ALJDEC - Licensing

2023A-06039-RFA-LS-ROC · Registrar of Contractors · 2025-03-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Eric Feller,

COMPLAINANT,

v.

RHINO CONCRETE LLC

License No. ROC 335131,

RESPONDENT.

No. 2023A-06039-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 27, 2025.

APPEARANCES: Assistant Attorney General Charles Hover appeared for the Registrar of Contractors. Eric Feller appeared on his own behalf. Diego Beltran appeared for Respondent.

ADMINISTRATIVE LAW JUDGE: Samuel Fox

EXHIBITS ADMITTED INTO EVIDENCE: Department’s Exhibits 1 through 22. Respondent’s Exhibits 1 through 18.

_____________________________________________________________________

FINDINGS OF FACT

Rhino Concrete LLC (Respondent) was the holder of License No. 335131 issued by the Arizona Registrar of Contractors (Registrar) on October 15, 2021.

On or about May 25, 2023, the Registrar received a Complaint against Respondent from Christopher Walsh (Complainant) alleging poor work and that Respondent was seeking more money to complete the work.

After an investigation a written directive was issued to correct the work. The Directive from the Registrar specified that:

Compliance Item: 1 - Contractor wants more money to finish job. Have numerous text messages from him. Need ROC to settle dispute. he has not spent nearly $56,000 pouring footings and stem wall footings are 27 yards of concrete per Cemex, and he has ordered the same for stem walls. refusing to finish job unless I pay him more. Claims he has already spent $56,000 doing footings and stem wall. house is 3250 sq feet with an 1350 sq ft garage. again he has a contract with me on price..;

stem wall inspection done 5/10/22, after stem wall inspection he told plumber to hold off on doing pipes for septic and fresh water. electrical and plumbing under through stem wall done 5/22 originally told me concrete would be poured this week, now on June 8th. I contacted plumber to do work which was completed by 5/17/23.

He has not completed any work since then always claims next week.; Does not return phone calls or texts, when told him I was going to file ROC complaint he texted still will not call.

Investigator’s Observation: The main footings for the home have been

poured.

Several of the spread footers for columns have not been poured. The 3 porch spread footings are not poured.

1 portico spread is not poured and the other appears to have been used for

wash out.

The 2 spreads in the back of the home for the porch are poured.

The stem wall has been formed up but has not been poured.

At the northeast corner of the home, a hard dig took place due to a vein of rock. There will be some extra concrete finishing at this location.

It is reported that the footing has received approval to pour from the county.

The contract is $70K and $56K has been paid.

80% of the contract has been paid but nowhere close to 80% of the work has been completed.

The respondent indicates that concrete costs have increased. The contract between the parties does not have a clause that would be triggered by a price increase.

The only change order that was present was for the hard dig and the complainant agreed to it and paid it.

The respondent is to complete the contract in an appropriate manner.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Respondent did not do any work during the directive period.

The Registrar issued a Citation against Respondent charging possible violations of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(3), specifically Arizona Administrative Code (A.A.C.) R4-9-108(A); A.R.S. § 32-1154(A)(12), specifically A.R.S. § 32-1158; and A.R.S. § 32-1154(A)(22).

Respondent filed a timely answer to the Citation, and an administrative hearing was held. In her Decision, Administrative Law Judge Tammy L. Eigenheer considered Respondent’s arguments and concluded that Complainant established Respondent had, in relevant part, violated A.R.S. § 32-1154(A)(3), specifically A.A.C. R4-9-108(A), and A.R.S. § 32-1154(A)(22) with respect to the Directive Compliance Items. The Administrative Law Judge recommended a five-day suspension of Respondent’s license and a $500.00 civil penalty.

On or about December 29, 2023, the Registrar issued its Final Decision, adopting the Administrative Law Judge’s Decision in full.

Complainant then filed a complete claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of completing or repairing the project.

The Register accepted the bid from Austin Concrete, LLC, for $38,230.00. The bid had a section titled “Bid includes,” which was left empty and another section titled “Exclusions” section was detailed. The bid also included several line items, which described different charges, including cost for yards of concrete and prep work.

The Registrar issued a Notice of Administrative Award, finding that Complainant’s compensable actual damages were $23,230.00. Respondent requested a hearing, appealing the actual damages amount. Complainant did not contest the amount of the administrative payout. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

A hearing was held on February 27, 2025.

Mr. Beltran did not contest that Mr. Feller was eligible for recovery.

Gail Matthews testified for the Registrar. Ms. Matthews testified that Complainant was eligible and followed all of the steps required to receive an award from the recovery fund. She testified in support of the documents and calculation provided in the exhibits. She testified in support of Complainant being entitled to a $23,230.00 award. Ms. Matthews testified that she consulted with Investigator Diamond, who conducted the original investigation in this matter, and he believed the chosen bid was appropriate. Ms. Matthews testified that after reviewing Respondent’s documents, her opinion had not changed. Ms. Matthews testified that if a bidding contractor believes that demolition of the deficient work needs to be done, then the bid can include that as well.

Mr. Beltran testified for Respondent. He testified that he believed the square footage of the bids were incorrect. The entire home was, including the patio, was 5,769 square feet. Mr. Beltran argued that the Austin Concrete bid double counted concrete required for the patio: the bid included 85 yards of concrete for 5,769 square feet for $17,425 ($205.00 per yard) and an additional 14 yards of concrete for $2,870 ($205.00 per yard), which is directly under “Patio 40’x25’ 1000SF.”

Mr. Beltran did not provide plans that would allow the Tribunal to calculate the exact amount of concrete to be used.

Ms. Matthews testified that she was not sure about the bid, which is why she consulted Investigator Diamond. She believed the additional 14 yards of concrete were for the grading, forms, and finish.

Mr. Beltran argued that the bid should not include demolition or re-doing his work. Mr. Beltran provided alternative bids that were lower than the bid accepted by the Registrar; Mr. Beltran testified that the contractors he had bid on the project based their bids on his descriptions; they were unable to inspect the property.

Mr. Feller testified for Complainant. He agreed with the Registrar’s position and testified about the work. He testified that the bidding contractors inspected the work site prior to making his bid.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

A.R.S. § 32-1132.01(B) provides, in pertinent part, as follows:

An award from the residential contractors’ recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor’s violation. Actual damages:

1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.

2. Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.

Respondent bears the burden of proof to establish that the proposed payout from the Fund is incorrect by 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.”

If work is not completed to workmanship standard, it is reasonable for a bidding contractor to include removal of prior work. The bidding contractor is not obligated to accept the condition of existing work.

The Registrar is not required to inspect the property prior to accepting a bid, and it is not required to accept a lower bid provided by Respondent.

Respondent had an opportunity to correct the faulty work following the written directive from the Registrar and failed to do so.

Because the accepted bid did not include a description of the work and Mr. Beltran credibly argued that the bid included too much concrete, the preponderance of the evidence supports the bid amount except for the $2,870 for the additional 14 yards of concrete.

The preponderance of the evidence established that the actual compensable damages should have been $20,360.00.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainants receive a payout from the Residential Contractors’ Recovery Fund in the amount of $20,360.00.

In the alternative, it is recommended that the award be quashed and the bid be amended and resubmitted to clearly demonstrate the work to be completed and the associated costs.

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, March 18, 2025.

/s/ Samuel Fox

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

RHINO CONCRETE LLC

[email redacted]

[email redacted]

Eric Feller

[email redacted]

Registrar of Contractors

[email redacted]

By: OAH Staff