ALJDEC - Licensing
2024A-06636-CHC-ROC · Registrar of Contractors · 2025-05-20
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Mary Lohr
COMPLAINANT,
v.
Intelligent Design Air Conditioning And
Heating, Inc.
License No. ROC 346980, 322375, 296386,
276673
RESPONDENT.
No. 2024A-06636-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: April 30, 2025
APPEARANCES: Mary Lohr (hereinafter “Complainant”) appeared on behalf of herself. Justin D. Castillo, Esq. represented Intelligent Design Air Conditioning And Heating, Inc. (hereinafter “Respondent”).
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
EXHIBITS ADMITTED INTO EVIDENCE: Respondent’s Exhibits 1 through 13.
_____________________________________________________________________
FINDINGS OF FACT
On January 9, 2025, the Registrar of Contractors, (hereinafter “Registrar”
or “ROC”), issued a Notice of Hearing setting the above-captioned matter for hearing on February 13, 2025, by the Office of Administrative Hearings in Phoenix, Arizona.
2. The hearing was continued to April 30, 2025.
3. Respondent holds license numbers 346980, 322375, 296386, and 276673 issued by the Registrar.
4. The Notice of Hearing shows that the hearing was set to consider the
charges made in the Citation and Complaint. Through the Citation, the ROC alleges that Respondent may have violated Arizona Revised Statutes, (hereinafter “A.R.S.”), sections 32-1154(A)(3),(8),(9)(a),(12),(13) and (22); A.R.S. section 32-1158 and Arizona Administrative Code (A.A.C. R4-9-108(A).
5. Respondent filed a timely answer to the Citation.
6. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.
7. At hearing, Complainant testified on behalf of herself. Respondent presented the testimony of Andrew Dobbins, David Porter, and David Mahmoodi.
Mr. Mahmoodi owns a roof coating business. Investigator Smith testified regarding his investigation of the complaint.
8. On or about August 10, 2022, Complainant and Respondent entered into solar project installation project for the amount of $109,847.42.
9. Through the contract, Respondent agreed to install “ThermalCork coating” on Complainant’s roof for the amount of $8,882.00. See the Registrar’s administrative record, pg. 15.
10. Respondent did not provide Complainant with a written contract that advised Complainant of her right to file a complaint with the Registrar against Respondent for an alleged violation of A.R.S. section 32-1154(A). Furthermore, Respondent did not provide Complainant with a written contract that included the estimated date of completion, the dollar amount of any advanced deposit or scheduled payment, and the dollar amount of progress payments.
11. On or about August 10, 2022, Respondent started work.
12. On or about November 7, 2023, Respondent stopped work.
13. Complainant subsequently filed a complaint with the ROC alleging poor work on the part of Respondent.
14. On or about July 24, 2024, ROC Investigator John Smith conducted a job-site inspection.
15. On July 24, 2024, the Registrar issued a Directive directing Respondent to complete the following complaint item, by appropriate means, no later than Friday, August 9, 2024:
Complaint Item 1: “Bubbles on roof. They came and cut off 2 bubbles (appear black in photos).”
Investigator’s Observations: Verified.
The scope of work per contract includes:
• ThermalCork Coating priced per square foot. Granulated cork mixed with an adhesive, applied to the surface as a thermal break to reduce heat gain...
Additionally, the respondent acknowledged applying the roof coating as part of this project.
Throughout the roof, there are several locations of bubbles in the roofing material. The respondent claims this is a result of a failure of the underlying coating, and not a failure of the product they applied.
However, the condition of the underlying surface is the responsibility of the respondent.
Quoted from Substantive Policy Statement 2017.01
Acceptance of the Surface
• "As a general principle in construction, a subcontractor who performs work
on top of a surface prepared by another accepts the surface. The
subcontractor should have inspected the surface for any flaws or defects that
would affect the work he proposes before performing the work. If he found
the surface to be unacceptable, he should have called any defects to the
owner's or general contractor's attention so that the owner can choose
whether to pay for the defective surface to be corrected or if the owner is
not willing to pay to correct the surface, the contractor may obtain an
explicit warranty disclaimer."
Source: Deebv. Check s Epoxy , No. 2014A-3258 (ALJ Decision at 11:11- 19).
Governing Rule: A.R.S. § 32-1154 (A)(3) - R4-9-108(a): Violation of any rule adopted by the registrar; Namely R 4-9-108(a) A contractor shall perform work in a professional and workmanlike manner.
16. On July 15, 2024, the Investigator Smith conducted a compliance job-site inspection. Investigator Smith observed that Respondent had failed to correct the items listed in the Directive.
17. On August 12, 2024, Respondent issued a new invoice to Complainant increasing the contract price to $149,793 without changing the scope of work.
18. At hearing, Investigator Smith explained that at the initial job-site inspection, Mr. Dobbins told Investigator that ThermalCork Installation, LLC installed the thermal coating on Complainant’s roof. During a phone conversation on August 7, 2024 and through an email on August 9, 2024, Mr. Dobbins stated that he previously misspoke and that Respondent’s employees performed the thermal coating and not ThermalCork Installation, LLC. ThermalCork held one CR34 ROC license that did not allow ThermalCork to perform roofing work. Respondent’s representative at the compliance job-site inspection, Paul Matthews, stated that the thermal coating was installed by Juan, an employee of ThermalCork.
19. Investigator Smith admitted at hearing that, prior to the hearing, Respondent provided the ROC with a contract that met the requirements of A.R.S. § 32-1158.
20. Complainant explained that Respondent preformed poor work when it installed the thermal coating.
21. Mr. Dobbins and Mr. Porter both asserted that the bubbles were caused by the roofing system that lied beneath the thermal coating. Respondent did not observe bubbles on the roof before applying the thermal coating. Mr. Porter and Investigator Smith confirmed that Complainant has a hot mop roof. Mr. Porter and
Mr. Mahmoodi confirmed the formation of bubbles can occur after the installation of thermal roof coating on a hot mop roof. Mr. Porter explained moisture can get into a hot mop roof from rain and bubbles can form after thermal coating is applied. Although Respondent was aware that bubbles can form on hot mop roofs after the application of thermal coating, Respondent did not obtain a signed disclaimer from Complainant.
22. Administrative notice is taken of the Registrar’s public website. According to the information available on the website on May 20, 2025, license numbers 346980, 322375, 296386, and 276673 held by Respondent are active. Such prior License record also shows that one complaint, filed against license 276673, was settled, resolved, or withdrawn by the complainant after the issuance of a corrective work order. Such prior License record further shows that the Registrar has never disciplined license numbers 346980, 322375, and 296386 held by Respondent. The lack of disciplinary history is considered a mitigating factor in the imposition of discipline.
CONCLUSIONS OF LAW
This matter lies within the ROC’s jurisdiction. See A.R.S. § 32-1101 et seq.
The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119.
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).
5. The Administrative Law Judge may consider the ROC’s administrative record. See Ariz. Admin. Code § R4-9-118.
4. The undisputed evidence established that Respondent’s contract did not include all of the requirements of A.R.S. section 32-1158, which is a violation of A.R.S. section 32-1154(A)(12) and 32-1158. However, it is undisputed that Respondent has submitted a form that meets the requirements of A.R.S. section 32-1158 to the Registrar.
5. The preponderance of the evidence shows that Respondent did not perform the work in a professional and workmanlike manner in violation of A.A.C. R4-9-108(A), and thereby of A.R.S. section 32-1154(A)(3). Consumers rely upon licensed contractors to take whatever measures are necessary to perform work that complies with the Registrar’s and industry standards at least as long as the statutory two-year warranty period. The evidence presented at hearing shows that Respondent was aware that bubbles could form on Complainant’s hot mop roof after the thermal coating was applied. Because Respondent accepted the surface and did not obtain any explicit warranty disclaimer signed by Complainant, Complainant established cause to suspend or revoke license numbers 346980, 322375, 296386, 276673, held by Respondent.
6. The preponderance of the evidence shows that Respondent failed to perform construction for the price stated in the contract, which is a violation of A.R.S. section 32-1154(A)(8).
7. The preponderance of the evidence shows that Respondent aided and abetted an unlicensed contractor, which is a violation of A.R.S. section 32-1154 (A)(9)(a).
8. The preponderance of the evidence shows that Respondent violated A.R.S. section 32-1154(A)(13).
9. The preponderance of the evidence shows that Respondent failed to comply with the Registrar’s Directive without valid justification, which is a violation of A.R.S. section 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 license numbers ROC 346980, 322375, 296386, and 276673 held by Intelligent Design Air Conditioning And Heating, Inc. for three days. It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. section 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. sections 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, May 20, 2025.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
Mary Lohr
[email redacted]
Justin D. Castillo, Esq.
BREI LAW FIRM
[email redacted]
By: OAH Staff