ALJDEC - Licensing
2023A-06895-CHC-ROC · Registrar of Contractors · 2023-12-06
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Terrell Broner,
COMPLAINANT,
v.
4H Restoration LLC
ROC License No. 335018,
RESPONDENT.
No. 2023A-06895-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: November 30, 2023 at 1:00 PM.
APPEARANCES: Terrell Broner (“Complainant”) appeared on her own behalf with Penni Leiser as a witness. Christopher Allison appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of 4H Restoration LLC (“Respondent”). Eugene Hanway, Stephanie Hanway, Brent Donnelley, Michael Schmidt, and Mark Broner observed.
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the Registrar’s agency file, was admitted into the record as its own exhibit.
_____________________________________________________________________
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 October 01, 2021, the Registrar issued License No. 335018 General Dual KB-2 Residential and Small Commercial contracting license to Respondent. The license was renewed through October 31, 2024, but was later voluntarily cancelled by Respondent, effective November 20, 2023. Edison Lee Harris is listed as the sole Member on the license. Respondent’s address of record for the license is 2449 Chiricahua Dr. Show Low, Arizona 85901. Respondent has a $14,000.00 surety bond on the license issued by American Contractors Indemnity Company, effective May 17, 2021, and another $14,000.00 surety bond on the license issued by Western Surety Company, effective May 03, 2023, both of which have been cancelled. The license has been disciplined on one prior occasion, and has had a complaint resolved or otherwise settled against it. Currently, there is one (1) open complaint listed against the license which is presumed to be related to this matter.
On or about June 20, 2023, the Registrar received a brief narrative complaint from Complainant against Respondent’s License No. 335018 alleging poor work of their residential water damage remediation project. The Registrar designated it Complaint No. 2023-06895 and assigned to Miles Crosby (“Investigator Crosby”) for investigation.
On June 21, 2023, Investigator Crosby issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on July 17, 2023, at 11:00 a.m. Correspondence was not returned as undeliverable to Respondent.
Sometime between late-June and early-July, Complaint No. 2023-06895 was reassigned to Registrar investigator Christopher Allison (“Investigator Allison”).
On July 17, 2023, Investigator Allison inspected the work that had been performed on the project to date. Respondent was present. Investigator Allison also reviewed the contract-related correspondence between the parties, and took 22 photographs of the project site. When he was finished, Investigator Allison drafted his Inspection Notes. Investigator Allison derived eight (8) separate and distinct complaint items from Complainant’s submission. He also added an additional complaint item at the onsite inspection, bringing the complaint item total to nine (9). Ultimately, Investigator Allison was able to substantiate eight (8) complaint items based on his firsthand observations. Specifically, Investigator Allison noted that complaint items 1 and 3-9 required correction and/or completion by Respondent because the work fell below the Registrar’s minimum workmanship standards.
On or about July 17, 2023, Investigator Allison issued a Warning Letter to Respondent for an alleged violation of 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.
On August 18, 2023, Investigator Allison issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated most of Complainant’s complaint allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on September 03, 2023, to notify the Registrar of its compliance with the Directive (e.g. obtain structural drawings and a building permit, and remedy the substantiated complaint items by appropriate means) or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.
On August 21, 2023, Investigator Allison issued a Revised Written Directive from the Registrar (“Revised Directive”) to Respondent which extended the compliance period to September 13, 2023, due to a conflict in Complainant’s schedule. All other terms of the corrective work order remained unchanged.
On September 14, 2023, Investigator Allison escalated the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On September 15, 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), 32-1154(A)(6), and 32-1154(A)(22). Respondent was given until September 30, 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 September 30, 2023, the Registrar received Respondent’s timely Answer whereby Mr. Harris argued that he had “made multiple attempts to coordinate with Inspector Allison and the complainant to no avail,” but did not specify what attempts were made or when.
On October 02, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on November 30, 2023. Per the October 12, 2023, Notice of Hearing on Contested Case (“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)(6)
Charge 3: A.R.S. § 32-1154(A)(22)
On November 03, 2023, OAH issued a Hearing Order to the parties that provided remote participation information, including a videoconference hyperlink and teleconference dial-in information, for the hearing scheduled November 30, 2023. Correspondence was not returned as undeliverable to Respondent.
Hearing Evidence
Complainant testified on her own behalf and called Investigator Allison and Penni Leiser as witnesses. The substantive evidence of record is as follows:
Complainant owns a residential property located at 104 County Road 3314 Vernon, Arizona 85940.
On March 25 2023, the parties entered into a $64,400.00 contract for water damage remediation; including beam corrections, electrical corrections, plumbing corrections, window corrections, concrete, foundations, abatement, and roofing at Complainant’s residence. Per the terms of their agreement, Respondent was to furnish Complainant with receipts for all labor and materials, and complete the work by June 15, 2023.
Work on the project commenced on or about March 24, 2023, and stopped or was otherwise completed on June 09, 2023.
Complaint paid Respondent $65,000.00 for the project.
Complaint No. 2023-06895 was reassigned to Investigator Allison due to Mr. Harris’ harassing and “outlandish” behaviors towards Investigator Crosby.
Just prior to the expiration of the Revised Directive, Respondent submitted an extension request to the Registrar predicated on the passing of a non-immediate family member. Upon investigation, Investigator Allison discovered that the decedent had passed prior to the issuance of the Directive, per a publically published obituary. As a result, Respondent’s request was denied.
At no time did Respondent furnish Complainant or the Registrar with proof that materials purchases had been made for the underlying project.
Due to Mr. Harris’ inappropriate and threatening behaviors, local law enforcement had to be engaged to ensure Complainant’s safety during in-person interactions with Respondent.
Although Complainant granted Respondent access to the project site between August 18, 2023, and September 13, 2023, Respondent did not perform any corrective work on the project.
On September 10, 2023, Mr. Harris advised Complainant that Respondent would perform remediations to the project on September 11, 2023, but failed to appear or reschedule with Complainant.
Respondent never provided the Registrar with proof that a building permit had been obtained for the project.
Additional Evidence
On or about August 27, 2022, Mr. Harris asked Ms. Leiser, an environmental field consultant, to perform microbial testing at a 6,000 sq. ft. commercial building in Pinetop-Lakeside, Arizona. Using technology that no other individual or firm in the state possesses, Ms. Leiser completed the testing as requested and provided an analytical report to Mr. Harris. Mr. Harris never paid Ms. Leiser for her work. Later, Ms. Leiser learned that Mr. Harris had made minimal changes to the report and given it to Complainant and the Registrar under the guise that it was for Complainant’s property. Ms. Leiser informed Investigator Allison.
On November 30, 2023, at 8:30 a.m. Mr. Harris emailed OAH and the Registrar to inquire about the time and date of the administrative hearing. OAH staff replied near immediately to Mr. Harris with the requested information, and copied the Registrar.
No request to appear via alternative means or motion to continue was ever received by OAH by or on behalf of Respondent.
Closing Argument
In closing, Complainant essentially opined that Respondent was a fraudster that posed a serious danger to the public. Complainant argued that Respondent had robbed her of time and money, and left her in a worse position that before Mr. Harris started her project. Complainant further argued that no reason(s) existed for Respondent’s failure to address the Registrar’s Revised Directive, and further opined that its contracting license should be revoked.
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.
The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received Notice of Hearing in this matter. Because OAH issued all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from OAH as well.
Complainant bears the burden of proof to establish cause 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 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”
Ariz. Rev. Stat. § 32-1154(A)(6) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[t]he doing of a fraudulent act by the licensee as a contractor resulting in another person being substantially injured.”
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 from the record that the parties had a construction remediation contract that Complainant paid in full. It is also clear from the record that most of Respondent’s workmanship on the project fell below the Registrar’s minimum workmanship standards, because a [Revised] Directive was issued. The record reflects that Respondent made no attempts to correct the deficiencies in the underlying work, or settle the dispute with Complainant. The record also reflects that Respondent’s contract with Complainant failed to include all nine (9) statutorily required minimum elements. There is no evidence to establish that Respondent’s contract template was updated to comply with Ariz. Rev. Stat. §32-1158 and/or provided to the Registrar. Most egregiously though, it is clear from the record that Mr. Harris lied on at least two (2) occasions; including when Mr. Harris tried to pass off Ms. Leiser’s commercial microbial analysis to Complainant and the Registrar as one conducted at the underlying project site.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Revised Directive and complete Complainant’s project per contract. This is an affirmative defense that Respondent bears the burden to establish. As Respondent failed to appear and provide testimony, this burden has not been sustained. Mr. Harris’ dishonesty in this matter is also a factor in aggravation. Here, the credible evidence of record shows that Respondent failed to perform corrective work on this project, and had no affirmative defense(s) for doing so.
Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(6), and 32-1154(A)(22), Complainant has also established cause for the Registrar to take disciplinary action against Respondent’s contracting 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 4H Restoration LLC, ROC License No. 335018, be revoked by the Registrar.
IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $500.00 (five hundred dollars) in certified funds as a civil penalty.
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 Order, that no future license 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, December 06, 2023.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
4H Restoration LLC, Respondent
2449 Chiricahua Dr.
Show Low, AZ 85901
[email redacted]
Terrell Broner, Complainant
P.O. Box 328
Show Low, AZ 85902
[email redacted]
By: OAH Staff