ALJDEC - Licensing
2023A-08308-CHC-ROC · Registrar of Contractors · 2024-04-15
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Sherry Peabody,
COMPLAINANT,
v.
Pro-Tec Contracting LLC
ROC License No. 326962,
RESPONDENT.
No. 2023A-08308-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: April 12, 2024 at 1:00 PM.
APPEARANCES: Sherry Peabody (“Complainant”) appeared on her own behalf. Ruben E. Brasher appeared on behalf of Pro-Tec Contracting LLC (“Respondent”). Todd Anderson 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 Agency File, was 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 November 25, 2019, the Registrar issued License No. 326962 General Dual KB-1 contracting license to Respondent. The license had been renewed through November 30, 2025. James M. O’Brien III is listed as the Qualifying Party and Member on the license. Ruben Eugene Brasher is also listed as a Member on the license. Respondent’s address of record for the license was 8611 N. Black Canyon Hwy., Ste. 114 Phoenix, Arizona 85021. Respondent has an active $20,000.00 surety bond on the license issued by American Contractors Indemnity Company, effective November 14, 2019. The license has been disciplined on one (1) prior occasion. Currently, the license has one (1) open complaint against it, which is presumed to be related to this matter.
On or about August 08, 2023, the Registrar received a lengthy narrative complaint from Complainant against Respondent’s License No. 326962 that essentially alleged poor work of a residential insurance remediation project regarding Complainant’s roof. The Registrar designated it Complaint No. 2023-08308 and assigned to Todd Anderson (“Investigator Anderson”) for investigation.
On August 14, 2023, Investigator Anderson issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on September 07, 2023, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On September 07, 2023, Investigator Anderson inspected the work that had been performed on the project to date. Respondent was present. Investigator Anderson also reviewed the contract-related correspondence between the parties, and took 24 photographs of the project site. When he was finished, Investigator Anderson drafted his Inspection Notes. Ultimately, Investigator Anderson derived a total of eighteen (18) separate and distinct complaint items from Complaint No. 2023-08308, three (3) of which he substantiated based on his firsthand observations. Specifically, Investigator Anderson determined Respondent’s workmanship on complaint items 2, 6, and 14 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 12, 2023, Investigator Anderson issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on October 31, 2023, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.
On November 13, 2023, because the Registrar was notified that Complainant’s insurance company would not cover costs associated with the remediation of substantiated complaint item 14, Investigator Anderson issued a Revised Written Directive from the Registrar (“Revised Directive”) to Respondent which removed the complaint item and instructed Respondent to perform corrective work on complaint items 2 and 6 only. Respondent was further put on notice that it had until 5:00 p.m. on November 20, 2023, to notify the Registrar of its compliance with the Revised 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 December 18, 2023, Investigator Anderson issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 08, 2024, at 1:30 p.m. Correspondence was not returned as undeliverable to Respondent.
On January 08, 2024, Investigator Anderson inspected the corrective work that had been performed on the project and took 5 photos. Respondent was present. When he was finished, Investigator Anderson drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Anderson determined that Respondent had satisfactorily remediated complaint item 2, but that complaint item 6 remained outstanding.
On January 18, 2024, Investigator Anderson forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On January 31, 2024, 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 February 15, 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 February 14, 2024, the Registrar received Respondent’s timely Answer whereby Respondent argued that it had completely remediated complaint item 6, albeit after the expiration of the Revised Directive.
On February 16, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 12, 2024. Per the February 28, 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 her own behalf and called Investigator Anderson as a witness. Ruben Brasher testified on behalf of Respondent. The substantive evidence of record is as follows:
Complainant owns residential property located at 8451 E. Mackenzie Dr. Phoenix, Arizona 85037.
On or about October 17, 2022, Complainant opened a claim with her homeowners’ insurance company (“Liberty Mutual”) for damage sustained to her roof on an unknown date.
On or about October 31, 2022, Liberty Mutual inspected Complainant’s roof, and returned a $19,223.80 estimate for materials and repairs on or about November 02, 2022.
On or about November 02, 2022, the parties entered into a $19,370.53 roof repair contract. Liberty Mutual tendered payment to a third party holding company (“Lion’s Bridge”) who agreed to hold the monies for disbursement to Respondent until Complainant signed-off on the project as complete.
Over the course of the project, an unknown number of verbal Change Orders were executed between the parties, as Respondent discovered issues with the state of Complainant’s roof during attempted repairs that ultimately required replacements in sections.
Lion’s Bridge released just under $8,000.00 to Respondent to commence the underlying project. Since that time Respondent has not received any additional funds earmarked for the job.
On October 26, 2023, five (5) days prior to the expiration of the Directive’s compliance period, Respondent asked the Registrar for an extension of time for compliance. Respondent’s request was granted, and the Directive was extended through November 15, 2023; which overlapped with the issuance of the November 13, 2023, Revised Directive.
On November 14, 2024, Respondent submitted a second extension request of the Directive to the Registrar. Respondent’s request was granted, and the Directive was extended through November 20, 2023; the same compliance deadline date for the Revised Directive.
On November 22, 2023, Respondent advised Investigator Anderson that it had completed remediations of substantiated compliant item 6 in compliance with the issued Directives. Investigator Anderson was unable to confirm Respondent’s assertion(s) with Complainant, however, because on December 18, 2023, Complainant requested that Investigator Anderson perform a compliance jobsite inspection to make an impartial determination, as she was still not satisfied with Respondent’s workmanship.
At the January 08, 2024, compliance jobsite inspection, Complainant agreed to afford Respondent ten (10) additional days to remediate substantiated compliant item 6. During the subsequent (10) day period, however, Respondent reported a denial of access to Investigator Anderson due to the fact that the parties were unable to agree on dates and/or times for Respondent to perform the corrective work at issue and Complainant refused to grant Respondent any additional time to remediate the project. Investigator Anderson declined to intervene and instead escalated the Complaint No. 2023-08308 to the Registrar’s legal department.
Notably, in the final attempts to remediate the underlying project, the parties’ relationship deteriorated to the point of being unable to effectively or respectfully communicate with one another; which was the primary contributing factor in the parties being able to schedule a final date for Respondent to perform corrective work.
At no point in time did the parties enter into a financial settlement agreement regarding substantiated complaint item 6.
Closing Arguments
Respondent declined to provide a closing argument.
In closing, Complainant argued that the Registrar should take disciplinary action against License No. 326962 because substantiated complaint item 6 remained outstanding.
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)(17) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[c]ontracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.”
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.
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 roof remediation contract that Liberty Mutual paid in full on behalf of Complainant. It is also clear from the record that Respondent was paid less than half of the amount tendered to Lion’s Bridge, and is unable to receive the balance until Complainant’s approves the work. It is also clear from the record that there were a small number of deficiencies in Respondent’s work that required correction, and that Respondent successfully remediated half prior to the expiration of applicable Directives in this matter; which Respondent did not timely comply with.
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 argues that because Complainant refused to grant access during the 10-day period following the compliance jobsite inspection in this matter, sans just cause, that Complainant’s conduct alleviates Respondent of its duty to remediate substantiated compliant item 6. The Tribunal, however, disagrees. At the latest, Respondent’s compliance with the underlying Directive(s) was due by November 20, 2023. The parties’ personal agreements, and/or recessions thereof, do not supersede the Registrar’s Directive. Here, the record reflects that the parties were still amicably working together October 26, 2023, through November 20, 2023. Nothing in the record establishes a viable justification or excuse for Respondent’s inaction and/or lack of performance on this project during that time period.
Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22) by a preponderance of the evidence, 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 Pro-Tec Contracting LLC, ROC License No. 326962, be suspended for one (1) business day.
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, April 16, 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]
Pro-Tec Contracting LLC, Respondent
8611 N. Black Canyon Hwy., Ste. 114
Phoenix, AZ 85021
[email redacted]
Sherry Peabody, Complainant
8451 W. Mackenzie Dr.
Phoenix, AZ 85037
[email redacted]
By: OAH Staff