ALJDEC decisions subject to certification as final

2023A-12390-RFA-LS-ROC · Registrar of Contractors · 2025-12-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Johnny Olariu,

COMPLAINANT,

Desert View Contractors LLC,

License No. ROC 277948,

RESPONDENT.

No. 2023A-12390-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 2, 2025 at 9:00am

APPEARANCES: Attorney Thomas Walcott represented Complainant Johnny Olariu. Attorney J. Gregory Cahill represented Respondent Desert View Contractors, LLC with witness Javier Munoz. Assistant Attorney General Mona Baskin represented the Arizona Registrar of Contractors with witness Meridith Bell.

ADMINISTRATIVE LAW JUDGE: Nicole Robinson

EXHIBITS ADMITTED INTO EVIDENCE: State’s Exhibits 1 through 12. Respondent Exhibits 1 through 17.

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (“Registrar”) issued License No. ROC 277948 to Desert View Contractors, LLC (“Respondent”).

On or about November 16, 2023, the Registrar received a Complaint (12390) against Respondent from Johnny Olariu (“Complainant”) alleging, among other things, poor work with Respondent’s contracted scope of work (“the workmanship complaints”). Respondent had contracted with Complainant for concrete and foundation installation for new home construction.

On or about January 29, 2024, the Registrar received a second Complaint (01175) against Respondent from Complainant alleging, among other things, poor workmanship and abandonment with respect to Respondent’s contracted scope of work. The workmanship complaints were both assigned to Registrar Investigator Joey Chester.

As a result of the workmanship complaints, on March 14, 2024 and March 28, 2024, the Registrar issued Citations against Respondent charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(2)(a); Ariz. Rev. Stat. § 32-1154(A)(3), namely of Ariz. Admin. Code R4-9-108(c), and Ariz. Rev. Stat. § 32-1154(A)(22), respectively.

Respondent filed a timely answer to the Citation. On September 11, 2024, an administrative hearing was held. In the October 28, 2024 Decision, Administrative Law Judge (“ALJ”) Samuel Fox considered Respondent’s arguments and concluded that Respondent violated the one charged provision, Ariz. Rev. Stat. § 32-1154(A)(22), of this State’s contracting laws, specifically regarding Compliance Item 4 (“First Directive”) and Compliance Item 2 (“Second Directive”). ALJ Fox recommended that Respondent’s contracting license be suspended for a period of two (2) days and Respondent pay a $200.00 civil penalty.

On October 29, 2024, Respondent requested the decision be certified. On or about, November 13, 2024, the Registrar issued a Final Administrative Decision and Order affirming the violation and imposing a $200.00 civil penalty.

On June 26, 2025, Complainant then filed a claim with the Residential Contractors’ Recovery Fund (“the Fund”) to recover the cost of performing the corrective work and completing the project.

As part of the claim process, Complainant submitted a bid from licensed contractor, Diego & Sons Construction to the Registrar. The bid/contract was dated April 7, 2025, Complainant agreed to the bid and accepted the contract, and Diego & Sons Construction performed the corrective work. The bid/contract detailed as follows:

Scope of Work: This proposal covers concrete crack repair for the concrete slab of a single-family residence and the replacement of two areas of concrete that was removed from pad:

Concrete Stitch Repair

Work Description:

Saw-Cut: Saw cut channels across and perpendicular to approximately 275 LF of present cracks observed at estimate date.

Carbon Fiber: Install fiber crack lock stitches and cement with high strength epoxy paste.

Seal Cracks: Seal and fill the length of crack with epoxy concrete filler.

Grind: Grind concrete stitch repair area smooth to allow for floor covering installation.

Exclusions: The observed and measured cracks amounted to approximately 275 feet. If there are additional cracks and/or the estimated/observed cracks have expanded upon job commencement, estimate will be adjusted accordingly.

Description Quantity Cost/Unit Total

Concrete Crack Stitch 275. Ft. $108/ft $29,700.00

Subtotal $29,700.00

Concrete Replacement

Work Description:

Rebar Doweling: Drill horizontal holes (12” length) into existing slab to accommodate #4 deformed rebar. Install rebar and epoxy in place.

Concrete Slab Installation: Replace missing sections of concrete with minimum of 4” concrete.

Exclusions: At time of estimate, existing concrete slab which was present in the home measured less than 3” thick. Client was advised to remove the existing concrete which is not per plans and spec. A separate proposal was submitted to client for that job. This proposal only covers the replacement of concrete ᷉ 10 sq. ft. which was removed for inspection.

Description Quantity Cost/Unit Total

Concrete Replacement (Existing Slab) 1 $2,750.00

Subtotal $2,750.00

Total Proposal Cost $32,450.00

On August 4, 2025, the Registrar issued a Notice of Administrative Award, finding that Complainant’s actual damages were $23,450.00. On August 14, 2025, Respondent requested a hearing believing the payout was too high. Complainant did not contest the amount of the administrative award. The Registrar referred the matter to the Office of Administrative Hearings for an evidentiary hearing.

A hearing was held on December 2, 2025 at 9:00AM.

Hearing Evidence

The First Directive dated December 13, 2023 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:

Compliant 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.

On February 8, 2024, at the Compliance Inspection, the following was determined by Register Investigator Chester:

Compliance Findings:

Complaint Item 4: Concrete and foundation cracked;

Investigator’s Observation: At the time of inspection the cracks were not corrected to workmanship standard.

The Second Directive dated February 22, 2024 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:

Compliant 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.

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.

Investigator Chester determined that Respondent was not in compliance with the First and Second Directive.

Meridith Bell, Legal Assistant and Claims Reviewer for the Fund, testified that she reviewed the Complaint, the Written Directive, the Compliance Jobsite findings, the ALJ 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 the bid/contract and payments 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.

Ms. Bell determined that upon her review and both parties stipulated that Complainant had satisfied the eligibility requirements for a payment from the Fund.

Ms. Bell testified that her calculation of actual damages took into account the contract price of $110,000.00 and the payments made toward the contract price in the amount of $110,000.00, and concluded that there was no remaining balance left on the contract.

Ms. Bell calculated Complainant’s actual damages by determining that the valid expenditures to complete/repair project were in the total amount of $32,450.00 and subtracted the $9,000.00 bond amount Complainant received from Respondent’s bond company, and arrived at the actual damages amount of $23,450.00.

Ms. Bell reviewed the documentation submitted by Complainant with Investigator Chester. Investigator Chester wrote in regards to the Diego & Sons bid/contract “To me that seems a little too high for what they bid for, I would request a couple more bids to find out if they are competitive.” Complainant did not obtain more bids. Ms. Bell explained to Investigator Chester by email that Complainant already had Diego & Sons complete the work. Ms. Bell asked Investigator Chester, if the repairs were in line with the directive and he responded “Yes, the repairs are in line with the directive.”

Javier Munoz, Owner, testified on behalf of Respondent’s Desert View Contractors, LLC. Mr. Munoz testified that there were two parts of Respondent’s contract with Complainant, and part one included – concrete, plumbing, and underground work which totaled $110,000.00. Mr. Munoz testified that part two of the contract included – framing work in the total amount of $260,000.00. Mr. Munoz testified that Complainant still owed $60.000.00 for part one of the contract and that the total amount of $110,000.00 for the concrete work was not fully paid.

Mr. Munoz further argued that the valid expenditures to complete/repair the project was in the amount of approximately $2,020.00. Mr. Munoz explained that he came to this amount because the Diego & Sons contract included 275 linear feet of concrete crack repairs. Mr. Munoz adamantly disagreed that 275 linear feet needed to be corrected and provided that it was only eight (8) linear feet that needed to be repaired. In addition, Ms. Bell testified that only cracks wider than 1/8” of an inch, needed repair. Mr. Munoz further testified that Investigator Chester did not specify the area size that needed to be repaired in his Directives. Mr. Munoz calculated that his labor costs would be for 16 hours, eight (8) hours a day with two (2) workers making $45 an hour which would equate to $720.00 plus materials at $650 which totaled $1,370.00. Mr. Munoz testified that the additional corrective work regarding the thickness of the concrete would bring the total amount of the corrective to $2,020.00. Lastly, Mr. Munoz testified that the Diego & Sons bid/contract stated that to perform the concrete crack repairs at $108.00 per linear feet was too expensive and above industry standards.

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 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.”

In this case, Respondent argued that the $110,000.00 concrete, plumbing, and underground contract had an outstanding balance of $60,000.00. If that argument could be proven, the Registrar’s actual damages calculation under the line item ‘less payment on contract,’ would change the administrative award. Hence, this ALJ would find that no recovery fund award would be due to Complainant because the total unpaid balance would be more than the compensable actual damages. However, the Respondent’s argument failed to meet its burden for the following reasons:

Mr. Munoz argued that in Complainant’s original Registrar complaint that Complainant wrote that there was still a $60,000.00 outstanding balance for the concrete work. However, when referred to both complaints, in evidence, nowhere in the two complaints was that allegation written.

Complainant’s payments that total $110,000.00 are listed in his recovery fund application, as such:

Draft #6255 dated June 20, 2023, was in the total amount of $60,000.00 and contained no detail in the Note section;

Draft #6231 dated July 11, 2023, was in the total amount of $30,000.00 and contained the following in the Note section “Concrete Bal 20,000.00;”

On or about August 5, 2023, a $20,000.00 payment was made in cash to Respondent.

At the top of Respondent’s modified concrete contract it stated, “Total Price 110,000.00 Complete PAD Under Ground Plumbing Concrete Foundation,” and this notation is initialed by both parties.

Respondent provided no invoices to show how he believed Complainant’s payments totaling $110,000.00, were applied.

Due to these reasons, Respondent failed to prove by a preponderance of the evidence that the concrete portion of the contract had an unpaid balance. Thus, the ‘Less payment on contract’ line item of $110,000.00, will remain unchanged on the award.

In regards to the actual damages amount of $23,450.00, Respondent met its burden and showed that the proposed payout from the Fund was too high and incorrect. Respondent provided Investigator Chester’s email response that directed other bids should be collected because Diego & Sons bid/contract was “too high.” Furthermore, Mr. Munoz provided evidence that the area of linear feet was too broad of an area and that the linear foot cost was higher than average.

After review of all the evidence, the Tribunal concludes that the award proposed by the Fund inaccurately reflected Complainant’s actual damages. As such, this ALJ does not have enough evidence to rely on these numbers to determine a proper award amount. Due to the drastic amount of the difference between the Registrar’s compensable “Actual Damages” amount of $23,450.00 and Respondent’s estimate of $2,020.00, this matter shall be remanded back to the Registrar to recalculate actual damages.

RECOMMENDED ORDER

Based on the foregoing,

It is Recommended that this matter is remanded back to the Registrar to recalculate a proper award amount payout to Complainant.

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, December 22, 2025.

/s/ Nicole Robinson

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

1700 W. Washington Street, Suite 105

Phoenix, AZ 85007

[email redacted]

J. Gregory Cahill

Broening Oberg Woods & Wilson, PC

2800 N. Central Ave., Suite 1600

Phoenix, AZ 85004-1047

[email redacted]

Thomas A. Walcott, Esq.

PROVIDENT LAW

16100 N 71st Street, Ste 350

Scottsdale, AZ 85254

[email redacted]

Mona Baskin, Esq.

Licensing & Enforcement Section

2005 N. Central Avenue

Phoenix, AZ 85004

[email redacted]

By: OAH Staff