2024A-07442-NPC-ROC Notice of Hearing & Packet MAILED 2024-07442.pdf

2024A-07442-NPC-ROC · Registrar of Contractors · 2024-10-18

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Khloes Dream Homes LLC, Case No. 2024-07442

COMPLAINANT, Docket No. 2024A-07442-NPC-ROC

v. NOTICE OF HEARING ON CONTESTED CASE 3R Construction Group LLC License No. ROC 332141,

RESPONDENT. This Notice of Hearing is issued under A.R.S. § 41-1092.05(D).

HEARING INFORMATION The hearing is set for:

December 6, 2024 9:00 AM Sondra Vanella Google Meet. A link will be provided directly from The Office of Administrative Hearings. Go to www.azoah.com to request to appear in-person.

If you have requested to appear in-person at the hearing, the hearing will be held at 1740 W Adams Street, Phoenix, AZ 85007.

You must attend this hearing. This is an adversarial hearing before an administrative law judge, and is conducted in a similar manner as judicial proceedings. Thus, you must be

prepared to present evidence, including witness testimony and documents, in support of your case.

STATEMENT OF LEGAL AUTHORITY AND JURISDICTION

The State of Arizona has determined that the licensing and regulation of construction contractors is a proper state function, and has vested authority in the Registrar of Contractors to administer Title 32, Chapter 10 of the Arizona Revised Statutes. A.R.S. §§ 32-1101 et seq. All hearings for alleged violations of Title 32, Chapter 10 are conducted under Title 41,

Chapter 6, Article 10. A.R.S. § 32-1156.

The statutes and rules governing the hearing can be found at: Arizona Revised

Statutes §§ 41-1092 to -1092.12, and Arizona Administrative Code R2-19-101 to -122.

PARTICULAR ARIZONA STATUTES AND RULES INVOLVED

The statutes and rules the Respondent is alleged to have violated are cited in the

complaint and citation, which were served on the Respondent on August 7, 2024. SHORT AND PLAIN STATEMENT OF THE MATTERS ASSERTED

The complaint and citation allege that the Respondent committed the following act(s): Charge: 1 A.R.S. § 32-1154(A)(10)

THE PARTIES TO THE ADMINISTRATIVE HEARING Because Respondent is a licensee and is charged with an act(s) or omission(s) that is cause for the suspension or revocation of a license, Respondent is a party to this case and will be a party to the hearing. Because Complainant alleged Respondent committed an act(s) or omission(s) that is cause for the suspension or revocation of a license, Complainant is a party to this case and will

be a party to the hearing.

Respondent and Complainant, as the parties to the hearing, will present evidence and

argument to the administrative law judge.

RIGHT TO BE REPRESENTED The parties to the administrative hearing may choose to be represented by an attorney. A.R.S. § 41-1092.07(B). If one of the parties is a company, the company may be represented

by an officer or employee if that person satisfies the conditions set forth in A.R.S. § 32-

1156(B).

CHANGE OF ADDRESS Each party must inform the Registrar and the Office of Administrative Hearings of any change of address within five (5) days of the change. A.R.S. § 41-1092.04.

HEARING PROCEDURES AND RULES

The administrative hearing will be conducted in accordance with A.R.S. §§ 41-1092 to -1092.12, and A.A.C. R2-19-101 to -122. The parties should review the statutes, rules, and

processes governing the administrative hearing. Copies of the statutes, rules, and articles regarding the administrative hearing process can be found at https://www.azoah.com/.

REGISTRAR’S APPEARANCE BY VIDEO CONFERENCE OR TELEPHONE

The Registrar’s investigators, employees, and attorneys will appear at the hearing via

video conference or telephone unless requested by a party to appear in-person. Requests for the Registrar’s investigators, employees, or attorneys to appear in-person must be filed with the Registrar and the Office of Administrative Hearings no later than seven (7) calendar days prior to the hearing date.

HEARING PACKET

In the interests of administrative efficiency, the Registrar compiles and discloses

certain documents to the parties and the Office of Administrative Hearings. These documents

are attached to this Notice of Hearing as the “Hearing Packet.” If any party wishes to submit additional evidence, they must do so during the hearing after completing a disclosure statement. See “Disclosure Statement” section below.

SUBPOENAS FOR TESTIMONY FROM A WITNESS OR DOCUMENTS

The parties to the hearing must be prepared to present evidence in support of their

case. If a party wants to obtain testimony from a witness or documents not in the party’s

possession, the party must prepare and file a written subpoena for the Administrative Law

Judge to review and sign, if approved. A.R.S. § 41-1092.07(C). Forms for requesting a subpoena can be found on the Office of Administrative Hearings’ website at www.azoah.com.

The party seeking a subpoena must serve notice on all the parties to the hearing, and on the Registrar. A.R.S. § 41-1092.04.

DISCLOSURE STATEMENT

At least seven calendar days before the hearing, each party must prepare and serve a

disclosure statement on all other parties, and file it with the Office of Administrative Hearings. A.A.C. R4-9-118; A.A.C. R2-19-108. The disclosure statement must include any exhibit the party will use at the hearing. A party’s failure to timely disclose any witness or exhibit, without good cause, may result in the administrative law judge excluding those witnesses or exhibits from being used at the hearing. A.A.C. R4-9-118(C). A sample disclosure form is available on the Registrar’s website at https://roc.az.gov/forms/RC-L-800A%20- %20Prehearing%20Disclosure%20Statement%2020191007v4.pdf

CHANGING THE HEARING DATE

The date of the hearing may only be advanced or delayed on the agreement of the

parties or on a showing of good cause. A.R.S. § 41-1092.05(C). The date of the hearing may

be changed by filing a written agreement of the parties to change the date of the hearing. The

written agreement must be filed with the Office of Administrative Hearings, directed to the assigned Administrative Law Judge, and transmitted to the Registrar and all other parties. The assigned Administrative Law Judge may be found on the Office of Administrative Hearings’ web portal at www.azoah.com

If a party would like to move the date of the hearing without agreement of all parties, the party must file a written motion with the Office of Administrative Hearings, directed to the assigned Administrative Law Judge, and transmit a copy to the Registrar and all other parties. The motion must state in detail good cause for why the date of the hearing should be advanced or delayed, and the position of all other parties regarding the advancement or delay. A party may also file a motion asserting a right to an expedited hearing upon a showing of

extraordinary circumstances or the possibility of irreparable harm. A.R.S. § 41-1092.05(E).

RESOLUTION SHORT OF ADJUDICATION In any case which is resolved or settled by the parties, or which is withdrawn by the Complainant without objection from Respondent after the Notice of Hearing is issued, the parties must notify the Office of Administrative Hearings of the resolution or settlement. Any such cases will be listed on the Registrar’s website and its records under the category: “Closed

Complaints – Resolved/Settled/Withdrawn.”

Dated October 18, 2024.

By: /s/ Erika Hoskin Erika Hoskin Legal Assistant II Legal Department Arizona Registrar of Contractors

Copy mailed via USPS First Class mail October 18, 2024 to:

Respondent(s) 3R Construction Group LLC 1570 S Sabino Ct Gilbert, AZ 85296

Respondent's Attorney Taylor J. Barlow Esq. 999 E Play de Norte Dr., Ste. 510 Temple, AZ 85288 Complainant(s) Khloes Dream Homes LLC 11686 W Luxton Ln Avondale, AZ 85323

Complainant's Attorney Casey C. Dempsey, Esq. 4105 N. 20th Street Suite 220 Phoenix, AZ 85012 Copy sent electronically this same date to:

Respondent at email address on record with the Registrar Respondent’s Attorney at email address of record with Registrar Complainant at email address on record with the Registrar Complainant’s Attorney at email address of record with Registrar Case No. 2024-07442 /

Hearing Packet FAQ What is the The Hearing Packet is a packet of certain documents collected or Hearing Packet? issued by the Registrar over the course of its investigation. Who gets the The Hearing Packet is assembled and distributed to all parties and Hearing Packet? to the Office of Administrative Hearings (“OAH”) prior to an administrative hearing. What types of The Registrar prepares a Hearing Packet for Complainant-Handled cases does the Cases and No-Pay Cases. Note: If the Docket Number on the Registrar prepare a Notice of Hearing contains a “CHC” or “NPC”, your case is a Hearing Packet for? Complainant-Handled Case or a No-Pay Case. What is in the The Hearing Packet contains essential case-specific documents and Hearing Packet? at a minimum will include the following documents: ● Original complaint; ● Citation; and ● Answer. The Hearing Packet will also contain the following documents (if applicable): ● Jobsite inspection notices, notes, and photos; ● Written directives; and ● Compliance inspection notices, notes, and photos. What if there are If there is any evidence you submitted to the Registrar that are not documents missing included in the Hearing Packet it is your responsibility to introduce from the Hearing that evidence at the administrative hearing. Note: The Packet? administrative law judge assigned to your case does not have access to the entire Registrar record.

If there is additional evidence you submitted to the Registrar during the investigation that you also want to introduce as evidence during your hearing, it is your responsibility to: ● Properly disclose that evidence to the other party; and ● Introduce the evidence during your hearing.

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Within AZ 877.692.9762 · Fax 602.542.1599 · roc.az.gov Hearing Packet FAQ

How do I disclose You must properly disclose any and all documents and witnesses evidence I intend to you intend to use at your hearing according to the Registrar’s use at a Hearing? Prehearing Disclosure Rules. See Arizona Administrative Code Section R4-9-118. A sample prehearing disclosure form and instructions are provided to the parties by the Registrar. How do I obtain If you previously submitted documents to the Registrar and need a documents I copy of these documents, please contact the Registrar’s Legal previously submitted Department or submit a public records request at to the Registrar? https://roc.force.com/AZRoc/s/roc-public-request.

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Within AZ 877.692.9762 · Fax 602.542.1599 · roc.az.gov Hearing Packet FAQ

7/9/24, 3:01 PM State of Arizona Mail - Our File: 92732-002 - Response to Complaint No. 2024-07442

Dylan Warwick <[email redacted]>

Our File: 92732-002 - Response to Complaint No. 2024-07442 Taylor Barlow <[email redacted]> Tue, Jul 9, 2024 at 11:30 AM To: "[email redacted]" <[email redacted]> Cc: "[email redacted]" <[email redacted]>

Mr. Warwick and others to whom it may concern,

Please be advised that our office represents 3R Construction Group LLC. This email is sent in response to the complaint referenced above, which complaint appears to be largely duplicative of Complaint 2024-06292. Therefore, Respondent incorporates its response to Complaint 2024-06292 into this response.

Moreover, Respondent respectfully requests that both Complaint 2024-07442 (this complaint) and Complaint 2024-06292 be dismissed as the subject matter of both complaints is the basis for a civil suit currently pending (see attached civil complaint, filed June 24, 2024).

Please feel free to contact me if you have any further questions.

Taylor Barlow

Attorney [email redacted] 999 E. Playa del Norte Drive Suite 510 Tempe, AZ 85288 Tel: +[number redacted] Fax: (480) 733‑3748

To make a secure online payment: CLICK HERE Does your company comply with the Corporate Transparency Act? Find out here This e-mail message (including attachments) is privileged and confidential, and is only for the use of the individual or entity named therein. If you are not the intended recipient, any use, distribution or copying of this communication or attachments is prohibited. If you are not the intended recipient, please forward this communication to us [email redacted] and delete it from your system. Please consider the environment before printing this email.

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https://mail.google.com/mail/u/0/?ik=e2d7877678&view=pt&search=all&permmsgid=msg-f:[number redacted]&simpl=msg-f:[number redacted] 1/1 Clerk of the Superior Court *** Electronically Filed *** E. Luetke, Deputy 6/24/2024 5:17:52 PM Filing ID 18043189

999 East Playa del Norte Drive, Suite 510 Tempe, Arizona 85288 Telephone: (480) 733-6800 Facsimile: (480) 733-3748 www.davismiles.com [email redacted] Taylor J. Barlow, State Bar No. 037622 Attorneys for Plaintiff IN THE SUPERIOR COURT OF THE STATE OF ARIZONA

IN AND FOR THE COUNTY OF MARICOPA

3R CONSTRUCTION GROUP, LLC, an CASE NO. CV2024-016388 Arizona limited liability company, VERIFIED COMPLAINT Plaintiff,

vs. (Tier 2) RAMIRO SALGUERO SUAREZ and MARIA GARCIA FLORES, a married couple residing in Arizona; SAGA CONSTRUCTION LLC, an Arizona limited liability company; and KHLOES DREAM HOMES LLC, an Arizona limited liability company,

Defendant.

Plaintiff 3R Construction Group, LLC (“Plaintiff” or “3R”), through its undersigned counsel, hereby submits the following as its Complaint against Defendants Ramiro Salguero Suarez (“Suarez”), Maria Garcia Flores (“Flores”), Saga Construction LLC (“Saga”), and Khloes Dream Homes LLC (“Khloes”) (each, a “Defendant” and collectively, “Defendants”): /// /// /// 1 PARTIES, JURISDICTION AND VENUE 1. Plaintiff 3R is a limited liability company with its principal place of business at 1570 S Sabino Ct., Gilbert, AZ, 85296. 2. Upon information and belief, Suarez and Flores are a married couple residing in Maricopa County, Arizona. 3. Upon information and belief, all acts and omissions of Suarez and Flores alleged herein were performed or omitted for the benefit of their marital community. 4. Upon information and belief, Saga is an Arizona limited liability company with its principal place of business at 7144 W. Berkeley Rd. Phoenix, AZ 85035. 5. Upon information and belief, Khloes is an Arizona limited liability company with its principal place of business at 11686 W. Luxton Ln., Avondale, AZ 85323. 6. Upon information and belief, the sole member and principal of Khloes is Ramiro Salguero (“Salguero”), an individual residing in Maricopa County, Arizona, and the son of Suarez and Flores. 7. Upon information and belief, at all times material, Defendants have maintained their respective residences and/or principal places of business in Maricopa County, as noted above, and therefore jurisdiction and venue in this court are proper. 8. As the amount in controversy exceeds $50,000, but is less than $300,000, a tier 2 designation is appropriate. ALLEGATIONS COMMON TO ALL COUNTS 9. Plaintiff is a licensed contractor, holding licenses for CR-61 Carpentry, Remodeling, and Repairs (ROC Lic. No. 332141) and KB-1 Dual Building (ROC Lic. No. 341791). 10. Khloes is a licensed contractor, holding a license for KB-1 Dual Building (ROC Lic. No. 338629). 11. Salguero is the qualifying party for Khloes and its sole member and principal. 2 12. Saga is not licensed by the Arizona Registrar of Contractors. 13. Upon information and belief, Suarez is the sole member and principal of Saga under the alias “Ramiro Salguero.” 14. Upon information and belief, Defendants Suarez and Flores are parents to Salguero. 15. Plaintiff was hired by non-party general contractor H&B Builders LLC, as a subcontractor to perform, among other tasks, siding and framing services for a project known as “The Villas on Lake Mary” in Flagstaff, AZ (hereinafter, the “Lake Mary Project”). 16. Plaintiff’s scope of work on the Lake Mary Project was to begin in July of 2023. 17. Plaintiff engaged Suarez to perform framing work on the Lake Mary Project as a sub-subcontractor in or about June of 2023. 18. Suarez represented to Plaintiff that he was properly licensed to perform the scope of work through Khloes. 19. Plaintiff presented a contract to Suarez, dated June 27, 2023, outlining the contract price for the scope of work Suarez and Khloes were to perform on the Lake Mary Project. The contract was signed by Plaintiff but was never countersigned by Suarez or Khloes (the “Unsigned Contract”). 20. Upon receipt of the Unsigned Contract, Suarez disclosed that he was reticent to sign it because Khloes actually belonged to Salguero, and that he would prefer to sign on through his own entity, Saga. 21. Plaintiff agreed that Saga would perform the work on the Lake Mary Project, and was unaware that Saga was not properly licensed, or not licensed at all. 22. The contract price established by the Unsigned Contract, for services to be rendered by Saga, was $547,291.50. 1 /// 1 This contract price was later increased to $564,232.14 as the scope of services was adjusted. 3 23. Between August 18 and November 17 of 2023, Plaintiff paid Saga a total of $430,000 via check, cash, or ACH transfer. 24. During this period, no Defendant submitted an invoice to Plaintiff relating to work on the Lake Mary Project. 25. Plaintiff and Saga were instead operating with the understanding that Saga would be paid the contract price included in the Unsigned Contract. 26. Checks were endorsed by Suarez and Saga, and funds sent via ACH were deposited directly into Saga accounts. 27. On or before November 30, 2023, Plaintiff received an invoice, dated November 21, 2023, whereby Khloes purported to be owed $695,689.00. 28. Plaintiff was confused by the invoice because Saga had been paid $430,000 and because Plaintiff had no agreement for services with Khloes. 29. On that same day, Plaintiff received a 72-hour cure notice from non-party H&B Builders, the general contractor for the Lake Mary Project, which informed Plaintiff that Saga had abandoned the Lake Mary Project. 30. To properly cure and prevent breach of its subcontract with H&B Builders, Plaintiff engaged another crew to complete the scope of work abandoned by Suarez and Saga. 31. Plaintiff expended additional funds to remedy deficient work performed by Suarez and Saga and to complete the abandoned scope of work. 32. On or about November 22, 2023, Plaintiff received an invoice from H&E Equipment Services, an equipment rental vendor utilized on the Lake Mary Project, for $69,821.48 for damage to a 10,000-pound, 56-foot Reachfork machine, which damage was caused by Suarez and Saga. 33. At the time Suarez and Saga abandoned the Lake Mary Project, it had reached a 70% completion threshold. 34. At 70% completion, Suarez and Saga were owed only $395,134.66. 4 35. At the time Suarez and Saga abandoned the Lake Mary Project, they had been paid $430,000, representing an overpayment of $34,865.34. 36. Shortly after December 5, 2023, Plaintiff received a “Twenty Day Preliminary Notice” from Khloes claiming lien rights pursuant to A.R.S. §33-992.01 in the Lake Mary Project. 37. This Twenty Day Preliminary Notice was also sent to, among others, the owner of the property and the general contractor. 38. Khloes never performed work on the Lake Mary Project and never had a contract, verbal or otherwise, with Plaintiff, the owner of the property, or the general contractor, and therefore lacks any standing to provide a preliminary lien notice. 39. Plaintiff, through counsel, has requested that Khloes sign a waiver releasing any claim, valid or otherwise, of lien in relation to the Lake Mary Project. 40. As of the date of this filing, Khloes has refused to sign and return a lien waiver as requested by Plaintiff. 41. Khloes fraudulent lien claims have injected doubt and concern into Plaintiff’s relationship with the property owner and the general contractor, creating the impression that Plaintiff does not have the financial stability necessary to meet its financial obligations. This has caused a significant delay in receipt of payment to Plaintiff on the Lake Mary Project and other reputational damages to be proven at trial. COUNT ONE (Breach of Contract against Suarez, Flores, and Saga) 42. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 43. Plaintiff entered into a valid verbal contract for services on the Lake Mary Project with Saga through Suarez. /// 5 44. The Unsigned Contract described the scope of work expected of Saga and Suarez and the contract price to be paid by Plaintiff. 45. The scope and price were accepted by Saga and Suarez, as evidenced through the parties’ course and pattern of performance over the ensuing months. 46. Saga breached the contract by abandoning the Lake Mary Project and refusing to indemnify Plaintiff for damages to equipment and overpayment. 47. As a direct and proximate result of Saga’s breach, Plaintiff has suffered damages in an amount to be proved at trial, but at least equal to $59,865.34 due to overpayment and the costs incurred to complete the project at an increased price with a new subcontractor. COUNT TWO (In the Alternative to Count One - Unjust Enrichment/Quantum Meruit, against Suarez, Flores, and Saga) 48. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 49. Plaintiff was impoverished by the Defendants’ actions as described in previous paragraphs set forth above, which were not justified, and the Defendant has been and will be unjustly enriched at the expense of Plaintiff. 50. Plaintiff is paying exorbitant interest and penalties for the debts incurred to make what Plaintiff now recognizes as overpayments to Saga, Suarez, and Flores. 51. As a result of the foregoing conduct, Plaintiff has suffered and will continue to suffer substantial harm from Saga’s and Suarez’ actions. 52. It would be inequitable for Saga, Flores, and Suarez to retain the benefits gained by their wrongful conduct without repaying the sums owed to Plaintiff. /// /// 6 COUNT THREE (Negligent Supervision against Suarez, Flores, and Saga) 53. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 54. As a hired sub-subcontractor on the Lake Mary Project, Saga and Suarez owed a duty of care to Plaintiff to maintain the equipment in good working order and to properly supervise workers within their control. 55. Saga and Suarez breached this duty by allowing an untrained and unqualified operator to take control of the 10,000 lb 56’ Reachfork machine, who ultimately caused the machine to tilt and crash. 56. Saga’s and Suarez’ failure to supervise was the direct and proximate cause of $69,821.48 in damage to the equipment, which sum Plaintiff guaranteed to the equipment supplier, and is entitled to recover from Saga and Suarez. COUNT FOUR (Tortious Interference against Khloes) 57. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 58. A valid and enforceable contract exists between Plaintiff and non-party H&B Builders. 59. Khloes had actual knowledge of the contractual relationship between Plaintiff and H&B Builders and of Plaintiff’s expectancy to receive payment for its services. 60. Khloes intentionally, wrongfully, and improperly asserted invalid and non- existent lien rights in the Lake Mary Project to interfere with the contract between H&B Builders and Plaintiff, contributing to significant delays and inducing a breach in H&B’s obligation to timely pay Plaintiff. 7 61. As a direct and proximate result of Khloes interference, Plaintiff has had to seek alternative financing with unfavorable interest provisions to ensure its downstream obligations are met while H&B withholds payment due to Khloes’ claims. 62. Plaintiff has suffered, and will continue to suffer, damages in an amount to be proven at trial. 63. Khloes’ actions as described above, demonstrate that such actions were intentional, wanton and reckless and showed ill will and demonstrated a reckless indifference disregard for the rights of and owed to Plaintiff and that such actions were outrageous and malicious so as to entitle Plaintiff to an award of punitive damages against Khloes. COUNT FIVE (Aiding and Abetting Tortious Conduct against Suarez, Flores, and Saga) 77. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 78. As described in the preceding paragraphs of this Complaint, Khloes committed the wrongful act of tortious interference with Plaintiff’s contract with H&B Builders, which resulted in damages to Plaintiff. 79. Suarez substantially assisted and encouraged Khloes in committing the tortious conduct set forth in the preceding paragraphs by leveraging the fact that both father and son share the name Ramiro Salguero to create the impression that Suarez is the principal and qualifying party for Khloes and to create the impression that Khloes initially contracted with Plaintiff, which resulted in the damages described herein to Plaintiff. 80. Suarez’ actions as described above demonstrate that such actions were intentional, wanton, and reckless and showed ill will and demonstrated a reckless indifference and disregard for the rights of and owed to Plaintiff and that such actions were outrageous and malicious so as to entitle Plaintiff to an award of punitive damages against Suarez. 8 COUNT FIVE (Fraudulent Misrepresentation against Suarez, Flores, and Saga) 64. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 65. As set forth in the preceding paragraphs, Suarez and Saga falsely represented that Saga was properly licensed to perform the scope of work anticipated by the Lake Mary Project. 66. Suarez knew that their representations set forth above were false, and that such information would be material to Plaintiffs in agreeing to hire and pay Saga, through Suarez., for services on the Lake Mary Project. 67. Defendant intended Plaintiff to rely upon such representations in deciding to bring Saga onto the Lake Mary Project and remit payment for framing services. 68. Plaintiff did not know the representations made by Suarez and Saga were false. 69. Plaintiff justifiably and reasonably relied upon the misrepresentations in deciding to pay Saga $430,000 for services rendered on and to the Lake Mary Project. 70. In making the representations, Suarez and Saga knew that the false information and representations and conduct would or were likely to cause significant damage to Plaintiff. 71. As a result of Suarez’ and Saga’s false representations, Plaintiff suffered damages in an amount to be proven at trial. 72. Suarez’ and Saga’s actions as described above demonstrate that such actions were intentional, wanton, and reckless and showed ill will and demonstrated a reckless indifference and disregard for the rights of and owed to Plaintiff and that such actions were

outrageous and malicious so as to entitle Plaintiff to an award of punitive damages against

Suarez and Saga.

9 PRAYER FOR RELIEF WHEREFORE, Plaintiff prays for judgment against the Defendants, jointly and severally, as follows: A. For an award of compensatory, general and special damages, and other damages in an amount to be determined at trial, but in no case less than $129,686.82; B. All reasonable attorneys’ fees and costs incurred in prosecuting this action, as it arises out of contract pursuant to Ariz. Rev. Stat. § 12-341.01, in an amount not less than $3,000.00. C. For post-judgment interest on all applicable amounts, at the highest legal rate; and D. For such other and further relief as the Court deems just and appropriate. DATED this 24th day of June 2024. DAVIS MILES, PLLC By:/s/ Taylor J. Barlow Taylor J. Barlow 999 E. Playa del Norte Dr., Ste 510 Tempe, AZ 85288 Attorneys for Plaintiff 10 July 9, 2024

Via U.S. Mail and Email

Complainant Khloes Dream Homes LLC 11686 W Luxton Ln Avondale, AZ 85323

Via U.S. Mail and Email

Respondent 3R Construction Group LLC 1570 S Sabino Ct Gilbert, AZ 85296

Re: Complaint No. 2024-07442

Dear Complainant and Respondent:

The Registrar received a complaint filed against 3R Construction Group LLC for non-payment of materials or services rendered. This complaint is complete and will be substantively reviewed by the Registrar.

Respondent is free to raise any issue or affirmative defense to this complaint by filing a response with the Registrar by July 16, 2024. Please reference the complaint number listed above if you file a response. Respondent may file a response by:

Mail: P.O. Box 18244, Phoenix, Arizona, 85005-8244 In-Person: 1700 W. Washington St., Ste. 105, Phoenix, Arizona, 85007-2812 Email: [email redacted]

The Registrar will not issue a citation before July 16, 2024 and will review Respondent’s response, if one is submitted.

Please be advised that a response to the complaint is not the same as a written answer. If the Registrar issues a citation Respondent must file a written answer to that citation in accordance with A.R.S. § 32-1155.

Sincerely,

/s/ Dylan Warwick Dylan Warwick

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg100 4/21 Legal Department 1700 W Washington St. Ste 105 Phoenix, AZ 85007

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg100 4/21 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Case No. 2024-07442 Khloes Dream Homes LLC,

COMPLAINANT, v. CITATION 3R Construction Group LLC License No. ROC 332141,

RESPONDENT.

The Registrar issues this Citation to 3R Construction Group LLC (“Respondent”) under A.R.S. § 32-1155(A). If Respondent fails to answer this Citation by August 22, 2024, then under A.R.S. § 32-1155(C), Respondent’s failure to answer may be deemed an admission of the act or acts charged in the underlying complaint, and the Registrar may then suspend or revoke Respondent’s license(s).

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1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 THE WRITTEN COMPLAINT On June 28, 2024, Khloes Dream Homes LLC (“Complainant”) filed a written complaint with the Registrar. A copy of that Complaint is attached to this Citation. A FORMAL STATEMENT OF THE CHARGES AGAINST RESPONDENT The Registrar investigated this matter and finds cause to charge Respondent with violation(s) of Title 32, Chapter 10 of the Arizona Revised Statutes. Respondent is charged with violating: Charge 1: A.R.S. § 32-1154(A)(10) Failure by a licensee or agent or official of a licensee to pay monies in excess of $750 when due for materials or services rendered in connection with the licensee's operations as a contractor unless the licensee proves that the licensee lacks the capacity to pay, and has not received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased. If the matter proceeds to a hearing and the administrative law judge determines that any of the charges listed above are supported by a preponderance of the evidence, then Respondent’s license(s) may be subject to suspension or revocation, and Respondent may be subject to other penalties provided by law, including civil penalties under A.R.S. §§ 32-1154(E) and (F).

FILING A WRITTEN ANSWER Respondent must appear by filing with the Registrar a written answer to the citation and complaint showing cause, if any, why Respondent’s license(s) should not be suspended or revoked. A.R.S. § 32-1155(A). Respondent’s written answer should contain the heading “Written Answer to Citation and Complaint” and should include the case number, which is Case No. 2024-07442.

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1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 How to File a Written Answer: Respondent’s written answer may be submitted in the following ways: In-Person: 1700 W. Washington St., Ste. 105, Phoenix, Arizona, 85007-2812 Mail: P.O. Box 18244, Phoenix, Arizona, 85005-8244 Email: [email redacted] The Registrar’s normal office hours are 8:00 a.m. to 5:00 p.m., Monday through Friday. If Respondent submits a written answer by mail, it is not filed with the Registrar until the Registrar actually receives it. Deadline for Filing a Written Answer: Respondent must file a written answer with the Registrar no later than August 22, 2024. This deadline is calculated under A.R.S. §§ 32-1155(A) and (B), which provides a deadline ten days after service of the Citation. Service of the Citation and Complaint is complete five days after the Registrar mails a copy of the Citation and Complaint to Respondent’s latest address of record in the Registrar’s office. Consequences for Failing to File a Written Answer: If Respondent fails to answer, Respondent’s failure may be deemed an admission of the act or acts charged in the written complaint. A.R.S. § 32-1155(C). The Registrar may then suspend or revoke Respondent’s license(s). THE ADMINISTRATIVE HEARING If Respondent files a timely written answer contesting any charges in the Complaint, then the Registrar will request the Office of Administrative Hearings set a date for an administrative hearing and will notify all the parties at least 30 days before that hearing. A.R.S. § 41-1092.05(D). INVESTIGATOR’S APPEARANCE AS A WITNESS The Registrar’s assigned investigator will appear as a witness at the hearing. If either party demands the attendance at the hearing of any other person, that party must obtain and

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1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 serve a subpoena in compliance with the rules and processes established by the Office of Administrative Hearings. RESPONDENT’S RIGHT TO REQUEST AN INFORMAL SETTLEMENT CONFERENCE Under A.R.S. § 41-1092.06, if Respondent submits a request to the Registrar for an informal settlement conference, the Registrar must hold a conference within 15 days after receiving the request. Respondent’s request for an informal settlement conference must be in writing and must be filed no later than 20 days before the administrative hearing. A.R.S. § 41- 1092.06(A). The Registrar will not close or settle any case without both parties’ appearance at the Settlement Conference. The parties participating in the settlement conference must have the authority to settle the case and must waive their right to object to the participation of the Registrar’s settlement conference representative in the final administrative decision. A.R.S. § 41-1092.06(B). Any statements, either written or oral, made by the parties at the conference, including a written document, created or expressed solely for the purpose of settlement negotiations, are inadmissible in the administrative hearing. A.R.S. § 41-1092.06(B). RESPONDENT’S PRIOR RECORD Under A.A.C. R4-9-117, in determining the appropriate discipline, the administrative law judge and the Registrar may consider not only facts in the current case, but also facts in prior cases and any documents regarding Respondent on file with the Registrar. Respondent’s prior disciplinary record and current license(s) status may be considered as a mitigating or aggravating factor in determining the appropriate discipline. EVIDENTIARY DISCLAIMER By issuing this Citation, the Registrar is directing Respondent to file a written answer to the Citation and Complaint, showing cause, if any, why Respondent’s license(s) should not be

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1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 suspended or revoked. A.R.S. § 32-1155(A). This Citation does not constitute proof that any charge or allegation in Complainant’s written complaint is in fact true. This Citation does not constitute proof that Respondent violated any statutory provision or rule adopted by the Registrar. Dated August 7, 2024. By: /s/ Margaret Lindsey Margaret Lindsey Assistant General Counsel Legal Department Arizona Registrar of Contractors COPY of the foregoing mailed by Certified Mail, Return Receipt Requested, August 7, 2024 to:

Respondent Certified Mail No: [number redacted]

3R Construction Group LLC 1570 S Sabino Ct Gilbert, AZ 85296

Copy mailed by USPS First Class mail this same date to:

3R Construction Group LLC 1570 S Sabino Ct Gilbert, AZ 85296 Respondent’s Attorney Taylor Barlow, Esq. Davis Miles 999 E. Playa Del Norte Drive Suite 510 Tempe, AZ 85288 Complainant Khloes Dream Homes LLC 11686 W Luxton Ln Avondale, AZ 85323 of 6

1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 Copy sent electronically this same date to: Respondent at email address on record with the Registrar Respondent’s attorney at email address on record with the Registrar Complainant at email address on record with the Registrar

Case No. 2024-07442 / <<CreatedBy_DW>

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1700 W. Washington Street, Suite 105 · Phoenix AZ 85007-2812 602.542.1525 · Toll Free 877.692.9762 · roc.az.gov Lg101 8/21 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received by Investigations 6/28/2024 2024-07442 Received 8/14/2024 ROC Legal

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA Khloes Dream Homes LLC, Case No. 2024-07442 COMPLAINANT, v. WRITTEN ANSWER TO CITATION AND COMPLAINT 3R Construction Group LLC, License No. ROC 332141, RESPONDENT. Respondent 3R Construction Group, LLC (“3R”), License No. ROC 332141, through counsel undersigned, hereby provides its Written Answer to Citation and Complaint arising out of Khloes Dream Homes LLC’s (“Complainant’s”) Complaint in the above-captioned matter. This answer is filed/sent by Fax and Email on August 14th, 2024. I. Answer to Charge 1: A.R.S. § 32-1154(A)(10): 3R answers Charge 1 and expressly denies that it violated A.R.S. § 32-1154(A)(10). 3R asserts that it had no contract or other agreement (whether verbal, written, or otherwise) with Complainant whereby 3R could or would be obligated to remit payment to Complainant. Respondent contracted with Saga Construction LLC (“Saga”) to perform the services for which Complainant now seeks payment. Saga ultimately abandoned the project which undergirds the Complaint. Received 8/14/2024 ROC Legal

In the Complaint, Complainant provides a single invoice, dated December 4, 2023. This invoice has never been seen by 3R prior to this Complaint and appears to have been generated solely for this Complaint. Complainant then provides printouts of a bank statement for Saga Construction LLC. Saga, not Complainant, was performing work on the project. Respondent contracted with and paid Saga – not Complainant. Complainant seeks to bring this complaint as a shadow entity because Saga is not properly licensed. Even if the Complainant was the proper entity to bring the Complaint, Charge 1 should still be dismissed because Respondent timely paid Saga for the work performed. After November 10, 2023 (the date of payment to Saga by Respondent), Saga (or Complainant if so determined) abandoned the project, leaving Respondent to cover with a successor subcontractor. Respondent incurred $9,200 in costs to cover with the successor subcontractor and expects to incur another $4,000 before the project is ultimately completed. These amounts have been demanded from Saga and are the subject of the litigation referenced below. II. Request for Dismissal Currently pending before the Maricopa County Superior Court is Case No. CV2024- 016388. This is a civil suit brought by 3R Construction Group, LLC against Khloes Dream Homes LLC, Saga Construction LLC, Ramiro Salguero Suarez, and Maria Garcia Flores to recover amounts due to 3R. 3R has raised claims for breach of contract, unjust enrichment/quantum meruit, negligent supervision, tortious interference, aiding and abetting tortious conduct, and fraudulent misrepresentation. To avoid duplicative, and potentially contradictory, findings of fact and law, 3R asks that the present Complaint and Citation be dismissed in its entirety while the civil matter referenced above is pending. III. Request for Hearing In the event that 3R’s request for dismissal is denied, 3R requests a formal hearing to defend against the allegations in the Complaint and the charge identified in the Citation. 3R acted as a reasonable and similarly situated contractor with regard to Complainant. 3R is a long-standing reputable contractor with decades of experience. It treats its customers and subcontractors fairly

Received 8/14/2024 ROC Legal

and reasonably, provides quality work, and ensures that any concerns with owners, general contractors, and subcontractors are resolved satisfactorily. In the present matter, 3R denies the charge against it, and thus does not believe any adverse action against 3R’s license is warranted. RESPECTFULLY SUBMITTED this 14th day of August, 2024. DAVIS MILES, PLLC By /s/ Taylor J. Barlow Taylor J. Barlow 999 E. Playa del Norte Dr., Ste 510 Tempe, AZ 85288 Attorneys for Respondent 3R Construction Group LLC ORIGINAL of the foregoing filed via e-mail and fax this 14th day of August, 2024 to: Margaret Lindsey Assistant General Counsel Legal Department Arizona Registrar of Contractors Fax: (602) 364-0416 Email: [email redacted] Copies of the foregoing sent via mail and email this 14th day of August, 2024 to:

Khloes Dream Homes LLC 11686 W Luxton Ln. Avondale, AZ 85323 [email redacted] Complainant

By: /s/ Mikayla Haehn

Received 8/15/24, 8:00 AM State of Arizona Mail - Answer to ROC Citation No. 2024-07442 8/14/2024 ROC Legal

Answers - AZROC <[email redacted]>

Answer to ROC Citation No. 2024-07442 message

Mikayla Haehn <[email redacted]> Wed, Aug 14, 2024 at 5:04 PM To: "[email redacted]" <[email redacted]> Cc: Taylor Barlow <[email redacted]>

Good afternoon,

Please see the attached Answer to ROC Citation No. 2024-07442 from Attorney Taylor Barlow on behalf of 3R Construction Group.

Kind regards,

Mikayla Haehn

Legal Assistant [email redacted] 999 E. Playa del Norte Drive Suite 510 Tempe, AZ 85288 Tel: Fax: (480) 733‑3748 To make a secure online payment: CLICK HERE Does your company comply with the Corporate Transparency Act? Find out here This e-mail message (including attachments) is privileged and confidential, and is only for the use of the individual or entity named therein. If you are not the intended recipient, any use, distribution or copying of this communication or attachments is prohibited. If you are not the intended recipient, please forward this communication to us [email redacted] and delete it from your system. Please consider the environment before printing this email.

Citation No. 2024-07442 Answer.pdf 550K

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SEARCH CRITERIA Entity Name: N/A Entity Type: All Statutory Agent Name: Ramiro Salguero Entity Status: All Principal Name: N/A Name Type: All Entity Number: N/A Entity County: All

SEARCH RESULTS

Entity Entity Agent Agent Entity Entity ID Entity Name Type County Name Type Status

Khloes dream homes LLC Domestic ramiro Statutory 23357647 (/BusinessSearch/BusinessInfo? Maricopa Active LLC salguero Agent entityNumber=23357647)

SAGA CONSTRUCTION LLC Domestic RAMIRO Statutory L21589628 (/BusinessSearch/BusinessInfo? Maricopa Active LLC SALGUERO Agent entityNumber=L21589628)

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ENTITY INFORMATION Search Date and Time: 8/15/2024 4:23:01 PM

Entity Details

Entity Name: KHLOES DREAM HOMES LLC Entity ID: 23357647 Entity Type: Domestic LLC Entity Status: Active Formation Date: 4/6/2022 Reason for Status: In Good Standing

Approval Date: 4/6/2022 Status Date: 4/6/2022 Original Incorporation Date: 4/6/2022 Life Period: Perpetual Business Type: Construction Last Annual Report Filed:

Domicile State: Arizona Annual Report Due Date:

Years Due:

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Statutory Agent Information

Name: ramiro salguero Appointed Status: Active 4/6/2022 Attention:

Address: 11686 W Luxton Ln, AVONDALE, AZ 85323, USA

Agent Last Updated: 5/12/2022 E-mail:

Attention:

Mailing Address: 11686 W Luxton Ln, AVONDALE, AZ 85323, USA County: Maricopa

Principal Information

Date of Last Title Name Attention Address Taking Office Updated

ramiro 11686 W Luxton Ln, AVONDALE, AZ, Member 5/12/2022 salguero 85323, Maricopa County, USA

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Address

Attention: Address: 11686 W Luxton Ln, AVONDALE, AZ, 85323, USA County: Maricopa Last Updated: 5/12/2022

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Entity Details

Entity Name: SAGA CONSTRUCTION LLC Entity ID: L21589628 Entity Type: Domestic LLC Entity Status: Active Formation Date: 2/7/2017 Reason for Status: In Good Standing

Approval Date: 2/8/2017 Status Date:

Original Incorporation Date: 2/7/2017 Life Period: Perpetual Business Type:

Last Annual Report Filed:

Domicile State: Arizona Annual Report Due Date:

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Original Publish Date:

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Name: RAMIRO SALGUERO Appointed Status: Active Attention:

Address: 7144 W BERKELEY RD , PHOENIX, AZ 85035, USA

Agent Last Updated: 2/8/2017 E-mail:

Attention:

Mailing Address: 7144 W BERKELEY RD , PHOENIX, AZ 85035, USA County:

Principal Information

Date of Taking Last Title Name Attention Address Office Updated

RAMIRO 7144 W BERKELEY RD, Manager 2/7/2017 2/8/2017 SALGUERO PHOENIX, AZ, 85035, USA

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Address

Attention: Address: 7144 W BERKELEY RD, PHOENIX, AZ, 85035, USA County: Maricopa Last Updated: 2/8/2017

Entity Principal Office Address

Attention: Address: Privacy Policy (http://azcc.gov/privacy-policy) ǀ Contact Us (http://azcc.gov/corporations/corporation-contacts) County:

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https://ecorp.azcc.gov/BusinessSearch/BusinessInfo?entityNumber=L21589628 3/3 Clerk of the Superior Court *** Electronically Filed *** E. Luetke, Deputy 6/24/2024 5:17:52 PM Filing ID 18043189

IN AND FOR THE COUNTY OF MARICOPA

3R CONSTRUCTION GROUP, LLC, an CASE NO. CV2024-016388 Arizona limited liability company, VERIFIED COMPLAINT Plaintiff,

Defendant.

Plaintiff 3R Construction Group, LLC (“Plaintiff” or “3R”), through its undersigned counsel, hereby submits the following as its Complaint against Defendants Ramiro Salguero Suarez (“Suarez”), Maria Garcia Flores (“Flores”), Saga Construction LLC (“Saga”), and Khloes Dream Homes LLC (“Khloes”) (each, a “Defendant” and collectively, “Defendants”): /// /// /// 1 PARTIES, JURISDICTION AND VENUE 1. Plaintiff 3R is a limited liability company with its principal place of business at 1570 S Sabino Ct., Gilbert, AZ, 85296. 2. Upon information and belief, Suarez and Flores are a married couple residing in Maricopa County, Arizona. 3. Upon information and belief, all acts and omissions of Suarez and Flores alleged herein were performed or omitted for the benefit of their marital community. 4. Upon information and belief, Saga is an Arizona limited liability company with its principal place of business at 7144 W. Berkeley Rd. Phoenix, AZ 85035. 5. Upon information and belief, Khloes is an Arizona limited liability company with its principal place of business at 11686 W. Luxton Ln., Avondale, AZ 85323. 6. Upon information and belief, the sole member and principal of Khloes is Ramiro Salguero (“Salguero”), an individual residing in Maricopa County, Arizona, and the son of Suarez and Flores. 7. Upon information and belief, at all times material, Defendants have maintained their respective residences and/or principal places of business in Maricopa County, as noted above, and therefore jurisdiction and venue in this court are proper. 8. As the amount in controversy exceeds $50,000, but is less than $300,000, a tier 2 designation is appropriate. ALLEGATIONS COMMON TO ALL COUNTS 9. Plaintiff is a licensed contractor, holding licenses for CR-61 Carpentry, Remodeling, and Repairs (ROC Lic. No. 332141) and KB-1 Dual Building (ROC Lic. No. 341791). 10. Khloes is a licensed contractor, holding a license for KB-1 Dual Building (ROC Lic. No. 338629). 11. Salguero is the qualifying party for Khloes and its sole member and principal. 2 12. Saga is not licensed by the Arizona Registrar of Contractors. 13. Upon information and belief, Suarez is the sole member and principal of Saga under the alias “Ramiro Salguero.” 14. Upon information and belief, Defendants Suarez and Flores are parents to Salguero. 15. Plaintiff was hired by non-party general contractor H&B Builders LLC, as a subcontractor to perform, among other tasks, siding and framing services for a project known as “The Villas on Lake Mary” in Flagstaff, AZ (hereinafter, the “Lake Mary Project”). 16. Plaintiff’s scope of work on the Lake Mary Project was to begin in July of 2023. 17. Plaintiff engaged Suarez to perform framing work on the Lake Mary Project as a sub-subcontractor in or about June of 2023. 18. Suarez represented to Plaintiff that he was properly licensed to perform the scope of work through Khloes. 19. Plaintiff presented a contract to Suarez, dated June 27, 2023, outlining the contract price for the scope of work Suarez and Khloes were to perform on the Lake Mary Project. The contract was signed by Plaintiff but was never countersigned by Suarez or Khloes (the “Unsigned Contract”). 20. Upon receipt of the Unsigned Contract, Suarez disclosed that he was reticent to sign it because Khloes actually belonged to Salguero, and that he would prefer to sign on through his own entity, Saga. 21. Plaintiff agreed that Saga would perform the work on the Lake Mary Project, and was unaware that Saga was not properly licensed, or not licensed at all. 22. The contract price established by the Unsigned Contract, for services to be rendered by Saga, was $547,291.50.1 /// 1 This contract price was later increased to $564,232.14 as the scope of services was adjusted. 3 23. Between August 18 and November 17 of 2023, Plaintiff paid Saga a total of $430,000 via check, cash, or ACH transfer. 24. During this period, no Defendant submitted an invoice to Plaintiff relating to work on the Lake Mary Project. 25. Plaintiff and Saga were instead operating with the understanding that Saga would be paid the contract price included in the Unsigned Contract. 26. Checks were endorsed by Suarez and Saga, and funds sent via ACH were deposited directly into Saga accounts. 27. On or before November 30, 2023, Plaintiff received an invoice, dated November 21, 2023, whereby Khloes purported to be owed $695,689.00. 28. Plaintiff was confused by the invoice because Saga had been paid $430,000 and because Plaintiff had no agreement for services with Khloes. 29. On that same day, Plaintiff received a 72-hour cure notice from non-party H&B Builders, the general contractor for the Lake Mary Project, which informed Plaintiff that Saga had abandoned the Lake Mary Project. 30. To properly cure and prevent breach of its subcontract with H&B Builders, Plaintiff engaged another crew to complete the scope of work abandoned by Suarez and Saga. 31. Plaintiff expended additional funds to remedy deficient work performed by Suarez and Saga and to complete the abandoned scope of work. 32. On or about November 22, 2023, Plaintiff received an invoice from H&E Equipment Services, an equipment rental vendor utilized on the Lake Mary Project, for $69,821.48 for damage to a 10,000-pound, 56-foot Reachfork machine, which damage was caused by Suarez and Saga. 33. At the time Suarez and Saga abandoned the Lake Mary Project, it had reached a 70% completion threshold. 34. At 70% completion, Suarez and Saga were owed only $395,134.66. 4 35. At the time Suarez and Saga abandoned the Lake Mary Project, they had been paid $430,000, representing an overpayment of $34,865.34. 36. Shortly after December 5, 2023, Plaintiff received a “Twenty Day Preliminary Notice” from Khloes claiming lien rights pursuant to A.R.S. §33-992.01 in the Lake Mary Project. 37. This Twenty Day Preliminary Notice was also sent to, among others, the owner of the property and the general contractor. 38. Khloes never performed work on the Lake Mary Project and never had a contract, verbal or otherwise, with Plaintiff, the owner of the property, or the general contractor, and therefore lacks any standing to provide a preliminary lien notice. 39. Plaintiff, through counsel, has requested that Khloes sign a waiver releasing any claim, valid or otherwise, of lien in relation to the Lake Mary Project. 40. As of the date of this filing, Khloes has refused to sign and return a lien waiver as requested by Plaintiff. 41. Khloes fraudulent lien claims have injected doubt and concern into Plaintiff’s relationship with the property owner and the general contractor, creating the impression that Plaintiff does not have the financial stability necessary to meet its financial obligations. This has caused a significant delay in receipt of payment to Plaintiff on the Lake Mary Project and other reputational damages to be proven at trial. COUNT ONE (Breach of Contract against Suarez, Flores, and Saga) 42. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 43. Plaintiff entered into a valid verbal contract for services on the Lake Mary Project with Saga through Suarez. /// 5 44. The Unsigned Contract described the scope of work expected of Saga and Suarez and the contract price to be paid by Plaintiff. 45. The scope and price were accepted by Saga and Suarez, as evidenced through the parties’ course and pattern of performance over the ensuing months. 46. Saga breached the contract by abandoning the Lake Mary Project and refusing to indemnify Plaintiff for damages to equipment and overpayment. 47. As a direct and proximate result of Saga’s breach, Plaintiff has suffered damages in an amount to be proved at trial, but at least equal to $59,865.34 due to overpayment and the costs incurred to complete the project at an increased price with a new subcontractor. COUNT TWO (In the Alternative to Count One - Unjust Enrichment/Quantum Meruit, against Suarez, Flores, and Saga) 48. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 49. Plaintiff was impoverished by the Defendants’ actions as described in previous paragraphs set forth above, which were not justified, and the Defendant has been and will be unjustly enriched at the expense of Plaintiff. 50. Plaintiff is paying exorbitant interest and penalties for the debts incurred to make what Plaintiff now recognizes as overpayments to Saga, Suarez, and Flores. 51. As a result of the foregoing conduct, Plaintiff has suffered and will continue to suffer substantial harm from Saga’s and Suarez’ actions. 52. It would be inequitable for Saga, Flores, and Suarez to retain the benefits gained by their wrongful conduct without repaying the sums owed to Plaintiff. /// /// 6 COUNT THREE (Negligent Supervision against Suarez, Flores, and Saga) 53. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 54. As a hired sub-subcontractor on the Lake Mary Project, Saga and Suarez owed a duty of care to Plaintiff to maintain the equipment in good working order and to properly supervise workers within their control. 55. Saga and Suarez breached this duty by allowing an untrained and unqualified operator to take control of the 10,000 lb 56’ Reachfork machine, who ultimately caused the machine to tilt and crash. 56. Saga’s and Suarez’ failure to supervise was the direct and proximate cause of $69,821.48 in damage to the equipment, which sum Plaintiff guaranteed to the equipment supplier, and is entitled to recover from Saga and Suarez. COUNT FOUR (Tortious Interference against Khloes) 57. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 58. A valid and enforceable contract exists between Plaintiff and non-party H&B Builders. 59. Khloes had actual knowledge of the contractual relationship between Plaintiff and H&B Builders and of Plaintiff’s expectancy to receive payment for its services. 60. Khloes intentionally, wrongfully, and improperly asserted invalid and non- existent lien rights in the Lake Mary Project to interfere with the contract between H&B Builders and Plaintiff, contributing to significant delays and inducing a breach in H&B’s obligation to timely pay Plaintiff. 7 61. As a direct and proximate result of Khloes interference, Plaintiff has had to seek alternative financing with unfavorable interest provisions to ensure its downstream obligations are met while H&B withholds payment due to Khloes’ claims. 62. Plaintiff has suffered, and will continue to suffer, damages in an amount to be proven at trial. 63. Khloes’ actions as described above, demonstrate that such actions were intentional, wanton and reckless and showed ill will and demonstrated a reckless indifference disregard for the rights of and owed to Plaintiff and that such actions were outrageous and malicious so as to entitle Plaintiff to an award of punitive damages against Khloes. COUNT FIVE (Aiding and Abetting Tortious Conduct against Suarez, Flores, and Saga) 77. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 78. As described in the preceding paragraphs of this Complaint, Khloes committed the wrongful act of tortious interference with Plaintiff’s contract with H&B Builders, which resulted in damages to Plaintiff. 79. Suarez substantially assisted and encouraged Khloes in committing the tortious conduct set forth in the preceding paragraphs by leveraging the fact that both father and son share the name Ramiro Salguero to create the impression that Suarez is the principal and qualifying party for Khloes and to create the impression that Khloes initially contracted with Plaintiff, which resulted in the damages described herein to Plaintiff. 80. Suarez’ actions as described above demonstrate that such actions were intentional, wanton, and reckless and showed ill will and demonstrated a reckless indifference and disregard for the rights of and owed to Plaintiff and that such actions were outrageous and malicious so as to entitle Plaintiff to an award of punitive damages against Suarez. 8 COUNT FIVE (Fraudulent Misrepresentation against Suarez, Flores, and Saga) 64. Plaintiff realleges and fully incorporates herein by reference all prior allegations set forth in the preceding paragraphs of the Complaint. 65. As set forth in the preceding paragraphs, Suarez and Saga falsely represented that Saga was properly licensed to perform the scope of work anticipated by the Lake Mary Project. 66. Suarez knew that their representations set forth above were false, and that such information would be material to Plaintiffs in agreeing to hire and pay Saga, through Suarez., for services on the Lake Mary Project. 67. Defendant intended Plaintiff to rely upon such representations in deciding to bring Saga onto the Lake Mary Project and remit payment for framing services. 68. Plaintiff did not know the representations made by Suarez and Saga were false. 69. Plaintiff justifiably and reasonably relied upon the misrepresentations in deciding to pay Saga $430,000 for services rendered on and to the Lake Mary Project. 70. In making the representations, Suarez and Saga knew that the false information and representations and conduct would or were likely to cause significant damage to Plaintiff. 71. As a result of Suarez’ and Saga’s false representations, Plaintiff suffered damages in an amount to be proven at trial. 72. Suarez’ and Saga’s actions as described above demonstrate that such actions were intentional, wanton, and reckless and showed ill will and demonstrated a reckless indifference and disregard for the rights of and owed to Plaintiff and that such actions were

outrageous and malicious so as to entitle Plaintiff to an award of punitive damages against

Suarez and Saga.

Tedi Quezada <[email redacted]>

Case 2024-07442 - 10 Day Response Letter - DO NOT REPLY message

Tedi Quezada <[email redacted]> Wed, Aug 21, 2024 at 9:20 AM Bcc: [email redacted], [email redacted], [email redacted]

Hello,

Please see the attached electronic courtesy copy of the 10 Day Response Letter issued in Case 2024-07442. This document was also sent to your attention via US Mail.

PLEASE DO NOT REPLY DIRECTLY TO THIS EMAIL. Any reply or response should be addressed to [email redacted]

Thank you

Tedi Quezada Legal Assistant II Legal Department Arizona Registrar of Contractors Main: 602.542-1525

Email: [email redacted]

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20240821 10 Day Response Letter 2024-07442 MAIL.pdf 1457K

https://mail.google.com/mail/u/0/?ik=b3c9c6c218&view=pt&search=all&permthid=thread-a:r-[number redacted]%7Cmsg-a:r-[number redacted]… 1/1 ARIZONA REGISTRAR OF CONTRACTORS

August 21, 2024

Via U.S. Mail and Electronic Mail

Complainant Khloes Dream Homes LLC 11686 W Luxton Ln Avondale, AZ 85323

Re: Complaint No. 2024-07442, License No ROC 332141

Dear Complainant:

3R Construction Group LLC filed its written answer, which included a request to dismiss the case. Respondent argues, amongst other things, that it had a contract with Saga Construction LLC (“Saga”), not Khloes Dream Homes LLC, for the 17645 N. Porter Road. Maricopa (clubhouse in Maricopa) (“Clubhouse Project”).

After review of the file on record, the Registrar has determined additional information is required. Please provide the following:

1. If the contract was signed, then please provide a signed contract between Kholes Dream Homes LLC and 3R Construction Group LLC or any documentation (including emails, letters, text messages etc.) to show that Kholes Dream Homes LLC had an agreement with 3R Construction Group LLC for the Clubhouse Project.

2. If the contract was verbal and you do not have any written documentation to provide to the Registrar to show that there was a contract between Kholes Dream Homes LLC and 3R Construction Group LLC, then provide a written statement that includes the following information: • Date of the contract/agreement; • Individuals who negotiated the contract/agreement and on behalf of which companies the agreement was made (include entity and ROC license number); • Scope of the work to be performed; and • Payment terms.

3. Explain the relationship between Khloes Dream Homes LLC and Saga Construction LLC. Please include in your explanation the reason that payments received from Respondent were deposited into Saga Construction LLC’s bank account.

Please provide the requested additional information within 10 days from the date of this letter. The Registrar will also allow you to respond to Respondent’s answer and

LG108a – 07/23 ARIZONA REGISTRAR OF CONTRACTORS

request to dismiss within 10 days from the date of this letter before it makes a determination on Respondent’s request.

Any written response may be submitted to the Registrar as follows:

In-Person: 1700 W Washington St., Ste. 105, Phoenix, AZ 85007-2812 Fax: (602) 771-6808 Email: [email redacted]

Sincerely,

/s/ Margaret Lindsey _________________ Margaret Lindsey Assistant General Counsel Legal Department 1700 W Washington St. Ste. 105 Phoenix, AZ 85007

CC: 3R Construction Group LLC Taylor J. Barlow, Esq.

LG108a – 07/23 Received 8/14/2024 ROC Legal

Received 8/14/2024 ROC Legal

Khloes Dream Homes LLC 11686 W Luxton Ln. Avondale, AZ 85323 [email redacted] Complainant

By: /s/ Mikayla Haehn

Received 8/15/24, 8:00 AM State of Arizona Mail - Answer to ROC Citation No. 2024-07442 8/14/2024 ROC Legal

Answers - AZROC <[email redacted]>

Answer to ROC Citation No. 2024-07442 message

Mikayla Haehn <[email redacted]> Wed, Aug 14, 2024 at 5:04 PM To: "[email redacted]" <[email redacted]> Cc: Taylor Barlow <[email redacted]>

Good afternoon,

Please see the attached Answer to ROC Citation No. 2024-07442 from Attorney Taylor Barlow on behalf of 3R Construction Group.

Kind regards,

Mikayla Haehn

Citation No. 2024-07442 Answer.pdf 550K

https://mail.google.com/mail/b/AEoRXRTGIZPntbDQRCCnUB4810z3nwwZKM9W3NaDD538kB7BSthb/u/0/?ik=581c53cf5c&view=pt&search=all&per… 1/1 lu),'l-01.-1'{a 08-22-2024

To whom it may concern.

I Ramiro Salguero, in writing this tetter wou[d [ike to address the reason as to why the deposit was made to Saga and not to Khtoes Dream House LLC. There was a verbaI agreement made with Mr. Rivera, owner of 3R Construction, on the project located at 17645 N. Porter Rd. Maricopa, Az for $ 35,000. The project was offered to us during the time that we were actively working on Mr. Riveras project in Ftagstaff the other project catted "The vittas on Lake Mary". ln addition, we have also submitted a ctaim on this project which atso inctudes lack of payment. Verbal contracts were made with Mr. Rivera as we had previousty worked for him on other projects with no issues. There for we consider his company to be retiabte at that time. The contract that was sent at that time that we initiated were not signed because the amounts were incorrect and were waiting forthem to be sent corrected. Therefore, we proceed in good faith expecting for the contract to be sent correctty without detayingthe project. Mr. Rivera agreed to correct the amount and asked that we move forward with the iob in Ftagstaff. The Maricopa contract was offered to us shortty after we started the Ftagstaff project. ln the interim Mr. Rivera requested that we use a Wetts Fargo account. Saga at that time had a Wetts Fargo account. Mr. Rivera indicated that Chase bank, Khloes Dream Homes LLC. Bankwoutd Detaythe retease offunds because he was having issues with the bank. We needed to make payrott that same day so we had Mr. Rivera make the deposit to the Saga account so payrott coutd be met and not detayed. l'm attaching the bank statement again where you can see he's actuatly stating the Ftaggstaff and Maricopa payment.

Best regards,

miro Satgu

r R Li G\U r r') lnitiate Business Checki ng sM wE,r.8 A5

de noviembre de 2023 EAIl(i6 Pagina 1 de 10 I Algunas secciones de este estado de cuenta son en inglcts

ZPreguntas? SAGA CONSTRUCTION LLC Dbponible por teldfono de lunes a sibado de 7:00 a.m. 1 686 W LUXTON LN a I 1:00 p.m. hora del este, domingos de 9:00 a.m. a AVONDALE AZ 85323.5434 10:00p.m., hora del este: Aceptamos lodas las llamadas de retransmrsion. incluso del 711

En espanol:1-877 -337 -7 454

rrgbhi 1 .8oo-CALL-WELLS (1 -800-225-5935)

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Resumen de la actividad del perlodo de estado de cuenta N{mero de cuenta: ,9055 Saldo inicialal 1 1/'l SAGA CONSTRUCIION LLC $1,702.83 Dep0sitos/Creditos 165,800.00 Arizona: Se aplican los tdfitinos y condiciones de la Retiros/Ddbitos cuenta 161,265.29 Para Depdsitos Directos utilice Saldo finalal 11/30 (mes/dia) $231 54 elnumero de triinsito interbancario (RTN)] '[number redacted] Para giros elect16nicos utilice el nrmero de lrirnsito interbancario (RTN): [number redacted]

Protecci0n contra Sobregiros Aclualmenle, esla cuenla no esla cubierta por Proleccidn contra Sobregiros. Si desea mas inFormacion acerca de la Protecci6n contra Sobregiros y los requisitos de elegibllidad, sirvase llamar alnumero que aparece en su estado de cuenla ovisite la sucursalde Wells Fargo de su localidad.

Historial de transacciones Traducciones de terminos de transacciones . ATM Withdrawal = Retiro de Cajero Automiitico (AIM) . Non-Wells FargoAT[4 Transaclion Fee = Cargo por Transacci6n de . Automatic Transfer = Transferencia Autom6tica Cajero Automatico (ATM) que no pertenece a Wells Fargo . Purchase = Compra . NSF Relurn llem Fee = Cargo por Partida Devuelta por lnsufaciencia de . lnlerest Payment = Pago de lntereses Fondos . [4onthly Service Fee = Cargo l\,4ensual por Servicio . Overdraft Fee = Cargo por Sobregiro . Overdraft Protection = Proteccidn contra Sobregiros . Withdrawals/Debits = Retiros/Debitos

Fecha Nfunerc Dep6sitos/ Bctiros/ Satdct (meddia de chequc Descipci1n Cr\ditos Dibitos diario |inal

Check # 01183 1111 < BusinpssloBusinessAcHDpbrl-Bank(ardMlhlylees23l03l 30i3 1b3750 [number redacted] Saga Construction 1112 Overdraft Fee for a lranlaLlion Posled on 1 1/01 $30 33 35 00 Bankcard Nlthly Feei 23103'l [number redacted] 055 Saga Construction 11t2 3RConst uctionACHPml231102 lllll22OTO0Payrolh 2000000 11/2 Pur c hase au thoriled on lo/Jl Pl5 financrdl Serv 877-6707336 215000 ']sa5250 lL [number redacted] Card '189'l '11/3 Purchase aulhorized on l l/O3 ALrlo2one 36T6 lcOOSVil 4305 Flagstaff AZ P303307861 529406 Card'1 891 11/3 1184 Check 1.850.00 17,55885 1116 eDepositlNBralLhll/obt2jo3215ePl,i11425WBurkeye 22.00000 Rd Avondale AZ 5746 Purc hase authorized on 1 1 /03 Chevron 03 5 4 990 Phoen ix AZ I 00.96 [number redacted] Card 1 891 11/6 1208 Ca5hed Check /400.00 11tb AZ Fu rchase authorized on 11/04 ft,4cDonalds t39630l\,4esa 17.85 [number redacted] Card 5746 11/6 Purchaseaulhorizedonll/04R6\Store\41948MesaAZ 299.80 P000000381 02 3383 Card 5746 de noviembre de 2023 A5 Pagina 3 de 10 wEr.r,s r&xcs

H i s t or i a I d e t ra nsa cc i one{c o n t i n u ac i 0n)

Iecha Nimeft) Dcpositos/ Retiros/ Saldo (fies/dia de Creditos D$itos diaio final U AU on n copa AZ [number redacted] 51 Card 5746 't1/6 1212 oeposited OR Cashed Check 1 300 00 11/6 l2t I D-po,,tpd OR Ca(hpo r-hpr. 1 s00 00 11/6 1221 Check 1,05ooo 11t6 12 0 Cne(N 1,800.00 11/6 l20l ( aeLA 680.00 11/6 22 Chert 1,350.00 11t6 ',l '2 o Cl.ecl '1,050.00 11/6 '118 CheL( '1,000 11/6 1229 Check 24000 11/6 1232 Check 1,050 OO 11/6 123 3 ChcLk 1,080 00 19 608 34 11/1 1225 Cashed Check 1 800 00 11t7 l,/04 Cd\hed CneLk 1300 o0 11t7 W Ihdraw,rl \,4dde l1 A Br,rnLh/Slore 350.00 11t7 < Business to Business ACH Deb 1 , Lm2 Properlies ACH Debil 595.00 231107 [number redacted] Saga Construction LLC 11t7 1217 Check 1,050 00 11/7 I216 Check '1,050 11/l '1234 Check 1,300.00 11ll 1224 LheLk 1,000.00 11/1 121 5 Check 1,200 oo 11/7 122 7 Check '1,500 11/1 1197 Check 1,750.00 i1/j .t1/7 I2Oo Ch-(k ?,800.00 1226 Check 2,100 00 11t1 1230 L'reck 1,000 00 11/1 1235 Check 600 o0 713 34 11/8 Purchase authorized on 'l1106 Circle K 06639 [,4aricopa AZ 50 00 S30331055300941 7 Card 5746 11t8 c1,r\" c.pdil c.d tp,jy 231 10/ /08 /023 /-s \rdria ca. rJ 1,00000 336 66 11t9 Overdraft Fee for a Transaction Posled on 11/08 $1.000 00 35 00 3 7',1 66

Chase Credit Crd Epay 23'll07 70870237T 9 N4aria Garcia 1tl10 3R Colsru ron A(H P-|,/lIIl0Il l3qlO)l345OOO'o 60.000 00 Flagstaffand 15,000 for N.4arlcopa 't 10,000 00 1/10 Withdrawal l\,4ade ln A Branch/Store 11/10 WrlhdrawalMade ll A B/dn'1 sro'a 10 000 00 11i 1o WilhdrawalMade ln A Branch/Store 4,700 00 34,928 34 't 1/13 N,4oney Transfer authorized on 1'll'10 Remilly' Pdol 449.99 WWW Remilly C WA [number redacted]'l07145 Card 5746 11/13 Purchase aulhorized on 11/'12 LA lvlichoacana AllPhoen x AZ 2815 [number redacted] Card 5746 11/13 'ld2 D"posilFd OR Ca .hpd CIP I 1,55000 11/13 ATM Withdrawal aulhorized on I1ll2 13470 W Van Buren St 200 00 Goodyear AZ 0002260 ATM lD 9964R Card 5746 11/13 '1257 Deposited OR Cashed Check 840 00 11/13 '1239 Check 2,10000 11113 124I LheLk 1,750 00 11i 13 '1240 Check 2,100 00 11/13 12 36 (l'pcl 8,300 00 't 05000 11t13 1205 Check /13 ',t 1248 Check 900 00 11t13 1245 Check 1,200 00 11/13 1206 Check 1 300 00 11/13 1?56 Check 700 00 11/13 1r50 Check 900 00 11/13 l24o Cnelk 1,000 00 11t13 I247 Check 1,000 00 11/13 I255 Check r 200 00 11113 1207 Check 1,200.00 't 1/13 1249 Check 1 240 00 11/13 12 54 Check 1,300 00 't 1/13 1243 Check 1 450 00 de noviembre de 2023 A5 PAgina 4 de 10 WE,IA I1IRGO

H istor i a I de t ransacci oneXconti nu aci0n)

Fecha Depdsitos/ letiros/ Saldo (mes/dia Oiditos Dabitos diaiolinal 1',l113 1244 Check 'r,850 00 11/13 1258 Check 950 00 1 130 40 11/14 Overdraft Fee for a Transaction Posted on 11/13 S1.850 00 35 oO Check r 01244 11/14 Overdraft tee for a Tran\action Posted on 1 l/13 i950 OO Checl 35 00 #01258 11114 pDeposit lN Brancr I1/l4123 01.04 44 P^l '11425 W Brrcteye s 800 00 Rd Avondale AZ 5746 11/14 'l 'll12 Purchase aulhoriTed on Tsl' Fiesta l\4exica Avondale AZ 134 22 S3833'l [number redacted] Card 5746 11t14 1260 Check 1 300 00 3'r65 38 11/15 1261 Deposrled OR Cashed Check 2 120 00 11t15 J.oennpy Paymenl Nov l5 [number redacted] /52 41 oo 1 004 38 [number redacted] 51 67526 11t16 S I Saving\ Bank Premium I I1623 " "'[number redacted] [/aria 126.'r5 Garcia 11116 Home Depot Aulo Pymt 231115 [number redacted] Ramiro 699.00 179 23 Suarez 11/11 3R Conslruclron ACH Prl 23I 1 l7 I I 1 I4528252 The Villas 30,000 00 Flagstaff 11/11 WithdrawalMade ln A Branch/Store 5 700 00 24 419 23 11120 e0eposit lN Branch 11/20/2301 28 02 PM 11425 W Euckeye 24 000 00 Rd Avondale AZ 5746 11t20 125] Cashed Chdck 2,100.00 11/20 1264 Cashed Check 6.800.00 'l 11/20 Purchase authorized on 1/'l8 Asos l.lS Sales LLC 47489 VWVW Asos Com Dt S383323040203974 Card 5746 11/2A PJr( hase wilh Ca\h Back $ 40 00 aurhofl/ed on 11/19 Slaples 116 43 0261 Glendale AZ P583323816056980 Card 5746 11/20 1268 Deposited OR Cashed Check 1 300.00 11/20 1291 Deposited OR Cashed Check T,200 00 11120 1272 lJe ited ORCashed Chec 1 4s000 11120 1273 Deposited OR Cashed Check 1 700 00 11/20 12i I Dnpo,rlrd 0R Ca .hPd Chp I 1 750 00 11t20 1284 Deposiled OR Cashed Check 2 200 00 11120 1266 Check 2 100 00 '150ooo 11t20 l209 Cl.eck 11120 T 263 Check 1 725 00 11t20 1280 Check 1,300.00 11120 1290 Check 750.00 11t20 1294 Check 2,100 00 11120 1277 Che.k 900.00 11/20 1291 Check 840.00 11120 '125 Check 1,100.00 11/20 1285 .le(( 1.400.00 15,61291 11121 1288 Cneck 700.00 11/21 1289 Check 8s0 00 11/21 1282 Check 900 00 11t21 I278 Check 1.200.00 11/21 12 74 Check 1,200.00 11/21 1287 Ch-"ck 1 200.00 11/21 I276 Check 1,250 00 11/21 '1275 Check 1,250.00 11/21 T 286 Check 1.560.00 i 21 l2o5 Chell 2,100.00 11121 1292 Cl'eLl 880 00 2 58291 1-124 Purchase authorized on 1'l/2'l Slarbucks Store 06 Avondale AZ 802 S463325525484300 Card 5746 11124 1293 Check r,300.00 11124 l2l9 CheLk 900.00 374 89 11/28 Dapo.rt I\,4adF lr A Brdnch'Sror" 4 000 00 11128 1313 Cashed Check 3 600 00 de noviembre de 2023 A5 Piigina 5 de 10 IIIELI,S rAR,G{}

H i stor ia I de transaccione{cont i nuaci6n)

Fecha Ntmer> Dep1sitos/ Retiros/ Saldo (mcs/dia de cheE e Descipci,n Creditos Dibitos diaiofrnal 112 723 [number redacted] Saga Construction 11t28 . BusrnessloBusinFs\ACHDebit.BankcardPcilepll2723 85.00 66cc4 [number redacted] Saga Construclion 11/29 Lowes Brc Payment Nov 29 [number redacted] 292.00 317.94 7982',][number redacted] I l/30 Cash Deposit Processing tee 140 40 237 54

Saldo final al 1/30 237 54

Totales $165,800 00 $161 265 29

ll Saldo Diaio Final no rcneja ningin rctiro o rctenci4n pendientes sobrc fondos depositados que ptedan habet eslado pendientes en la cuenla cuando se ajerllaro, JUs lrarrac ciones. Si no tenia fondos dbrynibles sufrcientes cuando se asentb una transacci6n, es posible que se hayan impuesto algunos cargos.

The Endlng Daily BaJance doas nol rcltecl any pending withdrawals or holds on deposited Iunds that nal have becn oulstanding on lout account when low ttansaclionsposted. ff you had insullicienl available funds when a trar$action posted, [ees may ha ye bee, a$esjed < Transacci'n de Empresa a Empresa a travds de la Camara de Compensaci1n Automatizada (ACH, pot sus siglas en ingl6s). Siesta es ura cuenta comercial esla traisaccidn tiene un plazo de devoluci6n de un dia labonble desde la fecha en que se regbtra. &te plazo no se aplica para cuentas al consunidor. < Euslness lo Eusine$ ACH: lfthb isa h)shres acxouX tib tanection hs arcttmt tinr flarrP olorp b6in?ss day fofit p6l dale.Ihislifieframc d@s nol apdy locdtsmrcr{cowts.

Resu men de los cheq ues em it idodos cre ques enunerados lambien se indican en el histoial de transacciones precedente)

Nimero Fecha 1',t 84 -iiB------r hnporle 8-50-oo- Ntmero 1230 Fccha 1117 Lnporte r,000.00 '1251 1/13'l Lnporte 840 00

' 'l 197 11/1 1,750.00 1232 ' 't1t6 1,050.00 t2s8 11113 950 00

1202 ' 11/6 680 00 1233 1116 1,080.00 't260' 11114 1 300 00

1204 ', 1111 1,800.00 1234 1111 1,300.00 1261 1/15'l 212000 1205 11t13 1,050.00 1235 11t1 600.00 1263 . 11120 1 725 00

1206 11/13 '1,300.00 1236 11113 8,300.00 1264 11120 6 80000

1201 11113 1,20000 1237 1.113 1,500.00 j265 11/21 2 100 00

1208 1116 7,400.00 1239 . 11/13 2,100.00 1266 11120 2 100 00

1209 't1tl r,800 00 't240 11/13 2,100.00 1268, 11/20 1,300.00

1210 '11/6 r,80000 1241 11113 1,750.00 1269 11/20 1,500.00

1211 '1116 1,50000 1242 1 l /'13 1,550.00 1211 . 11/20 1.750.00

1212 1116 1,30000 1243 11/13 1,450.00 1212 11120 1,450.00

1215 ' 11t1 r,200.00 1244 11113 1,850.00 j2j3 11/20 1 700 00

1216 11t7 1,050.00 1245 1r/13 1,200.00 1214 11/21 1,200.00

1211 1111 1,050 00 1246 11/13 1,00000 1215 11/21 1,250 00

1218 1116 1,000.00 1247 11/13 1,00000 1276 11/21 1.250 00

1219 11t6 ',t,050 1248 11/13 900.00 12j7 11120 900.00

1221 '. 11/6 1,05000 1249 11113 1,240.00 1218 11121 1200.00 1222 1116 1,350.00 1250 11/13 900.00 j2j9 11/24 900 00

1224 " 1117 1,00000 1251 11/20 2,100 00 t28O 11/20 1,300 00

1225 11t7 1,800.00 '1253' 11120 1,100.00 t28t 11/20 1,200 00

1226 11/7 2,100.00 1254 11/13 1,30000 j2B2 11/21 900 00

1227 11t1 1,50000 1255 11113 1,200.00 l2ai, 11/20 2200 00 1229 ', 11t6 240.00 1256 11/13 700.00 1285 11/20 1 400 00 \D_C_'E@ÿFDGÿI? B,B*ÿ=UÿL4N;=8,ÿ?,N9ÿÿXQ9=*ÿR4*,)ÿP=)*+ÿMÿG[ÿO=8+B4W<BN=8ÿT4=WSÿVVOÿ'D'EDCEE'

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01123455# 977 987#5# 5*5+7%,%%-2(./037%102134 +52+6&0%7839 04.6$335'55:5;2888< =;21<3 680; <26#107> 5 Received 10/08/2024 ROC Legal

DEGNAN LAW GROUP Mark W. Horne (AZ SBN 029449) Casey C. Dempsey (AZ SBN 035458) 4105 N. 20th Street, Suite 220 Phoenix, Arizona 85014 602.266.0531 [email redacted] [email redacted] Attorneys for Complainant REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA KHLOE DREAM HOMES, LLC, Case No: 2024-07442 Complainant, v. NOTICE OF APPEARANCE DEGNANLAW GROUP

3R CONSTRUCTION GROUP, LLC 4105 N. 20TH STREET, SUITE 220

License No. ROC332141 PHOENIX, ARIZONA 85016

Respondent. Mark. W. Horne, Casey C. Dempsey and the Degnan Law Group hereby give notice to the Registrar of Contractors and all interested parties of their appearance as counsel for Complainant in Case No. 21024-07442, and further request copies of all pleadings, notices, and filings be delivered to: Mark W. Horne, Esq. Casey C. Dempsey, Esq. Degnan Law Group 4105 North 20th Street, Suite 220 Phoenix, Arizona 85016 602-266-0531 [email redacted] [email redacted] [email redacted]

Received 10/08/2024 ROC Legal

DATED this 8th day of October, 2024. DEGNAN LAW, PLLC /s/ Mark W. Horne Mark W. Horne, Esq. Casey C. Dempsey, Esq. Attorneys for Complainant ORIGINAL of the foregoing E-mailed This 8th day of October, 2024 to: Arizona Registrar of Contractors Margaret Lindsey answer#@roc.az.gov [email redacted] [email redacted] DEGNANLAW GROUP

COPY of the foregoing e-mailed and/or mailed This 5th day of April, 2024 to: 4105 N. 20TH STREET, SUITE 220 PHOENIX, ARIZONA 85016

Taylor J Barlow Davis Miles 999 E. Playa del Norte Drive, Suite 510 Tempe, AZ 85288 [email redacted] [email redacted] /s/ Kristine Berry

Received 10/8/24, 11:26 AM State of Arizona Mail - Khloe Dream Homes v 3R Construction Group LLC 2024-07442 Notice of Appearance for Claimant 10/08/2024 ROC Legal

Answers - AZROC <[email redacted]>

Khloe Dream Homes v 3R Construction Group LLC 2024-07442 Notice of Appearance for Claimant message

DLG - Kristine Berry <[email redacted]> Tue, Oct 8, 2024 at 10:12 AM To: Answers - AZROC <[email redacted]> Cc: "[email redacted]" <[email redacted]>, Mark Horne <[email redacted]>, Casey Dempsey <[email redacted]>, "[email redacted]" <[email redacted]>

Good morning,

Attached is a Notice of Appearance on behalf of the Claimant for filing today in this matter.

Thank you,

Kristine Berry

Senior Litigation Paralegal

Degnan Law Group

4105 N. 20th Street, Suite 220

Phoenix, AZ 85016

Phone: 602.266.0531

Fax: 480.718.8534

https://degnanlawaz.com

CONFIDENTIALITY NOTICE: This e-mail, including attachments, may contain privileged and confidential information protected from disclosure by attorney client privilege or work product doctrine. If you are not the intended recipient, you may not use, copy or disclose this message or any information contained in it to anyone. Please notify the sender by reply e-mail and delete the message.

IRS CIRCULAR 230 NOTICE: In compliance with IRS requirements, we inform you that any U.S. tax advice contained in this communication (or in any attachment), if any, is not intended or written to be used, and cannot be used, for (a) the purpose of avoiding penalties under the Internal Revenue Code or (b) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

https://mail.google.com/mail/b/AEoRXRTgS8tjBFGOSmfKTUD7HCG5fxFXkN_tKyixnM04r5-FFrPU/u/0/?ik=581c53cf5c&view=pt&search=all&permthid… 1/2 Received 10/8/24, 11:26 AM State of Arizona Mail - Khloe Dream Homes v 3R Construction Group LLC 2024-07442 Notice of Appearance for Claimant 10/08/2024 ROC Legal

2024-10-08 NOA.pdf 153K

https://mail.google.com/mail/b/AEoRXRTgS8tjBFGOSmfKTUD7HCG5fxFXkN_tKyixnM04r5-FFrPU/u/0/?ik=581c53cf5c&view=pt&search=all&permthid… 2/2 REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Khloes Dream Homes LLC, Case No. 2024-07442 COMPLAINANT, v. 3R Construction Group LLC ORDER DENYING REQUEST TO License No. ROC 332141, DISMISS RESPONDENT. BACKGROUND On August 7, 2024, the Registrar issued a citation against Respondent’s License No. 332141. Respondent filed its Answer on August 14, 2024. The Answer included a request to dismiss the citation and complaint in its entirety. On August 21, 2024, the Registrar sent a letter to Complainant requesting additional information. On August 28, 2024, Complainant provided the Registrar the requested information. ORDER IT IS ORDERED that Respondent’s request to dismiss is DENIED. There are genuine factual disputes between the parties which are best to be resolved before an Administrative Law Judge at the Office of Administrative Hearings. Respondent is free to raise the arguments and defenses presented in its request to dismiss before the administrative law judge. A Notice of Hearing will be issued in due course. Dated October 9, 2024. By: /s/ Margaret Lindsey Margaret Lindsey Assistant General Counsel Legal Department Arizona Registrar of Contractors

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg127 5/21 Copy mailed via USPS First Class mail on October 9, 2024 to: Respondent 3R Construction Group LLC 1570 S Sabino Ct Gilbert, AZ 85296 Respondent’s Attorney Taylor J. Barlow, Esq. Davis Miles, PLLC 999 E Playa de Norte Dr., Ste. 510 Temple, AZ 85288 Complainant Khloes Dream Homes LLC 11686 W Luxton Ln Avondale, AZ 85323 Complainant’s Attorney Casey C. Dempsey, Esq. Degnan Law Group 4105 N. 20th St., Ste. 220 Phoenix, AZ 85012

Copy sent electronically this same date to: Respondent at email address on record with the Registrar Respondent’s Attorney at email address of record with Registrar Complainant at email address on record with the Registrar Case No. 2024-07442/ tq

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg127 5/21 Mediation Notice

Mediation Services Mediation services are available to the parties. What is Mediation? Mediation is a method of resolving disputes where the parties can end conflict without the expense and time associated with the full administrative process. Who Participates in During mediation, a mediator will attempt to help the Mediation? parties find an optimal solution to the conflict. Both parties must agree to participate in mediation, and both parties must bring a representative to mediation that has full authority to settle the entire matter. Mediation Is Not Neither the Registrar nor the Office of Administrative Mandatory Hearings will penalize a party for not agreeing to mediation. Where do the Parties The parties will meet at the Office of Administrative Meet for Mediation? Hearings to participate in mediation.

The Office of Administrative Hearings is located at 1400 West Washington, Suite 101, Phoenix, Arizona 85007. When does Mediation can occur after the Registrar issues a citation, but Mediation Occur? before the administrative hearing. Why Should Parties Mediation can be an alternative to the full administrative Consider Mediation? process. Mediation is beneficial because it is (1) time- efficient, (2) cost-effective, (3) confidential, and (4) capable of providing flexible solutions to complex problems. How to Request If the parties wish to mediate this case, they must file a Joint Mediation Request for Mediation with the Office of Administrative Hearings. A Joint Request for Mediation is included with this Mediation Notice. REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA _________________________ Case No. _______________ COMPLAINANT,

v. JOINT REQUEST FOR MEDIATION _________________________ RESPONDENT.

REQUEST

The parties jointly request that this matter be referred to mediation in the Office of Administrative Hearings (OAH). ☐ This matter is set for hearing on __________________(date). ☐ This matter is not currently set for hearing. MEDIATION AGREEMENT By requesting this mediation and signing below, the parties understand, represent, and agree: 1. The parties are prepared to commence mediation and will be ready for mediation on _____________________(date); 2. The parties will participate in the mediation process in good faith; 3. This request for mediation is not intended to hinder or delay administrative proceedings; 4. No party will contend that the mediation limits the power of OAH and its administrative law judges to conduct an administrative hearing and issue decisions under A.R.S. §§ 41-1092 – 1092.12; 5. The parties will be courteous and respectful throughout the mediation process to all participants; 6. The mediation is completely voluntary and the principal purpose is to allow the parties a full and fair opportunity to discuss settlement; of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – PHOENIX, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 7. The mediator may conduct joint and separate meetings with the parties and may suggest resolutions to the parties’ dispute, but the mediator has no authority to impose a settlement upon the parties; 8. The mediation process is confidential. Communications made, material created for or used during, and acts occurring during mediation are confidential and may not be discovered or admitted into evidence in any proceeding except as provided by A.R.S. § 12-2238; 9. The mediator is not subject to service of process or a subpoena to produce evidence or to testify regarding any evidence or occurrence relating to the mediation except as provided in A.R.S. § 12-2238(C); 10. Neither the mediator, nor the Registrar of Contractors, nor the Office of Administrative Hearings is subject to civil liability for any act or omission in connection with any mediation service or activity except for acts involving

intentional misconduct or reckless disregard of a substantial risk of injury to the rights of others; 11. Throughout the mediation process, each party must have a representative present who will have full settlement authority to settle all claims at issue in the administrative

proceeding. 12. The mediation process will terminate when: a. The parties reach settlement; b. The mediator determines that further efforts at mediation are no longer likely

to achieve a settlement; or c. One of the parties withdraws from mediation. _____________________________________ _______________________ Complainant (or representative) Date

_____________________________________ _______________________ Respondent (or representative) Date

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – PHOENIX, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 PREHEARING DISCLOSURE STATEMENT INSTRUCTIONS ***DO NOT SUBMIT THESE INSTRUCTIONS WITH THE PREHEARING DISCLOSURE FORM***

ADMINISTRATIVE RULES A copy of the Arizona Administrative Code’s Rules for the Registrar of Contractors can be located on the Registrar’s Website.

PREHEARING DISCLOSURE REQUIREMENT Under A.A.C. R4-9-118(A), before a hearing, the parties must prepare a disclosure statement. The disclosure statement must contain: • A list of all the witnesses the party will call to testify, including the witnesses’ contact information and a brief description of the subject matter of the witnesses’ expected testimony; and • A list of all the exhibits that the party will use at the hearing.

FILE PREHEARING DISCLOSURE STATEMENTS • The Prehearing Disclosure Statements and Exhibits may be submitted to the Arizona Office of Administrative Hearings using any of the following: • Electronically: https://portal.azoah.com/submission/ • In-Person or by Mail: 1740 West Adams Street, Lower Level, Phoenix, Arizona 85007

EXCHANGING DISCLOSURE STATEMENTS AND EXHIBITS Under A.A.C. R4-9-118(B) (effective November 5, 2017), a party to the hearing must serve on every other party and file with the Office of Administrative Hearings a copy of: • The disclosure statement; and, • Any exhibit that the party will use at the hearing. Service: The disclosure statement and exhibits must be served on all parties in accordance with Arizona Administrative Code R2-19-108 Filing Documents. Under A.A.C. R2-19-108, service is completed by: • Personal delivery; • 1st class, certified or express mail; or • Facsimile. Timing: The disclosure statement and the exhibits must be served and filed not less than seven calendar days before the date of the hearing. Under A.A.C. R2-19-108, a document is served on a party: • On the date it is personally served; • Five days after it is mailed by express or 1st class mail; • On the date of the return receipt if it is mailed by certified mail; or • On the date indicated on the facsimile transmission.

CONSEQUENCES FOR FAILING TO DISCLOSE Under A.A.C. R4-9-108(C), if a witness or an exhibit is not timely disclosed as required the rules, and good cause for the failure to disclose is not shown, then the administrative law judge may: • Order that certain witnesses or exhibits not be used at the hearing; • Order that a particular fact is or is not established for the record; or, • Order that a charge, a defense, a claim, or some portion thereof, be dismissed.

Form RC-L-800A Prehearing Disclosure Statement Rev. 10/08/2019 Instructions Form PREHEARING DISCLOSURE STATEMENT FORM RC-L-800A

PART 1: WITNESS LIST DOCKET NO. Under A.A.C. R4-9-118(A), before a hearing, a party must prepare a disclosure statement containing a list of all the witnesses the party will call to testify, including the witnesses’ contact information and a brief description of the subject matter of the witnesses’ expected testimony. If you need additional space to list all witnesses, complete and attach additional Witness Lists. Example 1. Name 2. Telephone Number 3. Email Address

John Doe (123) 456-7890 [email redacted] 4. Subject Matter of Expected Testimony

John Doe will testify regarding the poor workmanship and poor installation of the Garage Door. Mr. Doe will also testify regarding the invoices and change orders for the project.

Witness 1. Name 2. Telephone Number 3. Email Address

4. Subject Matter of Expected Testimony

Witness 1. Name 2. Telephone Number 3. Email Address

4. Subject Matter of Expected Testimony

Witness 1. Name 2. Telephone Number 3. Email Address

4. Subject Matter of Expected Testimony

Witness 1. Name 2. Telephone Number 3. Email Address

4. Subject Matter of Expected Testimony

Form RC-L-800A Prehearing Disclosure Statement Rev. 1/15/2019 Page 1 of 3 PART 2: EXHIBIT LIST DOCKET NO. Under A.A.C. R4-9-118(A), before a hearing, a party must prepare a disclosure statement containing a list of all the exhibits that the party will use at the hearing. Note: All exhibits listed below must be provided to all parties to the hearing. See A.A.C. R4-9-118(B). If you need additional space to list all witnesses, complete and attach additional Exhibit Lists. Example Contract for new garage door. Invoice #10001 – Cost for garage door replacement.

Exhibit Exhibit Name

Form RC-L-800A Prehearing Disclosure Statement Rev. 1/15/2019 Page 2 of 3 PART 3: ACKNOWLEDGEMENT & SIGNATURE I certify that the above information is true and correct and that I will serve a copy of this disclosure statement and any exhibits listed in Part 2 to all parties to the hearing in accordance with A.A.C. R4-9-118. I acknowledge and understand that if I fail to properly disclose a witness or exhibit, the administrative law judge may: • Order that certain witnesses or exhibits not be used at the hearing; • Order that a particular fact is or is not established for the record; or, • Order that a charge, a defense, a claim, or some portion thereof, be dismissed.

I am the (check one):  Complainant  Respondent Docket No.

Print Name Signature Date

Form RC-L-800A Prehearing Disclosure Statement Rev. 1/15/2019 Page 3 of 3