2024A-02009-NPC-ROC Notice of Hearing and Packet MAILED

2024A-02009-NPC-ROC · Registrar of Contractors · 2024-05-07

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Morningstar Homes LLC, Case No. 2024-02009 COMPLAINANT, Docket No. 2024A-02009-NPC-ROC v. NOTICE OF HEARING ON CONTESTED CASE Avantgarden Design + Build LLC License No. ROC 290552,

RESPONDENT.

This Notice of Hearing is issued under A.R.S. § 41-1092.05(D).

HEARING INFORMATION The hearing is set for:

June 7, 2024 9:00 AM Tammy Eigenheer Google Meet. A link will be provided directly from The Office of Administrative Hearings. Go to www.azoah.com to request to appear in-person. If you have requested to appear in-person at the hearing, the hearing will

be held at 1740 W Adams Street, Phoenix, AZ 85007.

You must attend this hearing. This is an adversarial hearing before an administrative

law judge, and is conducted in a similar manner as judicial proceedings. Thus, you must be

prepared to present evidence, including witness testimony and documents, in support of your case.

STATEMENT OF LEGAL AUTHORITY AND JURISDICTION The State of Arizona has determined that the licensing and regulation of construction contractors is a proper state function, and has vested authority in the Registrar of Contractors to administer Title 32, Chapter 10 of the Arizona Revised Statutes. A.R.S. §§ 32-1101 et seq. All hearings for alleged violations of Title 32, Chapter 10 are conducted under Title 41,

Chapter 6, Article 10. A.R.S. § 32-1156.

The statutes and rules governing the hearing can be found at: Arizona Revised

Statutes §§ 41-1092 to -1092.12, and Arizona Administrative Code R2-19-101 to -122.

PARTICULAR ARIZONA STATUTES AND RULES INVOLVED The statutes and rules the Respondent is alleged to have violated are cited in the

complaint and citation, which were served on the Respondent on April 1, 2024. SHORT AND PLAIN STATEMENT OF THE MATTERS ASSERTED The complaint and citation allege that the Respondent committed the following act(s): Charge: 1 A.R.S. § 32-1154(A)(10)

THE PARTIES TO THE ADMINISTRATIVE HEARING Because Respondent is a licensee and is charged with an act(s) or omission(s) that is cause for the suspension or revocation of a license, Respondent is a party to this case and will be a party to the hearing.

Because Complainant alleged Respondent committed an act(s) or omission(s) that is cause for the suspension or revocation of a license, Complainant is a party to this case and will be a party to the hearing. Respondent and Complainant, as the parties to the hearing, will present evidence and argument to the administrative law judge.

RIGHT TO BE REPRESENTED The parties to the administrative hearing may choose to be represented by an attorney.

A.R.S. § 41-1092.07(B). If one of the parties is a company, the company may be represented

by an officer or employee if that person satisfies the conditions set forth in A.R.S. § 32-

1156(B).

CHANGE OF ADDRESS Each party must inform the Registrar and the Office of Administrative Hearings of

any change of address within five (5) days of the change. A.R.S. § 41-1092.04. HEARING PROCEDURES AND RULES The administrative hearing will be conducted in accordance with A.R.S. §§ 41-1092 to -1092.12, and A.A.C. R2-19-101 to -122. The parties should review the statutes, rules, and processes governing the administrative hearing. Copies of the statutes, rules, and articles regarding the administrative hearing process can be found at https://www.azoah.com/.

REGISTRAR’S APPEARANCE BY VIDEO CONFERENCE OR TELEPHONE

The Registrar’s investigators, employees, and attorneys will appear at the hearing via

video conference or telephone unless requested by a party to appear in-person. Requests for

the Registrar’s investigators, employees, or attorneys to appear in-person must be filed with the Registrar and the Office of Administrative Hearings no later than seven (7) calendar days prior to the hearing date.

HEARING PACKET In the interests of administrative efficiency, the Registrar compiles and discloses certain documents to the parties and the Office of Administrative Hearings. These documents are attached to this Notice of Hearing as the “Hearing Packet.” If any party wishes to submit

additional evidence, they must do so during the hearing after completing a disclosure

statement. See “Disclosure Statement” section below.

SUBPOENAS FOR TESTIMONY FROM A WITNESS OR DOCUMENTS The parties to the hearing must be prepared to present evidence in support of their case. If a party wants to obtain testimony from a witness or documents not in the party’s possession, the party must prepare and file a written subpoena for the Administrative Law Judge to review and sign, if approved. A.R.S. § 41-1092.07(C). Forms for requesting a

subpoena can be found on the Office of Administrative Hearings’ website at www.azoah.com.

The party seeking a subpoena must serve notice on all the parties to the hearing, and on the

Registrar. A.R.S. § 41-1092.04.

DISCLOSURE STATEMENT At least seven calendar days before the hearing, each party must prepare and serve a

disclosure statement on all other parties, and file it with the Office of Administrative Hearings. A.A.C. R4-9-118; A.A.C. R2-19-108. The disclosure statement must include any exhibit the

party will use at the hearing. A party’s failure to timely disclose any witness or exhibit, without good cause, may result in the administrative law judge excluding those witnesses or exhibits from being used at the hearing. A.A.C. R4-9-118(C). A sample disclosure form is available on the Registrar’s website at https://roc.az.gov/forms/RC-L-800A%20- %20Prehearing%20Disclosure%20Statement%2020191007v4.pdf

CHANGING THE HEARING DATE

The date of the hearing may only be advanced or delayed on the agreement of the

parties or on a showing of good cause. A.R.S. § 41-1092.05(C). The date of the hearing may

be changed by filing a written agreement of the parties to change the date of the hearing. The written agreement must be filed with the Office of Administrative Hearings, directed to the assigned Administrative Law Judge, and transmitted to the Registrar and all other parties. The assigned Administrative Law Judge may be found on the Office of Administrative Hearings’ web portal at www.azoah.com If a party would like to move the date of the hearing without agreement of all parties, the party must file a written motion with the Office of Administrative Hearings, directed to the assigned Administrative Law Judge, and transmit a copy to the Registrar and all other parties. The motion must state in detail good cause for why the date of the hearing should be advanced

or delayed, and the position of all other parties regarding the advancement or delay.

A party may also file a motion asserting a right to an expedited hearing upon a showing of

extraordinary circumstances or the possibility of irreparable harm. A.R.S. § 41-1092.05(E).

RESOLUTION SHORT OF ADJUDICATION In any case which is resolved or settled by the parties, or which is withdrawn by the Complainant without objection from Respondent after the Notice of Hearing is issued, the parties must notify the Office of Administrative Hearings of the resolution or settlement. Any such cases will be listed on the Registrar’s website and its records under the category: “Closed Complaints – Resolved/Settled/Withdrawn.”

Dated May 7, 2024.

By: /s/ Erika Hoskin Erika Hoskin Legal Secretary Legal Department Arizona Registrar of Contractors

Copy mailed via USPS First Class mail May 7, 2024 to:

Respondent(s) Avantgarden Design + Build LLC 4638 E Clinton Street Phoenix, AZ 85028 Avantgarden Design + Build LLC 2709 E Cinnabar Ave Phoenix, AZ 85028-4326

Complainant(s) Morningstar Homes LLC 7829 S Stanley Pl Tempe, AZ 85284

Copy sent electronically this same date to:

Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar

Case No. 2024-02009 /

Katie Hobbs, Governor Martin Quezada, Director

Hearing Packet FAQ What is the Hearing Packet?

The Hearing Packet is a packet of certain documents collected or issued by the Registrar over the course of its investigation.

Who gets the Hearing Packet?

The Hearing Packet is assembled and distributed to all parties and to the Office of Administrative Hearings (“OAH”) prior to an administrative hearing.

What types of cases does the Registrar prepare a Hearing Packet for?

The Registrar prepares a Hearing Packet for Complainant-Handled Cases and No-Pay Cases. Note: If the Docket Number on the Notice of Hearing contains a “CHC” or “NPC”, your case is a Complainant-Handled Case or a No-Pay Case.

What is in the Hearing Packet?

The Hearing Packet contains essential case-specific documents and at a minimum will include the following documents:

● Original complaint;

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Within AZ 877.692.9762 · Fax 602.542.1599 · roc.az.gov Hearing Packet FAQ

Katie Hobbs, Governor Martin Quezada, Director

● Citation; and ● Answer.

The Hearing Packet will also contain the following documents (if applicable):

● Jobsite inspection notices, notes, and photos; ● Written directives; and ● Compliance inspection notices, notes, and photos.

What if there are documents missing from the Hearing Packet?

If there is any evidence you submitted to the Registrar that are not included in the Hearing Packet it is your responsibility to introduce that evidence at the administrative hearing. Note: The administrative law judge assigned to your case does not have access to the entire Registrar record.

If there is additional evidence you submitted to the Registrar during the investigation that you also want to introduce as evidence during your hearing, it is your responsibility to:

● Properly disclose that evidence to the other party; and ● Introduce the evidence during your hearing.

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Within AZ 877.692.9762 · Fax 602.542.1599 · roc.az.gov Hearing Packet FAQ

Katie Hobbs, Governor Martin Quezada, Director

How do I disclose evidence I intend to use at a Hearing?

You must properly disclose any and all documents and witnesses you intend to use at your hearing according to the Registrar’s Prehearing Disclosure Rules. See Arizona Administrative Code Section R4-9-118.

A sample prehearing disclosure form and instructions are provided to the parties by the Registrar.

How do I obtain documents I previously submitted to the Registrar?

If you previously submitted documents to the Registrar and need a copy of these documents, please contact the Registrar’s Legal Department or submit a public records request at https://roc.force.com/AZRoc/s/roc-public-request.

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Within AZ 877.692.9762 · Fax 602.542.1599 · roc.az.gov Hearing Packet FAQ

February 28, 2024

Via U.S. Mail and Email

Complainant Morningstar Homes LLC 7829 S Stanley Pl Tempe, AZ 85284

Via U.S. Mail and Email

Respondent Avantgarden Design + Build LLC 4638 E Clinton Street Phoenix, AZ 85028

Avantgarden Design + Build LLC 2709 E Cinnabar Ave Phoenix, AZ 85028-4326

Re: Complaint No. 2024-02009

Dear Complainant and Respondent:

The Registrar received a complaint filed against Avantgarden Design + Build LLC for non-payment of materials or services rendered. This complaint is complete and will be substantively reviewed by the Registrar.

Respondent is free to raise any issue or affirmative defense to this complaint by filing a response with the Registrar by March 6, 2024. Please reference the complaint number listed above if you file a response. Respondent may file a response by:

Mail: P.O. Box 18244, Phoenix, Arizona, 85005-8244 In-Person: 1700 W. Washington St., Ste. 105, Phoenix, Arizona, 85007-2812 Email: [email redacted]

The Registrar will not issue a citation before March 6, 2024 and will review Respondent’s response, if one is submitted.

Please be advised that a response to the complaint is not the same as a written answer. If the Registrar issues a citation Respondent must file a written answer to that citation in accordance with A.R.S. § 32-1155.

Sincerely,

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg100 4/21 /s/ Tedi Quezada ________________ Tedi Quezada Legal Department 1700 W Washington St. Ste. 105 Phoenix, AZ 85007

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg100 4/21 Non-Payment Complaint Form Departmental Use Only Complaint Number: Mail to: Registrar of Contractors P.O. Box 18243 Phoenix, AZ 85005-8243

Person Filing Complaint (Payee) Business Name Full Name (First Middle Last) ROC License Number(s) (if any) Michael Scott Longanecker Street Address City State Zip Code 7650 S. McClintock Dr. Tempe Arizona 85284 Phone Number Email Address 602-430-0007 [email redacted] I consent to receive communications electronically in connection with this case

Name of Attorney (if any)

Attorney’s Street Address City State Zip Code

Attorney’s Phone Number Attorney’s Email Address

Licensee Information (Payer) Name (as shown on contracts, invoices, etc.) ROC License Number(s) Avantgarden Design + Build LLC ROC 290552 Street Address City State Zip Code 4638 E Clinton Street Phoenix AZ 85028 Phone Number Email Address

Name of Person(s) Representing License Todor P. Spasov Complaint Information Principal Amount Due (excluding interest and fees) Contract Date (if applicable) $67,957.42 March 16, 2022 Have you filed a civil complaint? No List all specific invoices which have not been paid. Attach additional pages if necessary. Invoice 2288 dated March 16, 2022 has a balance of $64,574.00; Invoice 3021 dated November 9, 2022 has a balance of 3,383.42; Signed Sub-contractor agreement dated March 3, 2022

Certification I certify, upon information and belief, that the above-named licensee has failed to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor. I further certify, upon information and belief, that the above-named licensee has the capacity to pay, or has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased. A.R.S. § 32-1154(A)(10). Printed Name Signature Date Michael Scott Longanecker Declaration & Signature I am the Complainant in this Complaint Form or Complainant’s duly authorized representative. I declare under penalty of perjury that the information contained in this Form is true and correct to the best of my knowledge. I further certify that any documents submitted in support of this complaint are true and correct copies of the originals and are accurate to the best of my knowledge. I will assist in the investigation or in the prosecution of the contractor or other parties, and will, if necessary, attend hearings and testify to facts. Printed Name Signature Date Michael Scott Longanecker REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Case No. 2024-02009 Morningstar Homes LLC,

COMPLAINANT, v. CITATION Avantgarden Design + Build LLC License No. ROC 290552,

RESPONDENT.

The Registrar issues this Citation to Avantgarden Design + Build LLC (“Respondent”)

under A.R.S. § 32-1155(A). If Respondent fails to answer this Citation by April 16, 2024, then under A.R.S. § 32-1155(C), Respondent’s failure to answer may be deemed an admission of the

act or acts charged in the underlying complaint, and the Registrar may then suspend or revoke

Respondent’s license(s).

THE WRITTEN COMPLAINT

On February 19, 2024, Morningstar Homes LLC (“Complainant”) filed a written

complaint with the Registrar. A copy of that Complaint is attached to this Citation.

A FORMAL STATEMENT OF THE CHARGES AGAINST RESPONDENT

The Registrar investigated this matter and finds cause to charge Respondent with

violation(s) of Title 32, Chapter 10 of the Arizona Revised Statutes. Respondent is charged

with violating:

Charge :1 A.R.S. § 32-1154(A)(10) — Failure by a licensee or agent or official of a licensee to pay monies in excess of $750 when due for materials or services rendered in connection with the licensee's operations as a contractor unless the

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1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 licensee proves that the licensee lacks the capacity to pay and has not received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

If the matter proceeds to a hearing and the administrative law judge determines that any of the charges listed above are supported by a preponderance of the evidence, then Respondent’s license(s) may be subject to suspension or revocation, and Respondent may be subject to other penalties provided by law, including civil penalties under A.R.S. §§ 32-1154(E) and (F). FILING A WRITTEN ANSWER Respondent must appear by filing with the Registrar a written answer to the citation and complaint showing cause, if any, why Respondent’s license(s) should not be suspended or revoked. A.R.S. § 32-1155(A). Respondent’s written answer should contain the heading “Written Answer to Citation and Complaint” and should include the case number, which is Case No. 2024-02009. How to File a Written Answer: Respondent’s written answer may be submitted in the following ways: In-Person: 1700 W. Washington St., Ste. 105, Phoenix, Arizona, 85007-2812 Mail: P.O. Box 18244, Phoenix, Arizona, 85005-8244 Email: [email redacted] The Registrar’s normal office hours are 8:00 a.m. to 5:00 p.m., Monday through Friday. If Respondent submits a written answer by mail, it is not filed with the Registrar until the Registrar actually receives it. Deadline for Filing a Written Answer: Respondent must file a written answer with the Registrar no later than April 16, 2024. This deadline is calculated under A.R.S. §§ 32-1155(A) and (B), which provides a

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1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 deadline ten days after service of the Citation. Service of the Citation and Complaint is complete five days after the Registrar mails a copy of the Citation and Complaint to Respondent’s latest address of record in the Registrar’s office. Consequences for Failing to File a Written Answer: If Respondent fails to answer, Respondent’s failure may be deemed an admission of the act or acts charged in the written complaint. A.R.S. § 32-1155(C). The Registrar may then suspend or revoke Respondent’s license(s). THE ADMINISTRATIVE HEARING If Respondent files a timely written answer contesting any charges in the Complaint, then the Registrar will request the Office of Administrative Hearings set a date for an administrative hearing and will notify all the parties at least 30 days before that hearing. A.R.S. § 41-1092.05(D). RESPONDENT’S RIGHT TO REQUEST AN INFORMAL SETTLEMENT CONFERENCE Under A.R.S. § 41-1092.06, if Respondent submits a request to the Registrar for an informal settlement conference, the Registrar must hold a conference within 15 days after receiving the request. Respondent’s request for an informal settlement conference must be in writing and must be filed no later than 20 days before the administrative hearing. A.R.S. § 41- 1092.06(A). The Registrar will not close or settle any case without both parties’ appearance at the Settlement Conference. The parties participating in the settlement conference must have the authority to settle the case and must waive their right to object to the participation of the Registrar’s settlement conference representative in the final administrative decision. A.R.S. § 41-1092.06(B). Any statements, either written or oral, made by the parties at the conference, including a written document, created or expressed solely for the purpose of settlement negotiations, are

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1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 inadmissible in the administrative hearing. A.R.S. § 41-1092.06(B). RESPONDENT’S PRIOR RECORD Under A.A.C. R4-9-117, in determining the appropriate discipline, the administrative law judge and the Registrar may consider not only facts in the current case, but also facts in prior cases and any documents regarding Respondent on file with the Registrar. Respondent’s prior disciplinary record and current license(s) status may be considered as a mitigating or aggravating factor in determining the appropriate discipline. EVIDENTIARY DISCLAIMER By issuing this Citation, the Registrar is directing Respondent to file a written answer to the Citation and Complaint, showing cause, if any, why Respondent’s license(s) should not be suspended or revoked. A.R.S. § 32-1155(A). This Citation does not constitute proof that any charge or allegation in Complainant’s written complaint is in fact true. This Citation does not constitute proof that Respondent violated any statutory provision or rule adopted by the Registrar. Dated April 1, 2024. By: /s/ Margaret Lindsey Margaret Lindsey Assistant General Counsel Legal Department Arizona Registrar of Contractors COPY of the foregoing mailed by Certified Mail, Return Receipt Requested, April 1, 2024 to:

Respondent Certified Mail No: [number redacted]

Avantgarden Design + Build LLC 4638 E Clinton Street Phoenix, AZ 85028 Copy mailed by USPS First Class mail this same date to: of 5

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 Respondent Avantgarden Design + Build LLC 4638 E Clinton Street Phoenix, AZ 85028

Avantgarden Design + Build LLC 2709 E Cinnabar Ave Phoenix, AZ 85028-4326 Complainant Morningstar Homes LLC 7829 S Stanley Pl Tempe, AZ 85284

Copy sent electronically this same date to:

Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar

Case No. 2024-02009/tq

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1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 February 28, 2024

Via U.S. Mail and Email

Complainant Morningstar Homes LLC 7829 S Stanley Pl Tempe, AZ 85284

Via U.S. Mail and Email

Respondent Avantgarden Design + Build LLC 4638 E Clinton Street Phoenix, AZ 85028

Avantgarden Design + Build LLC 2709 E Cinnabar Ave Phoenix, AZ 85028-4326

Re: Complaint No. 2024-02009

Dear Complainant and Respondent:

Mail: P.O. Box 18244, Phoenix, Arizona, 85005-8244 In-Person: 1700 W. Washington St., Ste. 105, Phoenix, Arizona, 85007-2812 Email: [email redacted]

The Registrar will not issue a citation before March 6, 2024 and will review Respondent’s response, if one is submitted.

Sincerely,

Name of Attorney (if any)

Attorney’s Street Address City State Zip Code

Attorney’s Phone Number Attorney’s Email Address

Answers - AZROC <[email redacted]>

Case No. 2024-02009 Maci Burke <[email redacted]> Tue, Apr 16, 2024 at 4:41 PM To: Answers - AZROC <[email redacted]>, "[email redacted]" <[email redacted]> Cc: Charles Morrow <[email redacted]>

Hello Donna:

Thank you for letting me know. Attached are the Answer Exhibit E(1), (2), (4), (5), (6), (7), (8), and (9) documents. I will attempt to send Exhibit E(3) in a separate email due to size restrictions.

MACI R. BURKE 6720 N. Scottsdale Road, Suite 305, Scottsdale, Arizona 85253 602.955.1455 | www.gb.law | Connect on LinkedIn | Follow Galbut Beabeau

This email message is for the sole use of the intended recipient(s) and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message.

[Quoted text hidden]

attachments

Exhibit E(2).JPEG 1007K

Exhibit E(5).JPEG 1136K

https://mail.google.com/mail/b/AEoRXRS8KChKAaZZX8gdYQVf8Bgnv8nCv8YhlFyXvpWH3YZgKBpi/u/0/?ik=581c53cf5c&view=pt&search=all&perm… 1/2 Received 4/17/24, 8:04 AM State of Arizona Mail - Case No. 2024-02009 4/16/2024 ROC Legal

Exhibit E(6).JPEG 944K

Exhibit E(7).jpeg 772K

Exhibit E(8).JPEG 1214K

Exhibit E(1).MP4 26161K Exhibit E(4).MP4 3102K Exhibit E(9).MOV 937K

https://mail.google.com/mail/b/AEoRXRS8KChKAaZZX8gdYQVf8Bgnv8nCv8YhlFyXvpWH3YZgKBpi/u/0/?ik=581c53cf5c&view=pt&search=all&perm… 2/2 Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal

Charles J. Morrow (#026322) Maci R. Burke (#037149) GALBUT BEABEAU, P.C. 6720 N. Scottsdale Road, Suite 305 Scottsdale, Arizona 85253 Phone: 602.955.1455 [email redacted] Attorneys for Respondent REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA Morningstar Homes LLC, Case No. 2024-02009 Complainant, ANSWER TO CITATION AND vs. COMPLAINT Avantgarden Design + Build LLC AND License No. ROC 290552, REQUEST FOR SETTLEMENT Respondent. CONFERENCE Respondent Avantgarden Design + Build LLC hereby responds to the Registrar of Contractors (“ROC”) Citation dated April 1, 2024. Respondent denies the charges asserted in the Citation. Respondent further requests an informal settlement conference. I. BACKGROUND Complainant and Respondent entered two sub-contractor agreements for work at 7121 E. Wilshire Drive, Scottsdale, Arizona 85257 (the “Property”). Respondent engaged Complainant as a subcontractor pursuant to the sub-contractor agreement dated January 28, 2021 for framing work (the “Framing Agreement”). The Framing Agreement is attached hereto as Exhibit A. Respondent later engaged Complainant as a subcontractor pursuant to the sub-contractor agreement dated March 3, 2022 for roofing work (the “Roofing Agreement”, collectively with the Framing Agreement, the “Agreements”). The Roofing Agreement is attached hereto as Exhibit B. While Complainant completed its obligations Received 4/16/2024 ROC Legal

under the Framing Agreement, Complainant did not complete its obligations under the Roofing Agreement. Complainant incorrectly alleges that Respondent wrongfully failed to remit full payment in accordance with the Framing Agreement and Roofing Agreement. A. Framing Agreement. The Framing Agreement original contract price was $143,000.00 (the “Framing Contract Price”). See page 7 of Exhibit A. Respondent and Complainant agreed upon two change orders to the Framing Agreement work totaling $25,232.80 (collectively, the “Change Orders”), including change order #1 for $20,232.80 for crane, forklift, and hardware expenses and change order #2 for $5,300.00 for second-floor double deck expenses. Id. Respondent did not execute any other change orders pursuant to Section 7 of the Framing Agreement. In full satisfaction of the Framing Contract Price and Change Orders, Respondent remitted checks to Complainant totaling $168,532.80. See Exhibit C attached hereto. Respondent has paid Complainant for all amounts agreed to by the parties under the Framing Contract. Nonetheless, Complainant alleges Complainant is owed $3,383.42 under Invoice 3021. Invoice 3021 is for a total of $14,383.42, including $6,400 for the remaining Framing Contract Price (the “Remaining Price”), $2,152.50 for Job Materials balance (the “Materials Balance”), and $5,830.92 for Extra Work (the “Extra Work”). See page 22 of the Complaint (hereinafter defined). On or about November 30, 2023, Respondent provided Complainant check number 2011 in the amount of $6,400.00 for the Remaining Price (“Check 2011”), as that was agreed upon by the parties in the Framing Contract. Attached as Exhibit D is evidence of Check 2011. To date, Claimant has not deposited Check 2011. To the extent Complainant does not have Check 2011 or Check 2011 is lost, Respondent will issue a new check to Claimant to replace it. The Materials Balance and Extra Work are not due to Claimant. Section 7 of the Framing Agreement is clear that Claimant is not to perform any work outside the scope of

Received 4/16/2024 ROC Legal

the Framing Agreement without Respondent’s prior written authorization. As the Materials Balance and Extra Work were outside the scope of the Framing Agreement and Respondent did not provide prior written authorization of this work, Claimant has no proper claim to the Materials Balance and the Extra Work. It is unclear how Complainant has calculated there is a balance due of $3,383.42 under Invoice 3021. Regardless, Respondent has fully satisfied all amounts due under the Framing Agreement, and Claimant is not due any amount thereunder. B. Roofing Agreement. The Roofing Agreement contract price was $87,574.00 (the “Roofing Contract Price”) and the parties did not execute any change orders to the Roof Agreement. See page 7 of Exhibit B. Contrary to Complainant’s representations in the Complaint, to date Respondent has paid Complainant $69,500.00 pursuant to the Roofing Agreement. See Exhibit C attached hereto. The remaining $18,074.00 of the Roofing Contract Price has not been paid because Complainant failed to complete the roofing work in accordance with the Roofing Agreement and payment is not yet due. To date, Complainant has failed to complete the following roofing work under the Roofing Agreement: (1) missing drain domes on flat foam roofs; (2) missing flashing under sliding doors; and (3) mismatching paint on pli deck terrace (walking terrace deck) floors (the “Incomplete Work”). See video footage and images sent as attachments and titled as Exhibits E(1)-(4) showing the Incomplete Work. Respondent has requested Complainant complete the Incomplete Work on many occasions since August 2023. Despite Respondent’s efforts to have Complainant complete the Incomplete Work, Complainant: (1) sent subcontractors that were unable to complete the Incomplete Work in accordance with industry standards; (2) sent the same subcontractors to the Property without providing reasonable notice to Respondent or the Respondent-requested oversight (based on previous

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work unworkmanlike work performed); and (3) ceased responding to Respondent regarding completion of the Incomplete Work. The Incomplete Work remains unfinished. In addition, the work Complainant performed pursuant to the Framing Agreement and Roofing Agreement is plagued with workmanship issues and construction defects in violation of A.R.S. §§ 32-1154(A)(2)(a) and 32-1154(A)(3) (the “Construction Issues”). See video footage and images sent as attachments and titled as Exhibits E(5)-(9) showing the Construction Issues. On or about August 9, 2023, Respondent notified Complainant of Construction Issues known at the time, and Complainant addressed a portion of the Incomplete Work and Construction Issues on or about October 27, 2023. The known outstanding Incomplete Work and Construction Issues are described and listed in Exhibit F attached hereto. Respondent reserves all rights in connection with filing a ROC complaint against Complainant for the Incomplete Work and Construction Issues. Once the Incomplete Work is finished in accordance with industry standards and the Construction Issues are addressed, Respondent will issue the remaining $18,074.00 due under the Roofing Agreement to Complainant. C. The Complaint. Complainant filed a ROC Non-Payment Complaint Form on February 19, 2024 alleging Respondent failed to pay Complainant $67,957,42 (the “Complaint”). On or about February 28, 2024, the ROC notified Respondent that Complainant filed the Complaint (the “Complaint Notice”). On or about April 1, 2024, Respondent received the Citation. On April 11, 2024, Respondent contacted Complainant to attempt to resolve this dispute. The parties were unable to resolve the issue over a phone call, but Respondent remains willing to resolve this dispute without a hearing. CHARGE 1: A.R.S. § 32-1154(A)(10) Respondent denies the allegations in Charge 1 of the Citation.

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AFFIRMATIVE DEFENSES Respondent affirmatively asserts that Respondent has issued payments to Complainant for all agreed upon work Complainant has completed pursuant to the Framing Agreement and the Roofing Agreement. Respondent affirmatively asserts that Complainant abandoned the work under the Roofing Agreement despite the Incomplete Work. Respondent affirmatively asserts that there are Construction Issues with the work Complainant performed pursuant to the Framing Agreement and the Roofing Agreement. Respondent is entitled to an award of its attorneys’ fees and costs under A.R.S. §§ 12-341 and 12-341.01, and Section 32 of the Agreements. REQUEST FOR INFORMAL SETTLEMENT CONFERENCE Under A.R.S. § 41-1092.06, Respondent requests an informal settlement conference. RESPECTFULLY SUBMITTED this 16th day of April, 2024. GALBUT BEABEAU, P.C. By:/s/ Charles J. Morrow Charles J. Morrow Maci R. Burke Attorneys for Respondent ORIGINAL electronically filed this 16th day of April, 2024 with: Arizona Registrar of Contractors 1700 W. Washington Street, Suite 105 Phoenix, Arizona 85004-8244 [email redacted] /s/ Maci R. Burke

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EXHIBIT A Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal

4/12/2021 Received 4/16/2024 ROC Legal

paid 04/21/21

paid 05/03/21

paid 09/1/22

paid 1/9/22

paid 07/14/22

paid 08/06/22

paid 01/09/22

paid 11/30/23

T.S.

paid 01/01/22

paid 04/11/22 Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal

EXHIBIT B Received 4/16/2024 ROC Legal

ROC Lic No. KB-2 # 290552

Sub-Contractor Agreement This Sub-Contractor Agreement (the Agreement) is made and entered into this 3rd day of March, 2022, (the Effective Date) by and between Avantgarden Design + Build llc, (Avantgarden) and Morningstar Homes LLC an Arizona corporation, license number ROC 180771 (Sub-Contractor).

Owner of Project Site Address Legal Description (Owner) (Project Site)

7121 Wilshire LLC 67121 E. Wilshire Dr. APN# 129-05-010L Scottsdale, AZ 85257

WHEREAS, Avantgarden and Owner are parties to a contract (Prime Contract), providing for the sale of materials and labor in connection with the construction of a project at the Project Site (Project); and

WHEREAS, Avantgarden desires to hire Sub-Contractor to perform work at the Project Site pursuant to the terms of this Agreement.

NOW THEREFORE, the parties hereby agree as follows:

AGREEMENT

1. Scope of Work. Sub-Contractor will furnish all labor necessary to complete the Project (Work). Sub-Contractor will supervise and direct Work and will be solely responsible for all construction means, methods, techniques, sequences, and procedures and for coordinating all portions of Work.

2. Project Outline. The Project will be constructed in accordance with the Drawings, Specifications, and Construction Costs as set forth in Exhibit A to this Agreement. Sub-Contractor covenants and warrants that it has carefully reviewed the Drawings, Specifications, and Construction Costs.

3. Authority. Sub-Contractor represents and covenants that it has the authority to enter into this Agreement and that no pre- existing agreement or arrangement prevents Sub-Contractor from entering into this Agreement.

4. Licensing. Sub-Contractor warrants and represents that it holds a valid and proper Arizona contractors license or licenses for the scope of the Project.

5. Time for Performance of Work. Sub-Contractor will commence Work under this Agreement on approximately 8th March 2022. Sub-Contractor will complete the Project within 20 working days of commencement of Work (Project Schedule), notwithstanding any delays beyond Sub-Contractors control. Time is of the essence under this Agreement. Sub-Contractors failure to complete the Project in accordance with the Project Schedule will constitute a material breach of this Agreement. Sub- Contractor will notify Avantgarden immediately of any circumstances that may delay performance of Work. Subject to Avantgardens approval, in its sole discretion, Sub-Contractor may apply to Avantgarden for an extension of the Project Schedule for reason of delays resulting from circumstances beyond Sub-Contractors control, including without limitation, strikes, lock-outs, unusual delays in delivery of materials and supplies, unanticipated governmental requirements, acts of God, or Change Orders.

6. Performance of Work. Work will be expeditiously performed by Sub-Contractor with professional skill and care and in concert with, and so as not to unduly delay, the orderly progress of the Project. All Sub-Contractor employees will present themselves and conduct themselves in a professional manner at all times at the Project Site. No family or friends of Sub-Contractor are permitted on the Project Site.

7. Additional Work and Changes Orders. Sub-Contractor will not perform any services for or at the Project that are outside the scope of this Agreement (Additional Work) without Avantgardens prior written authorization (Change Orders). Change Orders will be confirmed by both parties in writing. All duly executed Change Orders will be incorporated into and become part of this Agreement. Should Sub-Contractor perform authorized Additional Work not shown on the Drawings, Specifications, and Construction Costs, the cost of said Additional Work will be added to the construction costs for the Project and paid at completion of that Additional Work.

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8. Reasonable Care. Sub-Contractor will exercise reasonable care to ensure that Work and Additional Work complies with applicable federal, state, and municipal laws, regulations, and ordinances governing Work and Additional Work covered by this Agreement. Sub-Contractor will complete all Work and Additional Work in connection with the Project and the Project Site in a professional and workmanlike manner consistent with the care and skill ordinarily used by members of the Sub-Contractors profession practicing under similar conditions at the same time and in the same locality.

9. Permits. Avantgarden will obtain and pay for all necessary building, municipality, or governmental permits to complete Work and any Additional Work. However, to the extent that Avantgarden does not obtain the necessary building, municipality, or governmental permits to complete Work and any additional Work. Owner will promptly reimburse Avantgarden or Sub-Contractor for any and all fees or expenses incurred by Avantgarden or Sub-Contractor to obtain, renew, or otherwise secure the permits.

10. Tools. Sub-Contractor is responsible for furnishing any tools or equipment required to fulfill its obligations pursuant to this Agreement.

11. Access to Project Site. Avantgarden grants to Sub-Contractor, or its authorized agent, permission to enter the Project Site at reasonable hours to complete its Work or Additional Work at the Project, with the express exception of limitations on access imposed by Owner. Avantgarden further grants free access to work areas for Sub-Contractors workers and vehicles, and will provide areas for reasonable storage of materials and debris at or near the Project Site. Sub-Contractor will keep Avantgarden advised as to the hours during which Work or Additional Work is scheduled to be performed at the Project Site.

12. Clean-up. Unless otherwise provided herein, Sub-Contractor will keep the Project Site and surrounding area free from accumulation of waste and debris caused by Sub-Contractors services under this Agreement. Upon Completion of Work or Additional Work, Sub-Contractor will dispose all debris in dumpsters. The Work or Additional Work completed will be cleaned and free of dirt, mud, or other matter and the terrace area will be swept and left broom clean. Avantgarden will be responsible for providing dumpster on site.

13. Safety. Sub-Contractor will take all reasonable safety precautions and comply with all applicable laws, rules, regulations, ordinances, or orders of governmental or public authorities for the safety of persons or property in connection with the performance of Work and Additional Work, including compliance with OSHA regulations. Sub-Contractor is solely responsible for its employees safety equipment and related obligations.

14. Payments & Liens

(a) Subcontract Price. In consideration of Sub-Contractors performance of Work, including all labor, supervision, or equipment, Avantgarden will pay Sub-Contractor as set forth in the payment schedule in Exhibit B to this Agreement (Payment Schedule). (b) Payment Schedule Modification. In the event payment to Avantgarden by Owner under the Prime Contract is delayed or modified, in Avantgarden sole and absolute discretion, Avantgarden has the ability to modify the Payment Schedule.

(c) Construction Costs. Sub-Contractor will furnish, provide, and advance all costs of construction (Construction Costs) as more fully set forth in Exhibit A to this Agreement. Construction Costs include, but are not limited to, costs at current unit market rates for labor provided by Sub-Contractor.

(d) Liens. Avantgarden will make no final payment to Sub-Contractor until Sub-Contractor has supplied mechanics lien releases, properly executed, on a form approved by Avantgarden. The releases will provide that Sub-Contractor has fully paid for all work, materials, and equipment supplied to the Project through the cut-off date of Sub-Contractors application for payment. Sub- Contractor will further supply, if Avantgarden requests as a condition to each payment, evidence in the form of invoices and cancelled checks to show that all such payments have been made.

15. Completion. Completion of Work (Completion) is the date upon which Avantgarden determines that Work or Additional Work is complete, as evidenced by the Completion Report in the form attached as Exhibit C hereto. All items of Work or Additional Work listed in the Completion Report as unsatisfactory will be corrected by the Sub-Contractor promptly in accordance with Avantgarden standards of quality. Final Completion of Work will occur upon verification by Avantgarden that all unsatisfactory items listed in the Completion Report, if any, have been corrected.

16. Bonding. Avantgarden may require Sub-Contractor to obtain the following (commercial projects only):

Payment and performance bond or lien;

and/or

Completion bond in an amount equal to $_____________

T.S. Received 4/16/2024 ROC Legal

Avantgarden will circle appropriate bond set forth above to indicate preference.

The bond required under this paragraph will be secured by an approved surety insurer. The charge for this bond is $_____________ and will be paid by Sub-Contractor as an additional charge over and above the Construction Cost. This paragraph will not apply to this Agreement unless initialed by both Avantgarden and Sub-Contractor.

Initials: _________ / _________

17. Sub-Contractor Insurance. From the execution of this Agreement until Completion, Sub-Contractor will maintain at its own costs and expense comprehensive general liability and property damage insurance with coverage in an amount not less than $1,000,000.00 per occurrence and not less than $2,000,000.00 aggregate. Such insurance will be maintained with a company or companies licensed in the jurisdiction in which the Project Site is located. Avantgarden and Owner will be named as additional insureds on each certificate of insurance. Each certificate of insurance will provide that the policy may not be cancelled or modified except upon thirty (30) days prior written notice to Avantgarden. Sub-Contractor will provide Avantgarden with current certificates of insurance with respect to such insurance. Sub-contractor also will provide Avantgarden evidence of compliance with applicable workers compensation insurance obligations.

18. Limited Warranty. Sub-Contractor warrants to Avantgarden and Owner that all Work and Additional Work will be free from defective workmanship and warranted in accordance with the current version of the Workmanship Standards for Licensed Contractors published by the Arizona Registrar of Contractors and conform to the requirements under this Agreement for a period of two (2) years after the date of Completion, unless otherwise agreed upon in writing. Sub-Contractor will repair or replace, at no charge, any defect in materials or workmanship within thirty (30) days of Sub-Contractors receipt of Avantgardens or Owners notification of such defect. All warranted repairs or replacements completed by Sub-Contractor are subject to the conditions of workmanship set forth in this Agreement and must meet Avantgarden standard of quality and be approved by Avantgarden.

19. Final Inspections. Sub-Contractor is responsible for conducting all final inspections of Work with any entity having authority over the Project Site.

20. Limitation of Liability. In no event will Avantgarden have any liability for special, indirect, incidental or consequential damages arising out of any Work, Additional Work, or materials furnished in connection with this Agreement. Avantgarden will not be responsible for any damage to any water, electrical, cable television, gas lines, or any other Avantgarden or Owners owned property for damage caused by Sub-Contractor. Prior to the commencement of any Work or Additional Work, Sub-Contractor will mark and label Bluestake and then notify Avantgarden of all underground conditions which could be damaged during the Project.

21. Indemnification. Sub-Contractor will defend, indemnify, and hold harmless, both Avantgarden and Owner and any of their respective agents and employees (collectively referred to as Indemnified Parties) from any and all liability, claims, demands, damages, costs, and expenses connected with Sub-Contractors duties and obligations under this Agreement or arising out of, or related to, its or its agents preparation for performance, performance, and/or post-performance activities under or related in any way to this Agreement, including, without limitation, property damage, hazardous materials, personal or bodily injury, personnel- related costs, attorneys fees and costs, and court costs. Sub-Contractors obligations under this section will not be limited in any way by any limitation on the amount or types of damages, compensation or benefits payable to or for any third-party under workers compensation acts, disability benefit acts, or other employee benefits laws. The indemnity under this section will be for the benefit of the Indemnified parties, their heirs, legal representatives, successors, or assigns.

22. Default, Remedies, and Termination.

(a) Event of Default. An Event of Default occurs if Sub-Contractor fails to: (i) comply with any duties or obligations under this Agreement; (ii) supply sufficient properly skilled workers to complete Work or Additional Work in accordance with the Project Schedule; or (iii) make prompt payment to its workers and suppliers.

(b) Remedies. Upon an Event of Default, Avantgarden may in its sole and exclusive discretion: (i) withhold any payments which would otherwise have been paid to Sub-Contractor under this Agreement; (ii) stop Work or Additional Work on the Project and use all lawful means to prevent further Work or Additional Work from being done on the Project until all Sub- Contractors obligations are fulfilled pursuant to this Agreement; and/or (iii) upon ten (10) calendar days written notice to Sub- Contractor, terminate this Agreement and finish any remaining Work or Additional Work by any method Avantgarden deems expedient. If Avantgarden chooses to finish any remaining Work or Additional Work pursuant to this section, Sub-Contractor must pay all costs incurred by Avantgarden and its agents to complete the Work or Additional Work, including reasonable overhead, profit, attorneys fees and costs, and other expenses. If the total amount exceeds the unpaid balance of the Work or Additional Work earned by Sub-Contractor, then Sub-Contractor will promptly pay the difference to Avantgarden upon notice thereof. If the total amount is less than the unpaid balance of the Work or Additional Work earned by Sub-Contractor, then Avantgarden will pay the difference to Sub-Contractor. If Avantgarden chooses to finish any remaining Work pursuant to this section, then Sub-Contractor will further permit Avantgarden to take possession of all materials at the Project Site for the purpose of completing the Work. Sub- Contractor agrees to cooperate in good faith to facilitate and ensure an orderly transition. The parties acknowledge and agree that

T.S. Received 4/16/2024 ROC Legal

the exercise of any right or the enforcement of any remedy upon an Event of Default will not release, modify, or diminish any of the obligations of Sub-Contractor under this Agreement.

(c) No Waiver. All rights and remedies are cumulative, and the exercise of any right or remedy will not be construed to be a waiver of any other right or remedy.

(d) Termination. Avantgarden may terminate this Agreement: (i) upon ten (10) days written notice to Sub-Contractor of an Event of Default; or (ii) immediately upon written notice to Sub-Contractor of the termination of the Prime Contract, in which case Sub-Contractor will only be entitled to a pro rata payment based upon the Work or Additional Work already completed.

23. No Assignment. Sub-Contractor may not assign, sub-contract or delegate any of its rights, duties or obligations under this Agreement without the prior written consent of Avantgarden.

24. Independent Relationship. This Agreement is an arms-length agreement through which Sub-Contractor is an independent contractor of Avantgarden. This Agreement does not commemorate or constitute a partnership, joint venture, or employment relationship.

25. Confidentiality. In furtherance of this Agreement, Sub-Contractor may come into information of a proprietary nature including the name, address, and other information regarding Owner or related to the Project, in the broadest sense. At no time will Sub-Contractor disclose such information, in the broadest sense, which includes but is not limited to, plans, photographs, or any other information related to the Project, Owner, or Avantgarden. All written and oral information disclosed to Sub-Contractor by Avantgarden or Owner, regardless of whether it was provided before or after the date of this Agreement or how it was provided to the Sub-Contractor, is protected by this Agreement. This provision continues after the termination of the Agreement. Avantgarden will be entitled to all remedies, including injunctive relief prohibiting disclosure, in the event of a breach of this provision. In the event of such a breach, Sub-Contractor must pay Avantgarden the amount of $10,000.00 as liquidated damages. The sum is liquidated damages and not as a penalty. The parties hereto have computed, estimated, and agreed upon the sum of $10,000.00 as an attempt to make a reasonable forecast of probable actual loss because of the difficulty of estimating with exactness the damages which will result from a breach of this provision.

26. Non-Solicitation. Sub-Contractor will not to solicit Owners or others related to the Project directly or indirectly, including Avantgarden personnel, to perform services for a period of one (1) year after the Completion of Work or Additional Work.

27. Drawings and Specifications. The drawings, specifications, and other documents prepared by Avantgarden for this Project (collectively Drawings and Specifications) are instruments of Avantgarden and will be utilized solely for the completion of services for the Project. Avantgarden is the author of the Drawings and Specifications and will retain all common law, statutory, and other reserved rights, including copyrights, therein. Sub-Contractor will be permitted to retain copies, including reproducible copies, of the Drawings and Specifications for the sole purpose of completing the Work or Additional Work. Sub-Contractor is prohibited from disclosing the Drawings and Specifications to unauthorized third-parties or from using the Drawings and Specifications for any purpose other than the completion of the Work or Additional Work.

28. Notices. Any written notices given or required to be given pursuant to this Agreement will be deemed to have been provided when delivered by hand, when sent by regular mail and addressed to the party at the address listed below or such other address as a party may provide from time to time in writing to the other party hereto, or when sent by facsimile.

If to Sub-Contractor, then to: If to Avantgarden, then to:

Michael Scot Longanecker Todor Spasov Morningstar Homes LLC Avantgarden design + build. llc 7829 S Stanley Pl 4638 E. Clinton St. Tempe, AZ 85284 Phoenix, AZ 85028

Tel: 602 697 8292 Tel: 602 327 9995

29. Disputes. In the event of any disagreement between Avantgarden and Sub-Contractor as to the scope of Work, Additional Work, scheduling, or any other disagreement arising out of or related to the Project or this Agreement, in the broadest sense, Sub- Contractor will not stop work or reduce progress unless specifically directed by Avantgarden in writing, but will continue with the prompt and diligent completion of the Work or Additional Work. If the parties are unable or unwilling to resolve a dispute between them, then the dispute will be settled by binding commercial arbitration (Arbitration) to take place in Phoenix, Arizona through the American Arbitration Association (Arbitration Board), and judgment upon the award rendered by the Arbitration Board which may be entered in any court having jurisdiction thereof. Sub-Contractor and Avantgarden will each select one (1) person to act as

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an arbitrator and these two (2) persons will jointly select a third (3rd) person who will also be chair of the Arbitration Board. If either party fails to select an arbitrator pursuant to this provision within ten (10) calendar days of a written request to do so, then the other party will be authorized and entitled to select the final arbitrators. The written decision of the Arbitration Board will be final and conclusive. Each party will be responsible for its share of the arbitration fees in accordance with the application of the Rules of Arbitration. If either party fails or refuses to appear or participate in the Arbitration, the Arbitration Board may decide the dispute on the evidence presented in such proceedings by the other party and the other party is entitled to costs of suit, including a reasonable attorneys fee for having to compel arbitration or enforce an award.

30. Recording. Avantgarden may record any conversations with any employee of Sub-Contractor. Sub-Contractor consents to such recordings and their use in any forum of dispute between Avantgarden and Sub-Contractors.

31. Governing Law/Forum. This Agreement is governed by the laws of the State of Arizona.

32. Attorneys Fees and Costs. In any dispute between the parties to this Agreement arising out of, or related to, the Project or this Agreement, or the rights and obligations of either in relation thereto, the prevailing party is entitled, in addition to other such relief as may be granted, to a reasonable sum and for that partys attorneys fees and costs incurred, including the cost of any arbitration. For the purposes of Arbitration, the parties will request that the Arbitration Board identify a prevailing party and award attorneys fees.

33. Recitals. All recitals are incorporated into this Agreement by reference.

34. Exhibits. All exhibits are incorporated into this Agreement by reference.

35. Entire Agreement. This Agreement and its exhibits contain the entire agreement and understanding of the parties and no oral representations of any kind will be considered a part of this Agreement unless agreed to into writing and signed by both parties.

36. Severability. The invalidity or unenforceability of any one or more provisions of this Agreement in no way affects any other provision.

37. Counterparts. This Agreement may be executed in duplicate originals or counterparts, each of which will be an original, and all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate either individually and/or by their duly authorized officers.

Morningstar Homes LLC, an Arizona company Avantgarden design + build, llc

By: By: Michael Scot Longanecker Todor Spasov, owner

License ROC # 180771

T.S. Received 4/16/2024 ROC Legal

Exhibit A

Drawings, Specifications, and Construction Cost

Subcontractor: Morningstar Homes LLC

Street Address: 7121 E Wilshire Dr, Scottsdale AZ

Scope of Work:

Spray Polyurethane Foam with Elastomeric Coating Roof System:

1. Spray-apply (1.5) inches of SPF over plywood deck 2. Spray-apply acrylic base coating @ 1.75 gallons per 100 square feet over new foam. 3. Spray-apply acrylic top coating @ 1.75 gallons per 100 square feet over base coating. 4. Our number excludes a slope or taper. This Proposal assumes all slopes are in structure. 5. Edge Metal to be Supplied and installed at Foam Edge 6. Drains, basket installation by other. Contractor to lock ring after Foam installation 7. Provide a 2 Year Roofing Labor Warranty. 8. Provide a 5 Year manufacturer material warranty.

Scope includes Buildings 1 and 2 ( all 5 units)

FOAM ROOF: $18,700.00

Pli Dek Pedestrian Walk Deck Coating Roof System:

1. Deck wood must Be Flat, Screwed, Glued Ready For System, All Voids, Swelling, non-furred out wood to be corrected before roof system installation. 2. Drains installed by Plumbing contractor. Product will be installed into drain head 3. Supply and install PliDeck Multi Coat Walk Deck system. Color to be selected 4. Metal to be Ran approx. 8 up Wall to be Capped by Stucco Screed or stucco stop by other 5. 3x5 Metal Ran up to door threshold, Door thresholds by other 6. Drip metal Supplied and installed By Morningstar in 26 ga Galv Paintable, Black or Brown 2x4 metal. 7. Crickets and or Slope to drain by Framer 8. Provide a 2 Year Roofing Labor Warranty. 9. Provide a 5 Year material warranty.

Scope includes Buildings 1 and 2 walk roof decks and terraces ( all 5 units)

PLI DECK: $68,874.00

TOTAL FOR PROJECT: $87,574.00

1. Sub-Contractor will perform the installation Work, as set forth above, including all and labor necessary to complete all Work according to the specifications and material lists herein, or attached, and in general accordance with plan concepts but not necessarily to the measurements or quantities of the landscape plans or drawings or on-site design.

2. Sub-Contractor warrants all Work and Additional Work for a period of two (2) years.:

3. Unless specified in writing, any oral comments made by Avantgarden regarding future scheduling of Work are advisory only

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and non-binding projections based on current workloads of Avantgarden.

4. Avantgarden is not responsible for delay associated with the Project for causes beyond its control, including delays caused by other contractors/subcontractors.

SUB CONTRACTOR CONTRACTOR Morningstar Homes, LLC Avantgarden design + build, llc

By: By: ___________________________________

Michael Scot Longanecker, Owner Todor Spasov, Owner

Date: 03/07/2022 ____________________________________ Date: ____________________________________

Exhibit B Payment Schedule

Number Payment description Amount Due Date

Down payment - FOAM 50% $ paid 03/16/22 9,500.00 at start of project Progress payment - Foam $ paid 08/09/23 5,000.00 progress Completion of Foam $ 4,200.00 at completion partial payment 08/09/23 - $20,000 Down payment - PLI DECK 50% payment 03/16/22 partial $ - $15,000 35,000.00 at start of project Progress payment PLI DECK $ paid 08/09/23 20,000.00 progress Completion of PLI DECK $ 13,874.00 at completion

total $ 87,574.00

T.S. Initials: _________ / _________

Received 4/16/2024 ROC Legal

Exhibit C

Completion Report

Owner of Project Site Address Legal Description (Owner) (Project Site)

7121 Wilshire LLC 67121 E. Wilshire Dr. APN# 129-05-010L Scottsdale, AZ 85257

ESTIMATED JOB ITEM DESCRIPTION DATE OF DATE OF COMPLETION COMPLETION

Avantgarden design + Build,llc

By: Todor Spasov, Owner

Date: _______________________________

T.S. Received 4/16/2024 ROC Legal ***Morningstar signature pages

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T.S. Received 4/16/2024 ROC Legal ***Morningstar signture a Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal

EXHIBIT C Received 4/16/2024 ROC Legal Received 4/16/2024 Payments by Avantgarden Design + Build, LLC to Morningstar Homes, LLC ROC Legal

Contract Number Amount Paid by Check # Check Amount Note Framing 1 $14,300.00 1407 $14,300.00 Framing 2 $16,000.00 1411 $16,000.00 Framing 3 $15,000.00 1447 $15,000.00 Framing 4 $14,000.00 1471 $34,000.00 Paid #4 and #8 Framing 5 $14,300.00 1426 $36,300.00 Paid #5 and #6 Framing 6 $22,000.00 1426 Paid #5 and #6 Framing 7 $21,000.00 1433 $21,000.00 Framing 8 $20,000.00 1471 Paid #4 and #8 Framing 9 $6,400.00 2011 $6,400.00 Never cashed Framing CO 1 $20,232.00 1472 $20,232.80 Framing CO 2 $5,300.00 1481 $5,300.00 Totals: $168,532.00 $168,532.80

Roofing 1 $9,500.00 1478 $24,500.00 Paid #1 and $15k of #4 Roofing 2 $5,000.00 1587 $45,000.00 Paid #2, $20k of #4, and $20k of #5 Roofing 3 $4,200.00 Roofing 4 $35,000.00 1478; 1587 Roofing 5 $20,000.00 1587 Roofing 5 $13,874.00 Totals: $87,574.00 $69,500.00

Morningstar Homes, LLC vs. Avantgarden Design + Build, LLC CV2024-02009 Received 4/16/2024 ROC Legal

EXHIBIT D Received 4/16/2024 ROC Legal Received 4/16/2024 ROC Legal

EXHIBIT E See separately attached documents accessible via the link provided in Respondent’s Answer submission e-mail. Received 4/16/2024 ROC Legal

EXHIBIT F Received 4/16/2024 ROC Legal

Morningstar Homes, LLC vs Avantgarden Design + Build, LLC

Incomplete Work and Construction Issues

1. Spray foam roof with Elastomeric Coating – drain domes. Complainant failed to install roof domes on 3 of the unit’s flat roofs internal drain assemblies. Domes need to be maintained regularly to prevent drains from clogging and proper installation is critical. See Exhibit E(1).

2. Pli Deck flashing under sliding doors. There is missing flashing under sliding doors for Units 1001, 1003, and 1004. This issue has already allowed water to enter the interior of the units following a rain storm. See Exhibits E(2-3).

3. Pli Deck crack repairs and final paint coat mismatch. Complainant repaired multiple locations where cracking occurred in the Pli Deck. The paint coat applied following such repairs does not match the original paint color due to sun exposure. Complainant agreed to fully repaint the repaired area, but Complainant failed to complete this work. See Exhibit E(4).

4. Pli Deck terrace surface installation detail. The installation detail does not match the sample provided by Complainant that Respondent approved. The detail is missing a membrane over the Pli Deck. The Pli Deck has excessive cracking. See Exhibits E(5-7). Exhibit E(5) shows the approved sample. Exhibits E(6-7) show the material actually installed.

5. Pli Deck terrace drainage. Pli Deck terrace walking deck material was improperly installed over sloped roof planes. The terrace collects and retains water longer than 48 hours which may result in roof failure. Complainant made multiple attempts to adjust slopes to prevent standing water, but there are still few areas where the roof collects and retains water longer than 48 hours. See Exhibits E(8-9).

CV2024-02009 Page 1 of 1 Received 4/16/24, 3:07 PM State of Arizona Mail - Case No. 2024-02009 4/16/2024 ROC Legal

Answers - AZROC <[email redacted]>

Case No. 2024-02009 messages

Maci Burke <[email redacted]> Tue, Apr 16, 2024 at 2:51 PM To: "[email redacted]" <[email redacted]> Cc: Charles Morrow <[email redacted]>

Hello:

This firm represents Avantgarden Design + Build LLC (License No. ROC 290552). Attached is Avantgarden’s Answer. The Answer Exhibit E documents are accessible via the link below as they are too large to send as e-mail attachments. Please let us know if the ROC requires any additional information on this matter.

Please confirm the ROC’s receipt today. Thank you.

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MACI R. BURKE 6720 N. Scottsdale Road, Suite 305, Scottsdale, Arizona 85253 602.955.1455 | www.gb.law | Connect on LinkedIn | Follow Galbut Beabeau

2024.04.16 Answer (with Exhibits).pdf 5209K

Answers - AZROC <[email redacted]> Tue, Apr 16, 2024 at 3:07 PM To: Maci Burke <[email redacted]>

Good afternoon. We cannot open up links to download files. You will need to provide them in pdf format or through the mail.

Thank you, Legal Department [Quoted text hidden] -- Thank you.

Registrar of Contractors Legal Department

https://mail.google.com/mail/b/AEoRXRTyDjFLZDdNYmAQLfeCK-8h7EvpeYlYPPteAEYLmYM8NBRU/u/0/?ik=581c53cf5c&view=pt&search=all&per… 2/2 Mediation Notice

Mediation Services Mediation services are available to the parties. What is Mediation? Mediation is a method of resolving disputes where the parties can end conflict without the expense and time associated with the full administrative process. Who Participates in During mediation, a mediator will attempt to help the Mediation? parties find an optimal solution to the conflict. Both parties must agree to participate in mediation, and both parties must bring a representative to mediation that has full authority to settle the entire matter. Mediation Is Not Neither the Registrar nor the Office of Administrative Mandatory Hearings will penalize a party for not agreeing to mediation. Where do the Parties The parties will meet at the Office of Administrative Meet for Mediation? Hearings to participate in mediation.

The Office of Administrative Hearings is located at 1400 West Washington, Suite 101, Phoenix, Arizona 85007. When does Mediation can occur after the Registrar issues a citation, but Mediation Occur? before the administrative hearing. Why Should Parties Mediation can be an alternative to the full administrative Consider Mediation? process. Mediation is beneficial because it is (1) time- efficient, (2) cost-effective, (3) confidential, and (4) capable of providing flexible solutions to complex problems. How to Request If the parties wish to mediate this case, they must file a Joint Mediation Request for Mediation with the Office of Administrative Hearings. A Joint Request for Mediation is included with this Mediation Notice. REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA _________________________ Case No. _______________ COMPLAINANT,

v. JOINT REQUEST FOR MEDIATION _________________________ RESPONDENT.

REQUEST

The parties jointly request that this matter be referred to mediation in the Office of Administrative Hearings (OAH). ☐ This matter is set for hearing on __________________(date). ☐ This matter is not currently set for hearing. MEDIATION AGREEMENT By requesting this mediation and signing below, the parties understand, represent, and agree: 1. The parties are prepared to commence mediation and will be ready for mediation on _____________________(date); 2. The parties will participate in the mediation process in good faith; 3. This request for mediation is not intended to hinder or delay administrative proceedings; 4. No party will contend that the mediation limits the power of OAH and its administrative law judges to conduct an administrative hearing and issue decisions under A.R.S. §§ 41-1092 – 1092.12; 5. The parties will be courteous and respectful throughout the mediation process to all participants; 6. The mediation is completely voluntary and the principal purpose is to allow the parties a full and fair opportunity to discuss settlement; of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – PHOENIX, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 7. The mediator may conduct joint and separate meetings with the parties and may suggest resolutions to the parties’ dispute, but the mediator has no authority to impose a settlement upon the parties; 8. The mediation process is confidential. Communications made, material created for or used during, and acts occurring during mediation are confidential and may not be discovered or admitted into evidence in any proceeding except as provided by A.R.S. § 12-2238; 9. The mediator is not subject to service of process or a subpoena to produce evidence or to testify regarding any evidence or occurrence relating to the mediation except as provided in A.R.S. § 12-2238(C); 10. Neither the mediator, nor the Registrar of Contractors, nor the Office of Administrative Hearings is subject to civil liability for any act or omission in connection with any mediation service or activity except for acts involving

intentional misconduct or reckless disregard of a substantial risk of injury to the rights of others; 11. Throughout the mediation process, each party must have a representative present who will have full settlement authority to settle all claims at issue in the administrative

proceeding. 12. The mediation process will terminate when: a. The parties reach settlement; b. The mediator determines that further efforts at mediation are no longer likely

to achieve a settlement; or c. One of the parties withdraws from mediation. _____________________________________ _______________________ Complainant (or representative) Date

_____________________________________ _______________________ Respondent (or representative) Date

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – PHOENIX, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 PREHEARING DISCLOSURE STATEMENT INSTRUCTIONS ***DO NOT SUBMIT THESE INSTRUCTIONS WITH THE PREHEARING DISCLOSURE FORM***

ADMINISTRATIVE RULES A copy of the Arizona Administrative Code’s Rules for the Registrar of Contractors can be located on the Registrar’s Website.

PREHEARING DISCLOSURE REQUIREMENT Under A.A.C. R4-9-118(A), before a hearing, the parties must prepare a disclosure statement. The disclosure statement must contain: • A list of all the witnesses the party will call to testify, including the witnesses’ contact information and a brief description of the subject matter of the witnesses’ expected testimony; and • A list of all the exhibits that the party will use at the hearing.

FILE PREHEARING DISCLOSURE STATEMENTS • The Prehearing Disclosure Statements and Exhibits may be submitted to the Arizona Office of Administrative Hearings using any of the following: • Electronically: https://portal.azoah.com/submission/ • In-Person or by Mail: 1740 West Adams Street, Lower Level, Phoenix, Arizona 85007

EXCHANGING DISCLOSURE STATEMENTS AND EXHIBITS Under A.A.C. R4-9-118(B) (effective November 5, 2017), a party to the hearing must serve on every other party and file with the Office of Administrative Hearings a copy of: • The disclosure statement; and, • Any exhibit that the party will use at the hearing. Service: The disclosure statement and exhibits must be served on all parties in accordance with Arizona Administrative Code R2-19-108 Filing Documents. Under A.A.C. R2-19-108, service is completed by: • Personal delivery; • 1st class, certified or express mail; or • Facsimile. Timing: The disclosure statement and the exhibits must be served and filed not less than seven calendar days before the date of the hearing. Under A.A.C. R2-19-108, a document is served on a party: • On the date it is personally served; • Five days after it is mailed by express or 1st class mail; • On the date of the return receipt if it is mailed by certified mail; or • On the date indicated on the facsimile transmission.

CONSEQUENCES FOR FAILING TO DISCLOSE Under A.A.C. R4-9-108(C), if a witness or an exhibit is not timely disclosed as required the rules, and good cause for the failure to disclose is not shown, then the administrative law judge may: • Order that certain witnesses or exhibits not be used at the hearing; • Order that a particular fact is or is not established for the record; or, • Order that a charge, a defense, a claim, or some portion thereof, be dismissed.

Form RC-L-800A Prehearing Disclosure Statement Rev. 10/08/2019 Instructions Form PREHEARING DISCLOSURE STATEMENT FORM RC-L-800A

PART 1: WITNESS LIST DOCKET NO. Under A.A.C. R4-9-118(A), before a hearing, a party must prepare a disclosure statement containing a list of all the witnesses the party will call to testify, including the witnesses’ contact information and a brief description of the subject matter of the witnesses’ expected testimony. If you need additional space to list all witnesses, complete and attach additional Witness Lists. Example 1. Name 2. Telephone Number 3. Email Address

John Doe (123) 456-7890 [email redacted] 4. Subject Matter of Expected Testimony

John Doe will testify regarding the poor workmanship and poor installation of the Garage Door. Mr. Doe will also testify regarding the invoices and change orders for the project.

Witness 1. Name 2. Telephone Number 3. Email Address

4. Subject Matter of Expected Testimony

Witness 1. Name 2. Telephone Number 3. Email Address

4. Subject Matter of Expected Testimony

Witness 1. Name 2. Telephone Number 3. Email Address

4. Subject Matter of Expected Testimony

Witness 1. Name 2. Telephone Number 3. Email Address

4. Subject Matter of Expected Testimony

Form RC-L-800A Prehearing Disclosure Statement Rev. 1/15/2019 Page 1 of 3 PART 2: EXHIBIT LIST DOCKET NO. Under A.A.C. R4-9-118(A), before a hearing, a party must prepare a disclosure statement containing a list of all the exhibits that the party will use at the hearing. Note: All exhibits listed below must be provided to all parties to the hearing. See A.A.C. R4-9-118(B). If you need additional space to list all witnesses, complete and attach additional Exhibit Lists. Example Contract for new garage door. Invoice #10001 – Cost for garage door replacement.

Exhibit Exhibit Name

Form RC-L-800A Prehearing Disclosure Statement Rev. 1/15/2019 Page 2 of 3 PART 3: ACKNOWLEDGEMENT & SIGNATURE I certify that the above information is true and correct and that I will serve a copy of this disclosure statement and any exhibits listed in Part 2 to all parties to the hearing in accordance with A.A.C. R4-9-118. I acknowledge and understand that if I fail to properly disclose a witness or exhibit, the administrative law judge may: • Order that certain witnesses or exhibits not be used at the hearing; • Order that a particular fact is or is not established for the record; or, • Order that a charge, a defense, a claim, or some portion thereof, be dismissed.

I am the (check one):  Complainant  Respondent Docket No.

Print Name Signature Date

Form RC-L-800A Prehearing Disclosure Statement Rev. 1/15/2019 Page 3 of 3