ALJDEC - Licensing
2024A-12789-CHC-ROC · Registrar of Contractors · 2025-08-21
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Adam Marc Lemisch,
COMPLAINANT,
v.
EK Home Builders LLC
ROC License No. 345111,
RESPONDENT
No. 2024A-12789-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: August 18, 2025 at 1:00 PM.
APPEARANCES: Adam Lemisch (“Complainant”) appeared on his own behalf. Kevin Ovalle appeared on behalf of EK Home Builders LLC (“Respondent”) with Elvin Maldonado as a witness. David Fagerburg appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Casey Stephens observed.
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, Respondent Exhibits 3-4 & 8, and July 10, 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 record as reflected on the Registrar’s public website. On May 19, 2023, the Registrar issued License No. 345111 General Residential B contracting license to Respondent. The license had been renewed through May 31, 2027. Elvin Manfredo Maldonado is listed as the Qualifying Party and Member on the license. Kevin Ovalle is also listed as a Member on the license. Respondent’s address of record for the license is 4612 S. Dorsey Ln. Tempe, Arizona 85282. Respondent has an active $15,000.00 surety bond on the license, effective July 02, 2025. The license has not previously been disciplined by the Registrar, or had any prior complaints settled or otherwise resolved against it. Currently, the license has one (1) open complaint against it; which is presumed to be related to this matter.
On or about November 27, 2024, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 345111 alleging poor work of a residential remodel construction project. The Registrar designated it Complaint No. 2024-12789 and assigned to David Fagerburg (“Investigator Fagerburg”) for investigation.
On December 02, 2024, Investigator Fagerburg issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 14, 2025, at 11:30 a.m. Correspondence was not returned as undeliverable to Respondent.
On an unknown date, Complainant submitted a six (6) item addendum complaint (“Addendum Complaint #1”) to the Registrar. The addendum complaint items were added to Investigator Fagerburg’s jobsite inspection schedule.
On January 14, 2025, Investigator Fagerburg inspected the work that had been performed on the project to date. Respondent was not present. Investigator Fagerburg also reviewed the contract-related correspondence between the parties, and took 133 photographs of the project site. When he was finished, Investigator Fagerburg drafted his Inspection Notes. Ultimately, Investigator Fagerburg derived eighty-four (84) separate and distinct complaint items from Complaint No. 2024-12789, of which he was able to substantiate sixty-four (64) based on his firsthand observations. Specifically, Investigator Fagerburg determined Respondent’s workmanship on complaint items 1, 3-5, 7-10, 12, 14-19, 21-23, 25, 28, 30-31, 33-41, 44-53, 55-63, 66-70, 72-76, 78 80-82, 84, as well as items 3-5 from Addendum Complaint #1, failed to meet the Registrar’s minimum workmanship standards in violation of Ariz. Rev. Stat. § 32-1154-(A)(3); Ariz. Admin. Code R4-9-108(a). Investigator Fagerburg also determined that Respondent was in violation of Ariz. Rev. Stat. §§ 32-1154(A)(12); 32-1158(A) for failing to have all required elements in its contract template, and 32-1154(A)(2)(b) departing or otherwise disregarding building code(s) in a material respect prejudicial to Complainant.
On February 19, 2025, Investigator Fagerburg issued another 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; specifically, items 4 and 7-9 included in its contract with Complainant. Correspondence was not returned as undeliverable to Respondent.
On February 19, 2025, Investigator Fagerburg issued another Warning Letter to Respondent to advise that building permit(s) were not obtained for the project in violation of the International Residential Code and the International Building Code. Respondent was further advised that failure to comply with the building codes was a violation of Ariz. Rev. Stat. § 32-1154(A)(2), which could result in discipline against Respondent’s license including suspension or revocation.
On February 19, 2025, Investigator Fagerburg issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated sixty-seven (67) of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on March 14, 2025, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.
On March 17, 2025, Complainant submitted a forty-five (45) item addendum complaint (“Addendum Complaint #2”) to the Registrar.
On March 18, 2025, Investigator Fagerburg issued an Addendum Jobsite Inspection Notification Letter to the parties, advising that he would conduct a secondary inspection of the project on April 03, 2025, at 11:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On April 03, 2025, Investigator Fagerburg inspected the work Respondent had performed items identified in Addendum Complaint #2. Respondent was not present. Investigator Fagerburg also took 60 photographs of the project site. When he was finished, Investigator Fagerburg drafted his Addendum Jobsite Inspection Notes. Ultimately, Investigator Fagerburg substantiated thirty-one (31) items from Addendum Complaint #2 based on his firsthand observations. Specifically, Investigator Fagerburg determined Respondent’s workmanship on addendum items 1-7, 9-15, 17-24, 28-31, 34-36, and 38-39 failed to meet the Registrar’s minimum workmanship standards in violation of Ariz. Rev. Stat. § 32-1154-(A)(3); Ariz. Admin. Code R4-9-108(a).
On April 30, 2025, Investigator Fagerburg issued an Amended Written Directive from the Registrar (“Amended Directive”) to Respondent based on the sixty-seven (67) substantiated items identified in the initial Directive, as well as the additional thirty-one (31) substantiated items from Addendum Complaint #2. Respondent was put on notice that it had until 5:00 p.m. on May 23, 2025, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.
On May 27, 2025, Investigator Fagerburg issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on June 05, 2025, at 11:30 a.m. Correspondence was not returned as undeliverable to Respondent.
On June 05, 2025, Investigator Fagerburg inspected the corrective work that had been performed on the project and took 40 photos. Respondent was not present. When he was finished, Investigator Fagerburg drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Fagerburg determined that Respondent had satisfactorily remediated a total of five (5) complaint items and two (2) addendum complaint items; specifically, items 48, 53, 62, 74, 80, and addendum items 38-39. Based on information received from a material supplier, Investigator Fagerburg removed complaint item 33 from the Directive. Ninety (90) complaint/addendum items remained outstanding.
On June 17, 2025, Investigator Fagerburg forwarded the matter to the Registrar’s legal department with the issuance of a Pencil Cite. Therein, Investigator Fagerburg specifically noted that Respondent had not provided a response to the complaint, requested to inspect the complained of work, and had failed to comply with the Amended Directive or request an extension thereof.
On June 20, 2025, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(b), 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 July 05, 2024, 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 June 24, 2025, the Registrar received a timely Answer on behalf Respondent from Mr. Ovalle. Mr. Ovalle did not address any of the alleged statutory violations outlined in the Citation, and instead noted that Respondent was “actively engaged in completing the permitted work” and also “resubmitting the design plans this week to ensure it follows local building codes and standards.” Additionally, Mr. Ovalle proposed a waiver of the outstanding contract balance in order to settle the dispute between the parties.
On or about June 25, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 18, 2025. Per the July 03, 2025, Notice of Hearing on Contested Case (“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)(2)(b)
Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)
Charge 3: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158
Charge 4: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on his own behalf and called Investigator Fagerburg as a witness. Mr. Ovalle and Mr. Maldonado testified on behalf of Respondent. The substantive evidence of record is as follows:
Complainant owns residential property located at 4626 E. Emerald Running Deer Trl. Cave Creek, Arizona 85331.
On or about August 13, 2024, the parties entered into a $45,398.61 whole-home renovation construction agreement. Specifically, Respondent agreed to “perform the Work in accordance with the plans and specifications in the provided MS Excel document outlining the work.”
Work on the underlying project commenced in or around mid-August 2024, and finished or otherwise stopped in or around mid-November 2024.
Complainant paid Respondent a total of $39,791.18 on the underlying project, as follows:
On August 15, 2024, Complainant tendered a $4,323.67 payment to Respondent for the project.
On August 26, 2024, Complainant tendered a $2,784.30 payment to Respondent for the project.
On August 29, 2024, Complainant tendered a $5,633.74 payment to Respondent for the project.
On September 06, 2024, Complainant tendered a $4,425.91 payment to Respondent for the project.
On September 12, 2024, Complainant tendered a $1,704.78 payment to Respondent for the project.
On October 02, 2024, Complainant tendered a $5,578.52 payment to Respondent for the project.
On October 07, 2024, Complainant tendered a $5,741.02 payment to Respondent for the project.
On October 15, 2024, Complainant tendered a $2,106.98 payment to Respondent for the project.
On November 08, 2024, Complainant tendered a $7,492.26 payment to Respondent for the project.
License No. 345111 was active and in good standing with the Registrar between February 19, 2025, and May 23, 2025.
On March 15, 2025, Respondent submitted a Request for Re-Evaluation & Clarifications request to Investigator Fagerburg, wherein Mr. Ovalle denied that Respondent was responsible for obtaining permits for the underlying project, questioned the feasibility of performing corrective work, and asked that the investigator reevaluate six (6) substantiated complaint items.
On March 27, 2025, Permit No. CTR-[number redacted] was issued by the local building authority for the underlying project, which was paid for by Respondent.
Respondent did not request an extension of the Directive or Amended Directive prior to May 23, 2025, allege a denial of access to the project site by that date, or enter into a settlement agreement with Complainant.
Upon the expiration of the Amended Directive’s compliance period, ninety (90) substantiated items remained outstanding as unaddressed by Respondent; namely, original complaint items 1, 3-5, 7-10, 12, 14-19, 21-23, 25, 28, 30-31, 33-41, 44-47, 49-52, 55-61, 63, 66-70, 72-73, 75-76, 78 81-82, and 84; items 3-5 from Addendum Complaint #1, and items 1-7, 9-15, 17-24, 28-31, and 34-36 from Addendum Complaint #2.
Additional Evidence
Respondent’s initial permit application to the local building authority was not inclusive of the entire scope of work for the underlying project, requiring Respondent to revise plans three (3) times and resubmit permit requests.
Based on the type of license Respondent possessed when the underlying contract was entered into, as well as when all work was performed and the Directive/Amended Directive were issued, Respondent was not appropriately licensed to perform work on original complaint items 4-5, 7-8, 10, 12, 14, 19, and 21-41, and addendum complaint items 1-2, 5-6, 9, 11, 13-15, 19, and 35. Respondent could have hired an appropriately licensed subcontractor to address these items, or entered into a settlement agreement with Complainant to satisfy the Directive/Amended Directive.
Respondent received all of the Registrar’s correspondence regarding onsite inspections of the underlying project. Respondent did not provide notice of unavailability or request to reschedule any, save the Addendum Jobsite Inspection one (1) day prior due Mr. Maldonado’s personal conflict and Mr. Ovalle being out of town.
Respondent never provided the Registrar with an updated construction contract template.
Closing Arguments
In closing, Respondent offered that it was desirous of completing Complainant’s project, and argued that discipline was not warranted based on its lack of prior discipline by the Registrar and positive client reviews.
In closing, Complainant argued that of the 135 total complaint items filed in Complaint No. 2024-12789, 98 were substantiated and Respondent only addressed 7. Complainant opined that discipline against License No. 345111 was warranted based on Respondent’s poor workmanship and failure to perform corrective work to make Complainant “whole.”
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.
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 for the Registrar 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)(2)(b) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Departure or disregard of a building code ... in any material respect that is prejudicial to another.”
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] contractor shall perform all work in a professional and workmanlike manner.”
Ariz. Rev. Stat. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, ““Failure in any material respect to comply with this chapter.”
Ariz. Rev. Stat. § 32-1158(A) provides that a contract between a contractor and property owner amounting to more than $1,000.00 must contain the following information in writing:
The name of the contractor and the contractor's business address and license number.
The name and mailing address of the owner and the jobsite address or legal description.
The date the parties entered into the contract.
The estimated date of completion of all work to be performed under the contract.
A description of the work to be performed under the contract.
The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.
The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.
The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.
That the property owner has the right to file a written complaint with the Registrar for an alleged violation of Ariz. Rev. Stat § 32-1154(A). The contract shall contain the Registrar's telephone number, website address, and shall state that complaints must be made within the applicable time period as set forth in Ariz. Rev. Stat § 32-1155(A). The information must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor.
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) holds, in pertinent parts, that the ROC 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 holds that no 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 not in dispute.
It is undisputed that the parties had a $45,398.61 whole-home renovation construction agreement, which Complainant substantially paid towards. It is also undisputed that most of the work Respondent performed on the project failed to meet the Registrar’s minimum workmanship standards. It is further undisputed that Respondent did not comply with the Registrar’s Directive or Amended Directive, or request an extension of either.
Therefore, the only remaining issue to address is whether Respondent raised sufficient justification or excuse for failing to have all substantiated complaint and addendum items remediated or enter into a settlement agreement with Complainant regarding those items in order to satisfy the Registrar’s Directive and Amended Directive, or enter ask for extensions thereof prior to the expiration of their respective deadlines. These are an affirmative defenses that Respondent bears the burden to establish. The Tribunal is not at liberty to make presumptions in favor of Respondent or accept facts in mitigation on behalf of Respondent that are not supported by the evidence. Here, the record reflects that Respondent failed to substantively act, by only addressing 7 of 98 substantiated complaint items, and had no affirmative defense(s) for doing so. It is clear from the record that Respondent had nominal communication with the Registrar during the entire pendency of Complaint No. 2024-12789 before the underlying Citation was issued by their legal department, which is a factor in aggravation as it illustrates Respondent’s unwillingness or inability to submit to regulation.
Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(b), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(12); 32-1158, and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.
Complainant may petition the Registrar’s Recovery Fund for financial recompense in this matter.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that that on the effective date of the Final Order in this matter, Respondent EK Home Builders LLC, ROC License No. 345111, shall be suspended for fourteen (14) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(2), 32-1154(A)(3), and 32-1154(A)(22).
It is further recommended that Respondent submit a construction contract template to the Registrar that complies with requirements set forth in Ariz. Rev. Stat. § 32-1158 within five (5) days of the effective date of the Final Order in this matter.
It is further recommended that the Registrar require Respondent to pay the sum total of $450.00 (four hundred fifty dollars) in certified funds as a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E).
It is further recommended 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 Order, the Registrar 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)(5), unless Respondent tenders payment of any outstanding prior civil penalty.
NOTICE
Pursuant to Ariz. Rev. Stat. §§ 41-1092.08(F)(3) and (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, August 25, 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]
EK Home Builders LLC, Respondent
c/o Kevin Ovalle & Elvin Maldonado, Agents
4612 S. Dorsey Ln.
Tempe, AZ 85282
[email redacted]
Adam Marc Lemisch, Complainant
4626 E. Running Deer Trl.
Cave Creek, AZ 85331
[email redacted]
By: OAH Staff