ALJDEC - Licensing

2023A-10443-CHC-ROC · Registrar of Contractors · 2024-03-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Guillermo Amarillas,

COMPLAINANT

Esplendor's Home Building LLC

License No. ROC 219516,

RESPONDENT

No. 2023A-10443-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 23, 2024

APPEARANCES: Guillermo Amarillas appeared on his own behalf. Luis Renterias, qualifying party, appeared on behalf of Respondent.

ADMINISTRATIVE LAW JUDGE: Amy M. Haley

EXHIBITS ADMITTED INTO EVIDENCE: Administrative Notice was taken of the Notice of Hearing packet and all of its documents contained therein.

_____________________________________________________________________

FINDINGS OF FACT

Esplendor’s Home Building LLC (Respondent) is the holder of License No. 219516 issued by the Arizona Registrar of Contractors (Registrar).

On or about November 27, 2021, Guillermo Amarillas (Complainant) entered into a contract with Respondent for the construction of a new home. The contract was missing element #9 as required by Ariz. Rev. Stat. § 32-1158.

The original agreement in the contract called for the project to be completed within 306 working days from the issuance of a building permit.

On or about September 7, 2023, the Registrar received a Complaint against Respondent from Complainant alleging “breach of contract” for failing to finish the project within the time promised per contract.

The Registrar assigned the Complaint to Investigator Gregory Johndrow.

On October 12, 2023, Investigator Johndrow conducted a jobsite inspection. At the time of the inspection, it had been 574 days from the issuance of the permit and 268 days past what the original completion date should have been.

Investigator Johndrow noted that the condition of the residence was in the “intermediate stages.” He noted that neither the drywall nor stucco was completed, that only the rough-in for plumbing and electrical work was completed, and that there were no finishes installed at the residence.

At the jobsite inspection, Investigator Johndrow asked Luis Renterias, qualifying party for Respondent, if he intended to finish the project, to which Mr. Renterias replied he did. Prior to issuing the written directive, Investigator Johndrow gave Respondent an opportunity to submit a completion schedule that Investigator Johndrow would take into consideration when issuing the written directive and its corresponding compliance deadline.

Respondent did submit a completion schedule to Investigator Johndrow.

Investigator Johndrow then issued a written directive to Respondent that provided as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on December 1, 2023.

. . . . .

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

Complaint Item 2: “Finish job was agreed to complete with in 306 working days”

Investigator’s Observations: Verified. The status of the construction, as of this inspection date, is 574 days from the permit issuance and 268 days past the completion date stated in the contract, under Article Three. The work listed in the 4th payment draw has not been completed, although the draw has been paid in full, as stated in the respondent’s complaint response. The Respondent shall complete project per original contract agreement, properly executed change orders, verbal agreements, local building codes and manufacturers installation instructions.

Governing Rule: A.R.S. § 32-1154 (A)(3) - R4-9-108(a): Violation of any rule adopted by the registrar; Namely R 4-9-108(a) A contractor shall perform work in a professional and workmanlike manner.

And

A.R.S. § 32-1154(A)(3) - R4-9-108 (B): a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.

. . . . .

Complaint Item 5: “Mr. Luis Renteria "Esplendor’s" Refuses to commit to job completion date.”

Investigator’s Observations: Verified. The respondent’s work is 268 days past the completion date listed in the contract. The respondent could not provide a completion date at the time of this inspection. The Respondent shall complete project per original contract agreement, properly executed change orders, verbal agreements, local building codes and manufacturers installation instructions.

Governing Rule: A.R.S. § 32-1154 (A)(3) - R4-9-108(a): Violation of any rule adopted by the registrar; Namely R 4-9-108(a) A contractor shall perform work in a professional and workmanlike manner.

And

All errors contained in original.

After the deadline in the directive expired, Investigator Johndrow received an email from Complainant advising that Respondent performed very little work and that Respondent was in non-compliance with the written directive.

The Registrar issued a Citation against Respondent, charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A) and (B); Ariz. Rev. Stat. § 32-1154(A)(12), namely Ariz. Rev. Stat. § 32-1158; and Ariz. Rev. Stat. § 32-1154(A)(22).

Investigator Johndrow testified consistently with his written directive, his compliance jobsite inspection notes and his corresponding photos. He further testified that the completion schedule that Respondent provided him was longer than the amount of time he gave to Respondent on the written directive. However, he testified that he advised Respondent that he would consider giving Respondent additional time after the original compliance deadline expired if he saw good faith efforts and progress being made on the project.

Investigator Johndrow testified that he allowed 43 days for compliance in the original written directive.

Based on Complainant’s email to him and no request for additional time from Respondent, Investigator Johndrow set a compliance jobsite inspection which occurred on December 7, 2023.

Investigator Johndrow testified that the only work he noted that had been performed during the 49 days that passed from the issuance of the written directive and the time of the compliance jobsite inspection was possibly a room or two where drywall had been hung. However, no finish work had been performed. He also testified that he noticed some stucco work that had been started possibly the day before, or possibly even that morning of the inspection.

Based on his findings at the compliance jobsite inspection, which at that time was 317 days past the completion date in the contract and 623 days from the issuance of the permit, and based on no good faith effort being made in accordance with Respondent’s own completion schedule it provided, Investigator Johndrow forwarded the matter to the Registrar’s legal department.

Investigator Johndrow further testified that the contract between Complainant and Respondent was missing element #9 of Ariz. Rev. Stat. § 32-1158.

Lastly, Investigator Johndrow testified that he received an email from Complainant stating that his property suffered vandalism as the result of not being completed.

Complainant testified that as a result of his home not being finished on time, he would have to pay $117,000.00 to finish it.

Enedina Amarillas, Complainant’s wife, testified that they encountered a lot of problems because the home was not completed. She testified that they were forced to rent two warehouses and an apartment that they were currently living in which cost them $1,800.00 per month.

Mr. Renteria testified on behalf of Respondent. He testified that he was sorry for everything and that he wanted to do whatever he needed to do to “take care of these people.” He further testified that he had been in this business for 27 years and had never had a problem. Lastly, he stated that he had issues with the business the last couple of years and that he was going to close the business.

Administrative notice is taken of Respondent’s prior License record on February 23, 2024. Such prior License record reflects that Respondent’s License No. 219516 was first issued on May 24, 2006, and is currently active. Such prior License record also reflects that there was one other open case and one prior disciplined case, resulting in suspension against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

The evidence established that Respondent’s work was not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A) and (B).

The evidence established that Respondent did not attempt to complete the corrective work following the Directive being issued. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of Ariz. Rev. Stat. § 32-1154(A)(22).

The evidence established that Respondent’s contract failed to include the required elements of a contract set forth in Ariz. Rev. Stat. § 32-1158(A). Therefore, Complainant established that Respondent failed to comply with the Registrar’s statute in violation of Ariz. Rev. Stat. § 32-1154(A)(12).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 219516 for a period of 4 days.

It is further recommended that the Registrar require Respondent to pay the sum of $500.00 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 final 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)(7), unless Respondent tenders payment of any outstanding prior civil penalty.

It is further recommended that, on or before thirty (30) days after the effective date of the final order, Respondent shall provide a sample contract to the Registrar to demonstrate that it has amended its contracts to include the nine terms required by Ariz. Rev. Stat. § 32-1158(A). If Respondent fails to establish to the Registrar that it has brought its contracts into compliance with Ariz. Rev. Stat. § 32-1158(A) within thirty days, its contractor’s license shall be suspended until it demonstrates that it has done so.

Pursuant to A.R.S. § 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 4, 2024.

/s/ Amy M. Haley

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

Registrar of Contractors

Esplendor's Home Building LLC

407 Rio Rico Dr.

Rio Rico, AZ 85648

[email redacted]

Guillermo Amarillas

299 Camino Panama

Rio Rico, AZ 85648

[email redacted]

By: OAH Staff