ALJDEC - Licensing

2024A-11584-CHC-ROC · Registrar of Contractors · 2025-07-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Milit Kumar,

COMPLAINANT

v.

Build a Better Phoenix LLC

License No. ROC 340922,

RESPONDENT

No. 2024A-11584-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 21, 2025.

APPEARANCES: Milit and Sandhya Kumar appeared on their own behalf. Kristopher Ontiveros and Jerald Woods appeared representing Build a Better Phoenix LLC. ROC Investigator Robert DiAlto appeared on behalf of Arizona Registrar of Contractors.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: ROC Packet

_____________________________________________________________________

FINDINGS OF FACT

Build a Better Phoenix LLC (Respondent), is the holder of Contracting License No. 340922, KB-1 Dual Building, issued by the Arizona Registrar of Contractors (Registrar or ROC) in September 2022.

On or about October 15, 2024, the Registrar received a Licensed Complaint Form (Complaint) from Milit Kumar (Complainant) against Respondent alleging abandonment and poor work. The project was a residential addition which had been contracted for in July 2023 for $125,279.00.

According to the Complaint, work began on August 13, 2024 but stopped on October 6, 2024. The Complaint included the allegation that Respondent stopped work because Respondent was asking for more money than was stated on the signed contract when the payment schedule called for $40,000.00 Deposit and the next payment was $40,000.00 after framing, rough in plumbing and electric. The Complaint further indicated the project is 13 months behind and will now cost about $35,000.00 more “due to their mistake in not including a drainage plan.” The Complaint also included a copy of a signed September 2024 Change Order for two new retaining walls and a revised contract in the amount of $153,319.00 for work to restart on October 10, 2024.

The Registrar assigned the Complaint to Investigator (Inv.) Robert DiAlto who conducted a Jobsite Inspection on December 5, 2024.

At the inspection, Inv. DiAlto documented the presence of the concrete pad for the addition; he also documented some trenching that had been performed in preparation for retaining walls. When speaking with the parties, Inv. DiAlto was told that Complainant had not been aware of retaining wall and site drainage requirements and that Respondent had not been aware of a set back requirement when he applied for the permit. Complainant’s position was that Respondent had stopped work due to their dispute over the change order and the additional costs for City-required site work (i.e., the site drainage and retaining walls).

On December 6, 2024, Inv. DiAlto issued a Directive requiring that Respondent perform corrective work and notify the Investigator no later than February 7, 2025, which was an extended timeframe given the work that needed to be done. Regarding the requisite work, the Directive indicates the following, in pertinent part:

The Respondent shall complete project per original contract agreement, properly executed change orders, verbal agreements, local building codes and manufacturers installation instruction, and correct any deficiencies required by the county / city, and pass final inspection.

Governing Rule: Workmanship rule: R4-9-108B: 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.

Inv. DiAlto did not receive any communication from Respondent before the Directive deadline and Complainant subsequently indicated that Respondent had not completed any Directive work. Inv. DiAlto forwarded the matter to ROC legal Department.

On February 11, 2025, the Registrar issued a Citation against Respondent charging the following possible violations:

Charge 1: A.R.S. § 32-1154(A)(1)

Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

Charge2: A.R.S. § 32-1154(A)(3) - R4-9-108(A)

Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Charge3: A.R.S. § 32-1154(A)(8)

Failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.

Charge4: A.R.S. § 32-1154(A)(22)

Failure to take appropriate corrective action to comply with this chapter or with 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.

On February 26, 2025, Respondent filed an Answer to the Citation. Respondent noted that it had not abandoned the project, because the City had mandated the preparation of engineered plans, which had not been required at the time of the permit, and now also required the construction of retaining walls. Respondent stated that these unexpected requirements had been the cause of delays on the project. Respondent disputed that the work had not been done in professional manner because their underground plumbing and the concrete pad had passed inspection. Respondent further noted that Complainant had been informed of and approved the necessary change order, but had then refused to pay any more monies at that time which left Respondent unable to proceed. Respondent indicated that it was ready and willing to complete the project if Complainant agreed to pay for city-mandated changes.

The Registrar subsequently referred the matter to the Office of Administrative Hearings, an independent State agency, for an evidentiary administrative hearing.

At the hearing, Inv. DiAlto testified consistent with the findings contained in his Jobsite Inspection and Directive. Given that a signed change order is a part of a contract, Inv. DiAlto further opined that the requisite work to complete the project could have been done out of sequence in order to comply with the city required retaining walls. Inv. DiAlto testified that the ROC simply does not have jurisdiction over contractual financial disputes but does have authority to direct that the contracted-for work be done.

At hearing, Complainant argued that the trenching was done in October but then Respondent would not proceed unless Complainant gave them $45,000.00. Complainant stated that there was not a stop-work order at the time of the jobsite inspection. Complainant argued that Respondent had ample opportunity to do the work and that Respondent had made no effort to negotiate or work with him. Complainant argued that he lost money and that now it was costing him more to move forward with the project. Complainant requested that the deposit money be returned.

At hearing, Respondent discussed the grade of the lot and the extra work that was required in order to construct retaining walls. Importantly, Respondent indicated that there would not have been room to bring in equipment to do the grading work if Respondent had completed work on the addition first. Respondent noted that the city had determined to stop the work during an in-field inspection. Respondent indicated that it had paid out the monies to have the mandated retaining walls constructed and believed that Complainant needed to pay towards that because he had signed off on the change order to have that required work performed.

Administrative notice is taken of Respondent’s license history and status with the Registrar on July 13, 2025. Respondent’s license record reflects that Respondent’s License No. 340922 is active, with one open cases, which is the instant case.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See Ariz. Rev. Stat. § 32-1101 et seq.

Unless otherwise provided by 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.

In this case, Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See Ariz. Rev. Stat. § 41-1092.07(G)(2); Ariz. Admin. Code R2-19-119(A) and Ariz. Admin. Code Section R2-19-119(B)(1); see also Vazzano v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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).

5. 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.").

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

7. 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).

8. Construction is not a perfect art and, normally, contractors must be allowed an opportunity to correct poor workmanship before their licenses may be suspended or revoked as a result of a failure to comply with workmanship standards.

9. The Directive mandated completion of the project “per original contract agreement, properly executed change orders, verbal agreements, local building codes and manufacturers installation instruction, and correct any deficiencies required by the county / city, and pass final inspection.” Although an extended period of time was given, Respondent did not perform any corrective work to complete the project.

10. Based on the evidence in the hearing record, the Administrative Law Judge concludes that the Investigator-determined abandonment issue existed and, thus, Respondent was in violation of Ariz. Rev. Stat. § 32-1154(A)(1) in the absence of any documented legal reason for the abandonment. The parties’ financial dispute is not a legal reason for note completing the project.

11. Based on the evidence in the hearing record, the Administrative Law Judge concludes that the Investigator-determined workmanship issues existed and, thus, Respondent was in violation of Ariz. Rev. Stat. § 32-1154(A)(3), specifically Ariz. Admin. Code R4-9-108(A) for failure to perform all work in a professional and workmanlike manner.

12. The Administrative Law Judge concludes that the Investigator-determined issue of failure to complete the project existed and, thus, Respondent was in violation of Ariz. Rev. Stat. § 32-1154(A)(8), for failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract or in any modification of the contract.

13. Finally, the Administrative Law Judge concludes that the Investigator-determined workmanship issues existed and Respondent had failed to comply with the Directive by the Directive deadline. Therefore, Respondent is in violation of Ariz. Rev. Stat. § 32-1154(A)(22) for failure to take appropriate corrective action within the time period allowed in the Directive.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the Registrar impose discipline on Respondent’s ROC License 340922 as follows:

a two business-day suspension on the effective date of the Registrar’s final Order in this matter; and,

Respondent pay a civil penalty in the amount of $500.00 payable to the Registrar on or before thirty (30) days after the effective date of the final Order. Further, 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 final Order, the Registrar may 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)(7), unless Respondent tenders payment of any outstanding prior civil penalty.

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, July 14, 2025.

/s/ Kay Abramsohn

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

Robert Di alto

[email redacted]

Milit Kumar

[email redacted]

Build a Better Phoenix LLC

[email redacted]

By: OAH Staff