ALJDEC - Licensing

2023A-12435-CHC-ROC · Registrar of Contractors · 2024-10-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

John-David Bowman,

COMPLAINANT,

v.

REVIVE CONSTRUCTION, LLC.

ROC License No. 337357,

RESPONDENT.

No. 2023A-12435-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 26, 2024 and October 31, 2024.

APPEARANCES: Samantha Lee, Esq. appeared on behalf of John-David Bowman (“Complainant”) with Complainant and Lindsay Bowman as witnesses. Robert Di Alto appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Benjamin Forsberg appeared on behalf of Revive Construction LLC (“Respondent”). Ginnie Bowman and Nicole Robinson 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, Complainant Exhibits 12 and 14-15, March 25, 2024, Hearing Order, and Minute Entry – Granting Continuances dated April 10, 2024, and August 08, 2024, were admitted into the evidentiary 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 March 29, 2022, the Registrar issued License No. 337357 General Dual KB-1 Building contracting license to Respondent. The license had been renewed through March 31, 2024, but was suspended by the Registrar on April 01, 2024, for non-renewal. Benjamin Forsberg is listed as the Qualifying Party and Manager on the license. Jennifer Diane Forsberg is also listed as the Member on the license. Respondent’s address of record for the license is 150 W. Seminole Dr. Phoenix, Arizona 85023. Respondent had a $14,000.00 surety bond on the license issued by RLI Insurance Company, which was cancelled on an unknown date. The license has not been previously disciplined by the Registrar, nor have there been any prior complaints settled or otherwise resolved against it. Currently, the license has one (1) open complaint against it; one of which is presumed to be related to this matter.

On November 09, 2023, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 337357 alleging poor work of an outdoor kitchen construction project. The Registrar designated it Complaint No. 2024-12435 and reassigned the matter to Robert Di Alto (“Investigator Di Alto”) for investigation.

On November 27, 2023, Investigator Di Alto issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on December 26, 2023, at 11:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On December 26, 2023, Investigator Di Alto inspected the work that had been performed on the project to date. Respondent was not present. Investigator Di Alto also reviewed the contract-related correspondence between the parties, and took 14 photographs of the project site. When he was finished, Investigator Di Alto drafted his Inspection Notes. Ultimately, Investigator Di Alto derived nine (9) distinct complaint items from Complaint No. 2023-12435, three (3) of which he substantiated based on his firsthand observations. Specifically, Investigator Di Alto determined that complaint items 1-2 and 5 fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent.

On December 26, 2023, Investigator Di Alto issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on January 12, 2024, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

On December 26, 2023, Investigator Philpott issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in his contracts, including his contract with Complainant. Correspondence was not returned as undeliverable to Respondent.

On or about January 17, 2024, Investigator Di Alto forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On January 25, 2024, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). Respondent was given until February 09, 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 29, 2024, the Registrar received a timely Answer on behalf of Respondent whereby Mr. Forsberg denied the poor workmanship allegation and argued that he had suffered “extenuating family circumstances” which prevented him from addressing the Directive. Mr. Forsberg noted that Respondent had “swapped” scopes of work; lighting transformer for porch fan, and that the project cost was higher than Complainant alleged.

On February 16, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 16, 2024. Per the March 01, 2024, Notice of Hearing on Contested Case (“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)(3) – A.A.C. R4-9-108(a)

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on his own behalf and called Lindsay Bowman and Investigator Di Alto as witnesses. Mr. Forsberg on behalf of Respondent. The substantive evidence of record is as follows:

Complainant owns residential property with his wife, Lindsay Bowman, located at 3216 E. Emile Zola Ave. Phoenix, Arizona 85032.

On or about December 03, 2022, the parties entered into a $37,625.00 residential construction contract with Respondent to build a backyard kitchen and deck, complete with lights, artificial turf, and lighting.

Work on the project commenced on or about February 13, 2023, and stopped on April 25, 2023.

On February 28, 2023, an $850.00 Change Order was executed on the project for shade and lights. On March 06, 2023, a $1,334.00 Change Order was executed on the project for stepping stones, shade and lights. These additions brought the project total to $39,809.00.

Complainant paid Respondent $35,100.00 towards the project. There is a $4,709.00 balance owed on the project.

On December 19, 2023, Complainant received correspondence from Respondent to advise that it was no longer in business, as it dissolved on December 15, 2023.

On April 27, 2024, sent a text message to Mr. Forsberg outlining her dissatisfaction with seven (7) items, and terminated Respondent from the project. Mrs. Bowman specifically noted, “For these reasons and previous issues, you are fired and can no longer step foot onto our property.”

Although Mr. Forsberg timely received the Registrar’s Directive, he never contacted Complainant during its compliance period to scheduled corrective work or attempt to settle the underlying dispute. Per Mr. Forsberg, he had “decided to [mentally] check-out for a couple of weeks,” and was not been “paying attention to dates” because he did not expect the Registrar to act as swiftly as it did.

On December 31, 2024, Mr. Forsberg’s wife gave birth to their child.

At no point in time prior to the expiration of the Directive’s compliance period, or anytime thereafter, did Respondent request an extension thereof.

The project site remained accessible throughout the Directive’s compliance period.

Additional Evidence

On January 15, 2024, Mr. Forsberg emailed Investigator Di Alto a response to the Warning Letter and Directive issued December 26, 2023. Mr. Forsberg avowed that he would include all nine (9) statutorily required elements in his contracts moving forward, but did not attach an updated template for the Registrar’s edification or verification. Mr. Forsberg noted that he was unsure of “how to move forward” on the project, and offered two (2) proposals.

On January 17, 2024, Investigator Di Alto replied to inform Mr. Forsberg that Complaint No. 2024-12435 had already been forwarded to the Registrar’s legal department.

Closing Arguments

In closing, Respondent argued that acted in good faith and to the best of its ability during construction, and that it remained willing to address the substantiated complaint items identified for remediation by the Registrar’s Directive. Respondent denied “ghosting” Complainant, and further argued that but for its termination from the project, Respondent would have completed its obligations under the terms of the parties’ contract.

In closing, Complainant argued that it had sustained its burden of proof, and opined that as such, the Registrar should take disciplinary action against License No. 337357 sbecause Mr. Forsberg’s workmanship was poor and went unaddressed as required by the licensee.

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)(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)(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 Registrar 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 substantive facts in the case at bar are not in dispute.

It is undisputed that the parties had a $39,809.00 backyard remodel agreement, which Complainant paid $35,100.00 towards. It is also undisputed that some of the work Respondent performed on the project fell below the Registrar’s minimum workmanship standards. It is further undisputed that Respondent failed to address the Directive, but legally could have as the license was active and in good standing with the Registrar during the compliance period.

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 his 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 had from December 26, 2023, through January 12, 2024, to schedule and complete corrective work of the three (3) substantiated complaint items at issue. Mr. Forsberg’s argument of “extenuating circumstances” lacks merit because the basis of his claim revolves around the birth of his child on December 31, 2023. Notwithstanding that special occasion, Mr. Forsberg did not provide a reasonable explanation for why he did not, schedule corrective work prior to that time or, at a minimum, request an extension of the Directive’s compliance period. The record reflects that Mr. Forsberg never reached out to Complainant or Investigator Di Alto. Moreover, Mr. Forsberg’s claim that he had been terminated in April 2024 is also meritless because he was specifically instructed by the Registrar not to wait and to communicate quickly with Complaint to schedule corrective work.

Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R2-19-108(a), and 32-1154(A)(22) by a preponderance of the evidence, 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, Respondent Revive Construction LLC, ROC License No. 337357, be suspended five (5) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

It is further recommended that the Registrar require Respondent to pay the sum total of two hundred fifty dollars ($250.00) 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, November 04, 2024.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

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

Tom Cole, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Scott H. Zwillinger, Esq.

Sherle R. Flaggman, Esq.

Samantha T. Lee, Esq.

Zwillinger Wulkan PLC, Counsel for Complainant

2020 N. Central Ave., Ste. 675

Phoenix, AZ 85004

[email redacted]

[email redacted]

[email redacted]

Revive Construction, LLC, Respondent

c/o Benjamin Forsberg, Agent

150 W. Seminole Dr.

Phoenix, AZ 85023

[email redacted]

By: OAH Staff