ALJDEC - Licensing
2024A-04146-CHC-ROC · Registrar of Contractors · 2024-11-07
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Victoria Joanne Kulczyk-Kenton,
COMPLAINANT,
v.
Right Way Roofing Inc.
ROC License No. 188504,
RESPONDENT.
No. 2024A-04146-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: August 23, 2024 & October 18, 2024.
APPEARANCES: Victoria Joanne Kulczyk-Kenton (“Complainant”) appeared on her own behalf. Joey Chester appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Chris R. Baniszewski, Esq. appeared as counsel on behalf of Right Way Roofing Inc. (“Respondent”) with Robert Ramsey, Kevin Clark, and Lori Clark as witnesses. Harry Kenton observed.
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the Registrar’s attached agency file, July 19, 2024, Hearing Order, August 28, 2024, Further Hearing Order, Complainant Exhibits A-B & O, and Respondent Exhibits 3, 5, 7-11, 14-20, 22, 24-42 and 47 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 September 03, 2003, the Registrar issued License No. 188504 Specialty Dual CR-42 Roofing contracting license to Respondent. The license has been renewed through September 30, 2025. John Ralph Clark is listed as the Qualifying Party and Officer on the license. Lori Ann Clark is also listed on the license as an Officer. Respondent’s address of record for the license was 8255 E. Wiletta St. Mesa, Arizona 85207. Respondent has an active $32,500.00 surety bond on the license issued by Old Republic Surety Company, effective September 20, 2019. The license does not been previously disciplined by the Registrar. There is one (1) prior complaint that was settled or otherwise resolved against the license in 2023. Currently, the license has one (1) open complaint against it; which is presumed to be related to this matter.
On April 09, 2024, the Registrar received a brief narrative complaint from Complainant against Respondent’s License No. 188504 alleging poor work on a residential roof replacement project. The Registrar designated it Complaint No. 2024-04146 and assigned the matter to Joey Chester (“Investigator Chester”) for investigation.
On April 10, 2024, Investigator Chester issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on May 09, 2024, at 12:00 p.m. Correspondence was not returned as undeliverable to Respondent.
On May 09, 2024, Investigator Chester inspected the work that had been performed on the project to date. Respondent was present. Investigator Chester also reviewed the contract-related correspondence between the parties, and took 21 photographs of the project site. When he was finished, Investigator Chester drafted his Inspection Notes. Ultimately, Investigator Chester derived four (4) separate and distinct complaint items from Complaint No. 2024-04146, two (2) of which he substantiated based on his firsthand observations. Specifically, Investigator Chester determined that complaint items 2 (i.e. interior water damage) and 3 (i.e. missing chimney screen and broken solar lights) fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent.
On May 14, 2024, Investigator Chester 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 June 18, 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). The Directive included a notable advisement, in pertinent part, as follows:
[Respondent] will need to correct this issue by the appropriate means. Since [Respondent] is not appropriately licensed to do this work, the appropriate means will be the two parties coming to a resolution to have an appropriately licensed contractor complete the corrective work.
(Emphasis in original.)
Correspondence was not returned as undeliverable to Respondent.
On June 19, 2024, Investigator Chester forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On June 20, 2024, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(c), and 32-1154(A)(22). Respondent was given until July 05, 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 July 03, 2024, the Registrar received a timely Answer on behalf of Respondent whereby Respondent asserted that it had “[C]ompleted its original scope of work for the Complaint, including addressing punch list items and minor credits/offsets.” Respondent argued that it had not been able to address substantiated complaint item 2, interior water damage, because Complainant failed to adhere to Investigator Chester’s instruction that she allow a third-party contractor to perform the repairs. Specifically, Respondent argued that Investigator Chester instructed Respondent to obtain a short list of subcontractors to perform corrective work and Complainant was to select one from Respondent’s list. Per Respondent, it proposed at least four (4) licensed subcontractors, but despite its proposals and repeated attempts to schedule repairs, Complainant never agreed to a subcontractor or to allow Respondent’s completion of repairs. Respondent noted that Complainant’s homeowner’s insurance broker proposed a subcontractor, but Respondent had declined to accept the recommendation. Overall, Respondent argued that Complainant had effectively denied its access to the project site to perform repairs and asked that Complaint No. 2024-04146 be closed by the Registrar.
On July 03, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 23, 2024. Per the July 16, 2024, 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)(3) – A.A.C. R4-9-108(c)
Charge 2: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on her own behalf and called Investigator Chester as a witness. Robert Ramsey, Kevin Clark, and Lori Clark testified as witnesses on behalf of Respondent. The substantive evidence of record is as follows:
Complainant owns residential property located at 13616 N. 2nd Pl. Phoenix, Arizona 85022.
On or about February 19, 2024, Complainant entered into an unsigned written $15,334.00 residential flat roof replacement contract with Respondent.
Per the terms of the contract, payment was due in full upon completion of the project.
Complainant did not pay any monies to Respondent towards their contract.
On March 19, 2024, Respondent commenced work on the project. The crew consisted of Respondent’s foreman (“Foreman”), supervisor (“Supervisor”), and several tradesmen. Shortly after the crew began removal of Complainant’s old roof, Foreman placed a phone call to Respondent’s superintendent (“Superintendent”) to advise that Complainant made the entire crew stop working and get off of her roof. Foreman also informed Superintendent that Complainant was yelling, swearing, threatening, and calling the crew pejorative names. Shortly thereafter, Superintendent reported to the project site and quelled Complainant sufficient enough for her to permit the crew to resume work, and then he left. A short time later, Superintendent was called back to the project site by Foreman because Complainant had again pulled Respondent’s crew off of her roof. Complainant confirmed, “I told them to shut the fuck up and get off my fucking roof, and that they weren’t gonna do shit until they fixed their fucked up fascia board, and if they got up there I would call the cops.” Although Superintendent was able to convince Complainant to permit Respondent’s crew to continue, due to a significant lapse in time addressing Complainant’s concerns, compounded by an impending storm, Respondent was only able to remove half of the roof. That portion was filled with spray foam to make it water-tight, and tarped.
On March 20, 2024, Complainant notified Respondent that during the prior night’s torrential rain, the tarped section of her roof leaked water into her bathroom, dining room, and garage.
On March 21, 2024, the parties executed a $679.00 Change Order.
On March 28, 2024, when Respondent returned to the project site to observe the leak damage, Respondent was able to confirm that interior damage existed, as it was still wet, but that the alleged leak through the garage was false because there was layered staining and discoloration denoting the existence of an old repetitive leak originating elsewhere. Respondent completed the remainder of the roof replacement that day.
On April 26, 2024, Complainant informed Respondent that she would close Complaint No. 2024-04146 if Respondent waived the cost of her roof installation.
On May 01, 2024, Complainant notified Respondent that she had chosen a contractor, Restore Master, to perform corrective work.
On May 03, 2024, Respondent offered to have a restoration company, Thermal Restoration, assess Complainant’s water damage and provide an estimate for repairs.
On May 06, 2024, Complainant, acting on the express advice of an adjuster with her homeowner’s insurance company, advised Respondent that while she preferred to use another restoration company, her adjuster suggested she would be amenable to having Thermal Restoration assess her residential damage.
On May 10, 2024, Respondent alternatively suggested another contractor, Servpro, which Complainant accepted. Later that evening, Complainant recanted her acceptance
On May 10, 2024, Investigator Chester explicitly clarified with the parties that it was Complainant’s responsibility to obtain two (2) or more repair estimates, and that it was Respondent’s responsibility to select one (1) and supply payment for the subcontracted work.
On May 13, 2024, Complainant asked Investigator Chester for further clarification regarding the parties’ duties and responsibilities. On May 14, 2024, Investigator Chester informed Complainant, “Of the estimates you receive, [Respondent] is able to pick whichever estimate she wants and goes with that company. There is no more both having to agree since you are getting the estimates.”
On May 17, 2024, Respondent addressed substantiated complaint item 3. Complainant confirmed her satisfaction of this item with Investigator Chester, who in turn forewent completing a compliance jobsite inspection.
On May 21, 2024, Respondent advised Complainant that it had obtained two (2) additional bids for corrective work, from Dean Restoration and Servpro. Complainant rejected both.
On May 29, 2024, Respondent filed a claim with its insurance company, and was advised not to select the restoration company chosen by Complainant’s insurance adjuster.
On May 30, 2024, Investigator Chester reiterated to Complainant that “The contractor does need to be confirmed by both parties,” and added “If you decide to hire a contractor without agreeing to one and they start the repair process, the ROC will no longer be holding [Respondent] responsible.” Complainant responded the same day in a series of objectively insulting emails to state that she had not entered into a formal repair contract, but had simply selected a subcontractor she trusted.
On June 12, 2024, Respondent informed Complainant that ASAP Restoration and Match All Drywall could provide repair estimates.
On June 14, 2024, Complainant informed Respondent that “I am not comfortable with you choosing a company that is working for you [and] not me.”
On June 17, 2024, Respondent replied, “If you won’t use a company that I found, can you please find a couple that you are comfortable with?” Complainant retorted the same day that she had “already found” a restoration company and “made her choice,” referring to Restore Master. Complainant did not provide Respondent with any additional remediation quotes or bids for repair.
Respondent did not request an extension of the Directive’s compliance period.
Because no repairs had been made to address complaint item 2, and because the parties’ failed to settle, Investigator Chester escalated Complaint No. 2024-04146 to the Registrar’s legal department.
Additional Facts
Complainant testified that after the Directive was issued, she obtained a single remediation quote and refused all sub-contractors suggested by Respondent. Complainant further testified that she felt justified in her actions because the Directive noted, “You may not perform or hire other contractors to perform work that is outside the scope of your license,” despite Investigator Chester’s instructions to the contrary.
Closing Arguments
In closing, Respondent argued that but for Complainant’s acrimonious conduct during Respondent’s initial attempt to replace her roof, Respondent’s crew would have been able to complete the project well in advance of the storm that occurred March 19, 2024. Respondent further argued that it was never afforded a reasonable opportunity to perform the corrective work required by the Directive because Complainant failed to provide it with at least two (2) repair bids or choose one of the subcontractors it proposed to remediate the water damage. Respondent opined that because the onus was on Complainant to, at a minimum, cooperate with Respondent to address complaint item 2, Respondent cannot be disciplined by the Registrar for failing to act when Complainant made it impossible to do so. Respondent noted that, as of the day of the hearing, it had been deprived of payment as Complainant had yet to pay for her $16,013.00 roof, which she had no complaints about. As such, Respondent asked that Complaint No. 2024-04146 be dismissed with prejudice for Complainant’s failure to sustain her burden of proof.
In closing, Complainant argued that Respondent’s poor tarping of her exposed roof lead to water damage on the interior of her home. Complainant argued that she should not have to accept any of Respondent’s recommended subcontractors because they would be employed by Respondent, not Complainant, which made her uncomfortable. Complainant opined that her strict construction of the Directive’s language permitted her to choose which company would remediate the water damage in her home, not Respondent.
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)(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(c) requires, in pertinent part, that “[a]ll work performed by a contractor shall be performed in accordance with professional industry standards.”
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.
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 a residential roof replacement contract. It is also clear from the contract’s terms that payment was due upon completion of the project, and that Complainant did not tender any monies to Respondent for its work. It is also clear that the interior of Complainant’s residence sustained water damage as a direct result of Respondent’s insufficient tarping, and that de minimis items, a chimney screen and a few solar lights, were damaged during the roof’s installation. It is further clear that a Directive was issued in order for Respondent to address these issues, and that the issue of water damage remediation remained outstanding at the expiration of the Directive’s compliance period.
It is uncontroverted that Respondent satisfactorily addressed substantiated complaint item 3, but did not remediate substantiated complaint item 2 before the Directive’s compliance period expired.
Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to fully comply with the Registrar’s Directive. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent has sustained its burden. It is clear from the record that parties were given two (2) sets of instructions when the Directive was issued: First, Investigator Chester told Respondent to compile a short list of subcontractors to perform corrective work so that Complainant could pick one, then Complainant was told to obtain at least two repair estimates so that Respondent could pick one. The record reflects that Complainant rejected all four (4) of the potential subcontractors Respondent selected, and that Complainant only provided Respondent with one (1) repair bid. Complainant effectively denied Respondent the opportunity to cure the underlying issue and comply with the Directive. Complainant’s contention that it was her right to select the subcontractor for repairs is incorrect. The Directive specifically advises that Complainant may not dictate the manner or means of repair.
Notably, Complainant’s conduct during the hearing is a factor in aggravation and is also demonstrative of the hostile behavior Complainant displayed towards Respondent and Investigator Chester during the complaint process.
Because Complainant has failed to establish Respondent’s alleged violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22) by a preponderance of the evidence, Complainant has not established cause for the Registrar to discipline Respondent’s contractor’s license.
Consequently, Complaint No. 2024-04146 should be closed and dismissed, with prejudice.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that Complaint No. 2024-04146 be closed and dismissed by the Registrar, with prejudice.
NOTICE
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 five days from the date of that certification.
Done this day, November 07, 2024.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile:
Tom Cole, Director
Registrar of Contractors
c/o Legal Department
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
Victoria Joanne Kulczyk-Kenton, Complainant
13616 N. 2nd Pl.
Phoenix, AZ 85022
[email redacted]
Chris R. Baniszewski, Esq.
Lance D. Hough, Esq.
Warner, Angle Hallam Jackson & Formanek PLC, Counsel for Respondent
2555 E. Camelback Rd., Ste. 800
Phoenix, AZ 85016
[email redacted]
By: OAH Staff