ALJDEC - Licensing
2024A-06832-CHC-ROC · Registrar of Contractors · 2024-11-22
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Kellie Benway,
COMPLAINANT,
v.
Manuel Alberto Amado
dba Odama Construction & Roofing Co.
ROC License No. 187856,
RESPONDENT.
No. 2024A-06832-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: November 18, 2024 at 1:00 PM.
APPEARANCES: Kellie Benway (“Complainant”) appeared on her own behalf. Nathan Amado appeared on behalf of Manuel Alberto Amado (“Respondent”) with Alfred Levine and Melissa Gentry as witnesses. Jon Smith 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 attached agency file, and October 08, 2024, 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 August 04, 2003, the Registrar issued License No. 187856 General Dual KB-1 Building contracting license to Respondent, a Sole Proprietorship. The license has been renewed through August 31, 2025. Manuel A. Amado is listed as the Qualifying Party and Owner on the license. Respondent’s address of record for the license was 4032 W. Azalea St. Tucson, Arizona 85741. Respondent has an active $14,000.00 surety bond on the license issued by American Contractors Indemnity Company, effective July 14, 2021. 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 one (1) open complaint against it; which is presumed to be related to this matter.
On or about July 14, 2024, the Registrar received a brief narrative complaint from Complainant against Respondent’s License No. 187856 alleging abandonment of a commercial-residential pipe replacement project. The Registrar designated it Complaint No. 2024-06832 and assigned the matter to John Smith (“Investigator Smith”) for investigation.
On July 22, 2024, Investigator Smith issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on August 08, 2024, at 8:00 a.m. Correspondence was not returned as undeliverable to Respondent.
Respondent did not provide a response to Complaint No. 2024-06832, or request to inspect the work complained of.
On July 22, 2024, Investigator Smith issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in his contracts, including his contract with Complainant.
On August 08, 2024, Investigator Smith inspected the work that had been performed on the project to date. Respondent was not present. Investigator Smith also reviewed the contract-related correspondence between the parties, and took 6 photographs of the project site. When he was finished, Investigator Smith drafted his Inspection Notes. Ultimately, Investigator Smith derived two (2) separate and distinct complaint items from Complaint No. 2024-06832, both of which he substantiated based on his firsthand observations. Specifically, Investigator Smith determined that there were no new hose bibs in the back of buildings 4 and 6, as noted in the parties’ contract. Investigator Smith also noted that, “[A]s a result of the respondent’s work, pre-existing irrigation valves and pre-existing hose bibs along the back sides of buildings 4 and 6 do not work.” Investigator Smith concluded that Respondent’s workmanship fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent.
On August 09, 2024, Investigator Smith issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated both of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on August 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). The Directive included a notable advisement, in pertinent part, as follows:
RESTRICTIONS
You may not perform or hire other contractors to perform work that is outside the scope of your license.
(Emphasis in original.)
Correspondence was not returned as undeliverable to Respondent.
On August 27, 2024, Investigator Smith 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 September 10, 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), 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until September 25, 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 September 19, 2024, the Registrar received a timely Answer on behalf of Respondent from Mr. Amado’s son, Nathan Amado. Mr. Amado denied abandoning the underlying project and explained that the original scope of work had been bargained for between Respondent and Alfred Levine, the Oro Valley Condominium Homeowner’s Association (“HOA”) President. Per Mr. Amado, “[R]esupplying water to the existing irrigation system and scattered hose bibs defeated the purpose which was to stop leaks from failing iron pipes, and improve water quality as well as pressure. When [Complainant] contacted me with her concerns I explained this, shown her the contract stated it was not included and landscaper had agreed to reconnect as needed because most of existing system was already obsolete and not in use. The new hose bibs installed at ends of buildings was agreed to be sufficient to provide water to landscaping which I personally did during and after the replacement of main line.”
On September 20, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on November 18, 2024. Per the October 07, 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)(2)(a)
Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)
Charge 2: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158
Charge 2: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on her own behalf and called Investigator Smith as a witness. Nathan Amado, Alfred Levine, and Melissa Gentry testified on behalf Respondent. The substantive evidence of record is as follows:
Oro Valley Condominium HOA is comprised of members who own residential property within its commercial real estate development, located at 2-4 W. Greenock Dr. Tucson, Arizona 85737. Complainant, Mr. Levine, and Ms. Gentry are all Oro Valley Condominium owners and members of the HOA.
In February 2024, Mr. Levine and Ms. Gentry were serving their final terms on the HOA’s Board of Directors, as its President and Vice President, respectively.
On February 23, 2024, Mr. Levine, acting on behalf of the HOA, entered into an $8,400.00 contract with Respondent for the replacement of the HOA’s galvanized water pipes, and assembly of all connections to buildings 4 and 6. On April 12, 2024, a $10,600.00 Change Order was issued to include work on building 2, and to include hose bibs on all three (3) buildings.
On February 23, 2024, the HOA provided Respondent a $4,200.00 down payment for the project.
On April 15, 2024, the HOA paid Respondent $5,300.00 towards the project.
On April 22, 2024, the HOA paid Respondent the final balance of $9,500.00 for the project.
Work on the project commenced February 23, 2024, and stopped or was otherwise completed on April 22, 2024. All work was completed by Nathan Amado.
It was Mr. Amado’s intention to leave the HOA with new pipes, and leave hose bibs for irrigation hook-up by the HOA’s landscaper.
In May 2024, Complainant was elected as the HOA President. After her election, Complainant walked the HOA’s grounds and discovered that there was “no outside water.” In June 2024, Nathan Amado returned to the project site and agreed to address Complainant’s irrigation concerns. He “hooked-up” the outside water to a single building. None of the remaining twelve (12) spigots were connected to a water line.
On an unknown date, Respondent’s mailing address changed to 2720 W. Camito de la Caterva Tucson, Arizona 85742. Respondent did not update its mailing address with the Registrar.
Respondent did not receive the Directive until August 24, 2024, two (2) days prior to its compliance deadline.
On August 25, 2024, Nathan Amado wrote the following, in pertinent parts, to Investigator Smith:
The project in question began as an emergency repair that lead to the replacement of original iron pipes. It was clearly stated in proposal the irrigation and existing hose bibs were not included. I was paid, job closed. [A] few weeks later I receive a demanding and accusing phone [message] from new HOA president concerning water at condominiums, demanding I return to finish project. I agreed to help resolve the irrigation issue personally, after hours. I managed to remedy the issue. [S]hortly after was informed a plumbing company was on site and all communication from Kellie had ceased.
Respondent did not request a compliance extension from the Registrar.
Additional Evidence
Mr. Levine testified that irrigation was not included in the scope of work of the original contract or Change Order he entered into with Respondent on behalf of the HOA.
Ms. Gentry testified that water lines behind HOA building 2, 4, and 6 were disconnected by the prior term’s President, as voted by a quorum of the HOA membership, due to leaks.
Investigator Smith testified that Respondent would have been cited for alleged violation of Ariz. Rev. Stat. § 32-1154(A)(9), had he been privy to the avowals contained in Respondent’s Answer on or before August 27, 2024.
Closing Arguments
In closing, Respondent argued that Complainant had no standing to bring Complaint No. 2024-06832 against Respondent, and that any attempts Complainant made to remediate the work nullified Respondent’s responsibility.
In closing, Complainant argued that Respondent was negligent for leaving the HOA without irrigation.
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, in pertinent part, “Departure or disregard of plans or specifications in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative.”
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)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Failure in any material respect to comply with this chapter.”
Ariz. Rev. Stat. § 32-1158(A) provides that a contract between a contractor and property owner amounting to more than $1,000.00 must contain the following information in writing:
The name of the contractor and the contractor's business address and license number.
The name and mailing address of the owner and the jobsite address or legal description.
The date the parties entered into the contract.
The estimated date of completion of all work to be performed under the contract.
A description of the work to be performed under the contract.
The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.
The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.
The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.
That the property owner has the right to file a written complaint with the Registrar for an alleged violation of Ariz. Rev. Stat § 32-1154(A). The contract shall contain the Registrar's telephone number, website address, and shall state that complaints must be made within the applicable time period as set forth in Ariz. Rev. Stat § 32-1155(A). The information must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor.
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) provides, in pertinent parts, that the Registrar 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 provides that “[n]o 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 Mr. Levine entered into a commercial-residential pipe replacement contract with Respondent on behalf of the Oro Valley Condominium HOA, which was later modified to include the addition of new hose bibs at the corners of HOA buildings 2, 4, and 6. It is clear that Respondent was paid in full for the project. It is also clear from the record that not only did Respondent unlawfully delegate or otherwise permit Nathan Amado, who does not possess a Plumbing license issued by the Registrar, to perform all scopes of work in the underlying project, but the record also reflects that some of the work he performed did not comply with the parties’ contract and fell below the Registrar’s minimum workmanship standards. The record further reflects that Respondent failed to remediate the identified deficiencies regarding the poor workmanship in adherence with issued Directive. The record also reflects that Respondent’s contract with the HOA did not include all requisite statutory elements.
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 not sustained its burden. Notwithstanding the fact that Nathan Amado unlawfully performed the work at issue in this matter, no evidence was presented to explain why Manuel A. Amado failed to correct, or attempt to correct, his son’s work on the underlying project. No evidence was presented to explain why Respondent did not ask the Registrar for an extension of the Directive’s compliance period. No evidence was presented to establish that Respondent timely updated its mailing address with the Registrar, or explain why it untimely received the Registrar’s correspondence in this matter.
All of Respondent’s aforementioned conduct, including conduct it allowed to happen, are factors in aggravation.
Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3), 32-1154(A)(12); 32-1158, 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.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Manuel Alberto Amado, dba Odama Construction & Roofing Co., ROC License No. 187856 be suspended for five (5) business days.
It is further recommended that the Registrar require Respondent to pay the sum total of $250.00 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
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 25, 2024.
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]
Manuel Alberto Amado, Respondent
dba Odama Construction and Roofing Co.
2720 W. Camito de la Caterva
Tucson, Arizona 85742
[email redacted]
Kellie Benway, Complainant
2 W. Greenock Drive #CC
Tucson, AZ 85737
[email redacted]
[email redacted]
By: OAH Staff