ALJDEC - Licensing

2023A-13234-CHC-ROC · Registrar of Contractors · 2024-03-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Darcie Shanklin,

COMPLAINANT,

v.

Adam Crippen Custom Home Works LLC

ROC License No. 314299,

RESPONDENT.

No. 2023A-13234-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 04, 2024 at 1:00 PM.

APPEARANCES: Darcie Shanklin (“Complainant”) appeared on her own behalf. John Smith appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of Adam Crippen Custom Home Works LLC (“Respondent”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The amended Notice of Hearing on Contested Case (“[Amended] Notice of Hearing”), including the Registrar’s attached agency file, was admitted into the record. The January 30, 2024, Hearing Order, and Order Denying Continuance and Minute Entry dated March 01, 2024, were also 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 June 16, 2017, the Registrar issued License No. 314299 General B Residential contracting license to Respondent. The license is renewed through June 30, 2025. Adam Wayne Crippen is listed as the Qualifying Party and on the license. Respondent’s address of record for the license is 2190 N. Ironwood Crest Dr. Tucson, Arizona 85745. Respondent has an active $9,000.00 surety bond on the license issued by RLI Insurance Company, effective June 09, 2017. The license has no prior disciplinary record, save one (1) open complaint against it; which is presumed to be related to this matter.

On November 16, 2023, the Registrar received a brief narrative complaint from Complainant against Respondent’s License No. 314299 alleging poor work of their residential kitchen remodel project. The Registrar designated it Complaint No. 2023-13234 and assigned to John Smith (“Investigator Smith”) for investigation.

On November 17, 2023, Investigator Smith issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 30, 2023, 2023, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On November 17, 2023, Investigator Smith 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 November 17, 2023, Investigator Smith issued a Warning Letter to Respondent to advise that building permit(s) were not obtained for the project in violation of the International Residential Code R105.1. Respondent was further advised that failure to comply with the building codes was a violation of Ariz. Rev. Stat. §§ 32-1154(A)(2)(b) and 32-1154(A)(3); Ariz. Admin. Code R2-9-108(b), which could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.

On November 17, 2023, Investigator Smith issued a Warning Letter to Respondent to advise that Respondent’s work on the underlying project required possession of residential electrical and plumbing licenses that Respondent did not possess, or appropriately subcontract to, 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 November 30, 2023, Investigator Smith inspected the work that had been performed on the project to date. Respondent was not present. Investigator Smith also reviewed the contract-related correspondence between the parties, and took 11 photographs of the project site. When he was finished, Investigator Smith drafted his Inspection Notes. Ultimately, Investigator Smith left Complainant’s narrative complaint as a single complaint item, of which he was able to substantiate against Respondent based on his firsthand observations. Specifically, Investigator Smith determined Respondent’s workmanship on complaint items 1 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.

On December 01, 2023, Investigator Smith issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on December 18, 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 18, 2023, Investigator Smith confirmed with Complainant that, although afforded seventeen (17) days, Respondent had not performed any corrective work or requested an extension of the Directive’s compliance period.

On December 19, 2023, Investigator Smith forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On December 19, 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)(3); Ariz. Admin. Code R4-9-108(b), 32-1154(A)(12); 32-1158, 32-1154(A)(16), and 32-1154(A)(22). Respondent was given until January 03, 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 02, 2024, the Registrar received Respondent’s timely Answer whereby Mr. Crippen noted his disagreement with all of the allegations in the Citation.

On January 05, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 04, 2024. Per the January 22, 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)(b)

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

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

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)

On January 30, 2024, OAH electronically issued a Hearing Order to the parties that provided remote participation information for the scheduled hearing. Correspondence was not returned as undeliverable to Respondent.

On February 22, 2024, attorney Brenda J. Lee, Esq. of the law firm Lee & Travers PLC electronically submitted a Notice of Appearance and Motion to Continue Hearing to OAH that was inadvertently flagged as solely being a motion to continue. The motion was only provided to Complainant electronically despite her email address being provided to Respondent in the Hearing Order issued January 30, 2024.

On February 29, 2024, OAH received a telephone call on behalf of Respondent to inquire whether the Tribunal had ruled on the pending motion to continue, and further inquired if counsel should submit the motion separately. As a result, later that same date, OAH electronically forwarded Respondent’s Motion to Continue to Complainant, who in turn filed a written objection on March 01, 2024.

On March 01, 2024, the Tribunal denied Respondent’s Motion to Continue as good cause had not been established. Later that same date, Lee & Travers PLC submitted a Notice of Withdrawal of Representation to OAH. Correspondence accepting the withdrawal was copied to Respondent electronically. It was not returned as undeliverable to Respondent.

Hearing Evidence

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

Complainant owns residential property located at 6641 N. Amahl Pl. Tucson, Arizona 85704.

On or about June 22, 2023, the parties entered into a $24,765.00 residential kitchen remodel contract, which included the removal of a wall, electrical, and plumbing.

Work on the project commenced on or about July 19, 2023. Respondent stopped working on the project on or about August 11, 2023.

Complainant paid Respondent $26,388.45 for the project.

On November 16, 2023, Respondent was involved in an altercation on the project site with Complainant’s partner and father. Complainant called the police. No arrests were made. As a result of the altercation, Respondent vowed not to return to the project site.

Between December 01, 2023, and December 18, 2023, Respondent did not perform any corrective work on substantiated complaint item 1, nor did Respondent hire subcontractors to perform any corrective work.

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.

A permit was not issued for the underlying project.

Respondent did not provide the Registrar with any additional information to corroborate or otherwise substantiate his “disagreement” with the charges in the Citation.

Additional Evidence

Complainant’s elderly parents reside with her at the Amahl Pl. property.

There Amahl Pl. property suffers from electrical problems that stem from Respondent’s workmanship, and have created safety issues for Complainant and her family.

Complainant spent approximately $35,000.00 on appliances and fixates for the underlying project.

Closing Arguments

In closing Complainant opined that she had established Respondent’s violations of all six (6) alleged statutory provisions in the Citation and [Amended] Notice of Hearing, and as such that the Registrar had grounds to discipline ROC License No. 314299.

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 [Amended] 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)(2)(b) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of [a] building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.”

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. Admin. Code R4-9-108(b) requires that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

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) provides, 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 provides that “[n]o 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 clear.

It is clear from the record that the Complainant paid Respondent in full for the underlying pool contract. It is also clear from the record that an overwhelming majority of the work Respondent performed on the project did not satisfy the minimum standards set for workmanship by the Registrar. It is also from the record clear that Respondent failed to comply with the Registrar’s Directive, and further failed to request an extension thereof. The record clearly establishes that Respondent was not appropriately licensed for multiple portions of the underlying scope of work; and did not subcontract those portions to one or more appropriately licensed subcontractors. The record also clearly establishes that Respondent’s contract with Complainant did not contain all statutorily required provisions, and that Respondent never provided a statutorily compliant contract template to the Registrar. The record clearly further establishes that Respondent never obtained a permit from the local building authority.

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, because Respondent failed to appear and provide evidence, this burden has not been sustained. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance/competence on this project. 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 failure to attempt to comply with the underlying Directive, are glaring facts in aggravation that evince Respondent’s unwillingness to submit to regulation by the Registrar.

Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(b), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a-b), 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 five days after the effective date of the Final Order in this matter, based on the egregiousness of its conduct in this matter, Respondent Adam Crippen Custom Home Works LLC, ROC License No. 314299, be suspended thirty (30) days.

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $500.00 (five hundred) in certified funds as a civil penalty in this matter.

IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s Final Order, the Registrar shall 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 07, 2024.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Copy mailed/e-mailed/faxed to:

Tom Cole, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Darcie Shanklin, Complainant

6641 N. Amahl Pl.

Tucson, AZ 85704

[email redacted]

Adam Crippen Custom Home Works LLC, Respondent

2190 N. Ironwood Crest Dr.

Tucson, AZ 85745

[email redacted]

By: OAH Staff