ALJDEC - Licensing
2023A-12531-CHC-ROC · Registrar of Contractors · 2024-02-27
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Edith H Bernstein,
COMPLAINANT,
v.
Sanels Wholesale Cabinets LLC
ROC License No. 338058,
RESPONDENT.
No. 2023A-12531-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: February 27, 2024 at 1:00 PM.
APPEARANCES: Edith Bernstein (“Complainant”) appeared on her own behalf with Douglas Bernstein as a witness. Daniel Edwards appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) as a witness. No appearance(s) by or on behalf of Sanels Wholesale Cabinets LLC (“Respondent”).
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the Registrar’s attached agency file, and the January 16, 2024, Hearing Order were admitted into the 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 May 09, 2022, the Registrar issued License No. 338058 General Dual KB Residential and Small Commercial contracting license to Respondent. Although the license was renewed through May 31, 2024, it was revoked by the Registrar on February 21, 2024. Joseph Darger disassociated as the Qualifying Party on the license, effective September 25, 2023, but remained listed as Member. Joshua Daniel Edwards and Zachary Dereese Shutt are also listed as Members on the license. Respondent’s address of record for the license is 3125 S. 52nd St. Tempe, Arizona 85282. Respondent has an active $14,000.00 surety bond on the license issued by RLI Insurance Company, effective March 22, 2022. The license has been disciplined on two (2) prior occasions, had eight (8) complaints settled or otherwise resolved against it, and has one (1) open complaint against it which is presumed to be related to this matter.
On January 02, 2024, the licensed was suspended as a result of discipline taken in Complaint No. 2023-03392.
On February 21, 2024, the licensed was revoked as a result of discipline taken in Complaint No. 2024-00630.
On October 31, 2023, the Registrar received a brief narrative complaint alleging “Installation was not completed” on behalf of Complainant against Respondent’s License No. 338058 regarding the parties’ custom cabinetry project. On November 14, 2023, the Registrar received a brief supplemental narrative complaint by Complainant alleging abandonment of contract. The Registrar designated it Complaint No. 2023-12531 and assigned to Daniel Edwards (“Investigator Edwards”) for investigation.
On November 16, 2023, Investigator Edwards issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 29, 2023, at 11:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On November 29, 2023, Investigator Edwards inspected the work that had been performed on the project to date. Respondent was not present. Investigator Edwards also reviewed the contract-related correspondence between the parties, and took 4 photographs of the project site. When he was finished, Investigator Edwards drafted his Inspection Notes. Ultimately, Investigator Edwards substantiated the sole complaint item against Respondent based on his firsthand observations. Specifically, Investigator Edwards determined the following:
Respondent appears to have been hired to supply and install the kitchen cabinets. Cabinets were supplied, however, cabinets were never installed by the respondent. Respondent's license has been voluntarily cancelled and they are unable to continue work on this project. Project appears to have been abandoned by [R]espondent. [sic]
On an unknown date, Investigator Edwards forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On December 04, 2023, the Registrar issued a Citation to Respondent for alleged violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(1). Respondent was given until December 19, 2023, 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.
Correspondence was issued to its mailing address via certified mail, and also copied to Respondent’s secondary address at 4645 S. 36th St. Phoenix, AZ 85282.
On December 19, 2023, the Registrar received Respondent’s timely Answer whereby Respondent noted, in pertinent part, that Complainant had “kindly accepted a refund in the amount of $2,975 for the installation that did not take place.”
On December 29, 2023, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on February 27, 2024. Per the January 16, 2024, Notice of Hearing the issue(s) to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violation(s):
Charge 1: A.R.S. § 32-1154(A)(1)
Hearing Evidence
Complainant testified on her own behalf, and called Investigator Edwards and Douglas Bernstein as witnesses. The substantive evidence of record is as follows:
Complainant owns residential property located at 19700 N. 76th St., Unit 1050 Scottsdale, AZ 85255.
On or about November 21, 2022, the parties entered into a $13,066.61 custom cabinetry fabrication and installation contract.
Work on the project commenced on or about November 21, 2022, but was never completed.
Complainant paid Respondent for the project in full, including $2,975.00 for installation.
A Written Directive from the Registrar (“Directive”) was not issued in this matter because Respondent’s license was voluntarily cancelled on or before November 29, 2023.
At no point in time between December 19, 2023, and February 27, 2024, did Respondent tender Complainant $2,975.00 for its unsatisfied portion of their contract.
Additional Evidence
On January 14, 2024, at approximately 1:03 p.m. Respondent emailed Investigator Edwards to advise that it was “waiting to be let into the administrative hearing.” Minutes later, Investigator Edwards wrote back to advise Respondent of the correct hearing date and time. Correspondence was not returned back to Investigator Edwards as undeliverable.
Closing Arguments
Complainant declined to provide a closing argument.
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.
The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from the Registrar as well.
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)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”
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 the parties had a custom cabinetry fabrication and installation contract that Complainant paid in full. It is also undisputed that Respondent delivered Complainant’s cabinetry but did not perform installation. It is also undisputed that Respondent did not provide a justification or excuse for its failure to complete the project.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to complete the underlying project and/or refund Complainant $2,975.00 for the installation costs she prepaid to Respondent. These are affirmative defenses 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/competence on this project. The record clearly establishes that although Respondent took affirmative steps to offer a refund to Complainant, despite Complainant’s acceptance, Respondent failed to ever issue the monies to Complainant in order to have the underlying Citation quashed. No mitigating evidence exists in the record in favor of Respondent. In fact, Respondent’s absence from the administrative hearing, as well as Respondent’s conduct during the entirety of the complaint process, are glaring facts in aggravation that evinces Respondent’s unwillingness to be regulated by the Registrar.
Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(1), 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, based on the egregiousness of its conduct in this matter, Respondent Sanels Wholesale Cabinets LLC, ROC License No. 338058, be revoked.
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, February 28, 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]
Sanels Wholesale Cabinets LLC, Respondent
3125 S. 52nd St.
Tempe, AZ 85282
[email redacted]
Sanels Wholesale Cabinets LLC, Respondent
4645 S. 36th St.
Phoenix, AZ 85282
[email redacted]
Edith H. Bernstein, Complainant
19700 N. 76th St.
Scottsdale, AZ 85255
[email redacted]
By: OAH Staff