ALJDEC - Licensing

2024A-10315-CHC-ROC · Registrar of Contractors · 2025-02-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Andrea Culp,

COMPLAINANT,

v.

Allphase Construction and Roofing LLC

dba Allphase Roofing,

ROC License No. 275971,

RESPONDENT.

No. 2024A-10315-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 19, 2025 at 1:00 PM.

APPEARANCES: Andrea Culp (“Complainant”) appeared on her own behalf. No appearance(s) by or on behalf of Allphase Construction and Roofing LLC (“Respondent”). David Cooke appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing, including the Registrar’s attached agency file, January 21, 2025, Hearing Order, and Complainant Exhibit 1 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 December 01, 2011, the Registrar issued ROC License No. 275971 Specialty Dual CR-42 contracting license to Respondent. The license has been renewed through December 31, 2025. Anthony Chance Williams is listed as the Qualifying Party and Control Person on the license. Respondent’s address of record for the license is 11811 N. Tatum Blvd., Ste. 3031 Phoenix, Arizona 85028. Respondent has an active $10,000.00 surety bond on the license issued by Merchants Bonding Company, effective December 23, 2013. The license has been previously disciplined by the Registrar on one (1) occasion, and had one (1) one other complainant settled or otherwise resolved against it. Currently, the license has one (1) open complaint against it; which is presumed to be related to this matter.

On September 09, 2024, the Registrar received a narrative complaint from Complainant against ROC License No. 275971 alleging poor work regarding a residential roof replacement. The Registrar designated it Complaint No. 2024-10315 and assigned the matter to David Cooke (“Investigator Cooke”) for investigation.

On September 24, 2024, Investigator Cooke issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 14, 2024, at 10:30 a.m. Correspondence was not returned as undeliverable to Respondent.

Respondent did not provide a response to Complaint No. 2024-10315, or request to inspect the work complained of.

Respondent did not submit a request to reschedule the jobsite inspection.

On November 14, 2024, Investigator Cooke inspected the work that had been performed on the project to date. Respondent was not present. Investigator Cooke also reviewed the contract-related correspondence between the parties, and took 12 photographs of the project site. When he was finished, Investigator Cooke drafted his Inspection Notes. Ultimately, Investigator Cooke derived five (5) separate and distinct complaint items from Complaint No. 2024-10315, only one (1) of which he substantiated based on his firsthand observations. Specifically, Investigator Cooke determined that complaint item 1, regarding the leak in Complainant’s rood, fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent. Investigator Cooke noted the following, in pertinent parts:

Roof is leaking at skylights and at front of garage. Drywall damage at both skylights. Roofing material peeling back at parapets. Open voids in overlaps of roofing at cricket and corners. Open vent.

On November 14, 2024, Investigator Cooke issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated one of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on December 02, 2024, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

On December 03, 2024, Investigator Cooke forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation, whereby he noted that Respondent did not comply with the Directive.

On December 04, 2024, 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), 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until December 19, 2024, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. Correspondence was not returned as undeliverable to Respondent.

On December 19, 2024, the Registrar received a timely Answer on behalf of Respondent. Overall, Mr. Williams argued that while he was out of state for several months for a personal emergency, his business manager absconded with funds and neglected the business after assuring him she had “things under control.” After pressuring her for more information regarding the status of Respondent’s affairs, she quit effective immediately while Mr. Williams was still out of state. Mr. Williams opined, per his review of Complaint No. 2024-10315, which involved “a simple warranty issue” that admittedly should have been handled immediately, but had not. Per Mr. Williams, he would send a trade to the project site to” make repairs immediately,” and asked the Registrar for a recommendation to resolve Complaint No. 2024-10315.

On December 22, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on February 19, 2025. Per the January 15, 2025, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violations:

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

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Cooke as a witness. The substantive evidence of record is as follows:

Complainant and her spouse own residential property located at 148 S. Charleston Ave. Vail, Arizona 85641. The property is used secondarily; its primary use is as long-term rental property.

On or about June 12, 2022, after extreme winds, Complainant reported a leak in the property’s roof to her homeowner’s insurance, USAA.

Late to mid-June 2022, Complainant contact Respondent to replace her roof.

On June 27, 2022, Respondent issued Invoice No. 971 to Complainant for a balance due of $6,642.56 on a $27,517.48 contract.

On July 07, 2022, USAA performed an inspection of the roof and determined that Complainant was eligible for roof replacement per her policy, under Restoration/Service/Remodel coverage. Replacement valuation, including items such as paint and tarping, was calculated at $20,874.92, after depreciation and deductible.

On July 21, 2022, USAA issued Complainant a check for $20, 874.92.

Additional Evidence

Between November 14, 2024 and December 02, 2024, Respondent’s contracting license was active and in good standing with the Registrar. During that period, Respondent did not have any contact with Investigator Cooke or Complainant. Respondent’s license was appropriate to remediate complaint item 1. Respondent did not request an extension of the Directive’s compliance period or allege a denial of access to the project site.

On December 03, 2024, Complainant informed Investigator Cooke that Respondent had neither scheduled nor performed corrective work in accordance with the Directive.

On December 03, 2024, Complainant paid Sunset Roofing, LLC $2,790.00, for roof repairs completed the prior day.

Closing Statements

Complainant declined to provide a closing argument.

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.

The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from the Registrar as well.

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. 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 Registrar may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also 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.

The credible evidence of record clearly establishes that in coordinating her homeowner’s insurance coverage after a wind event caused damaged to her roof, Complainant entered into a roof replacement agreement with Respondent for $27,517.48. Invoice No. 971 issued to Complainant also shows that Respondent was paid $20,874.92 by Complainant, which is the exact amount USAA tendered to Complainant. There is no evidence present in the record to establish that Complainant paid the outstanding $6,642.56 balance on her contract with Respondent, but there is evidence to establish that she paid another contractor $2,790.00 to remediate Respondent’s deficient work.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to remediate the underlying project or cover the cost of associated corrective work per the Registrar’s Directive. These are affirmative defenses that Respondent bears the burden to establish. Here, Respondent did not sustain his burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance/competence on the project or afterward. No mitigating evidence exists in the record in favor of Respondent. Notwithstanding Mr. Williams’ assertions of personal hardship, Respondent’s absence from the administrative hearing, including, at a minimum, a request to continue the proceedings at issue, as well as Respondent’s conduct during the entirety of the complaint process, are glaring facts in aggravation that evinces Respondent’s unwillingness to be regulated by the Registrar.

Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3) and (A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Allphase Construction and Roofing LLC, ROC License No. 275971, be suspended five (5) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and (A)(22).

It is further recommended that the Registrar require Respondent to pay the sum total of one hundred dollars ($100.00) 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, February 28, 2025.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Allphase Construction and Roofing LLC

c/o Anthony Chance Williams, Agent

11811 N. Tatum Blvd., Ste. 3031

Phoenix AZ 85028-1621

[email redacted]

Andrea Culp, Complainant

9339 S. Mountain Creek Ranch Rd.

Vail, AZ 85641

[email redacted]

By: OAH Staff