ALJDEC - Licensing

2024A-09006-CHC-ROC · Registrar of Contractors · 2025-10-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Thomas Catchings,

COMPLAINANT,

v.

Montes Drywall LLC

ROC License No. 164464,

RESPONDENT

No. 2024A-09006-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 06, 2025 & October 03, 2025.

APPEARANCES: Charles Oldham, Esq. appeared on behalf of Thomas Catchings (“Complainant”) with Complainant as a witness. Uriel Montes appeared on behalf of Montes Drywall LLC (“Respondent”). Mark Nipp appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Suzann Rodriguez and Mark Canas served as Spanish language interpreters, respectively on each day of hearing.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the Registrar’s attached administrative file, Complainant Exhibits 8 and 10-12, Minute Entries – Granting Continuance issued April 29, 2025, and June 19, 2025, and Further Hearing Orders issued August 11, 2025, and September 29. 2025, were admitted into the evidentiary record.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT

Background and Procedure

Pursuant to Arizona Administrative Code (“Ariz. Admin. Code”) R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. On April 24, 2001, the Registrar issued ROC License No. 164464 Specialty Dual CR-10 Drywall contracting license to Respondent. The license is active, in good standing with the Registrar, and renewed through April 30, 2027. Uriel Montes is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 5332 W. Taro Ln. Glendale, Arizona 85308-4963. Respondent has an active $6,750.00 surety bond on the license issued by RLI Insurance Company, effective October 10, 2007. The license has no prior disciplinary record, save two (2) open complaints against it, one (1) of which is presumed to be related to this matter.

On August 18, 2024, the Registrar received a brief narrative unlicensed complaint and a 57-item licensed complaint from Complainant against Respondent’s License No. 164464 alleging poor work and abandonment of a residential remodeling project. The Registrar designated it Complaint No. 2024-09006 and assigned to Mark Nipp (“Investigator Nipp”) for investigation, whereby both complaints were consolidated.

On September 10, 2024, Investigator Nipp issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on October 07, 2024. Correspondence was not returned as undeliverable to Respondent.

On October 07, 2024, Investigator Nipp inspected the work that had been performed on the project to date. Respondent was not present. Investigator Nipp also reviewed the contract-related correspondence between the parties, and took 124 photographs of the project site. The inspection was halted, however, once Complainant provided Investigator Nipp with 26 additional complaint items to Complaint No. 2024-09006.

On November 13, 2024, Investigator Nipp issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on December 03, 2024, at 9:30 a.m. Correspondence was not returned as undeliverable to Respondent.

On December 03, 2024, Investigator Nipp resumed his inspection of the underlying project site. Respondent was present. When he was finished, Investigator Nipp drafted his Inspection Notes. Ultimately, Investigator Nipp substantiated 17 of 83 complaint items against Respondent based on his firsthand observations. Specifically, Investigator Nipp determined that complaint items 1-2, 4-5, 12, 17,19, 25-26,45, 49-50, 62, 67-68, 79, and 82 failed to meet the Registrar’s minimum standards. Investigator Nipp also determined that much of Respondent’s workmanship had been performed outside the scope of ROC License No. 164464. As such, Investigator Nipp required Respondent to perform corrective and/or completion work to remediate identified deficiencies that fell within the scope of its construction license. Any work outside the scope of ROC License No. 164464 could not be subcontracted out to another licensed contractor.

On December 13, 2024, Investigator Nipp issued a Warning Letter to Respondent to advise that some of Respondent’s work on the underlying project required possession of a B or KB-2 license that Respondent did not possess during the relevant time period, in violation of Ariz. Rev. Stat. § 32-1154(A)(16), which could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.

On December 13, 2024, Investigator Nipp issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated all of Complainant’s complaint allegation(s) against ROC License No. 164464. Respondent was put on notice that it had until 5:00 p.m. on January 10, 2025, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

On February 07, 2025, Investigator Nipp forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On February 20, 2025, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a-b), 32-1154(A)(16), and 32-1154(A)(22). Respondent was given until March 07, 2025, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. Correspondence was not returned as undeliverable to Respondent.

On March 05, 2025, the Registrar received Respondent’s timely Answer whereby Mr. Montes alleged that all issues throughout the project were due to Complainant’s wife’s “unreasonable construction standards,” and argued that all of his work on the project passed city building inspections. Mr. Montes accused Complainant (and his wife) of being aware he was not licensed as a General Contractor, and noted that he had planned on obtaining such a license but decided against it halfway through the project. Mr. Montes noted that the parties had been friends, and because of that relationship Respondent had been “willing to work through punch list items” until he received the Registrar’s Warning Letter – whereby he reasoned he was unable to go back and complete the work, as Respondent was placed in a position where there was nothing that could be done.

On March 10, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 29, 2025. Per the March 13, 2025, Notice of Hearing the issue(s) to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violations:

Charge 1: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)

Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(b)

Charge 3: A.R.S. § 32-1154(A)(16)

Charge 4: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on his own behalf and called Investigator Nipp as a witness. Mr. Montes testified on behalf of Respondent. The substantive evidence of record is as follows:

Complainant, along with his wife Roxanna Chavez-Cathings, owns residential property located at 7253 E. Royal Palm Rd., Scottsdale, Arizona 85258.

Respondent advertises its business as a custom home builder, specializing in “luxury new construction and remodeling.”

On February 12, 2023, the parties entered into a $564,000.00 “whole home” remodel construction agreement; including, concrete, wood trusses, steel beams, plumbing, electrical, stucco, drywall, paint, flooring, closets, countertops, fireplaces, and cabinets. The contract identified MONTES DRYWALL, LLC/Uriel Montes as the contractor for the project – utilizing ROC License No. 164464 for all scopes of work. (Emphasis in original.)

Work on the project commenced on or about March 06, 2023, and stopped on or about July 19, 2024.

Between February 14, 2023, and July 02, 2024, Complainant paid Respondent $1,010,730.00 towards the underlying project. No written Change Orders were executed for the project.

Respondent coordinated the underlying project with Complainant’s designer, hired subcontractors to perform work, and purchased materials.

For the entirety of the project, Mr. Montes hung a banner on a fence surrounding the project site that directed prospective clients to view Respondent’s “luxury new construction and remodeling” workmanship on its Instagram handle at UMB_MONTESDRYWALL.

Because of the inherent limitations of ROC License No. 164464, Respondent was unable to perform corrective work on substantiated complaint items 1-2, 4-5, 12, 17,19, 25-26,45, 49-50, 62, 67-68, 79, and 82 as each fell outside the scope of Respondent’s construction license. Respondent was also unable to subcontract any of the items to an approximately licensed subcontractor. Thus, the only means available to address the Registrar’s Directive was for Respondent to enter into a settlement agreement with Complainant by January 10, 2025; either by reimbursing or refunding Complainant.

Respondent did not settle the underlying dispute with Complainant by January 10, 2025, as confirmed by Mr. Montes to Investigator Nipp on February 03, 2025.

Respondent never requested an extension of the Directive’s compliance period.

Additional Evidence

Complainant testified that he hired window, metalwork, and audio-visual contractors to perform work at his home. Respondent either performed all other scopes of work on the residential remodel or subcontracted out the work; including demolition, tile, and roof work.

Mr. Montes denied being the underlying project’s General Contractor, and testified that he “ran the job as a Foreman” and “brought subs together” as a favor for Complainant, his friend. Mr. Montes testified that he accepted the job because drywall work was “slow,” and he knew he could get the project complete by utilizing a number of contacts he had made during his tenure in the construction business. Per Mr. Montes, Mrs. Chavez-Cathings approved all of the subcontractors he suggested for the project. Mr. Montes also testified that Complainant made a number of changes during the project, and that Complainant was too difficult to please. Mr. Montes further testified that Complainant owed Respondent an outstanding balance between $30,000.00 and $80,000.00 for the underlying project. He opined that the money should have been enough for Complainant to hire trades to perform corrective work. Because Complainant disagreed, the parties were unable to settle their dispute.

Mr. Montes conceded that that neither he nor Respondent possessed any other licenses from the Registrar, save ROC License No. 164464.

Closing Arguments

In closing, Respondent argued that Complainant knew it was only licensed for drywall, so Complainant could not have believed that Mr. Montes was the General Contractor on the underlying project.

In closing, Complainant argued that Respondent knowingly contracted outside the scope of ROC License No. 164464, failed to meet the Registrar’s minimum standards on seventeen (17) complaint items, and failed to enter into a settlement agreement with Complainant for any of those substantiated complaint items. Thus, Complainant argued that grounds existed for the Registrar to take disciplinary action against Respondent’s construction license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

The Registrar may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.

Complainant bears the burden of proof to establish cause for the Registrar to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

Ariz. Rev. Stat. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.”

Ariz. Admin. Code R4-9-108(a) requires that “[a] contractor shall perform all work in a professional and workmanlike manner.”

Ariz. Admin. Code R4-9-108(b) requires that “[a] contractor shall perform all work in accordance with any applicable building codes and professional industry standards ... [using] such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.”

Ariz. Rev. Stat. § 32-1154(A)(16) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.”

Ariz. Rev. Stat. § 32-1154(A)(22) provides, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.

Ariz. Rev. Stat. § 32-1154(E) holds, in pertinent parts, that the ROC may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also holds that no future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.”

Statutes shall be liberally construed to affect their objects and to promote justice. In interpreting a statute, “[w]e first consider the language of the statute and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter, historical background, effects, consequences, spirit, and purpose.”

Statutes should be interpreted to provide a fair and sensible result. “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”

The Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.

The material facts in the case at bar are clear.

It is clear from the record that Respondent, a drywall contractor, entered into a residential remodel agreement with Complainant for scopes of work including, but not limited to, concrete, wood trusses, steel beams, plumbing, electrical, stucco, drywall, paint, flooring, closets, countertops, fireplaces, demolition, tile, and roofing, and cabinets. It is also clear from the record that some of Respondent’s workmanship fell short of meeting the Registrar’s minimum workmanship standards, and that Respondent failed to comply with the Registrar’s Directive which required him to address the deficient workmanship items.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to comply with the Registrar’s Directive. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain its burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction/incompetence. Respondent was not appropriately licensed for multiple portions of the underlying scope of work. Mr. Montes unquestionably knew that. His denials of wrongdoing and arguments about being a Foreman or Superintendent are disingenuous, and obtusely fail to address his admissions that he entered into a whole-home renovation contract, performed work outside the scope of his drywall license, and secured subcontractors to perform various scopes of work on the underlying project. Mr. Montes’ arguments are semantic and serve to deflect from his very obvious misconduct. No mitigating evidence exists in the record in favor of Respondent. Mr. Tena’s testimony evidences his clear misunderstanding of his duties, obligations, and restrictions as the holder of ROC License No. 164464 – which are all factors in aggravation, as the licensee poses a threat of harm to the public and has indisputably harmed Complainant.

Notably, Respondent’s presence for these proceedings evidences a willingness to submit to the regulation of the Registrar.

Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a-b), 32-1154(A)(16), and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

Complainant may petition the Registrar’s Recovery Fund for financial recompense in this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that that on the effective date of the Final Order in this matter, Respondent Montes Drywall LLC, ROC License No. 164464, shall be suspended for fifteen (15) business days.

It is further recommended that the Registrar require Respondent to pay the sum total of $500.00 as a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E).

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s Order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in Ariz. Rev. Stat. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

NOTICE

Pursuant to Ariz. Rev. Stat. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the Final Decision by the Office of Administrative Hearings.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of that certification.

Done this day, October 09, 2025.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Charles H. Oldham, Esq.

CHDB Law, LLP, Counsel for Complainant

1400 E. Southern Ave., Ste. 400

Tempe, AZ 85252

[email redacted]

[email redacted]

Montes Drywall LLC, Respondent

c/o Uriel Montes, Agent

5332 W. Taro Ln.

Glendale, AZ [number redacted]

[email redacted]

By: OAH Staff