ALJDEC - Licensing

2023A-14648-CHC-ROC · Registrar of Contractors · 2024-05-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Michael F Smith ,

COMPLAINANT

v.

Skylight Construction LLC

License No. ROC 327413,

RESPONDENT

No. 2023A-14648-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 14, 2024

APPEARANCES: Michael Smith appeared on his own behalf. Marco Antonio Holguin, qualifying party, appeared on behalf of Respondent Skylight Construction LLC.

ADMINISTRATIVE LAW JUDGE: Amy M. Haley

EXHIBITS ADMITTED INTO EVIDENCE: Administrative Notice was taken of the Notice of Hearing (NOH) packet and all of its documents contained therein.

_____________________________________________________________________

FINDINGS OF FACT

Skylight Construction LLC (Respondent) is the holder of License No. 327413 issued by the Arizona Registrar of Contractors (Registrar).

On or about April 15, 2021, Michael Smith (Complainant) entered into a contract with Respondent for the construction of a new home.

On or about December 28, 2023, the Registrar received a Complaint against Respondent from Complainant alleging abandonment with respect to the project.

The Registrar assigned the Complaint to Investigator Mike Wiskow. After a jobsite inspection, Investigator Wiskow issued a written directive to Respondent that provided as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on February 29th, 2024.

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

. . . . .

Compliance Item: 1 - We have paid a total of $280,695.00 and the home is only 70% complete. No work has been done on the project for 6 weeks.

Investigator’s Observation: Confirmed. The home is currently has stucco, and sheet rock. There are no exterior doors installed. At the JSI when questioned about the delay in finishing the home, the respondent said he was spending more money than he charged. In the opinion of the Registrar, the complainant has met the financial obligations of the contract pay schedule and the home should be finished per pay schedule. The contractor should finish the project per pay schedule level 6 by appropriate means. This level includes exterior stone, painting, cabinets, garage doors and exterior doors.

Governing Rule: Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

. . . . .

Compliance Item: 2 - The balcony is leaking water creating water damage in the basement.

Investigator’s Observation: Confirmed. The balcony area is leaking causing damage in the lower level. The contractor should repair and finish the balcony, and repair the damage in the basement by appropriate means. Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

After the deadline in the directive expired, Investigator Wiskow was notified no corrective work had been performed.

The Registrar issued a Citation against Respondent, charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(1); Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A); Ariz. Rev. Stat. § 32-1154(A)(12), namely Ariz. Rev. Stat. § 32-1158; and Ariz. Rev. Stat. § 32-1154(A)(22).

Investigator Wiskow testified consistently with his written directive. Investigator Wiskow also testified that Respondent’s contract was missing elements #4 and #9 of Ariz. Rev. Stat. § 32-1158(A). He further testified that after the deadline in the written directive had expired, both Complainant and Respondent advised that no work had been performed.

Complainant testified that the original contract specified that it would take up to six months to obtain permits and engineering and then another 6-8 months for completion. The work did not start for a year after the contract was signed. Complainant testified that, in the meantime, Complainant “loaned” Respondent $100,000.00 to cover materials. Complainant further testified that he paid “ahead of the terms of the contract.” At this point, he stated, it would cost approximately $225,000.00 to complete the whole house.

Steven Stoner, Complainant’s neighbor, testified on Complainant’s behalf. Mr. Stoner did not have any new, relevant testimony to provide on the issues pertaining to the written directive.

Elizabeth Smith, Complainant’s wife, testified on Complainant’s behalf. Mrs. Smith did not have any new, relevant testimony to provide on the issues pertaining to the written directive.

Marco Antonio Holguin, qualifying party, testified on behalf of Respondent. Mr. Holguin testified that Complainant failed to mention that Complainant was continually making additions in the middle of the contract that required new permits. Additionally, Complainant made a complaint against one of Respondent’s contractors that took 4 months “to fix.” Additionally, Mr. Holguin stated that the city was taking too long to issue permits. Ultimately, Mr. Holguin stated he quit the project because it was costing him more money than he was making and he did not have any more money to continue.

Administrative notice is taken of Respondent’s prior License record on May 15, 2024. Such prior License record reflects that Respondent’s License No. 327413 was first issued on January 16, 2020, and is currently suspended as of May 13, 2024. Such prior License record also reflects that there were 4 total open complaints inclusive of the present complaint, one prior disciplined complaint, and one prior resolved/settled complaint against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Respondent’s suspended license does not deprive Complainant of his right to prosecute his Complaint or prevent the Registrar from determining the merits of the Complaint.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

The evidence established that Respondent abandoned the contract because Respondent claimed to be losing money on the project. Accordingly, Complainant established that Respondent abandoned the contract without legal excuse for the abandonment in violation of Ariz. Rev. Stat. § 32-1154(A)(1).

The evidence established that Respondent’s contract failed to include #4 and #9 of the required elements of a contract set forth in Ariz. Rev. Stat. § 32-1158(A). Therefore, Complainant established that Respondent failed to comply with the Registrar’s statute in violation of Ariz. Rev. Stat. § 32-1154(A)(12).

The evidence established that Respondent’s work was not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A).

The evidence established that Respondent did not attempt to complete the corrective work following the Directive being issued. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of Ariz. Rev. Stat. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 327413 for a period of 5 days.

It is further recommended that the Registrar require Respondent to pay the sum of $500.00 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 final 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)(7), unless Respondent tenders payment of any outstanding prior civil penalty.

It is further recommended that, on or before thirty (30) days after the effective date of the final order, Respondent shall provide a sample contract to the Registrar to demonstrate that it has amended its contracts to include the nine terms required by Ariz. Rev. Stat. § 32-1158(A). If Respondent fails to establish to the Registrar that it has brought its contracts into compliance with Ariz. Rev. Stat. § 32-1158(A) within thirty days, its contractor’s license shall be suspended until it demonstrates that it has done so.

Pursuant to A.R.S. § 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, May 30, 2024.

/s/ Amy M. Haley

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

By: OAH Staff