ALJDEC - Licensing
2025A-00180-CHC-ROC · Registrar of Contractors · 2026-05-30
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Rafael Najera,
COMPLAINANT,
v.
R & C Development LLC,
ROC License No. 296418,
RESPONDENT.
No. 2025A-00180-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: September 24, 2025, and April 22, 2026.
APPEARANCES: Jay R. Graif, Esq. appeared on behalf of Rafael Najera (“Complainant”) with Complainant, Javier Saucedo, and James Carter as witnesses. Ryan D. Bailey, Esq. appeared on behalf of R&C Development LLC (“Respondent”) with Crystal Deitz-Garcia as a witness.
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 3-5, 8, and 10-11, Closing Arguments received from the parties May 22, 2026, and Hearing Orders issued August 14, 2025, September 25, 2025, December 02, 2025, and January 27, 2026, were admitted into the evidentiary record.
_____________________________________________________________________
Having reviewed 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 March 17, 2015, the Registrar issued License No. 296418 for General KB Dual Residential and Small Commercial contracting to Respondent. The license is active and in good standing with the Registrar, and has been renewed through March 31, 2027. Crystal L. Dietz Garcia is listed as the Qualifying Party and Member on the license. Ruben Dionisio Garcia is also listed as a Member on the license. Respondent’s address of record for the license is 1355 W. Dublin St. Chandler, Arizona 85224. Respondent has a $14,000.00 active surety bond on the license issued by Merchants Bonding Company, effective November 07, 2019. The license has not previously been disciplined by the Registrar, or had any prior complaints settled or otherwise resolved against it. However, there is currently one (1) open complaint against the license which is presumed to be related to the case at bar.
On January 08, 2025, the Registrar received a 3-item complaint from Complainant against Respondent’s License No. 322613 alleging poor work regarding a new residential construction project. The Registrar designated it Complaint No. 2025-00180 and assigned it to Mike Wiskow (“Investigator Wiskow”) for investigation.
On January 15, 2025, Investigator Wiskow issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 31, 2025, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On February 10, 2025, Complaint No. 2025-00180 was closed by the Registrar.
On March 14, 2025, per Complainant’s request to reopen Complaint No. 2025-00180, Investigator Wiskow issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on April 17, 2025, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On March 18, 2025, a Notice of Rescheduled Jobsite Inspection was issued to the parties, advising that Investigator Wiskow’s inspection of the project was reset to April 24, 2025, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On April 24, 2025, Investigator Wiskow inspected the work that had been performed on the project to date. Respondent was present. Investigator Wiskow also reviewed the contract-related correspondence between the parties, and took 14 photographs of the project site. Investigator Wiskow derived a total of 3 separate and distinct complaint items from Complaint No. 2025-00180: (1) home not completed, (2) roof is asphalt and should be tile, and (3) utilities not hooked up – all of which he substantiated based on his firsthand observations. Specifically, Investigator Wiskow determined that complaint items 1-3 required Respondent to perform corrective work sufficient to remedy the identified deficiencies, by appropriate means, or be held in violation of Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A)(1) and 32-1154(A)(2)(a).
On April 25, 2025, Investigator Wiskow issued a Written Directive from the Registrar (“Directive”) to Respondent due to his substantiation of Complainant’s complaint allegation(s) against License No. 296418. Respondent was put on notice that it had until 5:00 p.m. on May 12, 2025, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.
On May 13, 2025, Investigator Wiskow issued a Compliance Jobsite Inspection Notice to the parties, advising that he would conduct an inspection of the project on May 20, 2025, at 10:00 a.m. The notice also provided the following advisement:
[Complainant] is required to be present for this inspection. [Respondent] is encouraged to be present but is not required to attend.
Complainant:
SAFE ACCESS IS REQUIRED TO ANY AREA TO BE INSPECTED.
(All emphasis in original.)
Correspondence was not returned as undeliverable to Respondent.
On May 20, 2025, Investigator Wiskow inspected the corrective work that had been performed on the project to date. Complainant was not present. He took 17 photographs of the project site. Ultimately, Investigator Wiskow removed complaint item 2 from the Directive and determined that insufficient work had been performed on complaint items 1 or 3. He noted as follows, in pertinent parts:
Compliant Item: 1 – Home Not Completed
Compliance Observation:
-Mirrors have been installed in the bathrooms.
- None of the shower door glass has been installed.
-The A/C has been installed, but is not operating.
-The water heater has been installed.
-Window repair was started, but not finished.
-Not all the electrical fixtures or devices have been installed.
-None of the final inspections have been completed.
-The respondent was asked via the respondent’s attorney to have information concerning the rough-in inspections at the compliance inspection but none were supplied.
* * *
Complaint Item: 3 – the utilities are not hooked up
Compliance Observation: The Sewer and Water line has been installed from the street to the home, but neither line is operable or completely backfilled. There are no inspection records for any utilities run to the street. There has been no gas line run to the home from the street.
*The very small amount of work done since the directive was issued April 25th, 2025 [sic] does not constitute an extension of the directive period.
Additionally, [Respondent] has known about the abandonment allegation submitted to the Registrar for over 2 months and very little work has been completed.
(All emphasis in original.)
On May 20, 2025, Investigator Wiskow forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On May 22, 2025, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(A), and 32-1154(A)(22). Respondent was given until June 06, 2025, 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 05, 2025, the Registrar received Respondent’s timely Answer whereby Respondent denied abandoning the project, argued that workmanship was never alleged by Complainant, and opined that insufficient time had been afforded to address the Directive. Per Respondent, on or about July 12, 2022, Complainant and Respondent entered into a contract for Respondent to construct a residential structure on a vacant plot of land. Complainant had the plans for the new construction drafted and submitted to the City of Phoenix for approval. Complainant’s plans were approved, and a building permit was issued on or about August 15, 2022. Respondent began work at the jobsite but performance was delayed due to change orders and alterations to plans. In or around November 2024 it was determined the permit for water and sewer needed to be requested. On or about December 13, 2024, the lateral tap permit was issued to Complainant. Counsel for Respondent requested an extension of the Directive the same date the order was issued, but Investigator Wiskow tabled the request, as follows:
I will take a look at the attachments and get back to you next week. As far as the directive due date is concerned, it can be extended if appropriate progress is made during the directive period. The two most important words in 32-1154(A)(22) are “Take Action.” [sic]
(Emphasis added.)
Although Respondent argued the signed estimate clearly stated the roof would be asphalt shingle and connection of the gas utility was never part of the scope of work, and that the utility company was the only entity that can install a new gas line – a process that took approximately 6 weeks to complete, Investigator Wiskow never addressed Respondent’s extension request. Even though Respondent provided Investigator Wiskow with progress updates via photos on May 12, 2025, he declined to address its extension request and instead issued a Compliance Jobsite Inspection Notice. Despite Complainant’s presence being required by the Registrar, Investigator Wiskow proceeded with the inspection in Complainant’s absence. Ultimately, Respondent argued that the Citation charges “lacked merit” and that it should be dismissed.
On June 30, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 21, 2026. Per the July 07, 2025, 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)(1)
Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(A)
Charge 3: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on his own behalf and called Investigator Carter and Javier Saucedo as witnesses. Crystal Deitz-Garcia testified on behalf of Respondent. The substantive evidence of record is as follows:
Complainant owns property located at 2020 N. 17th Pl. Phoenix, Arizona 85006.
On July 07, 2022, the parties entered into a $670,447.00 contract for the construction of a residential structure and landscaping. Scope of work for the project included all materials, labor, and equipment for construction of foundation, termite treatments, electrical, plumbing, connection to city water, power, and sewer sources, framing, roofing of “tar paper and [sic] asphalt shingles,” HVAC, drywall, insulation, windows, doors, cabinetry, flooring, lighting, fixtures, countertops, paint, hardware, garage doors, siding, glass enclosures, and a driveway. An estimated date of completion was not included in the parties’ agreement. Work on the project commenced on or about August 01, 2022.
On October 24, 2022, the parties executed a Conditional Waiver and Release on Progress Payment for $167,611.75.
On January 27, 2023, the parties executed a Conditional Waiver and Release on Progress Payment for $70,730.00.
On March 31, 2023, the parties executed a Conditional Waiver and Release on Progress Payment for $58,150.00.
On December 20, 2023, the parties executed a Conditional Waiver and Release on Progress Payment for $88,400.00.
On April 06, 2024, the parties executed a Conditional Waiver and Release on Progress Payment for $66,810.00.
On May 21, 2024, the parties executed a Conditional Waiver and Release on Progress Payment for $29,990.00.
On April 25, 2025, Respondent requested an extension of the Directive’s compliance period to May 30, 2025, opining that the 3 weeks afforded by Investigator Wiskow was insufficient to “complete connection of the water, sewer, and get a certificate of occupancy” and argued that the tasks were “impossible to complete.” Respondent also argued that a litany of inspections had to be completed by the city before the sewer could be connected, and that the water could not be connected before the sewer was complete. Additionally, Respondent argued that it had been required to order materials from city approved vendors, which would not arrive on site until May 10, 2025. Per Respondent, it was diligently working to complete the underlying project, but was operating at the mercy of the city.
Between April 25, 2025, and May 12, 2025, Respondent performed nominal work on the project. A settlement agreement was not executed between the parties by the expiration of the Directive’s compliance period.
On May 12, 2025, Respondent renewed its Directive extension request to Investigator Wiskow. No response was issued.
On May 20, 2025, Investigator Wiskow instructed Complainant to file a new complaint if he wanted the Registrar to investigate alleged workmanship issues.
At no point in time during the Directive’s compliance period did Respondent allege a denial of access to the project site.
Additional Evidence
Complainant testified that he obtained construction plans from a designer and architect prior to hiring Respondent, and that he had submitted those plans to the city for approval and permit issuance. Complainant paid Respondent a total of $481,691.75 towards the project.
Mr. Saucedo testified that he was hired by Complainant in June 2025 to finish the underlying project. After he obtained a home inspection report it took Mr. Saucedo 2 weeks to repair the water line, and 2 months to repair the sewer line – which was delayed due to permit issues. A Certificate of Occupancy has yet to be issued for the residence.
Mr. Carter (“Investigator Carter”) is an investigator for the Registrar. Investigator Carter testified he was not involved in Complaint No. 2025-00180 and solely reviewed Investigator Wiskow’s case file in preparation to represent the Registrar at hearing. Per Investigator Carter, the Register is not permitted to require its licensees to perform work outside the scope of their contractual agreements with clients but noted that licensees must complete work they start. Investigator Carter testified that it is a common practice for the Registrar to provide a relatively short period of time for a licensee to complete tasks delineated in a Directive, so it may be determined if the licensee has made a good faith attempt to complete the tasks in a timely manner. Investigator Carter testified that if so, it is common for an investigator to grant a request for additional time because it is warranted and sufficient work has been performed. Investigator Carter acknowledged that Investigator Wiskow neither denied nor approved Respondent’s Directive extension request and further acknowledged that Investigator Wiskow proceeded with the compliance jobsite inspection in Complainant’s absence despite the party’s required attendance.
Ms. Deitz-Garcia testified that she performs administrative duties for Respondent and that her husband, Ruben Garcia, performs onsite construction on behalf of Respondent. Per Deitz-Garcia, because Complainant applied for permits for the project it did not have online access to review their statuses. Additionally, Respondent informed Investigator Wiskow “multiple times” that Respondent was only able to install the water and sewer lines was via an alley adjacent to the property that was not consistently accessible.
Closing Arguments
Respondent’s closing
In closing, Respondent argued that Charge 1 must be dismissed because it never abandoned the project. Respondent argued that the alleged last day of work performed could not have been November 01, 2024, because the city did not issue the water/sewer permit until December 13, 2024, which means that Respondent could not have performed or ceased work prior to that date. Respondent also argued that Investigator Wiskow’s compliance jobsite inspection notes confirmed that Respondent performed HVAC, window repair, electrical fixture repair, and work on the water/sewer lines during the Directive’s compliance period. Respondent also argued that due to the project site’s physical configuration that simultaneous trench and interior work physically impossible and required sequencing– as evidenced by photographs Respondent supplied to Investigator Wiskow prior to the expiration of the Directive’s compliance period. Respondent further argued that Mr. Saucedo failure to obtain a COO and a $188,755.25 outstanding balanced owed on the parties’ contract establishes that abandonment was not plausible.
Respondent argued that Charge 2 must be dismissed because workmanship was never alleged in Complaint No. 2025-00180, Complainant was specifically instructed by Investigator Wiskow to file a new complaint regarding any alleged workmanship issues on the project, and Investigator Carter could not provide a rational basis for its inclusion in the Citation.
Respondent argued that Charge 3 must be dismissed because the Registrar was not lawfully permitted to compel Respondent to perform work outside the scope of its contract with Complainant, and Investigator Wiskow failed to grant Respondent’s Directive extension requests despite evidence of the licensee’s “appropriate progress” on the project.
Ultimately, Respondent beseeched the Tribunal to dismiss Complaint No. 2025-00180 on the grounds that the Citation was improperly issued.
Complainant’s closing
In closing, Complainant argued that License No. 296418 should be subject to discipline pursuant to Ariz. Rev. Stat. § 32-1154(B) for violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3), and 32-1154(A)(22). Complainant argued that Investigator Wiskow was not obligated to extend the Directive based on Respondent’s lack of performance. No evidence of substantive change orders or delays relating thereto. Moreover, the city’s Inspection Report clearly shows that the last communication between Respondent and the local building authority regarding an inspection, prior to the filing of Complainant No. 2025-00180, was on June 24, 2024, whereby a city inspector partially passed the temporary power. Per the Inspection Report, the next communication between Respondent and the local building authority was on April 15, 2025. On April 16, 2025, the Respondent met with a city inspector to receive guidance on the proper installation of utilities. No further communications between Respondent and the city occurred prior to the issuance of the Citation. As such, Complainant opined that Respondent is subject to discipline for abandoning the contract, failing to perform work in a professional and workmanlike manner, and for failing to timely comply with the Directive without legal justification or excuse.
CONCLUSIONS OF LAW
The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.
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)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”
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)(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.
Statutes should be interpreted to provide a fair and sensible result.
Statutes shall be liberally construed to affect their objects and to promote justice.
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 substantive facts of record in this matter are clear.
It is clear that the parties entered a $670,447.00 contract for the construction of a residential structure and landscaping, of which a total of $481,691.75 was paid by Complainant to Respondent. It is also clear that Respondent commenced work on the project on or about August 01, 2022, and that Complaint No. 2025-00180 was filed by Complainant on January 08, 2025. It is also clear that although Investigator Wiskow substantiated all 3 complaint items, he removed the second at the compliance jobsite inspection – after having essentially ignored Respondent’s 2 requests to extend the Directive’s compliance period. It is further clear that although Respondent’s license was active and in good standing with the Registrar during the Directive’s compliance period, Respondent did not settle with Complainant or timely address substantiated complaint items 1 or 3, both of which were only alleged violations of Ariz. Rev. Stat. § 32-1154(A)(1), by May 12, 2025.
Therefore, the only remaining issues to address are whether Respondent raised sufficient justification or excuse for failing to appropriately remediate substantiated complaint items 1 or 3 per the Directive or enter into a settlement agreement with Complainant. These are affirmative defenses that Respondent bears the burden to establish. Here, the record reflects that while the residential structure at issue had not been completed by the time the underlying complaint was filed the allegation of abandonment has not been established. Additionally, the record reflects that the installation of a gas line was not a part of the parties’ agreement and was improperly included as a scope of work that should have been addressed during the compliance jobsite inspection. The fact that the water and sewer lines had been installed from the road to the property evinces that the project had not been abandoned. A reasonably prudent mind could argue that Respondent’s failure to backfill the water and sewer lines or make either operable are workmanship issues – issues that Complainant could have filed in a new complaint to the Registrar as instructed by Investigator Wiskow, but do not satisfy the components of statutory abandonment.
Notably, it is the opinion of this Tribunal that a delay in completion of a project does not inherently amount to an act of abandonment. While Respondent clearly did not adhere to requirements set forth in Ariz. Rev. Stat. § 32-1158(A)(4), which could arguably be a violation of Ariz. Admin. Code R4-9-108(A), and therefore a violation of Ariz. Rev. Stat. § 32-1154(A)(3) given the facts of this case, because Investigator Wiskow did not issue a Warning Letter to Respondent and the charge was not included in the Citation, it would infringe upon Respondent’s due process rights to find the licensee in violation of any of those statutes or rules.
Because Respondent has provided sufficient evidence to rebut the allegation of a violation of Ariz. Rev. Stat. § 32-1154(A)(1) and establish that the charge of a violation of Ariz. Rev. Stat. § 32-1154(A)(3) was improper, it follows that no violation of Ariz. Rev. Stat. § 32-1154(A)(22) can exist.
Thusly, as Complainant has failed to sustain its burden of proof in these proceedings, the undersign concludes that Complaint No. 2025-00180 must be dismissed.
RECOMMENDED ORDER
In consideration of the foregoing,
IT IS ORDERED that Complaint No. 2025-00180 be dismissed with prejudice.
IT IS FURTHER ORDERED that the Registrar not impose any discipline against License No. 296418 as a result of this action.
NOTICE
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, June 01, 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 Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
Jay R. Graif, Esq.
Freeman Mathis & Gary LLP, Counsel for Complainant
6720 N. Scottsdale Rd,. Ste. 310
Scottsdale, AZ 85253
[email redacted]
Ryan D. Bailey, Esq.
Stone Canyon Law PLC, Counsel for Respondent
502 S College Ave, Ste. 205
Tempe, AZ 85281
[email redacted]
By: OAH Staff