ALJDEC decisions subject to certification as final

2023A-10754-RFA-LS-ROC · Registrar of Contractors · 2025-07-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Nanneene McManis,

COMPLAINANT,

Beach Ventures Inc.

License No. ROC 186811,

RESPONDENT.

No. 2023A-10754-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 20, 2025 at 9:00am

APPEARANCES: Complainant Nanneene McManis on her own behalf. Zane Beach on behalf of Respondent Beach Ventures, Incorporated. Assistant Attorney General Charles S. Hover, III, on behalf of the Arizona Registrar of Contractors with witness Doug Ulmer.

ADMINISTRATIVE LAW JUDGE: Nicole Robinson

EXHIBITS ADMITTED INTO EVIDENCE: Registrar Exhibits 1-12. Respondent Exhibits 1A through 1G and 2A through 2D.

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (“Registrar”) issued License No. ROC 186811 to Respondent.

On or about September 20, 2023, the Registrar received a Complaint against Respondent from Complainant alleging, among other things, poor work and job abandonment (“the workmanship complaint”).

As a result of the workmanship complaint, the Registrar issued a Citation against Respondent charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(3), namely of Ariz. Admin. Code R4-9-108(A); Ariz. Rev. Stat. § 32-1154(A)(16); and Ariz. Rev. Stat. § 32-1154(22).

Respondent filed a timely answer to the Citation. An administrative hearing was held on November 18, 2024. In the Decision, Administrative Law Judge (“ALJ”) Moses-Thompson considered Respondent’s arguments and concluded, among other things, that “the Complainant established that Respondent did not perform the work in a professional and workmanlike manner in violation of Ariz. Rev. Stat. § 32-1154(A)(3).”

On April 8, 2025, the Registrar issued a Final Administrative Decision and Order modifying the ALJ’s finding to include a violation of the Written Directive. The Registrar’s Final Administrative Decision and Order stated in pertinent part, “

Because Respondent did not hold the necessary license to perform the corrective work, it could have entered a financial settlement with Complainant, or obtained the proper license within the Directive time period. To this end, the Written Directive here advised Respondent that it may not perform or hire other contractors to perform work that is outside the scope of [its] license, and directed Respondent to correct by appropriate means. Respondent failed to do so, which is a violation of Ariz. Rev. Stat. § 32-1154(A)(22).

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (“the Fund”) to recover the cost of completing or repairing the project. As part of the claim process, Complainant submitted bids from two different contractors to correct the project.

The Registrar issued a Notice of Claim for Administrative Payout, finding that Complainant’s actual damages were $4,450.38. Respondent requested a hearing, believing the payout was too high. Complainant did not contest the amount of the administrative payout.

On May 2, 2025, the Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an evidentiary hearing.

A hearing was held on June 20, 2025 at 9:00am.

Hearing Evidence

The Written Directive from the Registrar specified the following in pertinent part:

After investigation, the Registrar determined that you failed to meet the requirements of Ariz. Rev. Stat. § 32-1154(A). . . .

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

Compliance Item: 1 – Northside awning: The panels installed measure 4-inch- x 1.2 foot in a 2-inch old drain pan, there are only 36 total panels measuring 1.2 foot. These are the wrong size panels for this awning replacement. They appear to be stretched to fit to the 2-inch drain pan causing panels not to interlock, covering up drip edge, nonnormal light exposure and weakness in the pans causing them to split and creating stress points. The large pan cause water to over flow the drain pans and not down the pans to the drain spouts.

Correct install; 40 feet x 1 foot awning should take 40 panels

To fix the non-interlocking problem, contractor installed tape to the top side of the awning to keep the awning together and not leak. This is a quick fix and withstand AZ sun and weather.

Investigator’s Observation: At the time of the second inspection performed on 11/2/2023 it was verified that the length of the awning replaced on the north side of the residence was 40 feet. Within this forty foot distance there were 36 panels installed spanning the forty foot distance. Prior to the second jobsite inspection the investigator visited Mesa Awning to gather information regarding the installation of the panels. The investigator was informed that the intended span of the panels in question was approximately one foot wide with a 40 foot span requiring 40 panels and a minimum of 39. The employees at Mesa awning stated that the use of less panels could result in deteriorating the structural integrity of the panels. It was confirmed on 11/2 that 36 panels were installed over a forty foot span. The result of the installation appears to have stressed the panels resulting in gaps between the seams.

No evidence was gathered at the inspection nor the visit to Mesa Awning to determine that the 2-inch drain pan was not sufficient for the awning. However the respondent shall confirm that if the drain pan was to be replaced per the contractual obligations that said obligations are met. Allegation of improperly installed panels is confirmed. Respondent shall correct by the appropriate means.

. . . .

Compliance Item: 3 – Southside: The panels installed measure 4-inch- x 1.2 foot wide in a 2-inch old drain pan, there are only 16 total panels measuring 1.2 inch. 20 feet x 1 foot awning should take 20 panels.

Panels are cut uneven and jagged. Awnings leak, are dented, scratched, have gaps, empty screw holes minus screws, screws going through the awnings and hole in the center of awning. I witnessed an employee dent an awning and flashing when he was installing it. He was banging on the dent to remove it. It is still dented and has a gap at the connecting sheet.

Investigator’s Observation: At the time of the second jobsite inspection performed on 11/2/2023 it was noted that the distance of the second awning was 20 feet. Within this 20 foot span there were 18 panels installed. Based on the evidence gather from Mesa Awning and noted in line item number 1 there should have been a total of 20 panels installed for the length of awning span. A water test was performed on this side of the residence and there was notable leakage in various areas which included screw holes that remain unfilled and open to the elements. There was also jagged cuts which resulted in uneven edges of panel which also affected drainage in some areas. Any denting caused by hail on either side of the residence is not due to the respondent’s workmanship. Allegation of improper installation of panels is verified. Also holes, irregular cut edges of paneling and water leakage is verified. Respondent shall correct by the appropriate means.

At the Compliance Inspection, the following was determined by Registrar Investigator Steven Avila:

Respondent performed repairs to the metal awning per the written directive. It is noted that the Respondent who carries a CR-42 which accounts for the shingled portion of the scope of work. However, metal awnings are not covered under a CR-42 and instead require a R-3 Awnings, Canopies, Carports and Patio Covers license. Per A.R.S. 32-1154(A)(16) the Respondent is not allowed to contract beyond the scope of the license of the licensee which can result in citation being issued.

Compliance Inspection Findings: At the time of the inspection the panels had been reset in to the same rails. This time the panels reached a total number of 37 panels within a 40 foot span. A conversation had with Mesa awning stated that due to the presence of an adjacent awning and preexisting three inch rail this would be an acceptable number of panels. However, a water test being performed showed that there is still water intrusion thru a seam that has failed since the repair on the North side of the residence. The water test also showed that the metal tray on the North side of the residence does not allow for proper drainage due to lack of slope. Respondent had previously replaced the posts on this side of the residence that would have allowed for this drainage. Repairs for the Northside no not meet industry standards.

. . . .

Panels are cut uneven and jagged. Awnings leak, are dented, scratc

Compliance Inspection Findings: At the time of the inspection the south side awning was also repaired by the respondent per the written directive. A water test was performed in this area and the results were such. There was a location above the South side door in the residence that continued to leak a substantial amount of water. This leak ran down the facia of the residence and created a large puddle on the porch and adjacent to the porch. Due to the amount of leakage between the South side roof of the residence and the metal awning it is determined that the repairs in this area do not meet industry standards.

Doug Ulmer, Claims Reviewer for the Fund, testified that he reviewed the Complaint, the Written Directive, the Compliance Jobsite Findings from the Registrar that had been issued, the ALJ’s Decision regarding the underlying complaint, the parties’ contract, the payments made by Complainant to Respondent, the claim Complainant filed with Respondent’s bonding company, the deed to the property and bids submitted by Complainant for repair/completion of the project, in determining that Complainant was eligible to file a claim with the Fund and in calculating Complainant’s actual damages.

Mr. Ulmer determined upon his review that Complainant had satisfied the eligibility requirements for a payment from the Fund.

Mr. Ulmer testified that his calculation of actual damages took into account the contract price of $28,865.62 and the payments made toward the contract price in the amount of $20,300.00, and concluded that there was a remaining balance on the contract in the amount of $8,565.62.

Complainant submitted bids to repair and complete the project, as well as proof of the payments made to do so. Mr. Ulmer reviewed the bids/costs that were submitted by Complainant which included Bid 1 by United Aluminum in the total amount of $7,015.56 plus $6,000.00 for installation and Bid 2 by RYSE Construction in the total amount of $15,323.00, and determined that they were appropriate and in line with the Written Directive and the Compliance Jobsite findings.

Mr. Ulmer calculated the total compensable bid amount at $13,016.00, less the unpaid balance on the contract at $8,565.62, which put Complainant’s actual damages at $4,450.38.

Zane Beach, Respondent’s representative, testified that the actual damages that Mr. Ulmer calculated were too high and that the job did not require replacement, but merely repair. Mr. Beach further testified that he sent two $750.00 checks to Complainant in 2024 and that $1,500.00 was a reasonable and fair amount to make the project whole. Complainant did not cash those checks. In addition, Mr. Beach contested that there were only two bids and that those bids were too vague.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Ariz. Rev. Stat. § 32-1132.01(B) provides, in pertinent part, as follows:

An award from the residential contractors' recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor's violation. Actual damages:

1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.

2. Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.

Respondent, having contested the amount of the proposed payout from the Fund, bears the burden of proof to establish that the proposed payout from the Fund is incorrect/inappropriate by a preponderance of the evidence.

A preponderance of the evidence means “proof which leads the [trier of fact] to find that the existence of the contested fact is more probable than its nonexistence.”

Respondent had an opportunity to correct and complete its work following the Written Directive from the Registrar and failed to do so.

After review of all the evidence, the Tribunal concludes that the award provided by the Fund accurately reflected Complainant’s actual damages. Accordingly, Complainant is entitled to a payout from the Fund in the amount of $4,450.38.

RECOMMENDED ORDER

Based on the foregoing,

It is Recommended that on the effective date of the Registrar’s final order, the Residential Contractors’ Recovery Fund shall pay $4,450.38 to Complainant Nanneene McManis.

It is Further Recommended that under Ariz. Rev. Stat. § 32-1139(B), the Registrar shall charge $4,450.38, plus interest at a rate of ten percent a year, to Respondent Beach Ventures, Incorporated, License No ROC 186811.

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.

-54864001

001

-137160-45720000Done this day, July 7, 2025.

/s/ Nicole Robinson

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Nanneene McManis

[email redacted]

Charles S. Hover, III

Office of the Attorney General

[email redacted]

Bradley D. Weech

Davis Miles McGuire Gardner

[email redacted]

By: OAH Staff