ALJDEC - Licensing

2023A-14011-CHC-ROC · Registrar of Contractors · 2024-04-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Sajith Nair,

COMPLAINANT,

v.

360 Masonry & Hardscapes LLC

ROC License No. 338918,

RESPONDENT.

No. 2023A-14011-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 16, 2024 at 9:00 AM.

APPEARANCES: Sajith Nair (“Complainant”) appeared on his own behalf. Marc Santizo appeared on behalf of 360 Masonry & Hardscapes LLC (“Respondent”). Jack Grimm appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the Registrar’s attached agency file, was 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 June 21, 2022, the Registrar issued ROC License No. 338918 Specialty Dual CR-21 Hardscaping and Irrigation Systems contracting license to Respondent. The license is renewed through June 30, 2024. Michael Marcel Navarro is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license was 27283 N. 75th Ave. Peoria, Arizona 85383. Respondent has an active $6,750.00 surety bond on the license issued by RLI Insurance Company, effective May 25, 2022. The license has no prior disciplinary record, save two (2) open complaints against it; one of which is presumed to be related to this matter.

On or about December 09, 2023, the Registrar received a brief narrative complaint from Complainant against ROC License No. 338918 that essentially alleged poor work of a residential insurance remediation project regarding Complainant’s roof. The Registrar designated it Complaint No. 2023-14011 and assigned to Jack Grimm (“Investigator Grimm”) for investigation.

On December 15, 2023, Investigator Grimm issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 10, 2024, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On January 10, 2024, Investigator Grimm inspected the work that had been performed on the project to date. Respondent was not present. Investigator Grimm also reviewed the contract-related correspondence between the parties, and took 5 photographs of the project site. When he was finished, Investigator Grimm drafted his Inspection Notes. Ultimately, Investigator Grimm derived a single complaint item from Complaint No. 2023-14011, which he substantiated based on his firsthand observations. Specifically, Investigator Grimm determined Respondent’s workmanship on complaint item 1 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies. Investigator Grimm also determined that Respondent’s conduct constituted a refusal to perform after bidding on a project sans legal excuse.

On January 12, 2024, Investigator Grimm issued a Warning Letter to Respondent for an alleged violation of Arizona Revised Statutes (“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.

On January 12, 2024, Investigator Grimm issued a Warning Letter to Respondent because he believed the original scope of work for the underlying project required possession of a an appropriate contracting license for the installation of a “Gazebo and pool deck coating” that Respondent did not possess 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.

On January 12, 2024, Investigator Grimm 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 January 29, 2024, 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 January 30, 2024, Investigator Grimm forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On February 01, 2024, 2023, 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 16, 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 February 16, 2024, the Registrar received Respondent’s timely Answer whereby Mr. Santizo offered the following:

Regarding. Case. We Will be refunding. The. Deposit to Mr sanity

After. Trail.

(All errors in original.)

On February 21, 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 February 29, 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)(1)

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

Charge 3: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on his own behalf and called Investigator Grimm as a witness. Marc Santizo testified on behalf of Respondent. The substantive evidence of record is as follows:

Complainant owns residential property located at 1344 W. Amanda Ln. Tempe, Arizona 85284.

On or about October 19, 2023, the parties entered into a $13,250.00 backyard remodel agreement. The scope of work included grass removal, irrigation system demolition, 1870 sq. ft. cool deck coating, pony wall installation, and concrete driveway extension. Complainant paid Respondent $6,625.00 towards the project.

Work on the project commenced on October 28, 2023, but was never finished.

Respondent did not perform any corrective work on the underlying project January 12-29, 2024.

At no point in time did Respondent allege a denial of access to the project site to the Registrar during the Directive’s compliance period, or request an extension thereof to the agency.

The parties did not enter into a financial settlement agreement regarding substantiated complaint item 1.

Additional Evidence

Mr. Santizo testified that he sold 360 Masonry & Hardscapes LLC to Mr. Navarro in 2022, and stayed on as the Manager to assist with the transition.

Respondent received all of the Registrar’s correspondence in this matter. Although ROC License No. 338918 was active and in good standing with the Registrar January 12-29, 2024, Respondent did not communicate with Investigator Grimm whatsoever during the underlying complaint process.

Per Mr. Santizo, Respondent planned to refund Complainant’s deposit after the administrative hearing, less expenses for work performed and travel. Specifically, Mr. Santizo testified that Respondent intended on refunding Complainant $4,500.00.

Although Respondent was only on the project site for about an hour October 28, 2023, Complainant spent nearly $1,000.00 cleaning up the mess Respondent left behind.

Sometime in early-April 2024, Complainant hired Amberstone Hardscaping Design LCC (ROC License No. 311384) for $9,200.00 to remediate his project.

Closing Arguments

Respondent declined to provide a closing argument.

In closing, Complainant noted that he was desirous of accessing the Registrar’s Recovery Fund in order to recoup remediation-related expenses, and opined that disciplinary action was warranted against ROC License No. 338918 for the burden placed on his family.

CONCLUSIONS OF LAW

The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

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 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) holds, in pertinent part, that that among the grounds for suspension or revocation of a contractor’s license is “[A]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”

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)(17) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[c]ontracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.”

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.”

The material facts in the case at bar are not in dispute.

It is undisputed that the parties had a $13,250.00 backyard remodel project that Complainant paid $6,625.00 toward. It is also undisputed that Respondent did little to no work on the project, and the work that Respondent did perform required corrective work and completion. It is further undisputed that Respondent never attempted to comply with the Directive or request an extension thereof.

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 complete Complainant’s project per contract. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain its 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’s assertion that it “planned” on issuing a partial refund to Complainant in the unknown future does not constitute settlement or resolution of Complaint No. 2023-14011. It is unclear, however, why Respondent never communicated with Complainant or the Registrar between December 15, 2023, and January 29, 2024. Ultimately, no exigent or otherwise mitigating evidence exists in the record in favor of Respondent.

Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3), and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established cause for the Registrar to discipline ROC License No. 338918.

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 360 Masonry & Hardscapes LLC, ROC License No. 338918, be suspended for eighteen (18) days.

It is further recommended that the Registrar require Respondent to pay the sum total of $250.00 (two hundred fifty dollars) 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, April 19, 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]

360 Masonry & Hardscapes LLC, Respondent

c/o Marc Santizo, Manager

27283 N. 75th Ave.

Peoria, AZ 85383

[email redacted]

[email redacted]

Sajith Nair, Complainant

1344 W. Amanda Ln.

Tempe, AZ 85284

[email redacted]

By: OAH Staff