ALJDEC - Licensing

2024A-02551-CHC-ROC · Registrar of Contractors · 2024-09-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Michael Zamora,

COMPLAINANT

v.

The Morgan Group Properties LLC

DBA: The Morgan Group Properties

License No. ROC 338264,

RESPONDENT

No. 2024A-02551-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 15, 2024

APPEARANCES: Complainant Michael Zamora was represented by Wesley Cox who appeared via Google Meet. Scott Morgan appeared via Google Meet on behalf of Respondent The Morgan Group Properties LLC. Registrar of Contractors investigator Doug Barrett appeared via Google Meet.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

EXHIBITS ADMITTED INTO EVIDENCE: Complainant’s Exhibits 1-12 were admitted into evidence.

_____________________________________________________________________

FINDINGS OF FACT

The Morgan Group Properties LLC (Respondent) is the holder of License No. 338264 issued by the Arizona Registrar of Contractors (Registrar).

On or about October 7, 2022, Complainant hired Respondent to remodel his home in Tempe, Arizona. The total contracted price was $378,246.43.

On or about March 1, 2024, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to project.

The Registrar assigned the present complaint to Investigator Doug Barrett. The jobsite inspection was performed on March 25, 2024.

After the jobsite inspection, Investigator Barrett issued a Dismissal Letter which stated as follows:

The Registrar received and investigated your complaint. Although your complaint alleges both poor workmanship and a financial/contractual dispute with a licensed contractor, there is insufficient grounds for discipline under A.R.S. § 32-1154(A). Both parties understand there are outstanding punch list items that need to be completed. These items are normally addressed upon completion of the project and are not appropriate for a corrective order from the Registrar at this time. Based on the ongoing financial dispute between the parties and premature allegations of poor workmanship, the Registrar is declining to exercise its sole discretion under A.R.S. § 32-1155(A) to issue a citation in this matter. The complaint is hereby dismissed.

Please understand that nothing in this letter is intended to prevent you from seeking relief in another forum.

The matter was then re-opened on April 24, 2024, and Investigator Barrett then issued a Written Directive on or about April 25, 2024, which provided in pertinent part as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on Friday, May 17, 2024.

...

DIRECTIVE REQUIREMENTS

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

Compliance Item: 1 - PAINT: Numerous paint touch up areas are "blue tapped" & has been shown to contractor.

Investigator’s Observation: Verified. Several areas marked with blue tape were within standards. The following observed areas required paint correction:

Spot in paint above slider in Arizona room.

Paint touch up at laundry room door strike plate.

Paint the wrong sheen under kitchen cabinet to the right of the range.

Paint the wrong sheen in the kitchen pantry at light switch.

Nail hole at the top left corner trim to the right of fireplace.

Paint glob at left corner of the fireplace mantle.

Paint drip/smear below the switches at front door.

Poor texture/paint to the right of master bath tub.

Missing paint inside master bath linen closet.

Missing paint at repaired P-trap and stucco by exterior AC units.

Contractor should correct by appropriate means.

Governing Rule: Violation of any rule adopted by the Registrar;

Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 2 - HVAC AHU 2 STAGE WIRING: 2 units not properly wired for 2 stage use and efficiency

Investigator’s Observation: Verified. The two stage units are wired in single stage. The Complainant and Respondent agreed they needed correction.

Contractor should correct by appropriate means.

Governing Rule: Violation of any rule adopted by the Registrar;

Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 3 - HVAC AHU NOT SEALED: compressor piping into AHU not sealed. air leakage.

Investigator’s Observation: Verified. I observed the air handlers in the AZ room closet and the attic. The piping and refrigerant lines were not sealed and had leaking cold air. Contractor should correct by appropriate means.

Governing Rule: Violation of any rule adopted by the Registrar;

Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 4 - SEWER SMELL/SCREWS IN VENT STACK:

bathroom sewer smell & drywall screws in vent stack

Investigator’s Observation: Verified. I observed screws through the hall bathroom vent stack via a scope video provided by the Complainant. The sewer smell was not present during this inspection. Contractor should correct the vent stack by appropriate means.

Governing Rule: Violation of any rule adopted by the Registrar;

Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 5 - ROOF SHINGLE DEGRADATION: asphalt shingle granular degrading prematurely.

Investigator’s Observation: Verified. I observed the shingles to the left of the front porch and on the left side of the valley. The shingles were cracked as if they had been folded. Both parties agreed the valley was replaced after the roof was complete and this damage was most likely from the replacement.

Contractor should correct by appropriate means.

Governing Rule: Violation of any rule adopted by the Registrar;

Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Compliance Item: 4 - HVAC DUCT NOISE: duct work in bathroom & bedroom making crackling noise.

Investigator’s Observation: Unverified. The Complainant was unable to duplicate this item during the inspection.

Governing Rule: N/A...

(All errors contained in the original)

Investigator Barrett conducted an Compliance Jobsite Investigation on May 23, 2024. In his notes regarding the same, Investigator Barrett noted the following in pertinent part:

Compliance Inspection Findings: The complainant was present for the compliance inspection but no one from the respondent was present. No work has been started or completed per the written directive that was issued on April 25, 2024 with a completion date of May 17, 2024.

(All errors contained in the original).

On May 31, 2024, the Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a); and A.R.S. § 32-1154(A)(22).

On or about June 17, 2024, Respondent submitted an Answer to the Registrar.

On or about July 8, 2024, a Notice of Hearing was issued setting a hearing on August 15, 2024, at the Office of Administrative Hearings, an independent state agency.

At hearing, Investigator Barrett testified as to the Registrar’s involvement and the above timeline and findings from his inspections.

Investigator Barrett testified that after consulting with his supervisor, Alex Figueroa he re-opened the matter and issued the Directive.

Further, investigator Barrett testified that there was no representative from Respondent at the compliance jobsite inspection and there was no compliance with the Directive.

Finally, while Investigator Barrett testified that the items were very minor, they were still not up to workmanship standards, which was also why the Directive was issued.

Complainant called Alex Figueroa to testify. Mr. Figueroa testified that this matter came to his attention via correspondence from Complainant’s attorney. Mr. Figueroa testified that while there was a discrepancy as to the final compensation, there were still items which needed to be corrected.

Further, while he considered the jobsite to be substantially complete, Mr. Figueroa testified that it was the Registrar’s goal to resolve workmanship issues and not payment disputes.

Complainant testified on his own behalf, and testified that he paid $395,058.95 to Respondent. Complainant testified that he paid over the contract price because there were various additions to the contract like sliding glass doors and upgraded countertops which were not contemplated in the original contract.

Further, Complainant testified that Respondent never contacted him to make repairs.

Scott Morgan testified that he believed that Complainant failed to abide by the prompt pay act as he sent Complainant multiple invoices which went unpaid, and therefore he had a right to not perform the work,

Mr. Morgan testified however, that he still was willing to perform the corrective work, if Complainant made the remaining payments.

Further, Mr. Morgan testified that he could not get his subcontractors to make the necessary repairs as they did not want to go to Complainant’s property due to Complainant’s arrogance. Mr. Morgan testified however, that he was able to find different subcontractors but it was after the Directive expired.

Administrative notice was taken of Respondent’s prior License record on September 3, 2024. Such prior License record reflected that Respondent’s License No. 338264 was first issued on May 18, 2022, and reflected that there was one open case, namely the present case.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazzano v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

The preponderance of the evidence established, and there was no dispute that Respondent’s work was not completed in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A).

The evidence established Respondent failed to complete the corrective work following the Directive being issued. While, the tribunal appreciates Mr. Morgan’s position that he wanted to be paid on the remainder of the contract, the issue in this matter was the five items which he was required to correct to satisfy the Directive. He made no attempts to complete the same, and there was no evidence presented that Complainant somehow denied access. Therefore, Complainant 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).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 338264 for a period of two days.

It is further recommended that the Registrar require Respondent to pay the sum of $100.00 as a civil penalty pursuant to A.R.S. § 32-1154(E).

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(7), 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, September 3, 2024.

/s/ Adam D. Stone

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Wesley M. Cox

[email redacted]

The Morgan Group Properties LLC

[email redacted]

By: OAH Staff