ALJDEC - Licensing
2023A-07737-CHC-ROC · Registrar of Contractors · 2023-12-01
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Tom Philips,
COMPLAINANT,
v.
I Epoxy Floors LLC
ROC License No. 326387,
RESPONDENT.
No. 2023A-07737-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: November 17, 2023 at 1:00 PM.
APPEARANCES: Tom Philips (“Complainant”) appeared on his own behalf with Virginia Lees as a witness. Bruce Kriens appeared on behalf of I Epoxy Floors LLC (“Respondent”). Miles Crosby appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
_____________________________________________________________________
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, 2019, the Registrar issued License No. 326387 Specialty Dual CR-61 Carpentry, Remodeling and Repairs contracting license to Respondent. The license is renewed through October 31, 2025. Bruce Lee Kriens, Jr. is listed as the Qualifying Party and Manager on the license. Respondent’s address of record for the license is 712 E. White Mountain Blvd., Box #654 Pinetop, AZ 85935. Respondent has an active $6,750.00 surety bond on the license issued by RLI Insurance Company, effective August 07, 2020. The license no prior disciplinary record, save one (1) open complaint listed against the license which is presumed to be related to this matter.
On or about July 11, 2023, the Registrar received a brief narrative complaint from Complainant against Respondent’s License No. 326387 alleging poor work of their residential pickle ball court project. The Registrar designated it Complaint No. 2023-07737 and assigned to Miles Crosby (“Investigator Crosby”) for investigation.
On July 11, 2023, Investigator Crosby issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on July 26, 2023, at 11:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On July 26, 2023, Investigator Crosby inspected the work that had been performed on the project to date. Respondent was not present. Investigator Crosby also reviewed the contract-related correspondence between the parties, and took 10 photographs of the project site. When he was finished, Investigator Crosby drafted his Inspection Notes. Ultimately, Investigator Crosby derived a single complaint item from Complainant’s submission, of which he was able to substantiate based on his firsthand observations. Specifically, Investigator Crosby noted that Complaint No. 2022-06938 has been filed by Complainant the prior year, regarding the same issue, and although Respondent had acknowledged workmanship deficiencies and agreed to perform corrective work, the concrete slab for the pickle ball court remained in a similar condition – below the Registrar’s minimum workmanship standards.
On July 28, 2023, Investigator Crosby issued a Warning Letter to Respondent because he believed that some of the work on the underlying project required possession of a B-General Residential or CR-9 Concrete contracting license that Respondent did not possess during the relevant time period, in violation of Arizona Revised Statutes (“Ariz. Rev. Stat.”) § 32-1154(A)(16), which could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.
On July 28, 2023, Investigator Crosby also 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. Correspondence was not returned as undeliverable to Respondent.
On August 03, 2023, Investigator Crosby issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on August 18, 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). Respondent was specifically advised as follows:
RESTRICTIONS
You may not perform or hire other contractors to perform work that is outside the scope of your license.
(Emphasis in original.)
Correspondence was not returned as undeliverable to Respondent.
On August 29, 2023, Investigator Crosby issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on September 05, 2023, at 11:00 a.m.
On September 05, 2023, Investigator Crosby inspected the corrective work that had been performed on the project and took 7 photographs. Respondent was not present. When he was finished, Investigator Crosby drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Crosby determined that Respondent had started corrections on the slab, did not finish, failed to communicate with Complainant about the corrective work, and left behind a concrete grinding machine after failing to return to complete remediations.
On September 15, 2023, Investigator Crosby forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On September 11, 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)(12); 32-1158, 32-1154(A)(16), and 32-1154(A)(22). Respondent was given until September 26, 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 25, 2023, the Registrar received Respondent’s timely Answer whereby Mr. Kriens argued that he offered a resolution to Complainant on or about July 23, 2023, by issuing a new contract, but that Complainant had refused to sign..
On September 27, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on November 17, 2023. Per the October 04, 2023, Amended 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)(12) – A.R.S. § 32-1158
Charge 3: A.R.S. § 32-1154(A)(16)
Charge 4: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on his own behalf and called Investigator Crosby as a witness. Respondent called Bruce Kriens as a witness. The Registrar’s agency file, including the Amended Notice of Hearing, was admitted into the record as its own exhibit. The substantive evidence of record is as follows:
Complainant owns a residential property located at 2628 S. Hart Lake Ln. Pinetop-Lakeside, Arizona 85929.
On or about June 27, 2022, the parties entered into a $27,766.71 contract for the custom installation of a pickle ball court and shed at Complainant’s residence.
Work on the project commenced on or about July 05, 2022, and stopped or was otherwise completed July 25, 2022.
Complaint paid Respondent $29,764.71 for the project.
On August 15, 2022, Complainant filed Complaint No. 2022-06938 with the Registrar. It was closed on October 31, 2022, due to weather.
Although Respondent received all of the Registrar’s correspondence regarding Complaint No. 2023-07737, including the jobsite and compliance jobsite inspections, Mr. Kriens did not attend either because he “didn’t see the point in going.”
Based on the nature of its license, Respondent was not permitted to re-pour concrete as a means of remediation, but was permitted to make corrections to the existing slab in compliance with the Directive.
Respondent did not perform any corrective work between August 08-18, 2023, but did make attempts to fix the project in early-September 2023.
Respondent never asked for an extension of the Directive’s compliance period, or accused Complainant of refusing access to the project site.
Closing Arguments
Respondent declined to provide a closing argument.
In closing, Complainant argued that he was not required to sign Respondent’s new contract in order for Respondent to perform corrective work in compliance with the Registrar’s Directive. Complainant further argued that his burden had been sustained on all charges, and as such, the resulting decision should be in his favor.
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 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)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” Specifically, Ariz. Rev. Stat. § 32-1158 which provides that “Any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:
1. The name of the contractor and the contractor's business address and license number.
2. The name and mailing address of the owner and the jobsite address or legal description.
3. The date the parties entered into the contract.
4. The estimated date of completion of all work to be performed under the contract.
5. A description of the work to be performed under the contract.
6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.
7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.
8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.
9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection.
Ariz. Rev. Stat. § 32-1154(A)(16) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.”
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 contract that Complainant paid in full. It is also clear from the record that Respondent’s workmanship on the project fell below the Registrar’s minimum workmanship standards, because a Directive was issued. Though Respondent’s initial concrete pour exceeded the scope of License No. 326387, Respondent was permitted to make corrections to the existing concrete in compliance with the Directive. The record reflects, however, that although Respondent made an attempt to correct the deficiencies in the underlying work, those remediations did not sufficiently improve the overall workmanship at issue. Additionally, the record 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.
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 lack of performance on this project. Mr. Kriens’ insistence that he was unable to move forward without Complainant’s signature on a second contract is erroneous, legally and factually. Mr. Kriens performed corrective work, albeit after the expiration of the Directive’s compliance deadline, without Complainant’s signature on his proposed second contract, and there was no requirement for Complainant to sign in order to compel Respondent to act under the Directive.
Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(12), 32-1154(A)(16), 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 I Epoxy Floors LLC, ROC License No. 326387, be suspended ten (10) days.
IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $100.00 (one 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, 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, December 01, 2023.
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]
Tom Philips, Complainant
1831 W. Grove Dr.
Lakeside, AZ 85929
[email redacted]
I Epoxy Floors, LLC, Respondent
712 E. White Mountain Blvd., Box # 654
Pinetop, AZ 85935
[email redacted]
By: OAH Staff