (See JSI Photos #2 - 6)

Compliance Item 13 (Addendum Complaint): COMPLETE. Complainant had this work corrected by other than Respondent prior to this inspection. (See JSI Photos #7)

All errors in original.

Investigator Melton testified consistently with her Jobsite Inspection Notes, Written Directive, Amended Written Directive, and Compliance Jobsite General Notes. Investigator Melton testified that at the May 3, 2023 Jobsite Inspection, Mr. Taylor informed her that Mr. Nuzzo had terminated the contract, and Mr. Nuzzo agreed that he had terminated Respondent from the project. Investigator Melton testified that Respondent was denied access to the jobsite during the period of the Written Directive and that Complaint item number 13 was modified by others.

Investigator Melton referred 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)(3), namely A.A.C. R4-9-108(A), and A.R.S. § 32-1154(A)(22).

Complainants collectively testified that there was “nothing in writing” to prove that they fired Respondent from the project. Complainants further testified that they have paid Respondent all but ten percent of the contract price and there is unfinished work.

Tim Kelly of DaBella, testified on behalf of Complainants. Mr. Kelly testified that although he is not certified in window installation, based on his experience in the industry, the windows were not properly installed.

Mr. Taylor testified that Respondent attempted to complete the project. Mr. Taylor testified that the outlet in the laundry room was not within Respondent’s scope of work. Mr. Taylor further testified that when Complainants called for a city inspection, the project was not ready for an inspection, and he was not aware of the red tag. Mr. Taylor asserted that the work identified in the red tag would have been completed prior to Respondent calling for a city inspection as the inspection called by Complainants was premature.

Mr. Taylor testified that Mr. Nuzzo initially fired Respondent on March 28, 2023, however, Ms. Nuzzo called him back and he returned to the project. On July 4, 2023, Mr. Nuzzo told Mr. Taylor to leave the jobsite while he was working on the windows as directed by the Written Directives. Mr. Taylor testified that Mr. Nuzzo did not understand that a red tag is a list of corrections that need to be accomplished, not a stop work order. Mr. Taylor tried to explain this to Mr. Nuzzo, however, Mr. Nuzzo insisted that he stop working and leave. Mr. Taylor credibly testified that Respondent would have been able to timely comply with the Written Directives if Mr. Nuzzo had not prevented compliance by denying Respondent access to the jobsite on July 4, 2023, as the Amended Written Directive did not expire until July 7, 2023, at 5:00 p.m.

Administrative notice is taken of Respondent’s prior License record on November 20, 2023. Such prior License record reflects that Respondent’s License Number 340408 was first issued on August 25, 2022, and is active. Such prior License record also reflects that there is only the instant open complaint, one resolved/settled complaint, and no discipline against Respondent’s license.

The Registrar’s substantive policy statement 2017.01 sets out the following pertinent information:

Cooperation

“American jurisprudence implies in all contracts the obligation to cooperate in the performance of the contract and not to delay, hinder, or interfere with the performance of other parties. Over the years, owners have been found on numerous occasions to have breached their implied duty of cooperation in the context of construction contracts. Such instances have included failure to provide timely site access, failure to inspect the work or complete other work necessary to allow the contractor to proceed, and failure to reasonably schedule and coordinate owner-controlled work.”

Source: Philip L. Bruner and Patrick J. O’Connor, Jr., Bruner & O’Connor on Construction Law, § 12:55 (West Group 2002) (citing inter alia Restatement (Second) of Contracts §§ 212 to 223); id. § 9:99 (noting subsidiary duties, including “an ‘implied duty’ to make timely decisions” and “an ‘implied duty’ to exercise inspection and approval rights reasonably”).

Denial of Access

Complainants are not prevented from refusing access because of their right to exclude others from their homes and it would not be appropriate to require contractors to trespass. [But it] is recognized that lack of access impinges on one party’s ability to defend itself and utilizing the benefits of the Registrar of Contractors is a privilege. Therefore, it is recommended that the Registrar dismiss complaints in which access is denied.

. . . .

Notice and Opportunity to Cure

A breach cannot be said to be material if it is curable, notice to cure is given, and prompt steps are taken to cure or to offer assurances of cure. The right of a breaching party to be given an opportunity to cure its own material breach is an ancient equitable principle.... Cure is relevant to materiality by virtue of its focus on elimination of the breach and its implied assurance of intent to tender adequate future performance.... Providing a cure notice of curable breaches deemed by the nonbreaching party to be sufficiently material to warrant termination for cause is a fundamental prerequisite to termination.... Unless expressly waived, the right to cure is implied in every contract as a matter of law.

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 party asserting an affirmative defense has the burden of establishing the affirmative defense.

The standard of proof on all issues in this matter is that of 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.” 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.”

A.R.S. § 32-1154(A) provides:

The holder of a license or any person named on a license pursuant to this chapter may not commit any of the following acts or omissions:

. . . .

3. Violation of any rule adopted by the registrar.

. . . .

22. Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. . . .

A.A.C. R49108(A) provides that “[a] contractor shall perform all work in a professional and workmanlike manner.”

Substantive policy statement means:

[A] written expression which informs the general public of an agency’s current approach to, or opinion of, the requirements of the federal or state constitution, federal or state statute, administrative rule or regulation, or final judgment of a court of competent jurisdiction, including, where appropriate, the agency’s current practice, procedure or method of action based upon that approach or opinion. A substantive policy statement is advisory only.

“Statutes shall be liberally construed to effect their objects and to promote justice.” A.R.S. § 1-211(B). The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

The Registrar neither demands nor expects perfection from a licensee on the licensee’s first attempt at work. A licensee must be given a reasonable opportunity to remediate workmanship issues prior to the imposition of discipline against its license. In an administrative hearing, however, Respondent is responsible to establish a lack of opportunity or the preclusion from doing so.

Regarding the Registrar’s charge of poor workmanship, the credible evidence of record established that only two of eighteen complaint items were directed to be remedied, one of them was modified prior to Respondent being provided the opportunity to address it, and regarding the windows, Respondent was ready, willing, and able to perform the work. However, Complainants would not allow Respondent the opportunity to complete corrective work during the period provided in which to perform said work and precluded Respondent from accessing the jobsite.

Regarding Respondent’s alleged failure to comply with the Written Directives, the Administrative Law Judge concludes based on the credible, probative, and substantial evidence presented at hearing that Respondent established valid justification for not complying with the Written Directives. Complainants prevented Respondent from accessing the jobsite due to an erroneous belief that a red tag meant that no work could be performed.

Considering Respondent’s valid justification for not complying with the Written Directives, and the fact that there has been no prior discipline against Respondent’s license, are factors in mitigation. There was no substantial evidence adduced showing that Respondent was unscrupulous, unqualified, or financially irresponsible. Consequently, it would not be fair or just to impose discipline against Respondent’s license.

Considering the factors set out in the Registrar’s substantive policy statement, it is appropriate to dismiss this matter.

RECOMMENDED ORDER

It is recommended that the Registrar dismiss Complaint Number 2023-02924 against Respondent.

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 22, 2023.

/s/ Sondra J. Vanella

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

[email redacted]

Lisa Melton

[email redacted]

Sofia and Daniel Nuzzo

[email redacted]

1st Class Construction AZ, LLC

[email redacted]

By: OAH Staff