ALJDEC - Licensing

2023A-06146-CHC-ROC · Registrar of Contractors · 2024-01-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Steven Herold,

COMPLAINANT,

v.

Rugged Roofing, LLC

ROC License No. 329220,

RESPONDENT.

No. 2023A-06146-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 22, 2024 at 1:00 PM.

APPEARANCES: Steven Herold (“Complainant”) appeared on his own behalf. Tanner Schritter appeared on behalf of Rugged Roofing LLC (“Respondent”). Cliff Corlett appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Cindy Johnson observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the attached agency file, was admitted into the record along with the December 07, 2023, Hearing Order.

_____________________________________________________________________

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 June 06, 2020, the Registrar issued License No. 329220 Specialty Dual CR-42 Roofing contracting license to Respondent. The license is renewed through June 30, 2024. Laci Marie Mercer is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 4196 Gemstone Ave. Kingman, AZ 86401. Respondent has an active $32,500.00 surety bond on the license issued by RLI Insurance Company. The license has previously been disciplined on 1 prior occasion. There is currently 1 open complaint against the license which is presumed to be related to this matter.

On or about May 30, 2023, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 329220 alleging poor work of their residential remodel project. The Registrar designated it Complaint No. 2023-06146 and assigned to Cliff Corlett (“Investigator Corlett”) for investigation.

On June 08, 2023, Investigator Corlett issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on June 23, 2023, at 12:00 p.m. Correspondence was not returned as undeliverable to Respondent.

On September 08, 2023, Investigator Corlett issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on September 19, 2023, at 10:30 a.m. Correspondence was not returned as undeliverable to Respondent.

On September 19, 2023, Investigator Corlett inspected the work that had been performed on the project to date. Respondent was present. Investigator Corlett also reviewed the contract-related correspondence between the parties, and took 13 photographs of the project site. When he was finished, Investigator Corlett drafted his Inspection Notes. Ultimately, Investigator Corlett derived a total of 3 separate and distinct complaint items, of which he was able to substantiate all 3 based on his firsthand observations. Specifically, Investigator Corlett determined Respondent’s workmanship on complaint items 1-3 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.

On October 02, 2023, Investigator Corlett issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated all of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on October 20, 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 November 07, 2023, Investigator Corlett forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On November 09, 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 November 24, 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 November 23, 2023, the Registrar received Respondent’s timely Answer whereby Ms. Mercer argued that compliance items 1 and 3 were “corrected before the inspection,” and that Respondent was not made aware of compliance item 2 until April 24, 2023. Respondent further argued it “cannot determine if the roofing job caused the damage or if it was there before we performed any work.” Respondent opined that it “cannot be held accountable for damages or repairs caused or corrected by another party.”

On November 27, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on January 22, 2024. Per the December 06, 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 his own behalf and called Investigator Corlett as a witness. Tanner Schritter testified on behalf of Respondent. The substantive evidence of record is as follows:

Complainant owns a residential property located at 4691 E. Linn Ranch Dr. Kingman, Arizona 86401.

On or about April 20, 2021, the parties entered into a $14,031.38 roofing contract to repair a leak in Complainant’s roof. Respondent did not perform an interior or exterior survey of Complainant’s roof.

Work on the project commenced on or about April 24, 2021, and stopped or was otherwise completed about July 17, 2021.

Complainant paid Respondent $14,221.38 towards the project.

At the jobsite inspection, Complainant told Investigator Corlett that he had accessed his roof in June or July 2022 to perform a leak repair “with a trash bag and a towel.”

Between October 02, 2023, and October 20, 2023, Respondent did not perform any corrective work on complaint items 1-3 because Respondent “had issues” with the Directive.

Respondent did not contact Complainant to schedule time to perform corrective work.

Respondent called Investigator Corlett with questions but was unable to reach him.

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 November 09, 2023, Investigator Corlett’s supervisor instructed Respondent to Answer the Citation.

Closing Arguments

Respondent declined to provide a closing argument.

In closing, Complainant opined that the damage suffered by his roof was caused by Respondent, and as such, argued that the Registrar should take disciplinary action against Respondent’s license.

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 clear.

It is clear that the parties had a roofing contract that Complainant paid in full. It is also clear 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 remediate Complainant’s project. 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. Respondent’s assertions that it addressed complaint items 1 and 3 prior to the jobsite inspection are misplaced as irrelevant. While it could be true that Respondent performed corrective work between May 30, 2023, and September 19, 2023, the fact is Investigator Corlett made a professional determination that said work did not satisfy the Registrar’s minimum workmanship standards. Respondent’s argument regarding complaint item 2 are similarly irrelevant. Mr. Schritter conceded that Respondent received the Directive. Any question(s) Respondent may have had did not preclude or prevent it from adhering to the Registrar’s valid order to its license.

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 Rugged Roofing, LLC, ROC License No. 329220, be suspended two (2) days.

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $100.00 (one hundred) 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, January 25, 2024.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

c/o Legal Department

Registrar of Contractors

[email redacted]

Rugged Roofing, LLC, Respondent

c/o Tanner Schritter, Agent

4196 Gemstone Ave.

Kingman, AZ 86401

[email redacted]

Steven Herold, Complainant

4691 E. Linn Ranch Dr.

Kingman, AZ 86401

[email redacted]

By: OAH Staff