ALJDEC - Licensing

2024A-11222-NPC-ROC · Registrar of Contractors · 2025-02-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

All American Plumbing, Inc.

COMPLAINANT,

vs.

Structural Technology Custom Homes, LLC

License No. ROC 189480,

RESPONDENT.

No. 2024A-11222-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 24, 2025 and January 28, 2025

APPEARANCES at the hearing on January 24, 2025: Colten Merrill appeared on behalf of All American Plumbing, Inc., (hereinafter “Complainant”). Lawrence J. Felder, Esq., appeared on behalf of Structural Technology Custom Homes, LLC, (hereinafter “Respondent”).

APPEARANCES at the hearing on January 28, 2025: Richard N. Crenshaw, Esq. appeared on behalf of Complainant. Lawrence J. Felder, Esq. appeared on behalf of Respondent.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

EXHIBITS ADMITTED INTO EVIDENCE: Respondent’s Exhibit A:

The hearing packet of the Arizona Registrar of Contractors, (hereinafter “Registrar” or “ROC”).

_____________________________________________________________________

FINDINGS OF FACT

1. Respondent holds license number 189480 issued by the Registrar.

2. Joseph Rubanow is Respondent’s qualifying party.

3. On December 13, 2024, the Registrar issued a Notice of Hearing setting

the above-captioned matter for hearing on January 24, 2025, by the Office of Administrative Hearings in Phoenix, Arizona.

4. The Notice of Hearing shows that the hearing was set to consider the

charges made in the Citation and Complaint.

5. Through the Citation, the Registrar alleges that Respondent may have violated Ariz. Rev. Stat. § 32-1154(A)(10).

6. A hearing was held on January 24, 2025 and January 28, 2025.

7. At hearing, Colten Merrill, (hereinafter “Merrill”), and Joyce Eubanks,

(hereinafter “Eubanks”), testified on behalf of Complainant. Joseph Rubanow, (hereinafter “Rubanow”), testified on behalf of Respondent.

8. On July 9, 2024, Complainant issued an invoice in the total amount of $12,000.00 to Respondent to replace the sewer in Eubanks’s home. The invoice shows that Respondent had only paid Complainant $2,500.00.

9. Respondent did not pay the balance of $9,500.00

10. Complainant subsequently filed a complaint with the Registrar alleging

that Respondent failed to pay $9.500.00 for labor and materials provided to Respondent, in connection with Respondent’s activities as a contractor.

11. On November 6, 2024, the Registrar issued a Citation against

Respondent’s license.

12. Respondent filed a timely answer to the Citation.

13. The matter was referred to the Office of Administrative Hearings for an

evidentiary hearing.

Testimony of Merrill

14. Rubanow contacted Merrill to review the condition of Eubanks’s sewer line. Merrill met Eubanks once at her house. Merrill reviewed Eubanks’s sewer line with his camera and Rubanow was present. After concluding that Eubanks’s sewer line needed to be replaced, Rubanow requested estimates from Merrill for the work. Rubanow gave Merrill a down payment in the amount of $2,500 to start work. Merrill did not communicate with Eubanks about the work. The original price that Rubanow charged Eubanks was $25,000. Eubanks accepted the price.

15. After Merrill complete the installation of the new sewer system, Rubanow put the flooring back together and started drywall painting. Eubanks was happy with Merrill’s work. Eubanks gave Rubanow $28,000 with the expectation that Rubanow would pay Merrill for his work. However, Rubanow did not pay Complainant.

Testimony of Eubanks

16. Eubanks was married to an architect and she was a registered nurse. Eubanks knew that her pipes were full of tree roots. Eubanks believes that Merrill performed the sewer installation well. Eubanks trusted Rubanow to oversee the project. Eubanks had a verbal contract with Rubanow. Rubanow charged Eubanks $25,000 for the construction. Eubanks received two other estimates but she decided to work with Rubanow. Rubanow had questionable work “on occasion.” Eubanks recalls giving Rubanow $1,300 for Merrill doing the camera work. Eubanks gave Rubanow an additional $28,000 for the project after giving Rubanow $1,300 for the camera work performed by Merrill.

Testimony of Rubanow

17. Respondent performed structural and roof work for Eubanks in the past. Rubanow stated that he did not consider Structural to be Eubanks’s general contractor. Rubanow stated that Eubanks paid him cash for Merrill’s work because she did not have a checking account. Rubanow stated that Eubanks did not like to enter into written agreements. Rubanow alleged that he told Merrill by e-mail that Eubanks was his customer and not Respondent.

18. Merrill explained to Rubanow how he would perform the job. Rubanow agreed with the methods that Merrill proposed. However, Rubanow stated that he told Merrill to start at the laundry room, the highest point but instead, Merrill started at the kitchen.

19. Rubanow stated that Eubanks did not feel comfortable hiring Merrill because he did not have gray hair. Rubanow testified to the effect that Eubanks believed that if a person has gray hair, the person has experience and knowledge.

20. Rubanow stated Merrill did not follow all of his suggestions. Rubanow stated that he told Merrill to get a permit. Rubanow stated that Merrill performed sloppy and poor work. Rubanow also stated that he did not agree with Merrill to tear out all of the concrete in Eubanks’s home unless Eubanks agreed to pay extra money for the work. Eubanks refused to pay extra money. Merrill removed the concrete and piled it in the front of the home. Rubanow stated that he would remove it.

CONCLUSIONS OF LAW

A party asserting a claim, right, or entitlement bears the burden of proof; a

party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code R2-19-119.

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2).

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to affect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

The Administrative Law Judge may consider Registrar’s administrative record. See Ariz. Admin. Code § R4-9-118.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

Ariz. Rev. Stat § 32-1154(A) provides that:

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: .... 10. Failure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee's operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

9. Ariz. Rev. Stat § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.”

10. Payment for “[s]ervices rendered in connection with the licensee’s operations as a contractor” does not include interest, finance charges, lien charges, or other charges that are based solely on contract terms.

11. The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat § 32-1154(A)(10) as alleged.

12. The evidence presented at hearing establishes Respondent acted as a general contractor for Eubanks and hired Complainant as a subcontractor to performing plumbing work in Eubanks’s home. The evidence presented at hearing shows that Respondent, not Eubanks, sought out Complainant to perform the sewer work, and Eubanks trusted Respondent to oversee the project. Furthermore, Respondent provided insufficient evidence to establish that Complainant performed substandard work. The weight of the evidence shows that Eubanks was happy with Complainant’s work.

Based upon Respondent’s violation of the provisions of Ariz. Rev. Stat § 32-1154(A)(10), grounds exist to impose discipline against Respondent’s license.

13. Because Ariz. Rev. Stat § 32-1154(A)(10) only includes a licensee’s failure to pay for materials or services rendered in connection with the licensee’s operations as a contractor, not late fees, interest, or other consequential or contractual damages, the Administrative Law Judge does not recommend that Respondent be required to pay late fees as a condition of keeping its contractor’s license in good standing.

RECOMMENDed order

Based on the foregoing, it is recommended that the Registrar suspend Structural Technology Custom Homes, LLC License No. ROC 189480 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $9,500.00 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $9,500.00 in certified funds, the Registrar may close the Complaint in Case No. 2024-11222.

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, February 18, 2025.

/s/ Velva Moses-Thompson

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Richard N. Crenshaw, Esq.

[email redacted]

All American Plumbing Inc.

[email redacted]

Resolvere Law PLLC

Lawrence J. Felder, Esq.

Resolvere Law PLLC

[email redacted]

By: OAH Staff