ALJDEC - Licensing
2023A-04395-CHC-ROC · Registrar of Contractors · 2023-09-22
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Kirsty Sherwood,
COMPLAINANT,
v.
Hornbeck Enterprises LLC
ROC License No. 326383,
RESPONDENT.
No. 2023A-04395-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: September 21, 2023 at 9:00 AM.
APPEARANCES: Kirsty Sherwood (“Complainant”) appeared on her own behalf. Robert Di Alto appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Sean Hornbeck appeared on behalf of Hornbeck Enterprises 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 October 01, 2019, the Registrar issued License No. 326383 Specialty Dual CR-61 Carpentry, Remodeling and Repairs contracting license to Respondent. The license was renewed through October 31, 2024, however, on September 18, 2023, the license was subject to disciplinary suspension by the Registrar. Sean Kenneth Hornbeck is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 5237 S. Cobalt Mesa, AZ 85212. Respondent has an active $6,750.00 surety bond on the license issued by RLI Insurance Company, effective September 20, 2019. The license has been disciplined on one (1) prior occasion, and currently has two (2) open complaints listed against the license; one of which is presumed to be related to this matter.
On or about April 14, 2023, the Registrar received an 18-item complaint from Complainant against Respondent’s License No. 326383 alleging poor work of their residential flooring project. The Registrar designated it Complaint No. 2023-04395 and assigned to Robert Di Alto (“Investigator Di Alto”) for investigation.
On April 20, 2023, Investigator Di Alto issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on May 30, 2023, at 10:15 a.m. Correspondence, which was mailed and emailed to Respondent, was not returned as undeliverable.
On May 30, 2023, Investigator Di Alto inspected the work that had been performed on the project to date. Respondent was not present. Investigator Di Alto also reviewed the contract-related correspondence between the parties, and took 34 photographs of the project site. When he was finished, Investigator Di Alto drafted his Inspection Notes. Ultimately, Investigator Di Alto all 18 complaint items based on his firsthand observations. Specifically, Investigator Di Alto determined Respondent’s workmanship on complaint items 1-18 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.
On June 09, 2023, Investigator Di Alto issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated all of Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on June 30, 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.
On June 12, 2021, Investigator Di Alto issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 321154(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.
On July 10, 2023, Investigator Di Alto forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On July 12, 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 27, 2023, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. Mailed correspondence was returned as undeliverable/unable to forward to Respondent.
Nonetheless, on July 26, 2023, the Registrar received Respondent’s timely Answer whereby Respondent offered the following, in pertinent parts:
I had to step back from things concerning my work. These events all transpired at the end of 2022, my mental health was deteriorating severely and my overall health was not in a good place either.
I am not in a good place financially in the sense of being able to pay anything back all at once but I’ve offered to make payments back in increments and resolve things on our own but no one seems to want to do that which us [sic] understandable. I haven’t been physically present on the job because I am no longer in arizona. [sic] For my health, I could not stay there any longer.
I never thought I’d be dealing with anything like this and I need help I don’t know what to do from here, I probably won’t be seeking renewal on my license 326383 nor do I want it suspended or revoked because maybe one day I’ll be back in arizona [sic] one day but I am not positive. Also, the last thing I want to do is leave any of my previous clients, who entrusted me with improvements, in a bad position. I want to cleanly resolve all this and hopefully remain in good standing if possible.
(All errors in original.)
On July 26, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on September 21, 2023. Per the August 09, 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 2: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on her own behalf and called Investigator Di Alto as a witness. Respondent called Sean Hornbeck as a witness. The Registrar’s agency file; including the Notice of Hearing, and supplemental file were admitted into the record as their own exhibits. The substantive evidence of record is as follows:
Complainant owns a residential property located at 4458 S. Octagon Mesa, AZ 85212.
On or about February 28, 2022, the parties entered into a verbal $11,527.00 contract for the installation of Luxury Vinyl Plank (“LVP”) flooring at Complainant’s residence.
Work on the project commenced on or about March 07, 2022, and stopped or was otherwise completed March 10, 2023.
Complainant paid Respondent in full on the project.
June 09-30, 2023, Respondent did not perform, or attempt to perform, any corrective work in accordance with the Registrar’s Directive.
By the expiration of the Directive’s compliance period, which Respondent did not request an extension of, the parties had not settled their underlying dispute.
Additional Evidence
Complainant made numerous attempts to schedule corrective work and/or settle with Respondent prior to filing Complaint No. 2023-04395, but was unsuccessful.
Neither a compliance jobsite inspection nor a prehearing jobsite inspection was performed by Investigator Di Alto in this matter because no corrective work was attempted by or on behalf of Respondent.
In December 2022 Mr. Hornbeck relocated out of state.
Closing Arguments
Both parties declined to provide closing arguments.
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.
The record reflects that the parties had an LVP flooring contract that Complainant paid in full, which Respondent did not complete per the Registrar’s minimum workmanship standards. The record further reflects that Respondent did not complete corrective work in accordance with the Registrar’s Directive.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to perform corrective work or settle its underlying dispute with Complainant in compliance with the Registrar’s 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 as Mr. Hornbeck admitted that Respondent did not perform corrective work on the project, and made not attempts to perform corrective work, as required by the Registrar’s Directive or settle its dispute with Complainant before June 30, 2023. The undisclosed health-related issues that befell Mr. Hornbeck in late-2022 do not justify or otherwise excuse Respondent’s poor workmanship on Complainant’s project in early-2022, or failure to address the Registrar’s Directive mid-2023. 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) and 32-1154(A)(22) by a preponderance of the evidence, 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 Hornbeck Enterprises LLC, ROC License No. 326383, be suspended for seven (7) days.
IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $100.00 (one hundred dollars) in certified funds as a civil penalty in this matter.
IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s Final Order, the Registrar shall revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in Ariz. Rev. Stat. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.
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 22, 2023.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted electronically to:
Cindy Casaus, Interim Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
Hornbeck Enterprises LLC, Respondent
16050 S. 15th Dr.
Phoenix, AZ 85045
[email redacted]
Kirsty Sherwood, Complainant
4458 S. Octagon
Mesa, AZ 85212
[email redacted]
By: OAH Staff