ALJDEC - Licensing

2024A-03759-CHC-ROC · Registrar of Contractors · 2025-08-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Joe Hoffman,

COMPLAINANT,

v.

The Builders of Arizona Inc.

ROC License No. 311649,

RESPONDENT.

No. 2024A-03759-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 03, 2025 at 9:00 AM.

APPEARANCES: Joe Hoffman (“Complainant”) appeared on his own behalf. Doug Green appeared on behalf of The Builders of Arizona Inc. (“Respondent”) with Preston Newberry as a witness. Jim Dimond appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: the Notice of Hearing on Contested Case (“Notice of Hearing”), including the referring agency’s attached administrative file, Complainant Exhibits 7-8, and Minute Entries – Granting Continuance issued February 14, 2025, April 27, 2025, and May 15, 2025, were admitted into the evidentiary record.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT

Background and Procedure

Pursuant to Arizona Administrative Code (“Ariz. Admin. Code”) R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. On February 22, 2017, the Registrar issued License No. 311649 General Residential B contracting license to Respondent. The license has been renewed through February 28, 2027. Mark Given Ervin is listed as the Qualifying Party and Officer on the license. Respondent’s address of record for the license is 16019 N. 68th Ave. Peoria, Arizona 85382. Respondent has two (2) active $9,000.00 surety bonds on the license issued by RLI Insurance Company and American Contractors Indemnity Company, on February 02, 2017, and January 12, 2022, respectively. The license has not been previously disciplined by the Registrar, nor have there been any prior complaints settled or otherwise resolved against it. Currently, the license has two (2) open complaints against it; one of which is presumed to be related to this matter.

On April 01, 2024, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 311649 alleging poor work of a two-part project involving (1) structural framing of an RV garage and adjacent residence, including drawings and vapor barrier, for $120,000.00, and (2) siding installation on the RV garage and residence, including windows, for $32,300.00. The Registrar designated it Complaint No. 2024-03759 and reassigned the matter to Jim Dimond (“Investigator Dimond”) for investigation.

On April 03, 2024, Investigator Dimond issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on May 02, 2023, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.

Respondent did not provide a written reply to the underlying complaint, or request to inspect the complained-of work.

On June 11, 2024, Investigator Dimond inspected the work that had been performed on the project to date. Respondent was present. Investigator Dimond also reviewed the contract-related correspondence between the parties, and took 7 photographs of the project site. When he was finished, Investigator Dimond drafted his Inspection Notes. Ultimately, Investigator Dimond derived ten (10) distinct complaint items from Complaint No. 2024-03759, six (6) of which he substantiated based on his firsthand observations. Specifically, Investigator Dimond determined that complaint items 1-3, 5-6, and 10 fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent.

On November 06, 2024, Investigator Dimond issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on November 26, 2024, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

On or about December 03, 2024, Investigator Dimond forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On December 05, 2024, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). Respondent was given until December 20, 2024, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. Correspondence was not returned as undeliverable to Respondent.

On December 19, 2024, the Registrar received a timely Answer on behalf of Respondent whereby Mr. Green denied all alleged statutory violations and argued that Respondent had not been provided “all necessary specifications” or “proper materials” by Complainant.

On December 30, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on February 24, 2025. Per the January 24, 2025, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violations:

Charge 1: A.R.S. § 32-1154(A)(2)(a)

Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)

Charge 3: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on his own behalf and called Investigator Dimond as a witness. Mr. Green and Preston Newberry testified on behalf of Respondent. The substantive evidence of record is as follows:

Complainant owns residential property located at 12465 E. Mingus Vista Dr. Prescott Valley, Arizona 86315.

On October 18, 2022, the parties entered into a $32,300.00 labor-only construction agreement for siding installation on an RV garage and residence, including windows and sliding doors.

On November 01, 2022, the parties entered into a $120,000.00 labor-only construction agreement for structural framing of an RV garage and residence totaling approximately 9,885 square feet. Terms included drawings and the installation of a vapor barrier.

Both projects required a 20% deposit, 30% draw at 1⁄2 completion, 25% draw at 3⁄4 completion, 15% draw at 7⁄8 completion, and the final 10% balance due once the projects were complete.

On or about November 12, 2022, work on the projects commenced.

On or about April 15, 2023, work on the projects stopped or was otherwise completed.

In total, Complainant tendered $138,500.00 to Respondent for the projects. An outstanding balance of $13,800.00 is owed on the projects.

Respondent’s license was active and in good standing with the Registrar between November 06, 2024, and November 26, 2024.

Respondent did not schedule or perform any corrective work on substantiated complaint items 1-3, 5-6, and/or 10 during the Directive’s compliance period. Respondent did not request an extension of the Directive’s compliance period prior to November 26, 2024, allege a denial of access to the project site by that date, or enter into a settlement agreement with Complainant.

Additional Evidence

On or about April 15, 2023, Complainant asked Respondent to replace the onsite crew because he was unhappy with their workmanship. Respondent agreed that Complainant could hire subcontractors, but declined to actively replace the onsite crew. Later, Respondent declined to address Complainant’s workmanship concerns because it believed the parties did not have a valid construction contract.

In May 2023 Complainant supplied Respondent with a punch list of over 100 items. Respondent instructed Complainant to hire his own subcontractors to finish the project because Respondent did not have any crew members available to replace the ones Complainant was dissatisfied with, and Respondent did not want to perform any additional work until it was paid in full.

Closing Arguments

Respondent declined to provide a closing argument.

In closing, Complainant argued that there was no excuse for Respondent’s deviations or inaction. Complainant opined that he had sustained his burden of proof and asked for disciplinary action to be taken against License No. 311649.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

The Registrar may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.

Complainant bears the burden of proof to establish cause for the Registrar to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Ariz. Rev. Stat. § 32-1154(A)(2)(a) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of [p]lans or specifications in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.”

Ariz. Rev. Stat. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.”

Ariz. Admin. Code R4-9-108(a) requires that “[a] contractor shall perform all work in a professional and workmanlike manner.”

Ariz. Rev. Stat. § 32-1154(A)(22) provides, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.

Ariz. Rev. Stat. § 32-1154(E) holds, in pertinent parts, that the ROC may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also holds that no future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.”

Statutes shall be liberally construed to affect their objects and to promote justice. In interpreting a statute, “[w]e first consider the language of the statute and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter, historical background, effects, consequences, spirit, and purpose.”

Statutes should be interpreted to provide a fair and sensible result. “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”

The Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.

The material facts in the case at bar are clear.

It is clear from the record that the parties had two (2) contracts that essentially amounted the construction of an RV garage and accompanying residential structure; including drawings, windows, siding and a vapor barrier for $152,300.00. The record also reflects that Complainant tendered $138,500.00 to Respondent for the projects. The record further reflects that Investigator Dimond determined, after inspecting the project(s), that Respondent’s workmanship on complaint items 1-3, 5-6, and 10 were substandard and required remediation. It is also uncontroverted that Respondent never attempted to perform any corrective work.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and remediate Complainant’s project(s). This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain its burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance/competence on this project. Respondent had November 06-26, 2024, to schedule and complete corrective work on the six (6) substantiated complaint items at issue. Neither Mr. Green nor Mr. Newberry provided a rationale for why Respondent made no attempt to comply with the Directive or, at a minimum, request an extension of the Directive’s compliance period. The record reflects that Mr. Forsberg never reached out to Complainant or Investigator Dimond. The record establishes that Complainant substantially paid on its contracts with Respondent, and per their own terms, final payment was not due until the project(s) were complete. Thus, Respondent’s contention that it did not want to continue working on the project until it received final payment is unreasonable. No mitigating evidence exists in the record in favor of Respondent.

Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

Complainant may petition the Registrar’s Recovery Fund for financial recompense in this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that that on the effective date of the Final Order in this matter, Respondent The Builders of Arizona Inc., ROC License No. 311649, shall be suspended for six (6) business days.

It is further recommended that the Registrar require Respondent to pay the sum total of $200.00 (two hundred dollars) as a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E).

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s Order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in Ariz. Rev. Stat. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

NOTICE

Pursuant to Ariz. Rev. Stat. § 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 04, 2025.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Joe Hoffman, Complainant

12465 E. Mingus Vista Dr.

Prescott Valley, AZ 86315

[email redacted]

The Builders of Arizona Inc., Respondent

c/o Doug Green, Agent

16019 N. 68th Ave.

Peoria, AZ 85382

[email redacted]

[email redacted]

By: OAH Staff