ALJDEC - Licensing

2025A-00840-CHC-ROC · Registrar of Contractors · 2025-06-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ann Watrous,

COMPLAINANT,

v.

Black Hill Fabrication LLC,

ROC License No. 353006,

RESPONDENT.

No. 2025A-00840-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 19, 2025 at 9:00 AM.

APPEARANCES: Ann Watrous (“Complainant”) appeared on her own behalf. Arlo Houston appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of Black Hill Fabrication LLC (“Respondent”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the referring agency’s attached administrative file, and April 18, 2025, Minute Entry – Granting Continuance 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 June 25, 2024, the Registrar issued ROC License No. 353006 Specialty Dual CR-24 contracting license to Respondent. The license has been renewed through June 30, 2026. The license lists Christopher Navarro as its Qualifying Party and Member. Respondent’s address of record for the license is 4343 E. Illinois Tucson, Arizona 85714. Respondent has an active $6,750.00 surety bond on the license issued by RLI Insurance Company, effective June 25, 2024. The license has never been disciplined by the Registrar, but currently has had two (2) open complaints against it; one of which is presumed to be related to this matter.

On or about January 24, 2025, the Registrar received a brief narrative complaint from Complainant against ROC License No. 353006 alleging poor work regarding a residential new build. The Registrar designated it Complaint No. 2025-00840 and assigned the matter to Arlo Houston (“Investigator Houston”) for investigation.

On January 24, 2025, Investigator Houston issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on February 13, 2025, at 11:00 a.m. Correspondence was not returned as undeliverable to Respondent.

Respondent did not provide a written response to Complaint No. 2025-00840, or request to inspect the work complained of.

On January 24, 2025, Investigator Houston 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 February 13, 2025, Investigator Houston inspected the work that had been performed on the project to date. Respondent was present. Investigator Houston also reviewed the contract-related correspondence between the parties, and took 8 photographs of the project site. When he was finished, Investigator Houston drafted his Inspection Notes. Ultimately, Investigator Houston derived six (6) separate and distinct complaint items from Complaint No. 2025-00840, three (3) of which he substantiated based on his firsthand observations. Specifically, Investigator Houston determined that complaint items 2, 4 and 6 fell below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent.

On February 21, 2025, Investigator Houston issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated half of Complainant’s complaint allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on March 12, 2025, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A) and 32-1154(E). Respondent was further advised that its contract with Complainant did not comply with provisions 1, 4, and 9 of Ariz. Rev. Stat. § 32-1158. As such, Respondent was also required to submit an updated contract template to the Registrar to establish statutory compliance. Correspondence was not returned as undeliverable to Respondent.

On March 06, 2025, Investigator Houston issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on March 13, 2025, at 11:30 a.m. Correspondence was not returned as undeliverable to Respondent.

On March 13, 2025, Investigator Houston inspected the corrective work that had been performed on the project and took 14 photos. Respondent was not present. When he was finished, Investigator Houston drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Anderson determined that Respondent had satisfactorily remediated complaint item 2, but that complaint items 2 and 4 remained outstanding.

On March 14, 2025, Investigator Houston forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation, whereby he noted that Respondent did not comply with the Directive, but had provided him with a satisfactory updated contract template.

On March 18, 2025, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). Respondent was given until April 02, 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 April 01, 2025, the Registrar received a timely Answer on behalf of Respondent, whereby Respondent argued that the surface area of its installation site was “poor,” “unsafe,” and “unstable.”

On April 02, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on May 20, 2025. Per the April 10, 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)(3) – A.A.C. R4-9-108(a)

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Houston as a witness. The substantive evidence of record is as follows:

Complainant owns residential property located at 9421 E. Lorain Pl. Tucson, Arizona 85710.

On or about July 09, 2024, Complainant entered into a $6,534.00 contract for the demolition and removal of a wooden fence, and installation of a 6’ corrugated metal fence with a 97.5” x 7’ side gate.

Work on the project commenced September 11, 2024, and stopped on September 14, 2024. When Respondent left the project site on September 14, 2024, the project was not complete. Respondent was scheduled to return the following day to remove the demolished wooden fence, but did not. Complainant phoned and texted Respondent through September 23, 2024, to schedule work completion, but Respondent did not reply.

Complainant filed a complaint with the Better Business Bureau, which did not result in resolution.

During the jobsite inspection for Complaint No. 2025-00840, Investigator Houston identified each substantiated complaint item for the parties and took accompanying photographs. Investigator Houston’s jobsite inspection notes and photographs were not provided to the parties, but were available for dissemination upon request.

Between February 21, 2025, and March 12, 2025, Respondent’s license remained active and in good standing with the Registrar. During that time, Respondent did not petition the Registrar for an extension of the Directive’s compliance period or allege a denial of access to the project site.

On March 11, 2025, Respondent remediated substantiated complaint item 2.

The parties did not enter into a settlement agreement regarding outstanding complaint items 4 and/or 6 by March 12, 2025.

Additional Evidence

Investigator Houston testified that Respondent accepted the surface area of the installation site once construction began, and noted that Respondent’s contract did not contain any disclaimers or advisements to Complainant regarding surface area instability.

Complainant testified that Respondent failed to install the $850.00 side gate included in their contract, and although she paid the contract price in full to Respondent she was not refunded or otherwise compensated.

Closing Arguments

In closing, Complainant argued that Respondent’s poor workmanship and abandonment of her project left her with a lack of security, and unfairly saddled her with demolition remnants that she had to address herself despite her contract with Respondent including removal of her old fence. Per Complainant, discipline against ROC License No. 353006 was warranted by the Registrar because Respondent left her with a “floating abomination” that created multiple safety hazards.

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.

The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from the Registrar as well.

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)(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.

Ariz. Rev. Stat. § 32-1154(E) provides, in pertinent parts, that the Registrar 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 provides that “[n]o 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.”

Ariz. Rev. Stat. § 32-1156.01 provides that after a hearing 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.

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 clear.

It is clear from the record that the parties had a construction contract regarding the demolition and removal of Complainant’s wooden fence, and installation of new metal fence with a gate. It is also clear from the record that the contract was paid in full. The record also reflects that Respondent did not complete the gate installation and that there were a number of deficiencies in Respondent’s work that required correction, only some of which Respondent successfully remediated prior to the expiration of the Registrar’s Directive in this matter.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and complete Complainant’s project per contract. This is an affirmative defense 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, Respondent did not sustain its burden. No explanation was offered to excuses or otherwise justify why Respondent did not timely remediate complaint items 4 and 6 between February 21, 2025, and March 12, 2025; be it performing the work itself, hiring an appropriately licensed subcontractor to perform the work, or entering into a financial settlement agreement with Complainant. No evidence was presented to explain why Respondent did not ask the Investigator Houston for an extension of the Directive’s compliance period.

Notably, Respondent’s absence from this administrative proceeding is also a factor in aggravation, as it evinces the licensee’s unwillingness to be regulated by the Registrar.

Because Complainant has established Respondent’s statutory violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established cause for the Registrar to take disciplinary action against ROC License No. 353006. Additionally, because Complainant has established that she paid for materials and service that she did not receive, she has also established grounds to receive an order of restitution in this matter.

Complainant may petition the Registrar’s Recovery Fund for financial recompense in this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, ROC License No. 353006, as issued to Respondent Black Hill Fabrication LLC, be suspended by the Registrar for three (3) days for violating Ariz. Rev. Stat. §§ 32-1154(A)(3) and (A)(22).

IT IS FURTHER RECOMMENDED that pursuant to Ariz. Rev. Stat. § 32-1156.01 Respondent be required to pay the sum total of $850.00 (eight hundred fifty dollars) in certified funds to Complainant as restitution for failing to install a gate per their contract or refund the associate cost.

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $100.00 (one hundred dollars) in certified funds pursuant to Ariz. Rev. Stat. § 32-1154(E) as a civil penalty.

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 Order, that no future license 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(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.

Done this day, June 27, 2025.

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]

Ann Watrous, Complainant

9421 E. Lorain Pl.

Tucson, AZ 85710

[email redacted]

Black Hill Fabrication LLC, Respondent

c/o Christopher Navarro, Agent

4343 E. Illinois St.

Tucson, AZ 85714

[email redacted]

By: OAH Staff