ALJDEC - Licensing
2024A-10337-CHC-ROC · Registrar of Contractors · 2025-07-24
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
John Fagundes,
COMPLAINANT,
v.
Membery Development Corporation
License No. ROC 247151,
RESPONDENT.
No. 2024A-10337-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: July 9, 2025
APPEARANCES: Complainant John Fagundes appeared on his own behalf, with his husband, Jarrod Cranford. Robert Membery appeared on behalf of Respondent Membery Development Corporation. Arizona Registrar of Contractors Investigator Daniel Otero appeared as a witness.
ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella
EXHIBITS ADMITTED INTO EVIDENCE: None; Administrative Notice taken of Agency Record
FINDINGS OF FACT
Membery Development Corporation (“Respondent”) is the holder of License Number 247151 issued by the Arizona Registrar of Contractors (“Registrar”). Robert Membery is Respondent’s Qualifying Party and an officer.
On or about December 5, 2023, John Fagundes (“Complainant”) contracted with Respondent for Respondent to perform a full remodel of Complainant’s home in Munds Park, Arizona. The contract price was $275,000.00. Complainant has paid Respondent approximately $163,000.00.
On or about September 10, 2024, the Registrar received a Complaint against Respondent from Complainant alleging abandonment and poor work with respect to the project.
The Registrar assigned the Complaint to Investigator Daniel Otero. After an October 1, 2024 Jobsite Inspection, Investigator Otero issued a Written Directive to Respondent dated October 7, 2024, that provided as follows:
After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on Friday, October 25, 2024.
You are directed to remedy the following violations by the appropriate means:
Complaint Item: - Workmanship Health issues Can not complete job and will not refund monies
Investigator’s Observation: At the time of the inspection it was observed the respondent came into the house and demolished the upstairs main living area to start a remodel project per contract. There were walls and subfloor removed along with plumbing and electrical moved into new areas as planned. It appeared there were structural posts removed and not restructured. Many projects throughout the remodel were started but not completed. There are many violations that would be mitigated during a building inspection. Permits for this project were not obtained as required by the Coconino County Building Departments. Prior to any work beginning all applicable permits shall be obtained. Unpermitted work shall be inspected by the local building inspector and any building code deficiencies identified or code violations caused by the Respondent shall be corrected. All required inspections shall be scheduled and passed. Contractor shall perform all work in a professional manner with appropriately licensed contractors. Completed project must comply with original contract agreement, properly executed change orders, local building codes, and manufactures installation instructions
All errors in original.
The deadline for compliance with the Written Directive was extended three times to November 15, 2024.
After the November 15, 2024 deadline for compliance with the Written Directive, Investigator Otero ascertained that Respondent had not complied with the Written Directive. Thereafter, Investigator Otero forwarded the Complaint to the Registrar’s Legal Department. The Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(2)(a), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A) and (B), A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158, and A.R.S. § 32-1154(A)(22).
Respondent timely filed a written Answer to the Citation and the matter was referred to the Office of Administrative Hearing, an independent State agency, for an administrative hearing.
Investigator Otero testified consistently with the findings contained in his Jobsite Inspection Notes and the Written Directive. Investigator Otero testified that at the time of his inspection, the house was “in shambles,” there was no permit obtained for the remodel work, and that Respondent had performed work outside the scope of its license. Investigator Otero testified that there were many safety concerns including the fact that the main supporting beams had been removed and there was no temporary support installed in place of the beams, electrical wires were exposed, and there were “birds’ nests” of wires. Because permits had not been obtained, there had been no inspections, and licensed contractors were not utilized for the electrical and plumbing work. During his testimony, Investigator Otero referenced the numerous photographs he took depicting the poor work performed by Respondent.
Investigator Otero testified that he granted three extensions to the Written Directive deadline date because Respondent indicated that it was attempting to find an architect to draw plans in order to obtain a permit. However, Respondent ceased communications with Investigator Otero thereafter. Respondent did not perform any work after the issuance of the Written Directive. Investigator Otero testified that Respondent, as a licensed contractor, was responsible for obtaining the proper permits prior to commencing work on the project.
Investigator Otero testified that Respondent abandoned the parties’ contract due to Respondent having left the project for months without performing any work and with no communication. Investigator Otero testified that Respondent failed to obtain the proper permits for the work, there were no plans or specifications for the project, and there was a “pure lack” of professionalism and workmanship. Investigator Otero further testified that Respondent’s contract documents failed to contain the required advisement to a property owner concerning the right to file a complaint with the Registrar and information regarding how to do so.
Complainant agreed with Investigator Otero’s testimony. Complainant testified that a restoration company had performed the demolition work on the project and that he hired Respondent to perform the remodel work. Complainant asserted that he believed Respondent was properly licensed to perform the scope of work and that he “had no idea” Respondent was not properly licensed at that time. Complainant reiterated the safety concerns expressed by Investigator Otero.
Mr. Membery testified that Respondent began working on the project in December 2023, and that work was progressing “smoothly” until June 2024, when Complainant believed he had an opportunity to sell the house. Mr. Membery acknowledged that Complainant paid a deposit and draw number two and asserted that the amounts paid were for work that was completed.
Mr. Membery testified that after the issuance of the Written Directive, Respondent could not perform any work until a permit was obtained and he had difficulty finding an architect for the project. Mr. Membery asserted that he “complied to the best of his ability.”
Administrative notice is taken of Respondent’s prior License record on July 24, 2025. Such prior License record reflects that Respondent’s License Number 247151 was first issued on July 6, 2008, and has been suspended since August 16, 2022. Such prior License record also reflects that there are two open complaints including the instant Complaint, no resolved/settled complaints, and no complaints resulting in discipline against Respondent’s license. However, Respondent’s license history also indicates that the license was suspended in Case Number 2024-11746.
CONCLUSIONS OF LAW
This matter lies within the Registrar’s jurisdiction.
Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”
The evidence established that Respondent abandoned the parties’ contract without legal excuse. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(1).
The evidence established that Respondent failed to obtain a permit for the project and performed work without a permit. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(2)(a).
The evidence established that Respondent’s work was not in conformity with the Registrar’s standards, specifically, Respondent failed to perform its work in a professional and workmanlike manner and Respondent failed to perform its work in accordance with applicable building codes and professional industry standards. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A) and (B).
The evidence established that Respondent’s contract document failed to contain all of the statutorily required elements. Therefore, Complainant established that Respondent failed to comply with the Registrar’s statute in violation of A.R.S. § 32-1154(A)(12).
The evidence established that Respondent did not complete the corrective work following the Written Directive being issued and acknowledged such. Further, Respondent failed to establish any affirmative defense to establish valid justification for such failure. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a Written Directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).
RECOMMENDED ORDER
Based on the foregoing, and the egregious violations of this State’s contracting laws, it is recommended that on the effective date of the Order, the Registrar shall revoke Respondent’s License Number 247151.
Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.
In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of that certification.
Done this day, July 24, 2025.
/s/ Sondra J. Vanella
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
Membery Development Corporation
[email redacted]
John Fagundes
[email redacted]
Daniel Otero
[email redacted]
By: OAH Staff