ALJDEC - Licensing

2023A-10973-CHC-ROC · Registrar of Contractors · 2024-03-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Elizabeth Ann Cyprien,

COMPLAINANT,

v.

Cat Back Mountain Excavating LLC

ROC License No. 330545,

RESPONDENT.

No. 2023A-10973-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 06, 2024 at 1:00 PM.

APPEARANCES: Elizabeth Ann Cyprien (“Complainant”) appeared on her own behalf. Carlos Tena appeared on behalf of Cat Back Mountain Excavating LLC (“Respondent”). Gregory Johndrow appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). John Cyprien and Ray Sharp observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the Registrar’s attached agency file, was admitted into the record along with the February 23, 2024, Hearing Order.

_____________________________________________________________________

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 September 08, 2020, the Registrar issued ROC License No. 330545 Specialty Residential R-2 Excavating, Grading and Oil Surfacing contracting license to Respondent. The license is renewed through September 30, 2024. Carlos Alberto Tena is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 3958 W. Aragon St. Tucson, Arizona 85746. Respondent has an active $4,250.00 surety bond on the license issued by RLI Insurance Company, effective July 22, 2020. The license has no prior disciplinary record, save one (3) open complaint against it, which is presumed to be related to this matter.

On September 18, 2023, the Registrar received a 7-item complaint from Complainant against Respondent’s License No. 330545 alleging abandonment of their residential masonry project. The Registrar designated it Complaint No. 2023-10973 and assigned to Gregory Johndrow (“Investigator Johndrow”) for investigation.

On October 02, 2023, Investigator Johndrow issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 21, 2023, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On October 02, 2023, Investigator Johndrow issued a Warning Letter to Respondent for an alleged violation of Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A)(12); 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in his contracts, including his contract with Complainant. Respondent was further advised that statutory noncompliance could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.

On October 02, 2023, Investigator Johndrow issued a Warning Letter to Respondent to advise that some of Respondent’s work on the underlying project required possession of a KB-2 or CR-21 license that Respondent did not possess during the relevant time period, in violation of Ariz. Rev. Stat. § 32-1154(A)(16), which could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.

On October 02, 2023, Investigator Johndrow issued a Warning Letter to Respondent to advise that Mr. Tena’s unauthorized permission for Daniel Pina to perform work as an unlicensed contractor on Complainant’s project constituted “aiding and abetting” in violation of Ariz. Rev. Stat. §§ 32-1154(A)(16) and 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a). Respondent was further advised that such conduct could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.

On November 21, 2023, Investigator Johndrow inspected the work that had been performed on the project to date. Respondent was not present. Investigator Johndrow also reviewed the contract-related correspondence between the parties, and took 15 photographs of the project site. When he was finished, Investigator Johndrow drafted his Inspection Notes. Ultimately, Investigator Johndrow substantiated all 7 complaint items against Respondent based on his firsthand observations. Specifically, Investigator Johndrow determined that Respondent let an unlicensed contractor, Daniel Pina, use his construction license to enter into a construction agreement with a homeowner whose Homeowner’s Association required all construction to be performed by a licensed contractor. Investigator Johndrow further determined that all of the work Mr. Pina performed on Complainant’s project failed to meet the Registrar’s minimum standards. As such, Investigator Johndrow concluded that as the licensee, Respondent was required to perform corrective and/or completion work to remediate the identified deficiencies.

On November 21, 2023, Investigator Johndrow issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated all of Complainant’s complaint allegation(s) against ROC License No. 330545. Respondent was put on notice that it had until 5:00 p.m. on December 07, 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 December 11, 2023, Investigator Johndrow forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On December 21, 2023, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(9)(c), 32-1154(A)(12); 32-1158, 32-1154(A)(16), and 32-1154(A)(22). Respondent was given until January 04, 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 January 05, 2024, the Registrar received Respondent’s untimely Answer whereby Mr. Tena denied direct involvement with Complainant’s project, and proffered that he had done his best to persuade Mr. Pina to resolve Complainant’s concerns with the underlying project. Mr. Tena did not provide a reason as to why Respondent’s Answer was not timely.

On January 08, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 06, 2024. Per the January 23, 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)(2)(a)

Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)

Charge 3: A.R.S. § 32-1154(A)(9)(c)

Charge 4: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158

Charge 5: A.R.S. § 32-1154(A)(16)

Charge 6: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Johndrow as a witness. Mr. Tena testified on behalf of Respondent. The substantive evidence of record is as follows:

Complainant along with her husband, John Cyprien, owns residential property located at 896 N. Broken Hills Dr. Green Valley, Arizona 85614.

On January 14, 2023, Mr. Pina submitted a bid for the construction of an electric fireplace in Complainant’s backyard. On January 16, 2023, Complainant accepted Respondent’s bid.

Between January 30, 2023, and February 09, 2023, Complainant and Mr. Pina negotiated to add additional scopes of work to the project: a block wall with gates and a paved walkway, which brought their contract total to $8,962.00.

Complainant paid Mr. Pina $8,062.00 towards the project.

On January 26-27, 2023, Complainant submitted permit applications to her Homeowner’s Association for the aforementioned scopes of work.

On or about January 16, 2023, work on the project commenced. Sometime in mid-July 2023, Mr. Pina stopped work on the project. The project was never completed.

Sometime in late-August 2023, Mr. Pina agreed to complete the underlying project under ROC License No. 330545.

Between November 21, 2023, and December 07, 2023, Respondent did not perform any corrective work on substantiated complaint items 1-7.

On December 10, 2023, Investigator Johndrow confirmed with Complainant that no work had been performed.

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

On or about July 27, 2023, in an attempt to locate Mr. Pina, Respondent purportedly left the following message with Mr. Pina’s father:

Hello my name is Carlos Tena and I’m sorry to bother you. I’m trying to get a hold of Daniel. He asked me for a favor. I rented him my contractors [license] to do a job and he never completed it in Quail Creek. Never delivered over $3,500.00 of materials and not these people are coming after me and that’s not right. I’m just trying to get a hold of him to try and work this out so that [things] don’t get out of hand so that they don’t get the authorities involved. Cus once that happens it will be out of all our hands. Please give me a call.

(All errors in original.)

Mr. Tena took a photograph of the note and sent it to Complainant via text message, prior to leaving it with Mr. Pina’s father.

Closing Arguments

In closing Mr. Tena vehemently denied receiving any type of payment for the underlying project from Complainant or Mr. Pina, and argued that he had done all he could to encourage Mr. Pina to complete the project and/or perform corrective work. Mr. Tena also admitted to “renting” out Respondent’s contracting license, but opined that he was liable to perform corrective work.

In closing Complainant opined that Respondent was liable for Mr. Pina’s poor work performance and the remediation of her project, because Mr. Tena knowingly, intentionally, and volitionally permitted Mr. Pina to use Respondent’s construction license to complete her project.

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)(2)(a) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of [p]lans or specifications in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.”

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)(9)(c) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[A]llowing one's license to be used by a licensed or unlicensed person.”

Ariz. Rev. Stat. § 32-1154(A)(12) holds, in pertinent part, that among the grounds for suspension or revocation of a contractor’s license is a “[f]ailure in any material respect to comply with this chapter.” Specifically, Ariz. Rev. Stat. § 32-1158 provides that “Any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:

1. The name of the contractor and the contractor's business address and license number.

2. The name and mailing address of the owner and the jobsite address or legal description.

3. The date the parties entered into the contract.

4. The estimated date of completion of all work to be performed under the contract.

5. A description of the work to be performed under the contract.

6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.

7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.

8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.

9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection.”

Ariz. Rev. Stat. § 32-1154(A)(16) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.”

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 ROC 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 not in dispute.

It is undisputed that Respondent knowingly permitted an unlicensed individual, Daniel Pina, to use ROC License No. 330545 to secure a residential construction bid in a Homeowner’s Association that required licensed work in its subdivision. It also not in dispute that as a result, Complainant accepted Mr. Pina’s bid on her project, and that none of the work Mr. Pina performed satisfied the Registrar’s minimum standards for workmanship. It is further undisputed that after receiving the Registrar’s Directive, Respondent took no action to complete and/or remediate the underlying project or settle the dispute with Complainant.

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 remediate 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/competence on this project. The record clearly establishes that no plans or permits were obtained for Complainant’s project. The record also establishes that Respondent was not appropriately licensed for multiple portions of the underlying scope of work, and that Mr. Tena allowed an unlicensed person to “rent” his license for the project. The record further establishes that Mr. Pina’s agreement with Complainant, under the guise of ROC License No. 330545, did not contain all statutorily required provisions. No mitigating evidence exists in the record in favor of Respondent. Mr. Tena’s testimony evidences his clear misunderstanding of his duties, obligations, and restrictions as the holder of ROC License No. 330545.

Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(9)(c), 32-1154(A)(12); 32-1158, 32-1154(A)(16), 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 that on the effective date of the Final Order in this matter, Respondent Cat Back Mountain Excavating LLC, ROC License No. 330545, shall be suspended for eighteen (18) business days.

It is further recommended that the Registrar require Respondent to pay the sum total 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 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)(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 11, 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]

Cat Back Mountain Excavating, LLC, Respondent

3958 W. Aragon St.

Tucson, AZ 85746

[email redacted]

Elizabeth Ann Cyprien, Complainant

896 N. Broken Hills Dr.

Green Valley, AZ 85614

[email redacted]

By: OAH Staff