ALJDEC - Licensing

2023A-12390-CHC-ROC · Registrar of Contractors · 2024-10-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Johnny Olariu,

COMPLAINANT,

v.

Desert View Contractors LLC,

License No. ROC 277948,

RESPONDENT.

No. 2024A-01175-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: Convened and concluded on September 11, 2024.

APPEARANCES:

For Complainant: Johnny Olariu and Attorney Tracy Essig.

For Respondent: Javier Munoz and Attorney Greg Cahill.

For the Registrar of Contractors: Joey Chester.

ADMINISTRATIVE LAW JUDGE: Samuel Fox

EXHIBITS ADMITTED INTO EVIDENCE: Administrative notice was taken of the Notice of Hearing Packet One (2023A-12390-CHC-ROC) and Notice of Hearing Packet Two (2024A-01175-CHC-ROC) submitted by the Registrar of Contractors. Complainant’s Exhibits 1 through 18. Respondent’s Exhibits 1 through 22.

_____________________________________________________________________

FINDINGS OF FACT

Desert View Contractors LLC (Respondent) was the holder of License No. 277948 issued by the Arizona Registrar of Contractors (Registrar) on May 31, 2012.

On or about June 18, 2023, Johnny Olariu (Complainant) entered into a contract with Respondent for, among other things, construction of a new home.

First Complaint (2023A-12390-CHC-ROC)

On or about November 16, 2023, Complainant filed a Licensed Complaint Form with the Registrar (First Complaint), claiming poor work.

The Registrar assigned the First Complaint to Investigator Chester, who issued a Jobsite Inspection Notice on November 17, 2023, scheduling the inspection for December 6, 2023. Investigator Chester conducted the jobsite inspection on December 6, 2023, and Respondent was present. Following the inspection, Investigator Chester issued a Written Directive From the Registrar to Respondent (First Directive) on December 13, 2023, that provided as follows:

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

Complaint Item 4: Concrete and foundation cracked;

Investigator’s Observation: At time of inspection there were various cracks that were wider than 1/8”, respondent to repair by appropriate means.

Governing Rule: ARS §32-1154 (A) (3), namely R4-9-108, Poor work not performed in accordance with professional industry standards.

The First Directive required Respondent to notify Investigator Chester of Respondent’s compliance with the First Directive prior to 5:00 p.m. on January 19, 2024.

Investigator Chester conducted a Compliance Jobsite Inspection for the First Complaint on February 8, 2024, during which he deemed Complaint Item 4 not corrected to workmanship standards.

On March 14, 2024, the Registrar issued a Citation for the First Directive (First Citation), finding cause to charge Respondent with violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(C), and A.R.S. § 32-1154(A)(22).

Respondent submitted an Answer to the Citation on March 29, 2024. Respondent’s Answer denied the allegations, including that it failed to take appropriate corrective action.

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

On April 15, 2024, the Registrar issued a Notice of Hearing on Contested Case setting the hearing for May 31, 2024, at 9:00 AM.

On May 24, 2024, the Registrar issued an Amended Notice of Hearing on Contested Case setting the hearing for May 31, 2024, at 9:00 AM.

Second Complaint (2024A-01175-CHC-ROC)

On or about January 29, 2024, Complainant filed another Licensed Complaint Form with the Registrar (Second Complaint), claiming abandonment and poor work.

The Registrar also assigned the Second Complaint to Investigator Chester, who issued a Jobsite Inspection Notice on January 31, 2024, scheduling the inspection for February 14, 2024.

Investigator Chester conducted the jobsite inspection for the Second Complaint on February 14, 2024, and Respondent was present. Following the inspection, Investigator Chester issued a Written Directive From the Registrar to Respondent on February 22, 2024 that provided as follows:

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

Complaint Item 2: Plans required 4” concrete slab. Concrete slab is 2-3” thick.; Concrete installed on native soil. 4” ABC was not installed as per plan prior to pouring concrete.

Investigator’s Observation: At the time of inspection, I verified two areas that the concrete was not 4” thick, additional testing of the concrete from the complainant will need to take place to verify all areas of concrete are not 4” thick nominal. Respondent will need to correct areas that are not 4” thick by appropriate means.

Governing Rule: ARS §32-1154 (A) (3), namely R4-9-108, Poor work not performed in accordance with professional industry standards.

Complaint Item 4: Concrete was not completed as per contract and plan. Multiple concrete pads are missing.

Investigator’s Observation: At time of inspection, equipment pads had not been poured. Respondent will need to correct by appropriate means.

Governing Rule: ARS §32-1154 (A) (3), namely R4-9-108, Poor work not performed in accordance with professional industry standards.

The Written Directive required Respondent to notify Investigator Chester of Respondent’s compliance with the directive prior to 5:00 p.m. on March 22, 2024.

No compliance inspection was completed.

On March 28, 2024, the Registrar issued a Citation for the Second Directive (Second Citation) against Respondent, finding cause to charge Respondent with violations of A.R.S. § 32-1154(A)(2)(a); A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(C); and A.R.S. § 32-1154(A)(22).

Respondent submitted an Answer to the Citation on April 1, 2024. Respondent’s Answer denied the allegations, including that it failed to take appropriate corrective action.

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

On April 18, 2024, the Registrar issued a Notice of Hearing on Contested Case setting the hearing for June 3, 2024, at 9:00 AM.

Consolidated Action

A telephonic Prehearing Conference was held on May 28, 2024, at 3:00 PM. The Parties agreed to consolidate matters numbered 2023A-12390-CHC-ROC and 2024A-01175-CHC-ROC. On June 5, 2024, the assigned ALJ ordered the matters to be consolidated and continued the hearing to August 29, 2024.

The parties requested a continuance, and on June 18, 2024, the hearing was reset for September 11, 2024. The order granting the continuance from the Office of Administrative Hearings advised the parties of how to connect to the hearing via Google Meet.

The hearing was held on September 11, 2024. Marian Matacha, Hamid Rassti, and Thomas Haws testified for Complainant. Javier Munoz and Jeremy Walterscheid testified for Respondent.

Investigator Chester testified in support of his observations during the investigation.

Regarding the slab cracks, Investigator Chester testified that the cracking was not corrected by appropriate means because the material used to fix the cracks was dipping. Where Complainant cut out sections of the concrete, cracks were visibly going all the way through the concrete to the ground. Complainant’s witnesses testified in support of the corrections being insufficient. Respondent’s witnesses testified in support of the corrections made and the appropriateness of the correction.

Regarding the slab thickness, Investigator Chester and Complainant’s witnesses testified that in the two sections cut out by Complainant, the aggregate underlayment (ABC) and the concrete poured were not as deep as required by the plans. Investigator Chester stated that the Directive item was for the thickness of the concrete, not for the ABC. Complainant believed that the whole slab may be problematic. Respondent testified that some excess dirt may have been under the areas at issue, causing the concrete to be thinner. Respondent also testified that it did not complete the slab thickness corrections because it believed Complainant was going to identify additional areas that required correction.

Regarding the incomplete concrete pads, Investigator Chester testified that he was not sure whether the slabs were part of the contract and that Respondent only failed to comply with the plans if the slabs were part of the contract. Respondent testified that the slabs were not part of the contract; they were part of the bid as “Flat Concrete Work: $14,780.00,” but Respondent was not hired to complete that work. Complainant testified that the slabs were included with the other foundation items. That portion of the contract explicitly listed square footage for spaces entitled livable, rear patio, and garage and storage.

Complainant’s witnesses testified in support of other workmanship issues that Complainant alleged in their complaint, but which were not included in the Directives.

Administrative notice was taken of Respondent’s prior License record on October 22, 2024. According to that record, Respondent’s License No. 277948 was active, and it had no open cases. The record identified two disciplined cases, which were the matters at issue here.

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. Respondent bears the burden of proof to establish an affirmative defense 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.”

For the purposes of this hearing, Respondent only had notice regarding the alleged violations in the Citation. Accordingly, this Tribunal will only find violations of law that appear in the Citation. For complaint-specific items, only violations identified by the investigator are noticed in the Citation. As stated in the Citation, “[t]he Registrar investigated this matter and [found] cause to charge Respondent with violation(s).” Where the investigator did not find cause to charge Respondent, charges were not filed. Furthermore, the Registrar’s process provides the Respondent an opportunity to correct its deficient work by appropriate means, and without that opportunity, the matter is not ripe for hearing.

Respondent did not have notice for the following issues for which Complainant sought discipline: alleged violations of A.R.S. §§ 32-1154(A)(1), (8), and (12); and violations regarding complaint items that were not included in the Directives. Accordingly, those issues and compliance items will not be addressed here.

When a county, city, or other political subdivision (locality) adopts a code for workmanship standards, the Registrar defers to the locality’s standards. Approval by an inspector for a locality establishes a presumption of compliance with the applicable workmanship standards for the stage and scope of work that the inspector approved at the time of inspection.

In correcting work pursuant to a Written Directive From the Registrar, a contractor cannot damage property or create additional workmanship issues. Any damage or new deficiencies in workmanship must be fixed before the directive period ends. Failure to do so is a failure to correct a Directive item by appropriate means.

The preponderance of the evidence failed to establish that the additional concrete slabs, Second Directive, Item 4, were included in the contract.

The preponderance of the evidence failed to establish that Respondent departed from or disregarded plans or specifications in violation of A.R.S. § 32-1154(A)(2)(a).

The preponderance of the evidence failed to establish that the relevant county, city, or town did not have an applicable building code.

Although the preponderance of the evidence established that Respondent failed to perform all of its work in a professional and workmanlike manner, the preponderance of the evidence failed to establish that Respondent failed to perform all work in accordance with industry standards in a county, city, or town without applicable building codes in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(C).

The evidence established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of A.R.S. § 32-1154(A)(22), specifically regarding Compliance Items 4 (First Directive) and 2 (Second Directive).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend for two days Respondent’s License No. 277948.

It is further recommended that the Registrar require Respondent to pay the sum of $200 as a civil penalty pursuant to A.R.S. § 32-1154(E). No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

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, October 28, 2024.

/s/ Samuel Fox

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Johnny Olariu

[email redacted]

Joey Chester

[email redacted]

J. Gregory Cahill

Broening Oberg Woods & Wilson, PC

[email redacted]

By: OAH Staff