ALJDEC decisions subject to certification as final
2024A-12218-RFA-LS-ROC · Registrar of Contractors · 2026-04-10
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Candice Marinello,
COMPLAINANT,
v.
Outback Creations Inc.,
ROC License No. 199786,
RESPONDENT
No. 2024A-12218-RFA-LS-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: October 28, 2025 & April 02, 2026.
APPEARANCES: Assistant Attorney General Charles Hover III, Esq. appeared on behalf of the Arizona Registrar of Contractors with Meridith Bell as a witness. Candice Marinello (“Complainant”) appeared on her own behalf. Sterling Marinello, Sean Phillips, and Carl Penny observed.
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Appealable Agency Action (“Notice of Action”), Hearing Order issued October 01, 2025, Continued Hearing Orders issued October 18, 2025, December 22, 2025, and January 29, 2026, Registrar Exhibits 1-5 7-8, 11-12, 15-16, and Complainant Exhibit D 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 September 03, 2004, the Registrar issued License No. 199786 to Respondent for General Residential B contracting.Although the license was renewed through September 30, 2026, it was suspended by the Registrar on December 02, 2025. Charles Arnold is the Qualifying Party and Director on the license. Vance Hubbard is the Chief Executive Officer and President on the license, with Joseph Hubbard serving as the Director for the license. Respondent’s address of record for the license is 8450 E. Saddle Horn Trl. Prescott Valley, Arizona 86315. Respondent had a $9,000.00 surety bond for the license issued by Contractors Bonding and Insurance Company that has been cancelled. The license reflects discipline by the Registrar on five (5) prior occasions, one of which is presumed to be related to this matter.
In or around November 2024, the Registrar received a lengthy itemized complaint from Complainant against Respondent’s License No. 199786 alleging abandonment and poor workmanship of a $573,000.00 residential new build. The Registrar designated it Complaint No. 2024-12218 and assigned to Daniel Otero (“Investigator Otero”) for investigation.
On November 26, 2024, Investigator Otero conducted a review of the contract executed between the parties, took 47 photographs, and inspected the work that had been performed on the project to date. Respondent was not present. When he was finished, Investigator Otero drafted his Jobsite Inspection Notes. Ultimately, Investigator Otero derived forty-one (41) separate and distinct complaint items from Complaint No. 2024-12218, eight (8) of which he was able to substantiate based on his firsthand observations. Specifically, Investigator Otero concluded that the work Respondent had performed on complaint items 2-5, 8, 17, 37 and 41 failed to meet the Registrar’s minimum workmanship standards, and specifically noted the following:
I arrived at [Complainant’s] residence at the scheduled time. We proceeded to inspect the items on the complaint list in question. We walked around the house which was obviously incomplete, there were many allegations that were completed and were not done in a professional workmanship like manner. Items that appeared to be at their completed state were placed on the directive as poor workmanship. Some of those items were left in the hands of the county inspector when they do the required inspections to complete the house.
On December 16, 2024, Investigator Otero issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegations against Respondent. Respondent was further put on notice that it had until 5:00 p.m. on January 06, 2025, to notify the Registrar of its compliance with the Directive by remedying the identified deficiencies by “appropriate means” or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A), 32-1154(A)(22), and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.
On January 14, 2025, Investigator Otero performed a compliance jobsite inspection of the project and took 24 photographs. Respondent was not present. Based on his firsthand observations, Investigator Otero determined that Respondent had not performed sufficient corrective work to remediate any of the previously substantiated complaint items. Investigator Otero specifically noted as follows:
At the time of the compliance inspection it was observed there were only a few minor items on the [Directive] that were worked on but not completed in a professional workmanship like manner. Code infractions listed on the [Directive] were not complied with as well. Materials were brought to the job, they were the wrong materials. Many excuses were made as to why the jobs could not be done in the timeframe of the [Directive].
On January 15, 2025, Investigator Otero issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in his contracts, including his contract with Complainant. Correspondence was not returned as undeliverable to Respondent.
On January 17, 2025, the Registrar issued a Citation to Respondent for an alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(A), 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until February 01, 2024, to respond with its Answer. Respondent was specifically instructed that failure to file a timely Answer would be deemed an admission of the acts charged per Ariz. Rev. Stat. § 32-1155(C), which could result in the suspension or revocation of Respondent’s license.
On February 05, 2025, because Respondent failed to submit a timely Answer to the aforementioned Citation, the Registrar issued a Final Administrative Decision and Order (Default) (“Default Order”) to Respondent which suspended License No. 199786 pursuant to Ariz. Rev. Stat. §§ 32-1154 and 32-1155 for four (4) days, February 12, 2025. A civil penalty was not assessed against Respondent. Respondent did not appeal the Default Order.
On or about March 10, 2025, the Registrar received Complainant’s petition for payment from the Residential Contractors’ Recovery Fund (“Fund”), pursuant to Ariz. Rev. Stat. §§ 32-1132(A) and 32-1154(G). Complainant listed the underlying contract date as August 10, 2023, totaling $571,843.00, and avowed she paid $549,000.00; noting a total of eight (8) payments from January 08, 2024, through August 12, 2024. Attached were a bond denial letter from Respondent’s insurance company, Warranty Deed, and the parties’ underlying contract. No repair bids were included.
On August 12, 2025, the Registrar received a Statement of Facts and Exhibits from Complainant. Complainant explained that her project with Respondent was initially covered by personal funds and later financed by a loan obtained through her credit union. Attachments included payments made to Respondent for the project.
On August 29, 2025, the Registrar issued a Notice and Order of Recovery Fund Denial (“Notice of Denial”) to the parties which held that Complainant was ineligible to access the Fund because the Registrar was unable to make a determination regarding compensable actual damages.
On August 29, 2025, the Registrar received an appeal from Complainant wherein Complainant argued that “over $60,000.00 in damages” had been sustained due to Respondent, and that Complainant wanted to “receive something back.”
On September 17, 2025, the Registrar referred 2024A-12218-RFA-LS-ROC to OAH for an independent evidentiary hearing. Per the Notice of Action sent to the parties on September 25, 2025, the issue to be determined at hearing was whether the Registrar correctly and lawfully denied Complainant’s petition to the Fund pursuant to Ariz. Rev. Stat. §§ 32-1132 to 32-1133.01 and 32-1154(F), as justified by the evidence.
On October 28, 2025, and April 02, 2026, an administrative hearing in the above-captioned matter took place before OAH.
Hearing Evidence
At the hearing, the Registrar called Meridith Bell as a witness. Complainant testified on her own behalf. The substantive evidence is as follows:
Complainant owns single family residential property located at 8930 W. Mint Wash Pass Prescott, Arizona 86305.
On or about August 10, 2023, the parties entered into a $573,000.00 residential new build contract.
On or about November 20, 2024, escrow closed.
Complainant tendered a total of $549,000.00 to Respondent towards the project.
Although License No. 199786 was active and in good standing with the Registrar from December 16, 2024, to January 06, 2025, Respondent did not perform corrective work on eight (8) substantiated complaint items in this matter or enter into a settlement agreement with Complainant regarding said items. At no time during that period of time did Respondent allege a denial of access to the project site or request an extension of the Directive prior to the expiration of its compliance period.
Additional Evidence
Ms. Bell is a Legal Assistant II for the Registrar. Although another Legal Assistant II made the determination that Complainant was eligible to access the Fund, but ineligible to qualify for an administrative payout from the Fund because Complainant did not suffer any “actual damages,” Ms. Bell independently verified that information after that individual left the Registrar’s employ. Specifically, Ms. Bell determined the following:
Complainant own and occupies the residential property at issue.
Respondent’s license was active and in good standing with the Registrar when the underlying contract was entered into, when Respondent performed the underlying work in question, as well as when Respondent first received payment from Complainant for the project.
Complainant paid nearly 96% of the underlying contract, leaving a $24,000.00 balance owed to Respondent.
As a result of Complaint No. 2024-12218 being filed with the Registrar, License No. 199786 was suspended for a period of four (4) days by the Registrar.
Complainant did not receive a bond payout from Respondent’s insurance company.
At unknown times in 2025 Complainant hired licensed and unlicensed trades to perform corrective work on her project with Respondent. Complainant paid approximately $33,791.21 in total for remediations, only $1,118.93 of which were paid to licensed contractors. As such, Investigator Otero was not consulted to determine whether repairs fell within the scope of the Directive or if associated costs were reasonable.
Ultimately, Ms. Bell was unable to calculate Complainant’s actual compensable damages, if any.
Ms. Bell testified that the purpose of the Fund was to make homeowners aggrieved by licensees “whole,” and that Ariz. Rev. Stat. § 32-1131 et seq. was specifically limited to the cost of actual construction work, labor and materials – which, in Complainant’s case, was -$22,881.07 due to the nominal amount of valid repairs subtracted from the amount owed on the underlying contract. Consequently, Complainant’s Fund petition was deemed unfounded by the Registrar.
Complainant testified that after the initial continuance issued in these proceedings she provided the Registrar with additional “proof” of payments made to licensed contractors to remediate her project with Respondent that exceeded $60,000.00. None of that information was submitted to the Tribunal for consideration.
Closing Arguments
In closing, Complainant beseeched the Tribunal to consider information allegedly provided to the Registrar, her additional evidence of payments made to licensed contractors for corrective work performed.
The Registrar declined to provide a closing argument.
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.
Complainant bears the burden of establishing by a preponderance of the evidence that the Registrar’s Notice of Denial was incorrectly and/or otherwise improperly issued. Both Respondent and the Registrar bear the burden to establish factors in mitigation 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.”
Pursuant to Ariz. Rev. Stat. § 32-1131 et seq., in order to be eligible to access the Recovery Fund an applicant must meet specific eligibility criteria. An individual is eligible for an award from the residential contractors’ recovery fund if they both: (1) own residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance, and (2) actually occupy or intend to occupy the residential real property as the individual’s primary residence. Additionally, the applicant must have contracted with a residential contractor who was appropriately licensed either at the time of contract execution, when the first payment on the project was made, or when the work on the project first began.
Ariz. Rev. Stat. § 32-1154(F) provides that “if a contractor’s license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter the registrar may order payment from the residential contractors’ recovery fund to remedy the violation.”
Ariz. Rev. Stat § 32-1132.01 provides, in pertinent part, that an award from the Recovery Fund “[m]ay not exceed the actual damages suffered” and also “[m]ay not exceed an amount necessary to complete or repair a residential structure.” “Actual damages” means the reasonable cost of completing the contract and repairing the contractor’s defective performance, minus the part of the contract price still unpaid. The maximum individual award from the Recovery Fund is $30,000.00.
Statutes should be interpreted to provide a fair and sensible result. 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.” “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.
In the case at bar, however, a detailed factual analysis is not necessary because Complainant failed to present any compelling evidence at hearing.
While the credible evidence of record clearly establishes that Complainant was legally eligible to access the Fund, the record is devoid of any credible evidence to establish that any actual calculable damages were sustained. Complainant’s general assertions that $60,000.00 plus was tendered in remediations payments is not supported by the record. Complainant failed to provide any invoices, receipts, contracts, or witness testimony to corroborate her assertions. In doing so, Complainant failed to sustain her burden of proof.
Therefore, the undersigned Administrative Law Judge must conclude that Complainant was properly denied an administrative payout from the Fund.
Accordingly, Complainant’s appeal must be denied.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that the Registrar affirm the Fund’s August 29, 2025, Notice of Denial.
IT IS FURTHER RECOMMENDED that the Registrar dismiss Complainant’s appeal.
NOTICE
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 13, 2026.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
c/o Meridith Bell, Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
[email redacted]
Charles Hover III, Esq., Assistant Attorney General
Office of the Attorney General, Counsel for the Registrar
2005 N. Central Ave.
Phoenix, AZ 85004-1592
[email redacted]
Candice Marinello, Complainant
8930 W. Mint Wash Pass
Prescott, AZ 86305
[email redacted]
Outback Creations Inc., Respondent
c/o Charles Arnold, Vance Hubbard, Joseph Hubbard
8450 E. Saddle Horn Trl.
Prescott Valley, AZ 86315
[email redacted]
By: OAH Staff