ALJDEC - Licensing
2023A-10678-CHC-ROC · Registrar of Contractors · 2024-03-08
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Thomas Stehower,
COMPLAINANT,
v.
Legacy Contracting LLC
ROC License No. 333553,
RESPONDENT.
No. 2023A-10678-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: March 06, 2024 at 9:00 AM.
APPEARANCES: Thomas Stehower (“Complainant”) appeared on his own behalf. John “Joey” Chester appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Daylyn Eagleshield appeared on behalf of Legacy Contracting LLC (“Respondent”). Mary Stehower observed.
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the Registrar’s attached agency file, the January 05, 2024, Continued Hearing Order, and Complainant Exhibit 3 were all 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 June 02, 2021, the Registrar issued License No. 333553 General Dual KB-2 Residential and Small Commercial contracting license to Respondent. Although the license was renewed through June 30, 2025, it was suspended by the Registrar on March 06, 2024, for lack of a Qualifying Party. Respondent’s former Qualifying Party, Vance Louis Grubb, from the license effective January 05, 2024. Daylyn Xavior Eagleshield remains as the sole Member listed on the license. Respondent’s address of record for the license is 12211 W. Bell Rd., Ste. 204 Surprise, Arizona 85378. Respondent has an active $14,000.00 surety bond on the license issued by Merchants Bonding Company, effective May 06, 2021. The license does not have a prior disciplinary record, but has had four (4) complaints settled or otherwise resolved against it. Currently, there are two (2) open complaints against it, one of which is presumed to be related to this matter.
On September 12, 2023, the Registrar received a narrative complaint from Complainant alleging abandonment of a block fencing project against Respondent’s License No. 333553. The Registrar designated it Complaint No. 2023-10678 and assigned to Joey Chester (“Investigator Chester”) for investigation.
On September 15, 2023, Investigator Chester issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on October 04, 2023, at 12:00 p.m. Correspondence was not returned as undeliverable to Respondent.
On October 04, 2023, Investigator Chester inspected the work that had been performed on the project to date. Respondent was present. Investigator Chester also reviewed the contract-related correspondence between the parties, and took 7 photographs of the project site. When he was finished, Investigator Chester drafted his Inspection Notes. Ultimately, Investigator Chester derived a single complaint item from Complaint No. 2023-10678, which he was able to substantiate against Respondent based on his firsthand observations. Specifically, Investigator Chester determined the following:
At time of inspection now [sic] work has been started, Respondent shall complete project per original contract agreement, properly executed change orders, verbal agreements, local building codes and manufacturers installation instructions.
(Emphasis in original.)
On October 11, 2023, Investigator Chester 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 November 03, 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 06, 2023, Investigator Chester confirmed with Complainant that, although afforded twenty-eight (28) days, Respondent had not performed any corrective work or asked Complainant for an extension of the Directive’s compliance period.
On November 06, 2023, Investigator Chester forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On November 07, 2023, the Registrar issued a Citation to Respondent for alleged violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(1) and 32-1154(A)(22). Respondent was given until November 22, 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 November 21, 2023, the Registrar received Respondent’s timely Answer whereby Mr. Eagleshield alleged, in pertinent part, that Complainant never contacted Respondent regarding is concerns with the project, the project was unable to commence or be remediated because Respondent was in a “pending lawsuit with a local banking system” who committed “criminal acts” against Respondent.” Respondent also submitted the parties’ purported contract agreement as an attachment, which show signature dates of June 28, 2023, by Respondent, and June 23, 2023, by Complainant.
On November 27, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on January 25, 2024. Per the December 11, 2023, Notice of Hearing on Contested Case (“Notice of Hearing”) the issue(s) to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violation(s):
Charge 1: A.R.S. § 32-1154(A)(1)
Charge 2: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on his own behalf, and called Investigator Chester as a witness. Mr. Eagleshied testified on behalf of Respondent. The substantive evidence of record is as follows:
Complainant owns residential property located at 16908 W. Baker Dr. Surprise, Arizona 85387.
On May 16, 2023, Respondent provided Complainant with a quote to construct a block fence around Complainant’s backyard perimeter for the consideration of $11,903.63, with half due up front. Complainant signed the quote on May 18, 2023.
On May 24, 2023, Respondent issued Complainant an invoice for the remittance of the $5,951.84 down payment for the project.
On June 28, 2023, and June 23, 2023, respectively, Respondent and Complainant signed a formal contract.
Work was scheduled to commence July 18, 2023, and conclude by July 28, 2023.
Complainant tendered $5,951.84 to Respondent towards their contract.
In mid and late-August 2023, Complainant blocked several of Respondent’s phone calls and/or otherwise sent them to his voicemail box intentionally in order to “maintain for his records.”
On August 30, 2023, Complainant inquired with Tucson Freeman, Respondent’s sales representative, as to when Respondent planned to perform the underlying work at issue. The following day, Mr. Freeman replied that he would let Complainant know.
On October 04, 2023, Mr. Freeman confirmed with Investigator Chester that it was feasible for Respondent to complete the project by November 03, 2023.
Between October 11, 2023, and November 02, 2023, Respondent did not contact Complainant to complete the project.
On November 03, 2023, Respondent contacted Complainant to complete the project the same day, however, Respondent did not show or provide Complainant with a notice of unavailability.
On November 04, 2023, Respondent contacted Complainant to complete the project the same day, however, Respondent did not show or provide Complainant with a notice of unavailability.
On November 06, 2023, Respondent contacted Complainant to complete the project the same day. Complainant refused.
At no point in time did Respondent allege a denial of access to the project site during the Directive’s compliance period, or the extension thereof.
Additional Evidence
Respondent did not provide the Registrar with any additional information to corroborate or otherwise substantiate its position that the alleged difficulties it was experiencing with its bank and/or accounts receivable resulted in its inability to complete Complainant’s project.
Closing Arguments
Complainant declined to provide a closing argument.
In closing, Respondent argued that Complainant’s project was not completed because of financial hardship, and asked that no discipline be imposed against its contracting license.
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)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”
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 Complainant paid Respondent half of the amount owed on their fencing contract. It is also overwhelmingly clear from the record that Respondent never started work on the underlying project, and did not refund Complainant any of the monies paid toward completion of the project. It is also from the record clear that Respondent failed to comply with the Registrar’s Directive, and further failed to request an extension thereof.
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. 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. Respondent’s argument that it was not able to commence work on the project and/or complete it due to “financial hardship” is not supported by the record. No mitigating evidence exists in the record in favor of Respondent.
Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(1) 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, based on the egregiousness of its conduct in this matter, Respondent Legacy Contracting LLC, ROC License No. 333553, be revoked.
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 08, 2024.
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]
Legacy Contracting LLC, Respondent
12211 W. Bell Rd., Ste. 204
Surprise, AZ 85378
[email redacted]
Thomas Stehower, Complainant
16908 W. Baker Dr.
Surprise, AZ 85387
[email redacted]
By: OAH Staff