ALJDEC decisions subject to certification as final

2024A-10749-CHC-ROC · Registrar of Contractors · 2025-02-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Troy Hass,

COMPLAINANT,

v.

McCurdy Construction LLC

ROC License No. 322920,

RESPONDENT.

No. 2024A-10749-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 05, 2025 at 9:00 AM.

APPEARANCES: Troy Hass (“Complainant”) appeared on his own behalf with Michael Giavanti as a witness. Michael McCurdy appeared on behalf of McCurdy Construction LLC (“Respondent”). Charles Riddlehoover appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the Registrar’s attached agency file, and January 03, 2025, Hearing Order were admitted into the evidentiary record.

_____________________________________________________________________

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

FINDINGS OF FACT

Background and Procedure

Pursuant to Arizona Administrative Code (“Ariz. Admin. Code”) R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. On December 12, 2018, the Registrar issued ROC License No. 322920 General Residential B contracting license to Respondent. The license had been renewed through December 31, 2024, but was suspended by the Registrar on December 13, 2024 for non-renewal. Michael S. McCurdy is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 232090 E. University Dr., Ste. 105 Tempe, Arizona 85281. Respondent had a $9,000.00 surety bond on the license issued by RLI Insurance Company, but it was cancelled on an unknown date. The license has been disciplined by the Registrar on three (3) prior occasions, and has had three (3) other complainants settled or otherwise resolved against it. Currently, the license has three (3) open complaints against it; one of which is presumed to be related to this matter.

On September 20, 2024, the Registrar received a narrative complaint from Complainant against ROC License No. 322920 alleging abandonment and poor work regarding a residential remodel. The Registrar designated it Complaint No. 2024-10749 and assigned the matter to Charles Riddlehoover (“Investigator Riddlehoover”) for investigation.

On September 24, 2024, Investigator Riddlehoover issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on October 16, 2024, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.

Respondent did not provide a response to Complaint No. 2024-10749, or request to inspect the work complained of.

On October 16, 2024, Investigator Riddlehoover inspected the work that had been performed on the project to date. Respondent was present. Investigator Riddlehoover also reviewed the contract-related correspondence between the parties, and took 12 photographs of the project site. When he was finished, Investigator Riddlehoover drafted his Inspection Notes. Ultimately, Investigator Riddlehoover derived four (4) separate and distinct complaint items from Complaint No. 2024-10749, half of which he substantiated based on his firsthand observations. Specifically, Investigator Riddlehoover determined that complaint items 1 and 3 fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent. Because Mr. McCurdy avowed that he was waiting on material delivery in order to complete the project, Investigator Riddlehoover noted the following, in pertinent parts:

During inspection, I observed the complaint item was not completed/corrected. The Respondent will need to correct this by the appropriate means. Respondent was given 2 days to produce an invoice, delivery date and install date from the time of the inspection. If this is not done, we will proceed with a directive date set by the investigator.

On October 21, 2024, Investigator Riddlehoover issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated half of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on November 08, 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 November 15, 2024, Investigator Riddlehoover 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 November 26, 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-b). Respondent was given until December 11, 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 11, 2024, the Registrar received Respondent’s timely Answer whereby Respondent argued that it had performed work on the underlying project in a workmanlike manner, and had adhered to applicable building codes and professional standards. Per Respondent, only “aesthetic” punch list items remained at issue, and Complainant had not scheduled time for Respondent to address the items. Respondent also argued that some of the materials needed for corrections had already been delivered to the project site, but that the remainder were pending international delivery.

On December 16, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on February 05, 2025. Per the January 02, 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)(3) – A.A.C. R4-9-108(b)

Hearing Evidence

Complainant testified on his own behalf and called Investigator Riddlehoover and Michael Giavanti as witnesses. Michael McCurdy testified on behalf Respondent. The substantive evidence of record is as follows:

Complainant and Mr. Giavanti own residential property located at 1912 E. Rose Ln. Phoenix, Arizona 85016.

On or about April 02, 2021, the parties entered into a $199,756.09 residential remodel agreement for the demolition and reconstruction of the property’s kitchen, laundry room, and primary bathroom. The original agreement included the purchase and installation of custom-built European cabinetry, requiring international delivery.

At least five (5) Change Orders were executed for the project, increasing the overall cost to $410,446.84.

Complainant paid Respondent $340,329.13 towards the project.

Work on the project commenced on or about February 01, 2022, and stopped on or about April 03, 2024.

Although Respondent’s license remained active and in good standing with the Registrar during the Directive’s compliance period, no corrective work was performed. Respondent did not allege a denial of access to the project site, or request an extension of the Directive’s compliance period.

During the October 16, 2024, jobsite inspection, Mr. McCurdy insisted that he had paid for Complainant’s cabinets and was awaiting delivery. After affording Mr. McCurdy five (5) days, Investigator Riddlehoover did not receive proof of purchase or confirmation of shipping on behalf of Respondent, and issued the underlying Directive on October 21, 2024.

Respondent never provided the Registrar or Tribunal with proof of purchase or confirmation of shipping regarding Complainant’s European cabinetry.

Additional Evidence

Investigator Riddlehoover testified that failing to include alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1) and (A)(22) in his pencil cite the Registrar were unintentional omissions.

Complainant testified that there was never a delivery for “punch list items” or cabinets to the project site October 21, 2024, to November 08, 2024, or thereafter.

Mr. McCurdy testified he ordered Complainant’s cabinets on time, but forgot to pay for them, causing a delay in their shipping. Mr. McCurdy acknowledged that he could have communicated with Complainant more often and effectively, as to not cause him to think Respondent had abandoned the project. Mr. McCurdy also admitted that he could have addresses “punch list items” unrelated to Complainant’s cabinets during the Directive’s compliance period.

Closing Arguments

In closing, Respondent argued that it could have communicated with Complainant more frequently to assuage any dissatisfaction, but denied ever abandoning the underlying project.

In closing, Complainant argued that he was not seeking punitive action against Respondent, but merely wanted his costly project satisfactorily completed.

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. For work to be performed in accordance with professional industry standards, a contractor shall use 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)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Failure in any material respect to comply with this chapter.”

Ariz. Rev. Stat. § 32-1154(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.

It is clear from the record that the parties had a $410,446.84 construction agreement for the remodel of Complainant’s residence, and that Complainant paid Respondent nearly 83% of the contract price for the unfinished project. It is also clear from the record that some of Respondent’s workmanship on the project failed to satisfy the Registrar’s minimum standards. It is further clear that although directed to correct the identified deficiencies by the Registrar, Respondent took no action and neglected to request an extension of time to comply.

Therefore, the only issue in dispute is whether Respondent raised an affirmative defense regarding the deficiencies in his workmanship on this project, which must be sustained by a preponderance of the evidence. Here, Respondent did not sustain its burden. As the licensee, Respondent was required to perform work on the project a professional and workmanlike manner, and in accordance with local building codes and professional industry standards, but failed to do so. There is no evidence in the record that excuses or otherwise justifies Respondent’s conduct, or lack thereof.

The Tribunal notes that although Respondent should have also unquestionably been cited for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(22), and likely also Ariz. Rev. Stat. § 32-1154(A)(1), the Tribunal lacks the authority or jurisdiction to make a recommendation of any kind related to these statutes, as it would undoubtedly be a violation of Respondent’s due process rights.

Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. § 32-1154(A)(3), 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 five days after the effective date of the Final Order in this matter, Respondent McCurdy Construction LLC, ROC License No. 322920, be suspended two (2) days.

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).

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 18, 2025.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Troy Hass, Complainant

1912 E. Rose Ln.

Phoenix, AZ 85016

[email redacted]

McCurdy Construction LLC, Respondent

c/o Michael McCurdy

2090 E. University Dr., Ste. 105

Tempe, AZ 85281

[email redacted]

By: OAH Staff