ALJDEC - Licensing
2024A-12226-CHC-ROC · Registrar of Contractors · 2025-06-18
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Robert Dean Bauman,
COMPLAINANT,
v.
Horizon Group Construction LLC,
License No. ROC 327028,
RESPONDENT.
No. 2024A-12226-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: April 23, 2025, and June 13, 2025.
APPEARANCES:
For Complainant: Robert Bauman.
For Respondent: Michael Fischer (failed to appear at second hearing).
For the Registrar of Contractors: David Fagerburg.
ADMINISTRATIVE LAW JUDGE: Samuel Fox
EXHIBITS ADMITTED INTO EVIDENCE: Administrative notice was taken of the Notice of Hearing Packet submitted by the Registrar of Contractors (Not. of Hr’g). Complainant’s Exhibit Packet.
_____________________________________________________________________
FINDINGS OF FACT
Horizon Group Construction LLC (Respondent) was the holder of License No. 327028, issued by the Arizona Registrar of Contractors (Registrar) on December 2, 2019.
On or about November 19, 2023, Robert Bauman (Complainant) entered into a contract with Respondent for, among other things, construction of a fountain, a pool, and some other renovations.
On or about November 2, 2024, Complainant filed a Licensed Complaint Form with the Registrar.
The Registrar assigned the complaint to Investigator David Fagerburg, who conducted the jobsite inspection on December 13, 2024, and Respondent was present.
On December 27, 2024, Investigator Fagerburg issued a Written Directive From the Registrar to Respondent, requiring Respondent to correct the identified deficiencies by appropriate means by January 15, 2025. No deficiencies were corrected.
On January 21, 2025, the Registrar issued a Citation against Respondent, finding cause to charge Respondent with violations of A.R.S. § 32-1154(A)(1); A.R.S. § 32-1154(A)(3), specifically R4-9-108(a); A.R.S. § 32-1154(A)(8); and A.R.S. § 32-1154(A)(22).
On February 3, 2025, Respondent submitted an Answer to the Citation.
The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.
On February 27, 2025, the Registrar issued a Notice of Hearing on Contested Case setting the hearing for March 31, 2025. The hearing was reset for April 23, 2025, when opening statements were made. A further hearing was scheduled for June 13, 2025.
Although both parties were notified of each hearing using the same contact information, Respondent was present at the April hearing, but failed to appear at the June hearing. Respondent did not request another continuance and has not contacted the Arizona Office of Administrative Hearings since the most recent hearing date. Consequently, Respondent did not present any evidence to defend its license at the June 13, 2025, hearing, and no additional hearing time was scheduled.
Investigator Fagerburg testified in support of his investigation and findings.
Complainant testified in support of Investigator Fagerburg’s investigation and findings.
In its opening statement, Respondent argued the following:
He was not responsible for the subcontractor who stole Complainant’s money; and
He was not contractually obligated to continue working after the scope of work changed.
It was undisputed that the pool builder was Respondent’s subcontractor. Complainant paid Respondent over $120,000.00, and Respondent paid the pool builder $43,000, most of which was not earned or due under the pool builder’s contract. The pool builder performed poor work, and Complainant fired the pool builder. The pool builder absconded with all of the $43,000.00.
After the pool builder left, without returning the unearned amount, Respondent refused to perform any additional work without additional payment.
Respondent filed a complaint against the pool builder with the ROC, but the ROC declined to investigate, stating that Complainant had fired the pool builder. Respondent got a default judgment against the pool builder in superior court.
Administrative notice was taken of Respondent’s prior License record on June 13, 2025. According to that record, Respondent’s License No. 37028 was suspended for lack of bond. There was only one open complaint against the license.
CONCLUSIONS OF LAW
Respondent was deemed to have received the Notice of Hearing by methods reasonably calculated to effect notice. The Registrar mailed copies of the Notice of Hearing on Contested Case to its address and email address of record, and the Office of Administrative Hearings sent the order setting the continued hearing date to Respondent at its email address of record.
This matter lies within the Registrar’s jurisdiction.
Respondent’s suspended license does not deprive Complainant of the right to prosecute the complaint or prevent the Registrar from determining the merits of the complaint.
Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. Respondent bears the burden of proof to establish an affirmative defense by a preponderance of the evidence.
“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”
General contractors are responsible for their subcontractors. It is undisputed that the pool builder was Respondent’s subcontractor.
The contract for the work at issue included the following:
Any changes in engineering or design before or after commencement of work will automatically void this contract. Any change order not acceptable to the contractor voids this contract. Any hidden problem or damage discovered during remodeling, or any change that necessitates changing the engineering or plans presented for this contract voids this contact. Customer understands that if there is a change or repair to a property due to any unforeseen circumstance, a change order will be presented, and if it is not accepted, the contract is void. Contractor reserves the right to change the price of any or all aspects of this job as supply prices fluctuate or as the job demands.
The preponderance of the evidence established that Respondent abandoned the project or refused to perform work without a legal excuse in violation of A.R.S. § 32-1154(A)(1). Respondent had been paid for a substantial amount of work; he overpaid the pool builder, who stole the money; and then, Respondent refused to perform additional work pursuant to the contract. For the purposes of disciplinary proceedings, Respondent did not have a legal reason for failure to complete work for which he was paid.
The preponderance of the evidence established that Respondent failed to perform all work in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A).
The preponderance of the evidence established that Respondent failed in a material respect to complete the project for the contracted-for price in violation of A.R.S. § 32-1154(A)(8). Respondent received payments which significantly exceeded the work it performed for Complainant. Respondent refused to continue performing work for which it had contracted and been paid. Theft by the pool builder was not a legal excuse because Respondent was responsible for its subcontractor, and Respondent overpaid that subcontractor.
The preponderance of the evidence established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).
“The registrar may impose a civil penalty of not to exceed $500 on a contractor for each violation of subsection A, paragraph 22 of this section.” If a licensee fails to pay the civil penalty, their license is automatically revoked “thirty days after the effective date of the order providing for the civil penalty.” Additionally, any “person who is or was named on a license. . . may not receive a new license under this chapter until the entire civil penalty is paid.”
Firing a contractor does not necessarily preclude a complainant from the Registrar’s process. Contractors are responsible for their work and abiding by the governing statutes and rules, and a complainant may pursue discipline for violations of those statutes and rules even if they fired the contractor. Accordingly, if a contractor is fired from a job for violating a section of A.R.S. § 32-1154, the Registrar may still open an investigation into that contractor. Prohibiting an investigation and action under those circumstances has no clear basis in statute, rule, or policy, and a prohibition would harm homeowners, unduly benefit contractors for poor behavior, and encourage poor contractors to get themselves fired before a complaint is filed to avoid consequences.
Here, the Registrar refused to open an investigation into the pool builder for the above-entitled matter, claiming that it does not have jurisdiction because Complainant fired the pool builder. The pool builder is responsible for workmanship violations, it failed to complete a contract in accordance with its terms (including refunding unearned money), and may have engaged in other uninvestigated violations other than abandonment.
Notably, it is ordinary for the complaint allegation to differ from the Citation allegation. An improper Licensed Complaint Form allegation is not a basis for dismissal, and the Registrar regularly adds or amends violations after an investigation.
While it is plausible that the Registrar may not have been able to sustain a Citation for A.R.S. § 32-1154(A)(1) against the pool builder for work that the pool builder did not complete after being fired, the Registrar was able to investigate and potentially cite a licensed contractor for its violations of A.R.S. § 32-1154. Both parties in this matter agreed that the pool builder had significant responsibility.
RECOMMENDED ORDER
Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend for 10 days Respondent’s License No. 327028.
It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(E).
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, June 18, 2025.
/s/ Samuel Fox
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
Horizon Group Construction LLC
[email redacted]
David Fagerburg
[email redacted]
Robert Dean Bauman
[email redacted]
By: OAH Staff