ALJDEC - Licensing
2023A-10436-CHC-ROC · Registrar of Contractors · 2024-03-18
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
George Carr,
COMPLAINANT,
v.
Unlimited Construction Solutions LLC
ROC License No. 331727,
RESPONDENT.
No. 2023A-10436-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: March 15, 2024, at 1:00 PM.
APPEARANCES: George Carr (“Complainant”) appeared on his own behalf with Maelvy Mchaney as a witness. No appearance(s) by or on behalf of the Arizona Registrar of Contractors (“Registrar”). Lawrence J. Felder, Esq. appeared on behalf of Unlimited Construction Solutions LLC (“Respondent”) with Reynaldo Villaseňor as a witness.
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the Registrar’s attached agency file, along with Respondent Exhibits 1-11 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 December 21, 2020, the Registrar issued License No. 331727 General Dual KB-2 Residential and Small Commercial contracting license to Respondent. The license has been renewed through December 31, 2024. Ioan Galea is listed as the Qualifying Party and Member on the license. Reynaldo Villaseňor is also listed as a Member on the license. Respondent’s address of record for the license is 15455 N. Greenway Hayden Loop, Ste. C19 Scottsdale, Arizona 85251. Respondent has an active $30,000.00 surety bond on the license issued by RLI Insurance Company, effective January 18, 2023. The license had been disciplined on one (1) prior occasion, and currently has one (1) open complaint against the license; which is presumed to be related to the matter at bar.
On an unknown date, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 331727 alleging abandonment and poor work of a residential remodel project. The Registrar designated it Complaint No. 2023-10436 and assigned to Steve Klein (“Investigator Klein”) for investigation.
On September 08, 2023, Investigator Klein issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 01, 2023, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On November 01, 2023, Investigator Klein inspected the work that had been performed on the project to date. Respondent was present. Investigator Klein also reviewed the contract-related correspondence between the parties, and took 18 photographs of the project site. When he was finished, Investigator Klein drafted his Inspection Notes. Ultimately, Investigator Klein derived a total of 25 separate and distinct complaint items, 11 of which he substantiated based on his firsthand observations. Specifically, Investigator Klein determined Respondent’s workmanship on complaint items 2, 6-10, 12, and 15-18 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 01, 2023, at the jobsite inspection, Investigator Klein received an addendum complaint from Complainant, containing complaint items 26-43.
On November 03, 2023, Investigator Klein 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 December 05, 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 November 16, 2023, Investigator Klein issued an Addendum Jobsite Inspection Notification Letter to the parties, advising that he would conduct an addendum inspection of the project on December 05, 2023, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On December 05, 2023, Investigator Klein inspected the addendum complaint items submitted by Complainant, and substantiated 9 addendum complaint items based on his firsthand observations. Specifically, Investigator Klein determined Respondent’s workmanship on addendum complaint items 28, 32, 36, 37-39, and 41-43 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.
On December 06, 2023, Investigator Klein issued an Amended Written Directive from the Registrar (“Amended Directive”) to Respondent because he substantiated 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 20, 2023, to notify the Registrar of its compliance with the Amended 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 an unknown date, Investigator Klein issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on December 21, 2023, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On December 21, 2023, Investigator Klein inspected all of the corrective work that had been performed on the project. Respondent was present. When he was finished, Investigator Klein drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Klein determined that Respondent had satisfactorily remediated complaint item 17, but had not satisfactorily remediated complaint items 2, 6-7, 9-10, 12, 15-16, 18, 28, 32, 36, 37-39, and/or 41-43.
On an unknown date, Investigator Klein forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On December 27, 2023, 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 January 11, 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.
In December 2023, Investigator Klein retired from the Registrar.
On January 11, 2024, the Registrar received Respondent’s timely Answer whereby Mr. Villaseňor offered that he had taken over the $192,000.00 project from another project and increased the project to $245,900.00 after Complainant agreed to $53,900.00 in Change Orders. Mr. Villaseňor also offered that the project had increased by another $48,750.00, to $294,650.00 total, due to unidentified “costs incurred” by Respondent. Per Mr. Villaseňor there was also supposed to be a 10% “builder fee” added to the project. Mr. Villaseňor argued that Complainant had only paid $35,500.00 towards the contract. Mr. Villaseňor also argued that although Respondent had passed all building inspections, he stopped work on the project because Complainant refused to make progress payments. Mr. Villaseňor further argued that Respondent was afforded an insufficient time by the Registrar to address the original substantiated complaint items and substantiated addendum complaint items, and that but for Complainant’s refusal to extend the Directive’s compliance period all required corrective work could have been timely completed.
No additional documentation was provided to the Registrar to corroborate or otherwise substantiate Respondent’s claims that the total price for the parties’ contract increased from $192,000.00 to $245,900.00.
On January 17, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 15, 2024. Per the January 30, 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)
Sometime in mid-January 2024, Registrar investigator Alex Figueroa was reassigned a portion of Investigator Klein’s remaining caseload, including Complaint No. 2023-10436.
Hearing Evidence
Complainant testified on his own behalf and called Maelvy Mchaney as a witness. Mr. Villaseňor testified on behalf of Respondent. The substantive evidence of record is as follows:
Complainant owns a condominium located at 7181 E. Camelback Rd., Unit 106 Scottsdale, Arizona 85251.
On June 22, 2023, the parties entered into a $192,000.00 residential remodeling agreement.
On June 02, 2023, Complainant paid Respondent $13,000.00 towards their project.
On June 21, 2023, Complainant paid Respondent $10,000.00 towards their project.
On July 21, 2023, Complainant paid Respondent $12,500.00 towards their project.
Respondent was only able to perform work on the project intermittently on the project due to requirements set forth by Complainant’s condominium homeowner’s association.
Mr. Villaseňor testified that it would only take Respondent four (4) weeks to perform all corrective work identified in the Amended Directive.
Respondent did not perform any corrective work November 03, 2023, through December 05, 2023.
Respondent only performed corrective work on one day between December 06, 2023, and December 20, 2023.
On or about December 20, 2023, Mr. Villaseňor asked Investigator Klein for an extension of the Amended Directive’s compliance period. Investigator Klein instructed Mr. Villaseňor to confer with Complainant first. On or after December 21, 2023, Mr. Villaseňor posed the inquiry to Complaint, who denied the request.
At no point in time did Respondent allege a denial of access to the project site to the Registrar during the Directive’s or Amended Directive’s compliance periods.
Additional Evidence
Neither party could articulate what Complainant’s payment terms for the underlying contract were supposed to be.
Closing Arguments
In closing, Respondent argued that revocation of ROC License No. 331727 was unwarranted, as the record reflected Complainant had not paid Respondent to continue work though all work performed had passed building inspection. Per Respondent, there was a clear effort to comply with the Amended Directive as it had successfully remediated a complaint item and could have addressed all others had an extension been granted.
In closing, Complainant opined that his burden of proof had been established and as such discipline was warranted against ROC License No. 331727.
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.
The record clearly establishes that the parties had a residential remodel contract that Complainant paid $35,500.00 towards. It is also clear that some of the work Respondent performed on the project did not satisfy the minimum standards set for workmanship by the Registrar. It is further clear that Respondent failed to timely comply with the Registrar’s Amended Directive.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Amended Directive and remediate Complainant’s project. 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/competence on this project. While the record establishes that Respondent timely remediated substantiated complaint item 17, no mitigating evidence was presented to establish a valid basis for Respondent’s failure to address substantiated complaint items 2, 6-7, 9-10, 12, 15-16, 18, 28, 32, 36, 37-39, and/or 41-43. Respondent did not even attempt to perform corrective work under the originally issued Directive, and only worked one day during the Amended Directive’s compliance period, although Mr. Villaseňor testified it would take Respondent four (4) weeks to complete all corrective items. Moreover, Respondent did not provide sufficient testimony or evidence to use the Prompt Pay Act as a shield in these proceedings. Regardless, Complainant’s alleged failure to provide Respondent with progress payments bears no weight on Respondent’s duty to perform corrective work under the Registrar’s Amended Directive.
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 Unlimited Construction Solutions LLC, ROC License No. 331727, be suspended five (5) days.
IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $200.00 (two 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, March 19, 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]
Lawrence J. Felder, Esq.
Resolvere Law PLLC, Counsel for Respondent
3101 N. Central Ave., Ste. 850
Phoenix, AZ85012
[email redacted]
[email redacted]
George Carr, Complainant
7181 E. Camelback Rd., Unit 106
Scottsdale, AZ 85251
[email redacted]
By: OAH Staff