ALJDEC - Licensing

2024A-11746-CHC-ROC · Registrar of Contractors · 2025-04-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ian Davie,

COMPLAINANT,

Membery Development Corporation,

License No. ROC 247151,

RESPONDENT.

No. 2024A-11746-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 24, 2025

APPEARANCES: Ian and Allison Davie represented themselves. Robert Membery, Owner and Qualifying Party, represented Membery Development Corporation. ROC Investigator Brandon Smith appeared, on behalf of the Arizona Registrar of Contractors.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: Registrar Notice of Hearing Packet (Packet); Complainant Exhibits (not numbered); Respondent Exhibit 1.

_____________________________________________________________________

FINDINGS OF FACT

Membery Development Corporation (Respondent) is the holder of License No. 247151, B-1 General Commercial, issued by the Arizona Registrar of Contractors (Registrar or ROC) in July 2008.

On or about October 20, 2024, the Registrar received a Licensed Complaint Form (Complaint) from Ian Davie (Complainant) against Respondent alleging multiple and various construction issues on a residential remodeling project in Munds Park, Arizona.

The parties had entered into a contract in August of 2024 on the remodeling of a home, which home is not Complainant’s primary residence. The contract amount was $31,500.00 of which $16,000 has been paid. Construction work began on September 4, 2024 but stopped on October 15, 2024.

The Registrar assigned the Complaint to Investigator Brandon Smith, who conducted a Jobsite Inspection on August 7, 2024.

At the November 7, 2024 job site inspection, Inv. Smith documented the various construction issues through notes and over 40 photographs.

On November 7, 2024, Inv. Smith issued a Written Directive (Directive) requiring that Respondent perform corrective work and notify the Investigator no later than November 25, 2024. The Directive indicates the following:

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 Monday 11/25/24.

RESTRICTIONS

• You may not perform or hire other contractors to perform work that is outside the scope of your license.

• If your license is currently suspended for administrative reasons

or is inactive, expired, or cancelled, you may not perform any corrective work nor contract in any manner, which includes hiring other contractors to perform work, until the suspension of your license(s) has been lifted or your license(s) has been reactivated.

DIRECTIVE REQUIREMENTS

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

Complaint Item: 1 - Deck joists don't rest on new ledger board. There are

gaps between the 2. Hurricane straps are bearing the load.

Investigator’s Observation: VERIFIED: Upon Inspection The new ledger

board is sitting an inch below the deck joists. This project required a county building permit. This item would not pass inspection. Respondent directed to attain proper engineering, acceptance, permits and correct by appropriate means.

Governing Rule: 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.

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

Complaint Item: 2 - New posts supporting deck are not level. None of them.

Investigator’s Observation: VERIFIED. Upon inspection support posts are not placed plumb to support the upper deck system. This project required a county building permit. This item would not pass inspection. Respondent directed to attain proper engineering, acceptance, permits and correct by appropriate means.

Governing Rule: 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.

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

Complaint Item: 3 - New concrete footing is at grade level and post is only 1 inch above grade because of post base. concerned of rotting.

Investigator’s Observation: VERIFIED: Unapproved plans provided by the respondent to the ROC reviewed. Footings require engineering, plans review permitting and inspection by the local building authority. None of that happened. Footings actually sit below uphill grade. Complainant showed that the concrete footing had wood filler directly under the posts, which was concealed by mortar. This project required a county building permit. As built, this item would not pass inspection. Respondent directed to attain proper engineering, acceptance, permits and correct by appropriate means.

Governing Rule: 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.

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

Complaint Item: 4 - Contractor put scrap wood to fill the void under the

post bases & then covered it with something after my complaint.

Investigator’s Observation: VERIFIED: Duplicate Complaint explained in

complaint item #3. This project required a county building permit. As built, this item would not pass inspection. Respondent directed to attain proper engineering, acceptance, permits and correct by appropriate means.

Governing Rule: 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.

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

Complaint Item: 5 - 2 west crawlspace vents were cut through solid grouted cells on a load bearing wall instead of open cells.

Investigator’s Observation: VERIFIED: Crawl space vents were indeed cut into closed cells into a load bearing wall. This has the potential to cause catastrophic damage to the home compromising the integrity of the wall. This requires some engineering to remediate. Respondent directed to attain proper engineering, acceptance, permits and correct by appropriate means.

Governing Rule: 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.

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

Complaint Item: 7 - No east crawlspace vents were cut as intended as 0 east vents exist. I complained and he said it would be resolved.

Investigator’s Observation: VERIFIED: No crawlspace vents installed in

the east side of the home. Respondent directed to attain proper engineering, acceptance, permits and correct by appropriate means.

Governing Rule: 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.

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

Complaint Item: 8 - Insulation was supposed to be fixed in east crawlspace as well as unsupported/uninsulated copper pipe. Still no change.

Investigator’s Observation: VERIFIED: East side of home floor was

supposed to have the insulation reset into the floor and replaced when

necessary. It was also supposed to have plastic sheeting installed to keep the insulation in place. Copper pipe was also observed that was left unwrapped. Fix by appropriate means

Governing Rule: 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.

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

Complaint Item: 9 - I want to make sure the new 2 inch vents with the gable vent create proper air flow as promised to meet building code.

Investigator’s Observation: UNVERIFIED: Respondent was contracted to install attic vents into the home. The vents were installed where no vents existed before. There was no evidence provided that the Respondent consulted with an engineer to determine exact airflow requirements. Respondent directed to attain proper engineering, acceptance, permits and correct by appropriate means.

Governing Rule: 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.

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

Complaint Item: 10 - New bird blocks on northeast are not caulked as

promised. only 2 of them are caulked.

Investigator’s Observation: VERIFIED: Upon inspection, bird blocks were not caulked

Governing Rule: 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.

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

Complaint Item: 11 - New interior rail pickets unprofessional. Some are

redwood. Some are douglas fir. Not the same W or L. unfinished edges

Investigator’s Observation: VERIFIED: Upon inspection, rail pickets are

not cut to uniform length; They are left with a mixture of sharp and bullnose edging; They are installed poorly and not uniform with one another; New pickets were supposed to be redwood. They are clearly ink stamped by the manufacturer "KD FIR". Correct by appropriate means

Governing Rule: 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.

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

Complaint Item: 12 - Main beam in west crawl space was strapped better

after my complaint but concerned ends of beam need to be strapped too.

Investigator’s Observation: VERIFIED: Adequate strapping is determined by an engineers study. I will note the beam was not replaced. I did observe that the main beam was altered. Straps were added along with material to shim the floor. This may or may not require a building permit. I am directing the Respondent to make a written inquiry to the local building department and take appropriate action as required by their agency. If no permit is required provide an email verifying this.

Governing Rule: 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.

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

Complaint Item: 14 - The respondent is not properly licensed to perform

Residential Construction Work.

Investigator’s Observation: VERIFIED: The Respondent is currently

licensed as a Commercial General Contractor. The Respondent has until

Monday November 25, 2024 to acquire the proper licensing or this matter will be forwarded to the ROC Legal Department with a citation. No extensions will be considered without this being completed.

Governing Rule: Knowingly contracting beyond the scope of the license or licenses of the licensee.

A.R.S. § 32-1154(A)(16)

Complaint Item: 15 - The respondent did not secure permits before

beginning the work,

Investigator’s Observation: VERIFIED: Coconino County verified that

permits are required for this project and no permits were acquired. The

Respondent has until Monday November 25, 2024 to acquire the proper

permits from Coconino County or this matter will be forwarded to the ROC

Legal Department with a citation. No extensions will be considered without this being completed.

Governing Rule: Departure from or disregard of: (b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

A.R.S. § 32-1154(A)(2)(b)

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Complaint Item: 6 - West crawlspace already had vents. The vents were to be added as needed to meet code but feel they are redundant.

Investigator’s Observation: UNVERIFIED: West space had vents that [were] covered over by the ledger installed to support the deck. I am not able to verify if the work was agreed upon or appropriate.

Governing Rule: Not Applicable

Complaint Item: 13 - He keeps telling me work is completed but its clear to me he hasn't even been there to see the work by his team.

Investigator’s Observation: This is a statement and not a verifiable

complaint item.

Governing Rule: Not Applicable

On November 26, 2024, Inv. Smith issued his Compliance notes, after confirming with ROC Legal Department that Respondent had not taken steps to obtain the proper ROC license and confirming with Complainant that Respondent had not done any work. Inv. Smith subsequently forwarded the matter to ROC legal Department.

On December 17, 2024, the ROC 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.

Charge: 2 A.R.S. § 32-1154(A)(2)(b) Departure from or disregard of: (b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

Charge: 3 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.

Charge: 4 A.R.S. § 32-1154(A)(3) - R4-9-108(B)

Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(b): 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.

Charge: 5 A.R.S. § 32-1154(A)(16) Knowingly contracting beyond the scope of the license or licenses of the licensee.

Charge: 6 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 December 31, 2024, Mr. Membery filed an Answer to the Citation and included four attachments.

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

On January 30, 2025, the Registrar issued a Notice of Hearing setting the matter to convene on February 28, 2025 and the Office of Administrative Hearings issued an ORDER advising the parties about the virtual hearing and specifying how to connect to the virtual session. After a continuance, the hearing convened on March 24, 2025.

At hearing, Inv. Smith testified consistent with the findings contained in his Jobsite Inspection, Directive, and Compliance notes. Inv. Smith testified that, due to Respondent not having a contractor’s license allowing him to perform residential contracting, Respondent would be, and has been, unable to perform the corrective work or make contractual arrangements for licensed subcontractors to perform the corrective work.

Inv. Smith testified that Respondent was warned by the ROC two times in 2020 regarding performing work outside the scope of his license and, further, that this Complaint is a second Complaint in which Respondent was found to have been working outside the scope of his license. Inv. Smith opined that there were serious engineering issues that needed to be addressed regarding the work that had been incorrectly performed which likely would not pass code inspections.

At hearing, Respondent indicated that he had contacted an architect who, after coming to the site, drew up plans and, further, that Respondent had obtained a permit. Respondent noted that he has health issues and cannot work but knows a licensed contractor who can do the corrective work. In his testimony, Respondent explained the specifics about how some of the work had been done, noting that it had been appropriate to do it that way and opining that the county code(s) would not have required it to be done differently. Respondent asserted that there were simple fixes, even to the items for which Inv. Smith was most concerned, such as the posts, the ledger board, the joists, and stem wall. Respondent believed the work could be done in about a week to 10 days now that he had a license and the permit.

At hearing, Complainant testified that, from their perspective, given the Directive, they would not trust any contractor recommended by Respondent. Complainant noted that they had obtained some estimates for items that need to be corrected and that the situation cannot be downplayed as only needing simple fixes. Complainant echoed Inv. Smith’s concerns regarding engineering needs. Complainant requested that they be “released” from the contract and that restitution be considered as a mechanism to allow them to have the requisite corrective work performed.

Since the time of the hearing, Complainant has not notified the Tribunal that the parties have come to any settlement.

Administrative notice is taken of Respondent’s license history and status with the Registrar on April 25, 2025. Respondent’s ROC license record reflects that Respondent’s B-1 General Commercial license, License No. 274151 is active, with two open cases, one of which is the instant case. Respondent’s B-2 General Small Commercial License No. 180501 was issued in 2002 and was revoked in 2009. Respondent’s B General Residential License No. 154311 was issued in 2000 and was revoked in 2013.

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. Based on the evidence in the hearing record, the Administrative Law Judge concludes that each of the Investigator-determined workmanship, permit, and scope issues existed and, thus, as cited by the ROC, Respondent was in violation of the following Arizona contracting laws and rules:

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.

A.R.S. § 32-1154(A)(2)(b) Departure from or disregard of: (b) A building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.

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.

A.R.S. § 32-1154(A)(3) - R4-9-108(B)

A.R.S. § 32-1154(A)(16) Knowingly contracting beyond the scope of the license or licenses of the licensee.

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.

Further, the evidence demonstrates Respondent failed to correct any item in the Directive.

9. A.R.S. § 32-1156.01(A) provides, “[a]fter a hearing pursuant to this article, an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.”

10. Based on the hearing record, the Administrative Law Judge concludes that Respondent, with the work performed at Complainant’s property in violation of multiple statutory and regulatory provisions, has damaged Complainant’s property to the extent that restitution is appropriate. Therefore, the Administrative Law Judge concludes that the appropriate discipline in this matter is a provisional suspension of Respondent’s license until it refunds to Complainant the $16,000.00 amount Complainant has paid to Respondent in this matter.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the Registrar provisionally suspend Respondent’s License No. 11746 issued by the Registrar until Respondent has provided to the Registrar, and the Registrar has accepted documents which establish that Respondent has paid restitution to Complainant in the amount of $16,000.00 in certified funds.

It is further recommended that the Registrar require Respondent to pay the sum of $6,500.00 as a civil penalty pursuant to A.R.S. § 32-1154(E) for the failure to have corrected each item pursuant to the Directive.

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 final order, the Registrar shall 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 A.R.S. § 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, April 25, 2025.

/s/ Kay Abramsohn

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

Brandon Smith

[email redacted]

Membery Development Corporation

PO Box 25904

Munds Park, AZ 86017

[email redacted]

Ian Davie

315 W San Juan Ave

Phoenix, AZ 85013

[email redacted]

By: OAH Staff