ALJDEC - Licensing

2023A-06291-CHC-ROC · Registrar of Contractors · 2024-01-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Clark Hansen,

COMPLAINANT,

v.

RML Custom Cabinets and Millwork LLC

ROC License No. 343856,

RESPONDENT

No. 2023A-06291-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 03, 2024 at 9:00 AM.

APPEARANCES: Clark Hansen (“Complainant”) appeared on his own behalf with Melissa Saenz as a witness. Robert M. Lee appeared on behalf of RML Custom Cabinets and Millwork LLC (“Respondent”) with Hannah Lee as a witness. Robert Di Alto appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Sheila Hansen observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the Registrar’s attached administrative file, December 11, 2023, Hearing Order, Complainant Exhibits 1-9, and Respondent Exhibits 1-3 were admitted into the record.

_____________________________________________________________________

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 Mach 20 2023, the Registrar issued License No. 343856 Specialty Dual CR-60 Finish Carpentry contracting license to Respondent. The license is renewed through March 31, 2025. Robert Michael Lee is listed as the Qualifying Party and Owner on the license. Respondent’s address of record for the license is 9257 N. 85th Dr. Peoria, AZ 85345. Respondent has an active $6,750.00 surety bond on the license issued by Western Surety Company, effective March 14, 2023. The license no prior disciplinary record. There is, however, one (1) open complaint against the license which is presumed to be related to this matter.

On or about June 02, 2023, the Registrar received a brief narrative complaint from Complainant against Respondent’s License No. 343856 alleging abandonment of their residential custom cabinetry project. The Registrar designated it Complaint No. 2023-06291 and assigned to Robert Di Alto (“Investigator Di Alto”) for investigation.

On June 14, 2023, Investigator Di Alto issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on July 07, 2023, at 10:30 a.m. Correspondence was not returned as undeliverable to Respondent.

On June 28, 2023, Investigator Di Alto issued a Notice of Rescheduled Jobsite Inspection Letter to the parties, advising that the onsite inspection of the project would be conducted on July 20, 2023, at 10:30 a.m.

On July 17, 2023, Investigator Di Alto issued another Notice of Rescheduled Jobsite Inspection Letter to the parties, advising that the onsite inspection of the project would instead be conducted on August 09, 2023, at 9:30 a.m.

On August 09, 2023, Investigator Di Alto inspected the work that had been performed on the project to date. Respondent was present. Investigator Di Alto also reviewed the contract-related correspondence between the parties, and took 20 photographs of the project site. When he was finished, Investigator Di Alto drafted his Inspection Notes. Ultimately, Investigator Di Alto derived a single complaint item from Complaint No. 2023-06291, which he was able to substantiate based on his firsthand observations. Specifically, Investigator Di Alto determined Respondent’s workmanship on complaint item 1 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.

On August 21, 2023, Investigator Di Alto issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s complaint allegation against Respondent. Respondent was put on notice that it had until 5:00 p.m. on October 11, 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.

Investigator Di Alto also included the following advisement, in pertinent parts, regarding the remediation of complaint item 1:

Investigator’s Observation:

The following areas were reviewed at this jobsite inspection; kitchen, master bathroom vanity cabinets, master closet, linen, media room cabinets and shelves. I observed that cabinets were mostly complete in the kitchen and master bathroom vanities (his & hers). I observed missing cabinet hardware, doors still needing adjustment and alignment, incomplete moldings, and poor miter joints. I also saw a miss colored [sic] decorative wall cabinet end panel that did not match the finish in the kitchen. I noted that the tall cabinetry was lacking shelving from the upper compartment. The Respondent shall correct by the appropriate means and complete as per Contract, estimate’s and change orders.

The master vanity base cabinet end panels and corner filler finishes do not match the shade or glazing of the doors or drawer fronts that are installed on the cabinets. There are also hinge cups and/or base plates that are missing screws. Matching toe kick cover is not completed. The Respondent shall correct by the appropriate means and complete as per Contract, estimate’s and change orders.

The linen, media cabinets and shelves, and the master bedroom walk in closets are not installed as per the Contract. The Respondent stated he would provide the Complainant a final design for review and approval, and then assemble, finish and install the cabinetry for these areas. The Respondent shall correct by the appropriate means and complete as per Contract, estimate’s and change orders.

(Emphasis in original.)

On August 22, 2023, Investigator Di Alto issued a Warning Letter to Respondent for an alleged violation of Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(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. Respondent was further advised that statutory noncompliance could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.

On October 11, 2023, Investigator Di Alto forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On October 20, 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 04, 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 04, 2023, the Registrar received Respondent’s timely Answer whereby Mr. Lee offered that Complainant’s project was not timely completed due to “circumstances beyond the control of the owner/operator,” and alleged that Complaint No. 2023-06291 was Complainant’s way of “attempting to obtain work done without having to submit payment.” Respondent also alleged that the parties had agreed that a portion of the project would be completed at a later time, when Complainant returned from “out of state travel.”

On November 06, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on January 03, 2024. Per the November 16, 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 Di Alto and Melissa Saenz as witnesses. Robert M. Lee and Hannah Lee testified on behalf of Respondent. 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:

Complainant owns residential property located at 3980 E. Expedition Way Phoenix, Arizona 85050.

In 2022 Ms. Saenz, a general contractor who was then performing work for Complainant, referred Respondent to Complainant for cabinetry work.

On or about July 17, 2022, the parties entered into a $40,718.74 custom cabinetry contract for Respondent to build and install cabinets in Complainant’s kitchen, primary bathroom and closet, linen closet, and living room wall unit.

Work on the projects commenced on or about December 15, 2022, and stopped or was otherwise completed on May 13, 2023.

Complainant paid Respondent $27,451.72 towards the project.

Ms. Saenz did not oversee Respondent’s work on Complainant’s project.

From December 17, 2022, through April 14, 2023, Complainant’s residence was unoccupied, in part, to afford Respondent time and space to work on the underlying project. To access the interior of the residence, Complainant placed a lock box on his front door and gave Respondent the access code for at-will entry.

On or about January 08, 2023, Mr. Lee suffered a medical emergency that required him to stay 2 nights at the hospital. After his release on January 10, 2023, Mr. Lee was ordered to rest for 2 weeks, and placed on light work in the 6 to 12 weeks that followed.

On or about March 06, 2023, Mr. Lee informed Complainant that the project would be finished by April 23, 2023.

May 13, 2023, was the last day Mr. Lee performed any work on the project.

Between August 21, 2023, and October 11, 2023, Respondent performed corrective work on complaint item 1, but did not finish because time “got away” from Mr. Lee. Per Mr. Lee, Respondent ran out of funds “quicker than expected” to complete the project. When asked, Complainant agreed to pay several vendors directly for materials needed to complete the job. No additional funds or materials were necessary for Respondent to finish the project.

On an unknown date, Ms. Saenz referred Respondent to 2 other prospective clients. Respondent accepted the referrals, and as a result immediately began working on those projects, because Mr. Lee was fearful that if he refused Ms. Saenz would no longer refer him for work. Ms. Saenz did not demand that Respondent reprioritize Complainant’s project. Consequently, Complainant’s project was further delayed.

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.

Closing Arguments

Respondent declined to provide a closing argument.

In closing, Complainant expressed his frustrations with the underlying project timeline, Respondent’s poor workmanship, and concerns regarding future expenses that may be required to complete his project.

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.

It is undisputed that the Complainant paid Respondent substantially towards their contract, and also paid several vendors directly in an effort to help Respondent finish the job. It is also undisputed that Respondent did not complete the project per the terms of its contract with Complainant, and that a majority of the work Respondent performed did not satisfy the minimum standards set for workmanship by the Registrar. It is further undisputed that although Respondent attempted to comply with the Registrar’s Directive, Mr. Lee was unable to timely or completely finish remediations.

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 complete Complainant’s project per contract. 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. While the record establishes that Mr. Lee suffered a scary medical emergency in January 2023, the Directive was not issued by the Registrar until August 21, 2023, which was several months past Mr. Lee’s 6-12 week recovery period. The record reflects that Mr. Lee admitted time “got away” from him, and that additional monies and/or materials were not needed to finish the work.

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 RML Custom Cabinets and Millwork LLC, ROC License No. 343856, be suspended two (2) days.

IT IS FURTHER RECOMMENDED that the Registrar forgo the imposition of a civil penalty in this matter.

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 11, 2024.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

RML Custom Cabinets and Millwork LLC, Respondent

9257 N. 85th Dr.

Peoria, AZ 85345

[email redacted]

Clark Hansen, Complainant

3980 E. Expedition Way

Phoenix, AZ 85050

[email redacted]

By: OAH Staff