ALJDEC - Licensing

2024A-01161-CHC-ROC · Registrar of Contractors · 2024-08-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Craig P Barton,

COMPLAINANT

v.

Anchor Home Renovation LLC

License No. ROC 329763 and 319452,

RESPONDENT

No. 2024A-01161-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: Convened and concluded on August 8, 2024.

APPEARANCES:

For Complainant: Complainant’s attorney Mark G. Saric appeared with Craig Barton.

For Respondent: Respondent’s attorney Megan Schandle appeared with Jose Palascio, the sole member of Anchor Home Renovation LLC.

For the Registrar of Contractors: Investigator Mark Nipp.

ADMINISTRATIVE LAW JUDGE: Samuel Fox

EXHIBITS ADMITTED INTO EVIDENCE: Administrative notice was taken of the Notice of Hearing Packet submitted by the Registrar of Contractors. Complainant’s Exhibit 1. Respondent’s Exhibits 1 through 14c.

_____________________________________________________________________

FINDINGS OF FACT

Anchor Home Renovation LLC (Respondent) was the holder of License Numbers 329763 and 319452 issued by the Arizona Registrar of Contractors (Registrar).

On or about January 5, 2023, Craig Barton (Complainant) entered into a contract with Respondent for, among other things, remodeling his home and constructing an addition.

On or about January 29, 2024, Complainant filed a Licensed Complaint Form with the Registrar, claiming Respondent abandoned the project.

The Registrar assigned the complaint to Investigator Mark Nipp, who issued a Jobsite Inspection Notice on February 20, 2024, scheduling the inspection for March 13, 2024.

On February 26, 2024, Complainant informed Investigator Nipp about additional complaint items. Investigator Nipp issued an updated Jobsite Inspection Notice on February 27, 2024 for the March 13, 2024, inspection.

Investigator Nipp conducted the jobsite inspection on March 13, 2024, and Respondent was present. Following the inspection, Investigator Nipp issued a Written Directive From the Registrar to Respondent on March 22, 2024, requiring compliance by April 9, 2024. On April 9, 2024, Investigator Nipp issued an Amended Written Directive, which provided as follows:

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

Compliance Item #1: Drywall work not completed and poor quality

Investigator’s Observation: Verified

Both parties agreed that the scope of work for drywall was to repair existing damaged areas only.

Both parties agreed there was a verbal agreement to apply a skip trowel finish on all interior drywall.

I saw multiple locations where the drywall repairs were incomplete. The locations had rough finishes or were still in process.

I also saw that the interior drywall finish was not a skip trowel finish. It did not appear that the Respondent had started applying the skip trowel finish.

I reviewed the contract and noted that it called for, “Texture walls throughout and repair existing, finish garage and addition.” (page 5)

The respondent should correct by appropriate means, pursuant to the contract, applicable building codes, and within the scope of their license.

Reference Picture(s) 2-9 . . .

Compliance Item #2: Interior paint not completed and poor quality

Investigator’s Observation: Verified

Both parties agreed that the Respondent had not painted the interior as required by the contract.

I saw that the interior did not appear to have been recently painted. I reviewed the contract and noted that it called for the Respondent to paint the entire interior.

The respondent should correct by appropriate means, pursuant to the contract, applicable building codes, and within the scope of their license.

Reference Picture(s) 2-10 . . .

Compliance Item #3: Water Line not run to fridge

Investigator’s Observation: Verified

I saw that there was not water line for the refrigerator. Both parties agreed the contract did not specify that the Respondent was to install a water line in that location; however, there was a verbal agreement to install the refrigerator water line.

The respondent should correct by appropriate means, pursuant to the contract, applicable building codes, and within the scope of their license.

Reference Picture(s) 11 . . .

Compliance Item #4: Kitchen cabinets and trim poorly installed must be removed and reinstalled properly

Investigator’s Observation: Verified

I saw that the cabinet face frames were not aligned with the adjacent filler pieces and/or face frames, causing a lippage effect from section to section. I also noted that there some cabinets were not even with each other on the lower edge (P19-20). I was able to use a plastic card (1/32”) to slide along each area and noted that the card was stopped by the adjacent piece.

The respondent should correct by appropriate means, pursuant to the contract, applicable building codes, and within the scope of their license.

Reference Picture(s) 12-24 . . .

Compliance Item #6: Electrical lighting, switches and outlets wiring not complete and not in proper locations

Investigator’s Observation: Verified

The Complainant explained that along with not being complete, the kitchen electric was not done to code, specifically, the height of the kitchen countertop outlets was different and there were not enough outlets.

I saw that the electrical was not complete throughout the house. In many locations there were unprotected wires protruding from electrical boxes. In one location, I saw electrical wires protruding from the wall and noted they were not contained within an electrical box as required by (P31-32) the International Residential Code (IRC); Chapter 39.

In the kitchen I saw there were only two outlets and that the heights of each one were different. I also noted that the number of outlets was not compliant with International Residential Code (IRC); Chapter 39.

The respondent should correct by appropriate means, pursuant to the contract, applicable building codes, and within the scope of their license.

Reference Picture(s) 27-34 . . .

Compliance Item #8: Laminate flooring not completely installed, installed flooring damaged and not installed properly

Investigator’s Observation: Verified

Both parties agreed the flooring installation is not complete.

I inspected the areas pointed out by the Complainant and noted that flooring was not complete. I also noted multiple locations throughout the completed flooring where the end joints were ‘peaking’, indicating they had been over-driven when installed. I also saw excessive gaps between planks throughout the house. I also noted that there were multiple locations where there was independent vertical deflection between adjacent planks, indicating the locking tab was broken. This issue is indicative of inappropriate installation.

The respondent should correct by appropriate means, pursuant to the contract, applicable building codes, and within the scope of their license.

Reference Picture(s) 37-44 . . .

Compliance Item #9: Baseboard and door trim not installed

Investigator’s Observation: Verified

Both parties agreed that the baseboards and door trims have not been installed. I saw that the baseboards and door trims have not been installed.

The respondent should correct by appropriate means, pursuant to the contract, applicable building codes, and within the scope of their license.

Reference Picture(s) 3-4, 38, 41, 44-47 . . .

Compliance Item #11: 2 Bathroom windows not replaced

Investigator’s Observation: Verified

Both parties agreed that the two bathroom windows had not been replaced.

The Respondent stated that there had been many changes in the window sizes since the project started and agrees the current pre-existing windows need to be replaced.

I saw there were two bathroom windows that did not appear to have been replaced.

The respondent should correct by appropriate means, pursuant to the contract, applicable building codes, and within the scope of their license.

Reference Picture(s) 48 . . .

The Amended Written Directive required Respondent to notify Investigator Nipp of Respondent’s compliance with the directive prior to 5:00 p.m. on April 22, 2024.

On April 12, 2024, Investigator Nipp issued a Compliance Inspection Notice, setting the inspection for April 24, 2024. During the inspection, Compliance Items 1, 2, 3, 4, 6, 8, 9, and 11 were deemed not completed.

On April 30, 2024, the Registrar issued a Citation against Respondent, charging the following possible violations A.R.S. § 32-1154(A)(2)(a); A.R.S. § 32-1154(A)(2)(b); A.R.S. § 32-1154(A)(3), specifically A.A.C. R4-9-108(a); A.R.S. § 32-1154(A)(3), specifically A.A.C. R4-9-108(b); and A.R.S. § 32-1154(A)(22).

Respondent submitted an Answer to the Citation on May 14, 2024. Respondent’s Answer denied all charges in the Citation and any other wrongdoing.

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

On May 30, 2024, the Registrar issued a Notice of Hearing on Contested Case setting the hearing at July 8, 2024, at 9:00 AM.

On or about June 24, 2024, Complainant requested that the hearing be continued, and on or about July 1, 2024, Respondent informed the Tribunal that they did not object to a continuance.

On or about July 5, 2024, the parties were notified the hearing was set for July 24, 2024.

On or about July 22, 2024, Respondent requested that the hearing be continued for medical reasons. The order granting continuance from the Office of Administrative Hearings was issued on July 24, 2024, notifying the Parties that the hearing was continued to August 8, 2024 and advising the parties of how to connect to the hearing via Google Meet.

The hearing was held via Google Meet on August 8, 2024.

Investigator Nipp testified to his findings as documented above, and he made the following clarifications. The Compliance Jobsite Inspection findings did not include items 15 through 19, and the original document was no longer available. Investigator Nipp testified that Compliance Items 16, 17, and 18 were not part of the Amended Directive. They were marked as “DUPLICATE” items because Investigator Nipp intended for those items to be included in other Compliance Items, but they were not clearly included. Those items were violations and should have been corrected, but they were not corrected. He explained that Complainant could file another complaint for those items.

Complainant testified that around September 2023 he proffered a cancellation agreement, trying to end the relationship amicably and get a partial refund of money he had already paid Respondent. Respondent did not accept the cancellation agreement. Respondent testified that the cancellation agreement and refund request occurred in January 2024.

Complainant testified that around November 2023, Complainant was trying to find out why no work was being done, and Respondent stated that they did not have a contract for the work. Respondent told Complainant that his contract would be approximately $65,000.00 more than the original contract. Respondent testified that he never denied having a contract.

The parties disagreed about whether Complainant accepted the updated contract: Complainant testified that he did not accept the contract; Respondent testified that Complainant did accept the contract.

The only signature was on the scope of work agreement from January 2023, which is for $115,997.50.

Respondent testified that in November 2023, a key was no longer available at the property. Complainant testified that he did not change the lock box until 2024.

Respondent testified that he was not responsible for delays in the project. He stated that the plans provided by Complainant were not actionable, and that Respondent needed to get updated plans. Complainant was also responsible for providing materials, such as flooring, tile, cabinets, and lighting fixtures.

Respondent argued that Complainant attempted to abuse the process to harm Respondent. On a February 25, 2024 phone call between Complainant and Investigator Nipp, Complainant indicated that he wanted to harm Respondent. Complainant testified that he was angry. Investigator Nipp testified that angry statements by a homeowner were normal, and in his opinion, Complainant’s statements were not indicative of abuse of the administrative process.

Respondent argued that another contractor may have worked on the property. Complainant hired another contactor to work on the project. Complainant testified that the contractor only worked on the Compliance Items that had been designated as having been modified by another contractor. Respondent testified that another contractor moved the bottom kitchen cabinets, and he may have worked on other Compliance Items.

Respondent argued that another contractor’s work on the property damaged Respondent’s work on the property, specifically that the other contractor damaged the drywall by removing and replacing the patio roof. Respondent also argued that it was not hired to do electrical work in the kitchen, that it completed the flooring and that the marks were easily cleaned, and that another contractor instructed Respondent not to install the windows because other windows would be installed.

Respondent argued that it was prevented from working on the property because it was locked out of the property for a period of time, including December of 2023, and because other contractors were working on the property. Complainant testified that he never prohibited or prevented Respondent from accessing the property.

Respondent argued that Compliance Item 3 was not part of the contract. The audio recording of the Jobsite Inspection, Exhibit 14b, starting at 18:38, indicated, that the Parties did not agree that Compliance Item 3 was part of the contract.

Administrative notice was taken of Respondent’s prior License record on August 27, 2024. According to that record, Respondent’s License No. 319452 was first issued on April 30, 2018. It was suspended on May 1, 2024 for non-renewal. There was one previous complaint resulting in discipline against Respondent’s license. According to that record, Respondent’s License No. 329763 was first issued on July 17, 2020. It was active with two open complaints against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

This Tribunal must address contract-related issues when such contract-related issues are necessary to understand the basis for a license discipline. This is a license discipline matter, not solely a private contract dispute.

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. Respondent bears the burden of proof to establish an affirmative defense 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 preponderance of the evidence did not establish that the contract was cancelled and did not establish that Respondent was terminated.

The Registrar of Contractors process should not be used inappropriately, and if a complainant abuses the process, the complaint should be dismissed. However, legitimate disciplinary claims against a contractor’s license are not rendered an abuse of the process by mere expressions of anger or discontentment.

The preponderance of the evidence did not establish that Complainant abused the process.

Homeowners cannot refuse access to a contractor during the directive correction period because doing so impinges on the contractor’s ability to defend itself and to use the Registrar of Contractors as a privilege.

The preponderance of the evidence does not establish that Complainant denied Respondent access to the property.

The preponderance of the evidence did not establish that Compliance Item 3 was part of the contract. Accordingly, the violations associated with Compliance Item 3 were not established by the preponderance of the evidence.

The preponderance of the evidence failed to establish that Respondent departed from or disregarded plans or specifications in violation of A.R.S. § 32-1154(A)(2)(a).

The preponderance of the evidence established that Respondent departed from or disregarded a building code in violation of A.R.S. § 32-1154(A)(2)(b), specifically regarding Compliance Item 6.

The preponderance of the evidence established that Respondent failed to perform all work in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A), specifically regarding Compliance Items 1, 2, 4, 6, 8, 9, and 11.

The preponderance of the evidence established that Respondent failed to perform all work in accordance with applicable building codes and professional industry standards in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(B), specifically regarding Compliance Items 1, 2, 6, 8, 9, and 11.

The preponderance of the evidence established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of A.R.S. § 32-1154(A)(22), specifically regarding Compliance Items 1, 2, 4, 6, 8, 9, and 11.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend for 2 days Respondent’s License Numbers 329763 and 319452.

It is further recommended that the Registrar require Respondent to pay the sum of $250.00 as a civil penalty pursuant to A.R.S. § 32-1154(E). No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

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, August 28, 2024.

/s/ Samuel Fox

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Megan N. Schandle, Esq.

[email redacted]

Mark Nipp

[email redacted]

Mark G. Saric, Esq.

[email redacted]

By: OAH Staff