ALJDEC - Licensing
2024A-05534-CHC-ROC · Registrar of Contractors · 2024-12-23
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Melinda Miller,
COMPLAINANT,
v.
Crested Construction Company
ROC License No. 328766,
RESPONDENT.
No. 2024A-05534-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: December 06, 2024 at 9:00 AM.
APPEARANCES: Melinda Miller (“Complainant”) appeared on her own behalf. Thomas Brennan appeared on behalf of Crested Construction Company (“Respondent”) with Chaz East, Marcus Baumann, and Rebecca Hames as witnesses. Daniel Otero 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 Registrar’s attached agency file, Respondent Exhibit 13, and October 08, 2024, Continued Hearing Order 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 May 07, 2020, the Registrar issued License No. 328766 General Dual KB-2 Residential and Small Commercial contracting license to Respondent, a Sole Proprietorship. The license has been renewed through May 31, 2026. Thomas M. Brennan is listed as the Qualifying Party and Owner on the license. Respondent’s address of record for the license is 190 Cedar St. Green River, WY 82935. Respondent has an active $14,000.00 surety bond on the license issued by Old Republic Surety Company, effective May 04, 2020. The license has not been previously disciplined by the Registrar, or had any other complainants 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 or about May 22, 2024, the Registrar received a brief narrative complaint from Complainant against Respondent’s License No. 328766 alleging poor work of a residential remodel project. The Registrar designated it Complaint No. 2024-05534 and assigned the matter to Daniel Otero (“Investigator Otero”) for investigation.
On May 29, 2024, Investigator Otero issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on June 17, 2024, at 12:00 p.m. Correspondence was not returned as undeliverable to Respondent.
Respondent did not provide a response to Complaint No. 2024-05534, or request to inspect the work complained of.
On June 17, 2024, Investigator Otero inspected the work that had been performed on the project to date. Respondent was present. Investigator Otero also reviewed the contract-related correspondence between the parties, and took 9 photographs of the project site. When he was finished, Investigator Otero drafted his Inspection Notes. Ultimately, Investigator Otero derived four (4) separate and distinct complaint items from Complaint No. 2024-05534, all of which he substantiated based on his firsthand observations. Specifically, Investigator Otero determined that all 4 complaint items fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent.
On June 28, 2024, Investigator Otero issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated all of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on July 15, 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:
DIRECTIVE REQUIREMENTS
Investigator’s observation: Permits for this project were not obtained as required by the Yavapai County/Cottonwood Building Departments. Prior to any work beginning all applicable permits shall be obtained. Unpermitted work shall be inspected by the local building inspector and any building code deficiencies identified or code violations caused by the Respondent shall be corrected. All required inspections shall be scheduled and passed. Contractor shall perform all work in a professional manner. Completed project must comply with original contract agreement, properly executed change orders, local building codes, and manufactures installation instructions.
(Emphasis in original.)
Correspondence was not returned as undeliverable to Respondent.
On July 25, 2024, Investigator Otero forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation, whereby he noted that Respondent did not attempt to comply with the Directive.
On July 30, 2024, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). Respondent was given until August 14, 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 August 14, 2024, the Registrar received a timely Answer on behalf of Respondent. Overall, Respondent argued that Complainant refused to pay for required design and engineer work, which resulted in the lack of permitting for the project, and that due to health reasons he was unable to perform corrective work until after August 15, 2024.
On August 16, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on October 08, 2024. Per the August 21, 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)(1)
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 her own behalf and called Investigator Otero as a witness. Thomas Brennan, Chaz East, Marcus Baumann, and Rebecca Hames testified on behalf Respondent. The substantive evidence of record is as follows:
Complainant owns residential property located at 3661 E. Comanche Dr.. Cottonwood, Arizona 86326.
On or about September 13, 2023, Complainant entered into a $17,000.00 residential rear 6x12 porch preplacement contract with Respondent.
On an unknown date, a $3,500.00 Change Order was executed for the installation of an interior beam, bringing the project total to $20,500.00.
Between September 14, 2023, and November 30, 2023, Complainant paid Respondent $19,400.00 towards the project.
Work on the project commenced on or about October 10, 2023, and stopped or was otherwise completed on November 30, 2023.
An engineer’s report for Complainant’s property dated June 19, 2024, noted a truss overload because it was broken prior to June 17, 2024.
On July 15, 2024, Respondent emailed Investigator Otero to advise that he would not be able to address the Directive until after August 15, 2024, due to his poor health. Respondent did not explicitly request an extension of the Directive’s compliance period.
Additional Evidence
Complainant was advised prior to commencement of work on the project, that it would require permitting by the local building authority, which would also require plans by an engineer. Complainant retorted that she wanted the project done “for cheap” and that she was “not worried” about obtaining plans or permits.
When Respondent started work on Complainant’s porch, Complainant was also having demolition performed on the interior of her home. Respondent installed a beam in Complainant’s ceiling to support the porch installation, because the trusses were in poor condition.
Both parties testified that the project was paid in full by Complainant.
In December 2023, Respondent returned to the project site after Complainant complained of a leak. Respondent was unable to observe a leak, but noticed that the home had been “gutted” as several walls had been removed and the ceiling was sagging.
From December 2023, to January 2024, Rebecca Hames temporarily stayed at Complainant’s residence. Complainant was not present during this period. Due to the rainy season, and at Complainant’s request, Ms. Hames routinely checked for leaks in the home but found none. At that time, most of the walls were either missing or stripped. Visibility was high since none of the walls had insulation.
On February 26, 2024, Marcus Baumann of Inspired Creations Carpentry Inc., ROC License No. 344843, inspected Complainant’s property to determine if he could finish the project. Mr. Baumann was met onsite by Complainant’s Project Manager, Trisha. At that time, Mr. Baumann noticed that the load-bearing walls had been removed from the home’s interior, and that there was visible signs of past water damage. Mr. Baumann also saw an engineered truss in Complainant’s attic. When Mr. Baumann asked Trisha about plans and permits for the project, Trisha declined and noted Complainant was trying to “save on costs.” Mr. Baumann declined to work on the project.
No Warning Letters were issued to Respondent by Investigator Otero for alleged violations of Ariz. Rev. Stat. § 32-1154(A)(12); 32-1158 or 32-1152(A)(2).
Closing Arguments
In closing, Respondent blamed the lack of permitting on the underlying project on Complainant, and opined that Investigator Otero failure to extend the Directive’s compliance period was an error.
In closing, Complainant argued that she was never against obtaining plans or permits for the job, and denied refusing to do so. Per Complainant, she was never advised that she needed a permit prior to starting the project, and never told asked by Respondent to get one during the Directive’s compliance period.
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)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Abandonment of a contract.”
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 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and 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 rear porch installation project that Complainant paid in full. It is also clear that the project warranted permitting by the local building authority. It is also clear that Respondent’s work failed to meet the Registrar’s minimum workmanship standards. It is further clear that Respondent failed to timely and completely comply with the Registrar’s Directive.
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. 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 on this project. Firstly, it was Complainant’s responsibility to obtain plans and permits for her project. However, the moment Respondent commenced construction, he unequivocally adopted that responsibility. Secondly, Respondent’s correspondence with Investigator Otero July 15, 2024, was not a request to extend the Directive’s compliance period. Respondent was responsible for timely performing corrective work, work that needed to be permitted before he could begin. Respondent’s contention that Complainant was required to obtain the permits and/or plans in order for Respondent to perform remediations, without any overt evidence that she agreed to do so, are incorrect.
The record does not support a finding that a violation of Ariz. Rev. Stat. § 32-1154(A)(1) occurred. However, because Complainant established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22) by a preponderance of the evidence, 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 five days after the effective date of the Final Order in this matter, Respondent Crested Construction Company, ROC License No. 328766, be suspended for four (4) business days.
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, December 23, 2025.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
Crested Construction Company, Respondent
c/o Thomas Brennan, Agent
190 Cedar St.
Green River, WY 82935
[email redacted]
Melinda Miller, Complainant
3661 E. Comanche Dr.
Cottonwood, AZ 86326
[email redacted]
By: OAH Staff