ALJDEC - Licensing
2023A-04292-CHC-ROC · Registrar of Contractors · 2023-09-14
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Natalie Olow,
COMPLAINANT,
v.
J B Rios Construction AZ LLC
ROC License No. 339155,
RESPONDENT.
No. 2023A-04292-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: August 31, 2023 at 9:00 AM.
APPEARANCES: Natalie Olow (“Complainant”) appeared on her own behalf. José Rios appeared on behalf of J B Rios Construction AZ LLC (“Respondent”). Ruben Perez, Sr. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).
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 July 05, 2022, the Registrar issued License No. 339155 General Dual KB-1 contracting license to Respondent. The license is renewed through July 31, 2024. José B. Rios is listed as the Qualifying Party and Manager on the license. Respondent’s address of record for the license is 576 S. 6th Ave. Yuma, AZ 85364. Respondent has an active $14,000.00 surety bond on the license issued by RLI Insurance Company, effective May 12, 2022. The license no prior disciplinary record.
On or about April 17, 2023, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 339155 alleging poor work and abandonment of their residential remodel project. The Registrar designated it Complaint No. 2023-04292 and assigned to Ruben Perez (“Investigator Perez”) for investigation.
On April 17, 2023, Investigator Perez issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on May 02, 2023, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On May 02, 2023, Investigator Perez inspected the work that had been performed on the project to date. Respondent was present. Investigator Perez also reviewed the contract-related correspondence between the parties, and took 14 photographs of the project site. When he was finished, Investigator Perez drafted his Inspection Notes. Ultimately, Investigator Perez derived a total of 14 separate and distinct complaint items, of which he was able to substantiate 3 based on his firsthand observations. Specifically, Investigator Perez determined Respondent’s workmanship on complaint items 1-2 and 10 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.
On May 12, 2023, Investigator Perez issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on May 31, 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.
Investigator Perez also included the following advisement regarding the remediation of complaint item 2:
Respondent to obtain building permit and correct by appropriate means.
(Emphasis added.)
On May 12, 2023, Investigator Perez issued a Warning Letter to Respondent for an alleged violation of Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A)(12); 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in his contracts, including his contract with Complainant. Respondent was further advised that statutory noncompliance could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.
On May 12, 2023, Investigator Perez issued a Warning Letter to Respondent to advise that building permit(s) were not obtained for the project in violation of the International Residential Code and the International Building Code. Respondent was further advised that failure to comply with the building codes was a violation of Ariz. Rev. Stat. § 32-1154(A)(2), which could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.
On June 06, 2023, Investigator Perez issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on June 09, 2023, at 10:30 a.m. Correspondence was not returned as undeliverable to Respondent.
On June 09, 2023, Investigator Perez inspected the corrective work that had been performed on the project and took 13 photographs. Respondent was present. When he was finished, Investigator Perez drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Perez determined that the parties had entered into a settlement agreement regarding complain item 10, but that Respondent had not performed corrective work necessary to remediate complaint items 1 or 2.
On June 09, 2023, Investigator Perez forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On June 23, 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), and 32-1154(A)(22). Respondent was given until July 08, 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 July 03, 2023, the Registrar received Respondent’s timely Answer whereby Mr. Rios argued that 15 days was an insufficient amount of time for Respondent to perform corrective work, but that he and his crew tried diligently to comply with the Directive. Mr. Rios further offered that discipline of Respondent’s license unduly cause him financial hardship.
On July 03, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 31, 2023. Per the July 10, 2023, Amended 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)(22)
Hearing Evidence
Complainant testified on her own behalf and called Investigator Perez as a witness. José Rios testified on behalf of Respondent. The Registrar’s agency file, including the Amended 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 10627 S. Via Salida Yuma, Arizona 85367.
On or about January 11, 2023, the parties entered into a $7,640.00 water remediation contract to restore drywall, electrical, plumbing and paint in Complainant’s kitchen.
On or about January 20, 2023, the parties entered into a $43,264.12 residential remodeling contract. The scope of work included a bathroom remodel with drain relocation, kitchen cabinets and countertops, patio door and windows, and a water filtration system.
Work on the projects commenced on or about January 17, 2023, and stopped or was otherwise completed in April 2023.
Complainant paid Respondent in full on the first project, and paid $9,000.00 to Respondent towards the second project.
Between May 12, 2023, and May 31, 2023, Respondent did not perform any corrective work on complaint items 1 or 2 because Mr. Rios believed Complainant did not want him on site.
On June 05, 2023, Respondent obtained building permit #B2230380 for the underlying project from the local building authority. Between June 07, 2023, and June 15, 2023, Respondent performed corrective work on the underlying project.
At no point in time did Respondent beseech the Registrar for an extension of the Directive’s compliance period. At no point in time did Respondent allege a denial of access to the project site during the Directive’s compliance period.
On August 21, 2023, Investigator Perez issued a Prehearing Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on August 29, 2023, at 10:30 a.m. Correspondence was not returned as undeliverable to Respondent.
On August 29, 2023, Investigator Perez inspected the corrective work that had been performed on the project. Respondent was present. Ultimately, Investigator Perez determined Respondent had satisfactorily addressed complaint item 2, but had not performed corrective work necessary to remediate complaint items 1.
Mr. Rios hired licensed contractors to perform work on the project, but did not have any assistance from trades on portions of the project he undertook himself.
Additional Evidence
Complainant has not been able to make use of her kitchen since April 2023.
Closing Arguments
In closing Respondent argued that custom built cabinetry was an art and not an exact science, and that given more time Respondent could have performed corrective work necessary to satisfy complaint item 1.
In closing Complainant expressed her frustrations with the underlying project timeline, Mr. Rios’ perceived lack of accountability, and concerns regarding future expenses that may be required to complete her project.
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)(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 Complainant paid Respondent in full for the first contract and approximately 20% of the second contract. It is also undisputed that Respondent did not complete the project per the terms of its contract(s), and that some of the work Respondent performed did not satisfy the minimum standards set for workmanship by the Registrar. It is further undisputed that Respondent failed to timely and completely comply with the Registrar’s Directive.
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 complete Complainants’ projects per contract. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain his burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project. While the record establishes that Respondent timely settled the parties’ dispute regarding substantiated complaint item 10, Respondent untimely addressed substantiated complaint item 2 and failed to appropriately remediate substantiated complaint item 1.
Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 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 J B Rios Construction AZ LLC, ROC License No. 339155, be suspended two (2) 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, September 14, 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]
J B Rios Construction AZ LLC, Respondent
576 S. 6th Ave.
Yuma, AZ 85364
[email redacted]
Natalie Olow, Complainant
10627 S. Via Salida
Yuma, AZ 85367
[email redacted]
By: OAH Staff