ALJDEC - Licensing
2023A-14496-CHC-ROC · Registrar of Contractors · 2025-03-06
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Monica Adams,
COMPLAINANT,
v.
Mosaic Construction Services LLC
ROC License No. 323883,
RESPONDENT.
No. 2023A-14496-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: February 27, 2025 at 9:00 AM.
APPEARANCES: Monica Adams (“Complainant”) appeared on her own behalf. Katie Anderson, Esq. appeared on behalf of Mosaic Construction Services LLC (“Respondent”). James “Jim” Dimond appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Elizabeth Ciggia 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, January 30, 2025, Hearing Order, and Respondent Exhibits 1-4 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 24, 2019, the Registrar issued ROC License No. 323883 General Dual KB-1 contracting license to Respondent. The license has been renewed through March 31, 2027. The license lists Joshua Ty Bell as its Qualifying Party, Salman Azeem Ahmad as its Owner, and Mosaic Building Group Inc. as its Parent Entity. Respondent’s address of record for the license is 5227 N. 7th Ste. 18005 Phoenix, Arizona 85014. Respondent has an active $115,000.00 surety bond on the license issued by RLI Insurance Company, effective November 11, 2023. The license has never been disciplined by the Registrar, but has had fourteen (14) other complainants settled or otherwise resolved against it. Currently, the license has thirteen (13) open complaints against it; one of which is presumed to be related to this matter.
On December 21, 2023, the Registrar received a narrative complaint from Complainant against ROC License No. 323883 alleging poor work regarding a residential new build. The Registrar designated it Complaint No. 2023-14496 and assigned the matter to Jim Dimond (“Investigator Dimond”) for investigation.
On December 22, 2023, Investigator Dimond issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 18, 2024, at 12:00 p.m. Correspondence was not returned as undeliverable to Respondent.
Respondent did not provide a response to Complaint No. 2023-14496, or request to inspect the work complained of.
On January 18, 2024, Investigator Dimond inspected the work that had been performed on the project to date. Respondent was present. Investigator Dimond also reviewed the contract-related correspondence between the parties, and took 28 photographs of the project site. When he was finished, Investigator Dimond drafted his Inspection Notes. Ultimately, Investigator Dimond derived eight (8) separate and distinct complaint items from Complaint No. 2023-14496, all but one (1) of which he substantiated based on his firsthand observations. Specifically, Investigator Dimond determined that complaint items 1-5 and 7-8 fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent.
On April 22, 2024, Investigator Dimond issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated seven (7) of Complainant’s complaint allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on May 10, 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 July 18, 2024, Investigator Dimond received a sixteen (16) item addendum complaint from Complainant.
On an unknown date, Investigator Dimond issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an addendum inspection of the project on November 15, 2024, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On November 15, 2024, Investigator Dimond inspected the addendum complaint items identified in Complainant’s addendum complaint, and took photographs. Respondent was present. When he was finished, Investigator Dimond drafted his Addendum Jobsite Inspection Notes. Ultimately, Investigator Dimond substantiated three (3) addendum complaint items based on his firsthand observations. Specifically, Investigator Dimond determined that addendum complaint items 1, 3, and 4 fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent.
On November 15, 2024, Investigator Dimond issued an Addendum Written Directive from the Registrar (“Addendum Directive”) to Respondent because he substantiated three (3) of Complainant’s addendum complaint allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on December 03, 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 03, 2024, Investigator Dimond forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation, whereby he noted that Respondent did not comply with both the Directive and Addendum Directive.
On December 20, 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 January 04, 2025, 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 03, 2025, the Registrar received a timely Answer on behalf of Respondent, whereby Respondent argued that the basis for the Citation was unclear as it was unable to identify which substantiated complaint items, from the Directive or Addendum Directive, gave rise to the disciplinary document. Respondent continued by arguing that it did not have a “meaningful opportunity to investigate respond to the allegations in the Citation,” but denied committing any statutory violations as it “properly corrected any items that requires correction in connection with Complainant’s home.”
On January 08, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on February 27, 2025. Per the January 28, 2025, 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 her own behalf and called Investigator Dimond as a witness. Katie Anderson testified on behalf of Respondent. The substantive evidence of record is as follows:
On or about February 10, 2022, Complainant entered into a $527,441.00 contract for the purchase of new residential property built at 5938 E. Killen Loop Prescott Valley, Arizona 86314 by Mandalay Communities, Inc. (“Developer”), and built by Respondent as the general contractor.
Construction commenced in or around February 2022, and was completed late-July 2023.
Escrow closed on August 02, 2023.
Respondent hired Interior Logic Holdings LLC, dba Interior Logic Group (“Interior Logic”), as the flooring and bathroom subcontractor for Complainant’s build.
Between April 22, 2024, and May 10, 2024, Interior Logic refused to perform corrective work on substantiated complaint items 1-5 and/or 7-8 and/or hire another subcontractor to perform the corrective work. Respondent did not perform the corrective work at issue itself. Although materials were ordered, they were incorrect. As a result, Investigator Dimond unofficially extended the Directive’s compliance period. A modified Directive noting the extension for compliance was not issued.
In late-May 2024, Respondent had its painting subcontractor perform corrective work on the project. In late-July 2024, Respondent had its solar panel, drywall, and block wall subcontractors perform corrective work on the project. Also in late-July and early-October 2024, Interior Logic performed some corrective work on Complainant’s cabinets and floors. Interior Logic also issued Complainant a $500.00 refund check. In late-September 2024, Respondent had its trim subcontractor perform corrective work on the project.
After the Addendum Directive expired on December 03, 2024, Complainant alleged to Investigator Dimond that substantiated addendum complaint items 1, 3, and 4 had not been remediated, and that originally substantiated complaint items 1-5 and 7-8 remained outstanding as well. Because Investigator Dimond could not confirm with Respondent as to whether any corrective work had been attempted, he did not schedule a compliance jobsite inspection.
Respondent’s license remained active and in good standing with the Registrar during the Directive’s and Addendum Directive’s compliance periods.
Respondent did not allege a denial of access to the project site at any time, or request an extension of the Addendum Directive’s compliance period.
Additional Evidence
On January 29, 2025, out of an abundance of caution, Investigator Dimond issued a Prehearing Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on February 26, 2025, at 2:30 p.m. Correspondence was not returned as undeliverable to Respondent.
On February 26, 2025, Investigator Dimond Investigator Dimond inspected the project site to review the status of complaint items 1-5, 7-8, and addendum complaint items 1, 3, and 4. Ultimately, Investigator Dimond determined that all items had been satisfactorily remediated by Respondent, save complaint item 8.
The parties did not enter into a settlement agreement regarding outstanding complaint item 8.
Closing Statements
In closing, Respondent argued that it substantially complied with the Directives issued in the matter, and were able to make all remediations except one. Respondent opined that discipline was not warranted based on Respondent’s conduct.
In closing, Complainant opined that she had sustained her burden of proof, and argued that after affording Respondent multiple opportunities to correct its poor work over eighteen (18) months, it failed to make all corrections despite her leniency.
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.
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 Respondent performed the scope of original work on Complainant’s new residential build, and subcontracted various portions of the project to another licensees. It is also clear from the record that some of the workmanship on the underlying build failed to satisfy the Registrar’s minimum standards. It is further clear that although directed to correct the identified deficiencies by the Registrar, Respondent did not remediate all items to the Registrar’s satisfaction.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to completely remediate the underlying project per the Registrar’s Directive. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain its burden. No explanation was offered to excuses or otherwise justify why Respondent did not timely remediate complaint item 8 between April 22, 2024, and December 03, 2024; be it performing the work itself, hiring an appropriately licensed subcontractor to perform the work, or entering into a financial settlement agreement with Complainant. No evidence was presented to explain why Respondent did not ask the Investigator Dimond for an extension of the Addendum Directive’s compliance period.
Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 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 Respondent’s contractor’s license.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Mosaic Construction Services LLC, ROC License No. 323883, be suspended for five (5) business days.
NOTICE
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 five days from the date of that certification.
Done this day, March 06, 2025.
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]
Monica Adams, Complainant
5938 E. Killen Loop
Prescott Valley, AZ 86314
[email redacted]
Mosaic Construction Services LLC, Respondent
5227 N 7th St., Ste. 18005
Phoenix, AZ 85014
[email redacted]
By: OAH Staff