ALJDEC - Licensing
2023A-07294-CHC-ROC · Registrar of Contractors · 2024-06-04
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Jacob Gault,
COMPLAINANT,
v.
Herbert Michael Higgins,
ROC License No. 322396,
RESPONDENT.
No. 2023A-07294-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: May 24, 2024 at 9:00 AM.
APPEARANCES: Jacob Gault (“Complainant”) appeared on his own behalf. Herbert M. Higgins (“Respondent”) appeared on his own behalf. Cliff Corlett appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the Registrar’s attached administrative file, was admitted into the evidentiary 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 October 25, 2018, the Registrar issued License No. 322396 General Dual KB-21 Residential and Small Commercial contracting license to Respondent. The license has been renewed through October 31, 2024. Herbert Michael Higgins is listed as the Qualifying Party and Owner on the license. Respondent’s address of record for the license is 3001 Anita Ave. Lake Havasu City, Arizona 86404. Respondent has a $14,000.00 surety bond on the license from RLI Insurance Company, effective September 20, 2018. The license had no prior disciplinary record. Currently, there is one (1) open complaint against the license which is presumed to be related to this matter.
On or about June 28, 2023, the Registrar received a lengthy narrative complaint from Complainant against Respondent’s License No. 322396 alleging poor work of a residential remodeling project. The Registrar designated it Complaint No. 2023-07294 and assigned to Cliff Corlett (“Investigator Corlett”) for investigation.
On July 11, 2023, Investigator Corlett issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on August 02, 2023, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On July 18, 2023, Investigator Corlett issued an Amended Jobsite Inspection Notification Letter to the parties, advising that Complainant had submitted an amended complaint to the Registrar. Investigator Corlett reiterated that the onsite inspection remained scheduled for 10:00 a.m. on August 02, 2023. Correspondence was not returned as undeliverable to Respondent.
On August 02, 2023, Investigator Corlett inspected the work that had been performed on the project by Respondent. Respondent was present. Investigator Corlett also reviewed the contract-related correspondence between the parties, and took 46 photographs of the project site. When he was finished, Investigator Corlett drafted his Inspection Notes. Ultimately, Investigator Corlett derived a total of thirty-nine (39) separate and distinct complaint items, thirty-one (31) of which he substantiated based on his firsthand observations. Specifically, Investigator Corlett determined Respondent’s workmanship on complaint items 1-8, 11-13, 15-24, 26-27, 29-30, and 34-39 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 Corlett issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated most of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on September 21, 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 October 09, 2023, the Registrar received an amended complaint from Complainant that contained twenty-four (24) additional complaint items.
On October 09, 2023, Investigator Corlett issued an Addendum Jobsite Inspection Notification Letter to the parties, advising that Complainant had submitted an addendum complaint to the Registrar. Investigator Corlett advised that he would conduct an addendum inspection of the project on October 24, 2023, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On October 24, 2023, Investigator Corlett inspected the addendum complaint items identified by Complainant. Respondent was present. Investigator Corlett also took 2 photographs of the project site. When he was finished, Investigator Corlett drafted his Addendum Jobsite Inspection Notes. Ultimately, Investigator Corlett substantiated four (4) addendum complaint items based on his firsthand observations. Specifically, Investigator Corlett determined Respondent’s workmanship on addendum complaint items 10 and 22-24 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.
On November 28, 2023, Investigator Corlett issued an addendum Written Directive from the Registrar (“Addendum Directive”) to Respondent due to the substantiation of some of Complainant’s addendum complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on December 15, 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 February 02, 2024, Investigator Corlett issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on February 13, 2024, at 9:30 a.m. Correspondence was not returned as undeliverable to Respondent.
On February 13, 2024, Investigator Corlett inspected the corrective work that had been performed on the project by Respondent. Respondent was not present. When he was finished, Investigator Corlett drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Corlett determined that Respondent had satisfactorily remediated previously substantiated complaint items 1-2, 5, 7-8, 11, 14, 16, 25, and 38, but that Respondent had not satisfactorily remediated previously substantiated complaint items 3-4, 6, 9-10, 12-13, 15, 17-24, and 26-37.
On March 05, 2024, Investigator Corlett forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On March 14, 2024, 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 March 29, 2024, 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 March 26, 2024, the Registrar received Respondent’s timely Answer whereby Mr. Higgins alleged that Complainant rescheduled each attempt Respondent made to perform corrective work during the Directive’s compliance period, denied Respondent access to the project site, and that the local building authority declined to perform a property inspection because “the inspectors son-in-law is a co-worker with Mr. Gault at the San Bernardino Sherriff’s Office out of Needles, CA.” [sic]
On March 27, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on May 24, 2024. Per the April 08, 2024, 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. Mr. Higgins testified on behalf of Respondent. The substantive evidence of record is as follows:
Complainant owns residential property located at 2299 Pennant Ln. Lake Havasu City, Arizona 86403.
On or about August 11, 2022, the parties entered into a $360,000.00 home renovation and RV garage addition construction agreement.
Six (6) Change Orders were issued for the project, increasing the contract by $34,490.74.
Work on the project commenced August 0, 2022, and continued through June 28, 2023.
Complainant paid Respondent $380,430.00 towards their agreement.
At no point in time did Respondent allege a denial of access to the project site to the Registrar during the Directive’s compliance period, or request an extension thereof to the agency.
The parties did not enter into a settlement agreement for previously substantiated complaint items 3-4, 6, 9-10, 12-13, 15, 17-24, and/or 26-37.
CONCLUSIONS OF LAW
This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.
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) holds, 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 holds that no 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 home remodeling construction contract that included an RV addition, and that Complainant substantially paid Respondent for work on the project. It is also clear from the record that there were several deficiencies in Respondent’s work that required correction, and that Respondent did not fully comply with the Registrar’s [Addendum] Directive, or request an extension thereof. It is further clear from the record that Respondent was afforded between August 21, 2023, to December 15, 2023, to perform corrective work, and that Respondent was given nearly two additional months by Investigator Corlett to complete the project.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Addendum Directive and remediate the deficiencies identified in the underlying project and complete the job. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain its burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project. Here, Mr. Higgins did not present any evidence to rebut the credible testimony offered by Complainant regarding previously substantiated complaint items 3-4, 6, 9-10, 12-13, 15, 17-24, and/or 26-37, and the fact that Respondent had not performed satisfactory repairs by December 15, 2023. Mr. Higgins admitted that he did not request an extension of either Directive and never alleged to Investigator Corlett that Respondent was being prohibited from accessing the project site. Mr. Higgins also admitted that Respondent did not attempt to settle the underlying dispute between the parties.
Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3) 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 Herbert Michael Higgins, ROC License No. 322396, be suspended for five (5) business days.
It is further recommended that the Registrar require Respondent to pay the sum total of one hundred dollars ($100.00) as a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E).
It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s 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 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, June 04, 2024.
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]
Herbert Michael Higgins, Respondent
3001 Anita Ave.
Lake Havasu City, AZ 86404
[email redacted]
Jacob Gault, Complainant
2299 Pennant Ln.
Lake Havasu City, AZ 86403
[email redacted]
By: OAH Staff