ALJDEC - Licensing
2023A-04475-CHC-ROC · Registrar of Contractors · 2023-09-26
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Amy Frederick-Hall,
COMPLAINANT,
v.
Retail Store Construction Inc.,
ROC License No. 327719,
RESPONDENT.
No. 2023A-04475-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: September 26, 2023 at 9:00 AM.
APPEARANCES: Amy Frederick-Hall (“Complainant”) appeared on her own behalf. Kyle Kimberlain appeared on behalf of Retail Store Construction Inc. (“Respondent”). Todd Anderson appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Chad Hall observed.
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 November 27, 2007, the Registrar issued License No. 239785 General Commercial B-1 contracting license to Respondent. Though renewed through November 30, 2021, the license was voluntarily cancelled on February 13, 2020, in large part, because the Registrar issued License No. 327719 General Dual KB-1 contracting license to Respondent on February 13, 2020. Kyle Kimberlain is listed on the license as the Qualifying Party and President. Respondent’s address of record for the license is 10437 W. Innovation Dr., Ste. 548 Wauwatosa, WI 53226. Respondent has an active $32,000.00 surety bond on the license, effective January 29, 2020. The license no prior disciplinary record, save two (2) resolved or otherwise settled complaints against it, and one (1) open complaint which is presumed to be related to this matter.
On or about April 17, 2023, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 327719 poor work of newly constructed residential property. The Registrar designated it Complaint No. 2023-04475 and assigned to Todd Anderson (“Investigator Anderson”) for investigation.
On April 18, 2023, Investigator Anderson issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on May 18, 2023, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On May 18, 2023, Investigator Anderson inspected the work that had been performed on the project to date. Respondent was present. Investigator Anderson also reviewed the contract-related correspondence between the parties, and took 33 photographs of the project site. When he was finished, Investigator Anderson drafted his Inspection Notes. Ultimately, Investigator Anderson derived 23 separate and distinct complaint items from Complaint No. 2023-04475, 11 of which he was able to substantiate based on his firsthand observations. Specifically, Investigator Anderson determined Respondent’s workmanship on complaint items 5, 8, 10, 14, and 17-23 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 12, 2023, Investigator Anderson issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated nearly half of Complainant’s workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on July 03, 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.
On July 03, 2023, Investigator Anderson issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on July 17, 2023, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On July 17, 2023, Investigator Anderson inspected the work that had been performed on the project to date. Respondent was not present. Investigator Anderson also took 14 photographs of the project site. When he was finished, Investigator Anderson drafted his Compliance Jobsite General Notes. Ultimately, Investigator Anderson determined that complaint item 19 had been satisfactorily remediated by Respondent, but that complaint items 5, 8, 10, 14, and 17-18, and 20-23 had not been remediated by Respondent.
On July 18, 2023, Investigator Anderson forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On July 19, 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 August 03, 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 August 02, 2023, the Registrar received Respondent’s timely Answer whereby Mr. Kimberlain argued that Respondent had “completed the directive written by inspector, Todd Anderson [sic] to the best of our ability, with a handful of items ongoing.”
On August 02, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on September 26, 2023. Per the August 15, 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 Anderson as a witness. Respondent called Kyle Kimberlain 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:
Sometime in spring of 2020, Respondent constructed a 4-home residential development in Buckeye, Arizona. One of the homes, located at 6244 S. Dean Rd. Buckeye, Arizona, 85326, was purchased by Complainant on February 21, 2023, for $524,000.00. Respondent was not involved in the sale.
The Certificate of Occupancy for Complainant’s property was issued by the local authority in September 2022.
Respondent performed corrective work on substantiated complaint item 19 on or about June 08, 2023, but did not make any attempts to perform corrective work on any other substantiated complaint items between June 12, 2023, and July 03, 2023, in adherence with the Registrar’s Directive.
On July 17, 2023 Respondent asked Investigator Anderson for an 18-month extension of the Directive. No reason was offered for why the request was submitted after the expiration of the Directive’s compliance period. The request was not granted.
At no point in time did Respondent allege a denial of access to the project site during the Directive’s compliance period.
Additional Evidence
Per Mr. Kimnerlain, substantiated complaint items 5, 8, 10, 14, and 17-18, and 20-23 are “punch list” and “warrantied” items that Respondent remains willing to address.
Closing Arguments
In closing, Respondent argued that Complainant’s “small issues” could be addressed in a short time, and would have been but for her unresponsiveness prior to hearing.
Complainant declined to provide a closing argument.
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 Respondent constructed residential property located at 6244 S. Dean Rd. Buckeye, Arizona, 85326 in spring of 2022, which was purchased by Complainant in February 2023. The record also reflects that some of Respondent’s workmanship on the construction did not comply with the Registrar’s minimum workmanship standards, and that Respondent did not substantially comply with the Registrar’s Directive. The record further reflects that Respondent never settled the underlying dispute with Complainant.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to comply with the Registrar’s Directive or timely enter into a financial settlement agreement with Complainant on or before July 03, 2023. 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. Kimberlain did not offer an explanation for why Respondent only addressed substantiated complaint item 19, admitted that he asked for an extension to the Directive 2 weeks after its compliance period expired, and further admitted that he did not settle the dispute at issue with Complainant. 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); 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 Retail Store Construction Inc., ROC License No. 327719, be suspended five (5) 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 27, 2023.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Cindy Casaus, Interim Director
c/o Todd Anderson, Investigator
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
Retail Store Construction Inc., Respondent
10437 W Innovation Dr., Ste. 548
Wauwatosa, WI 53226
[email redacted]
Amy Frederick-Hall, Complainant
6244 S. Dean Rd.
Buckeye, AZ 85326
[email redacted]
By: OAH Staff