ALJDEC - Licensing

2023A-04896-CHC-ROC · Registrar of Contractors · 2023-11-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Mark Benz Custom Building and Remodeling LLC,

COMPLAINANT,

v.

Revive & Refinish, LLC

License No. ROC 293759,

RESPONDENT.

No. 2023A-04896-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 31, 2023

APPEARANCES: Logan Elia, Esq. represented Complainant Mark Benz Custom Building and Remodeling, LLC. Mark Benz was present on behalf of Complainant Mark Benz Custom Building and Remodeling, LLC. Caleb and Ali Shultz appeared on behalf of Respondent Revive & Refinish, LLC. Arizona Registrar of Contractors Investigator David Fagerburg appeared as a witness.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Revive & Refinish, LLC (“Respondent”) is the holder of License Number 293759 issued by the Arizona Registrar of Contractors (“Registrar”). Caleb Shultz is Respondent’s Qualifying Party and Member.

On or about September 15, 2022, Mark Benz Custom Building and Remodeling, LLC (“Complainant”) contracted with Respondent for the installation of custom closets in the primary and guest closets of the Kime residence. The contract price was $23,750.00. Complainant paid Respondent $11,875.00.

On or about April 23, 2023, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to Respondent’s scope of work. Complainant’s attorney, Logan Elia, filed the Complaint on behalf of Complainant, and the Registrar inadvertently issued the Citation and Notice of Hearing in this matter listing Mr. Elia as the named Complainant. However, on August 15, 2023, the Registrar issued a Correction of Clerical Error advising the parties of the following: “The Citation issued June 26, 2023, contains a clerical error and should be corrected as follows: the correct Complainant should be listed as Mark Benz Custom Building. The above caption should be used for all future correspondence.”

The Registrar assigned the Complaint to Investigator David Fagerburg. After a May 19, 2023 Jobsite Inspection, Investigator Fagerburg issued a Written Directive dated June 1, 2023, 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 Thursday June 22, 2023.

Investigator Notes:

1: In the documents submitted I am able to verify a notice of termination of work order was provided to the respondent dated March 21, 2023.

2: The respondent is responsible for any completed work prior to the notice of termination.

3: During this jobsite investigation the complainant stated that the respondent has not returned to the property since December 2022.

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

Compliant Item 1: Poor painting on cabinets

Investigator’s Observation: Verified. The respondent shall correct the poor painting throughout both sets of closet cabinets by appropriate means.

Compliant Item 2: Drawers not closing correctly

Investigator’s Observation: Verified. The respondent shall correct the cabinet drawers and doors that do not close correctly by appropriate means.

Compliant Item 3: Panels not sanded prior to painting

Investigator’s Observation: Verified. The respondent shall correct the cabinet panels and trim that were not sanded prior to painting throughout both sets of closet cabinets by appropriate means.

Compliant Item 4: Painting not completed

Investigator’s Observation: Verified. The respondent shall correct the incomplete painting throughout the 2 sets of closet cabinets by appropriate means.

Compliant Item 5: Nail holes not puttied

Investigator’s Observation: Verified. The respondent shall correct the nail holes that are not filled, scars, blemishes and cracked trim butt joints throughout both sets of closet cabinets by appropriate means.

All errors in original.

After the issuance of the Written Directive and the expiration of the time period in which to perform corrective work, Investigator Fagerburg contacted Complainant and was informed that Respondent had not performed any further work on the project and was not scheduled to perform any work. On June 23, 2023, the day after the expiration of the Written Directive, Investigator Fagerburg attempted to contact Respondent via phone, and left a message.

Thereafter, Investigator Fagerburg forwarded 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)(1), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a), and A.R.S. § 32-1154(A)(22).

Investigator David Fagerburg’s Testimony

Investigator Fagerburg explained the reason behind the Registrar’s clerical error in initially naming Complainant’s attorney as Complainant. Investigator Fagerburg clarified that the Complaint was filed by Complainant’s attorney, on behalf of Complainant, and that Complainant’s representative, Mark Benz, actually completed the Complaint form.

Investigator Fagerburg testified consistently and in detail with his findings contained in the Written Directive. During his testimony, Investigator Fagerburg referenced the photographs taken at the Jobsite Inspection in order to illustrate Respondent’s workmanship deficiencies. Investigator Fagerburg testified that Respondent did not attend the Jobsite Inspection, did not request that it be rescheduled, and did not provide a reason for Respondent’s nonattendance. Investigator Fagerburg testified that had Respondent attended the Jobsite Inspection, he would have considered any input provided by Respondent.

Investigator Fagerburg testified that he did not receive any communication from either party during the period of the Written Directive. Investigator Fagerburg testified that he received mailings from Respondent “with questions and explanations,” however, he was not certain of the dates he received those mailings. Respondent did not call or email Investigator Fagerburg during the period of the Written Directive and there was no attempt by Respondent to comply with the Written Directive.

Investigator Fagerburg testified that Complainant attached to the filed Complaint a copy of a Notice of Termination of Work Order for Convenience (“Notice of Termination”), dated March 21, 2023.

On October 27, 2023, Investigator Fagerburg spoke with Complainant’s attorney and was advised that the corrective work was completed by another contractor subsequent to the expiration of the Written Directive. Investigator Fagerburg explained that having the work corrected and/or completed by another contractor after the expiration of the Written Directive is not considered to be a modification of Respondent’s work. This is so because such work was completed after the time period provided to Respondent for any corrective work had expired.

When questioned by Respondent, Investigator Fagerburg testified that the fact that Respondent received two punch lists from Complainant was not unreasonable, and that punch lists can be submitted until all work is completed.

Respondent questioned Investigator Fagerburg regarding the mailings that Respondent sent to Investigator Fagerburg. Investigator Fagerburg testified that he did not respond to any of the written communication from Respondent based on advice from the Registrar’s legal counsel, as the documentation mailed to Investigator Fagerburg “had no legal effect and no impact on his investigation.”

Investigator Fagerburg explained that the Registrar has a two year jurisdiction over poor work and that a contractor is responsible for its work for a period of two years after the completion of work. Consequently, the Registrar can require a contractor to make corrections to its work for a period of two years regardless of whether a contractor has been terminated from a project because a contractor is responsible for its work performed prior to termination. The Written Directive expressly notified Respondent of the following: “[t]he respondent is responsible for any completed work prior to the notice of termination.” Investigator Fagerburg further explained that if Complainant had not allowed Respondent access to perform corrective work during the period of the Written Directive, the Complaint would have been dismissed. That was not the circumstance in this case. Respondent chose not to perform the required corrective work.

Investigator Fagerburg testified that it was within Complainant’s rights to withhold final payment due to the fact that Respondent had not completed its work to Complainant’s satisfaction, especially in light of the fact that Respondent was provided with notice and an opportunity to perform the requested work prior to the termination date.

Mark Benz’s Testimony

Mr. Benz testified that he called, texted, and emailed Respondent multiple times to inform Respondent that he was dissatisfied with the work. Mr. Benz testified that he sent a Notice of Repair to Respondent on March 6, 2023. The Notice to Repair put Respondent on notice that it had until March 20, 2023, to repair “substandard finish carpentry to all closet systems provided and installed.” The Notice to Repair further advised Respondent that failure to perform the repairs may result in Complainant filing a Complaint with the Registrar.

Mr. Benz testified that Respondent did not return to the jobsite after the Notice to Repair was issued and therefore, did not perform the repair work. Consequently the Notice of Termination was issued on March 21, 2023. Mr. Benz credibly testified that neither he nor the owners prevented Respondent from performing repair work.

Mr. Benz testified that after the Notice of Termination was issued, Complainant was compelled to complete the project, and therefore, filed the instant Complaint, and provided Respondent with an opportunity to perform the repair work during the period of the Written Directive. After Respondent failed to comply with the Written Directive, Complainant hired another contractor to perform the repairs that Respondent failed to perform. Mr. Benz testified that Complainant paid the replacement contractor $13,100.00 to perform the repairs to Respondent’s deficient work.

Ali and Caleb Shultz’s Testimony

Ali Shultz, Mr. Shultz’s wife and partner in the business, testified that Respondent was paid fifty percent of the contract price, $11,875.00, and that because it was “difficult” to be onsite due to other subcontractors, Respondent began its work in November 2022. Ms. Shultz further testified that Respondent completed its work pursuant to the terms of its contract with Complainant and that thereafter, Respondent was denied access to the jobsite.

Ms. Shultz referenced photographs taken by Mr. Shultz at the jobsite on February 3, 2023. Ms. Shultz testified that Respondent completed a punch list on February 6, 2023, and on February 7, 2023, submitted a final invoice to Complainant. Ms. Shultz asserted that because Complainant did not pay the final invoice, Respondent had legal excuse not to comply with the Written Directive. Ms. Shultz further asserted that because Complainant terminated the contract on March 21, 2023, Respondent would have been trespassing in order to comply with the Written Directive. Respondent asserted that it did not receive the Notice of Termination until it received the filed Complaint. Ms. Shultz testified that Respondent “thought if it complied with the Written Directive, Respondent would be waiving Complainant’s breach” and that Complainant’s “breach alleviated Respondent from “complying with the Written Directive.” Ms. Shultz testified that Respondent did not hear from Complainant from February 7, 2023, until March 1, 2023, and it was only upon receiving the final invoice that Complainant provided a second punch list to Respondent.

According to Ms. Shultz, on March 6, 2023, Respondent made minor adjustments, and once again requested final payment. Respondent admittedly did not return to the jobsite after March 6, 2023.

Ms. Shultz asserted that the Notice to Repair was “vague” and did not contain defined items. Ms. Shultz testified that Respondent perceived the Notice to Repair as “a threat” and believed that it would not be able to complete the project to Complainant’s satisfaction.

Respondent asserted that there were “only problems when payment was requested.” Respondent further asserted that the “Written Directive conflicted with the parties’ contract and the Final Notice.” Mr. Shultz testified that his “mind would have been put at ease” if Complainant had made a partial payment because Mr. Shultz had heard rumors that Complainant had a “history of lack of paying.” Mr. Shultz testified that he did not abandon the project.

Mr. Shultz testified that he communicated through registered mail and had all of his written communications notarized because he “believed everything had to be witnessed.” Mr. Shultz testified that he responded to the Written Directive via a letter containing questions regarding how to proceed and did not receive a reply from Investigator Fagerburg.

Respondent erroneously believed that because it was terminated and because Complainant owed monies, that it was excused from performing corrective work. Mr. Shultz testified that it was a “legal impossibility” to perform corrective work and that such was valid justification for failing to comply with the Written Directive. Mr. Shultz testified that if Respondent had complied with the Written Directive, Respondent “would have trespassed and waived Complainant’s breach and could not recover damages.”

Complainant’s counsel argued during closing arguments that Respondent admitted that it received the Written Directive and made no effort to comply therewith. Complainant’s counsel further argued that as a licensed contractor, Respondent’s complete lack of understanding of the statutes and rules governing licensed contractors, as well as Respondent’s obligations as a licensed contractor, is quite concerning and “reprehensible.” Counsel argued that Respondent “made up its own process” and submitted 103 pages of “notarized nonsense.”

Administrative notice is taken of Respondent’s prior License record on November 13, 2023. Such prior License record reflects that Respondent’s License Number 293759 was first issued on July 23, 2014, and is active. Such prior License record also reflects that there is only the instant open complaint, zero resolved/settled complaints, and no discipline 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. Respondent bears the burden to establish 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.”

The credible evidence of record established that Respondent did not complete the project, as work remained to be performed, and Respondent refused to perform corrective work, all without legal excuse. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(1).

In this case, Investigator Fagerburg found that Respondent’s work was not in conformity with the Registrar’s standards. Investigator Fagerburg determined the existence of workmanship issues concerning the work that was performed by Respondent and credibly testified about those workmanship deficiencies. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a).

The evidence, including both Mr. and Ms. Shultz’s own admissions, established that Respondent did not complete the required corrective work following the Written Directive being issued. Respondent asserted various reasons for not complying with the Written Directive. However, none of those reasons justified non-compliance. The Administrative Law Judge concludes based on the credible, substantial, and probative evidence of record that valid justification did not exist for Respondent’s failure to comply with the Written Directive. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a Written Directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License Number 293759 for a period of five (5) days.

It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(E).

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 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 A.R.S. § 32-1101(A)(7), unless Respondent tenders payment of any outstanding prior civil penalty.

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 15, 2023.

/s/ Sondra J. Vanella

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

[email redacted]

David Fagerburg

[email redacted]

Revive & Refinish, LLC

[email redacted]

[email redacted]

Logan Elia Esq.

ROSE LAW GROUP, PC

[email redacted]

[email redacted]

[email redacted]

By: OAH Staff