ALJDEC - Licensing

2024A-11400-CHC-ROC · Registrar of Contractors · 2025-03-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Steven Marcher,

COMPLAINANT,

v.

Reimagine Roofing LLC

License No. ROC 332022, 346893, 339039,

& 338968,

RESPONDENT.

No. 2024A-11400-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 04, 2025 at 9:00 AM.

APPEARANCES: Steven Marcher (“Complainant”) appeared on his own behalf. Kody Landals appeared on behalf of Reimagine Roofing LLC (“Respondent”). Chris Allison 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 February 04, 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 records as reflected on the Registrar’s public website. On June 29, 2022, the Registrar issued License No. 339039 Specialty Dual CR-42 Roofing contracting license to Respondent. The license has been renewed through June 30, 2026. The license lists Michael D. Leathers is listed as the Qualifying Party, Kody J. Landals as the Manager and Member, Martha Jo Gee as a Member, and Brooke Enterprises LLC as the Parent Entity. Respondent’s address of record for the license is 1100 E. Washington St., Ste. 200 Phoenix, Arizona 85034. The license does not have a prior disciplinary action taken against it. There are currently two (2) open complaints against the license; one of which is presumed to be related to this matter. Respondent has an active $32,500.00 surety bond on the license issued by Western Surety Company, effective May 26, 2022.

On January 22, 2021, the Registrar issued License No. 332022 General Residential B contracting license to Respondent. The license has been renewed through January 31, 2027. The license lists Kody J. Landals as the Qualifying Party, Manager, and Member. Martha Jo Gee is also listed as a Member. Brooke Enterprises LLC is listed as the Parent Entity. The license has been disciplined on one (1) prior occasion, and has had two (2) other complaints settled or otherwise resolved against it. Currently, there is one (1) open complaint against the license; which is presumed to be related to this matter. Respondent has an active $20,500.00 surety bond on the license issued by Ohio Casualty Insurance Company, effective June 08, 2024.

On October 09, 2024, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 332022 alleging poor work of a residential roofing project. The Registrar designated it Complaint No. 2024-11400 and assigned to Chris Allison (“Investigator Allison”) for investigation.

On October 24, 2024, Investigator Allison issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on November 13, 2024, at 1:00 p.m. Correspondence was not returned as undeliverable to Respondent.

On November 13, 2024, Investigator Allison inspected the work that had been performed on the project to date. Respondent was not present. Investigator Allison also reviewed contract-related correspondence, and took 22 photographs of the project site. When he was finished, Investigator Allison drafted his Inspection Notes. Ultimately, Investigator Allison derived eighteen (18) separate and distinct complaint items from Complaint No. 2024-11400, fourteen (14) of which substantiated based on his firsthand observations. Specifically, Investigator Allison determined Respondent’s workmanship on complaint items 1-2, 5-9, 11-16, and 18 failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.

On November 27, 2024, Investigator Allison issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated most of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on December 15, 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.

Investigator Allison also included the following advisement regarding the remediation of substantiated complaint items 1-2, 5-9, 11-16, and 18:

DIRECTIVE REQUIREMENTS:

You are directed to remedy the following violations by appropriate means:

(Emphasis in original.)

On December 17, 2024, Investigator Allison forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On December 23, 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), and 32-1154(A)(22). Respondent was given until January 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 January 06, 2025, the Registrar received Respondent’s timely Answer whereby Mr. Landals admitted Respondent’s performance on the project at issue and generally denied both Citation allegations, but did not provide any specific information regarding the project itself or Respondent’s remediation efforts, if any, during the Directive’s compliance period. Nor did Respondent offer an explanation as to why it failed to attend any of the Registrar’s jobsite inspection for the matter.

On January 10, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on March 04, 2025. Per the January 31, 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 his own behalf and called Investigator Allison as a witness. The substantive evidence of record is as follows:

Complainant owns residential property located at 133 W. Covey Run Ln. Tonto Basin, Arizona 85553.

On or about February 24, 2022, Complainant entered into a $43,806.55 solar power purchase agreement with Titan Solar Power (“Titan”) for the installation of 17 solar panels on a newly installed roof at Complainant’s residence. Complainant financed the project at 1.49% through GoodLeap.

Titan subcontracted the roof installation portion of the project to Respondent.

Work on the project commenced on or about June 18, 2022, and stopped on or about February 14, 2024.

Complainant did not tender any payments directly to Respondent for the project.

Although Investigator Allison noted in his jobsite inspection notes that substantiated complaint item 18 appeared not to have been installed per manufacturer installation instructions, which would be a violation of Ariz. Rev. Stat. § 32-1154(A)(2)(a), a Warning Letter was not issued to Respondent regarding the observation and concern.

Although Respondent’s license was active and good standing with the Registrar between November 27, 2024, and December 15, 2024, no corrective work was scheduled or attempted by or on behalf of Respondent.

At no time prior to the expiration of the Directive’s compliance period did Respondent request an extension thereof or allege a denial of access.

Additional Evidence

Investigator Allison testified that he referenced all license numbers belonging to Respondent, including 338968 for CR-39 Air Conditioning & Refrigeration and 346893 for CR-11 Electrical, in error when he escalated Complaint No. 2024-11400 to the Registrar’s legal department. He clarified that only License Nos. 332022 and 339039 were applicable to Complaint No. 2024-11400.

Complainant testified that he paid $9,000.00 “to the bank” towards his contract with Titan, but never paid Titan or Respondent directly for the project. Titan was contacted to try and remediate the roof, but were unable to be reached after they “went out of business.”

Closing Arguments

In closing, Respondent offered that it would be willing to redo Complainant’s roof to resolve the underlying dispute, and apologized for not being able to communicate with him “on a regular basis.”

In closing, Complainant argued that there had never been a denial of access to the project’s site, and stated that he just wanted his roof “fixed.”

CONCLUSIONS OF LAW

The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

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 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]ll work shall be performed 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) provides, 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 provides that “[n]o 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 Titan subcontracted Respondent to perform the roofing portion of the underlying contract, and that Complainant tendered partial payment on the financed project to the lender. It is also clear from the record that Respondent’s workmanship on the project fell below the Registrar’s minimum workmanship standards, because a Directive was issued. The record further reflects that Respondent made no attempts to correct the deficiencies in the underlying work, or settle the dispute with Complainant.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and complete Complainant’s project per contract. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent presented no evidence to sustain this burden. The credible evidence of record shows that Respondent failed to perform corrective work on this project, and had no affirmative defense(s) for doing so. Moreover, nothing prevented Respondent from entering into a financial settlement agreement with Complainant.

Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22), Complainant has also established cause for the Registrar to take disciplinary action against ROC License Nos. 332022 and 339039.

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, Reimagine Roofing LLC, ROC License Nos. 332022 and 339039, as issued to Respondent, be suspended by the Registrar for five (5) days.

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $200.00 (two hundred dollars) in certified funds as a civil penalty.

IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s Order, that no future license 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.

IT IS FURTHER RECOMMENDED that no discipline be imposed against ROC License Nos. 338968 and/or 346893 as a result of Complaint No. 2024-11400.

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, March 13, 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]

Reimagine Roofing LLC, Respondent

c/o Kody Landals, Agent

1100 E. Washington St., Ste. 200

Phoenix, AZ 85034

[email redacted]

Steven Marcher, Complainant

P.O. Box 779

Tonto Basin, AZ 85553

[email redacted]

By: OAH Staff