ALJDEC - Licensing

2025A-01149-CHC-ROC · Registrar of Contractors · 2025-09-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jeffrey Meade,

COMPLAINANT,

v.

Arizona Elite Builders LLC

ROC License No. 312067,

RESPONDENT.

No. 2025A-01149-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 05, 2025 at 9:00 AM.

APPEARANCES: Christian Lestinsky, Esq. appeared on behalf of Jeffrey Meade (“Complainant”) with Complainant and Phillip Clark as witnesses. James Carter appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of Arizona Elite Builders LLC (“Respondent”).

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, July 02, 2025, Continued Hearing Order, Complainant Exhibit 3, and Respondent’s September 04, 2025, Notice of Voluntary License Cancellation 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 March 14, 2017, the Registrar issued License No. 312067 General Dual KB-1 contracting license to Respondent. Although the license was renewed through March 31, 2027, it was voluntarily cancelled by Respondent on August 23, 2025. Jacob Floyd Garrison is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 1457 W. Harvard Ave. Bldg. 1 Gilbert, Arizona 85233. Respondent has an active $14,000.00 surety bond on the license issued by Old Republic Surety Company, effective February 28, 2019. The license has no prior disciplinary record, save one (1) prior complaint that was settled or otherwise resolved against the license. Currently, there are eight (8) open complaints against the license; one of which is presumed to be related to the underlying complaint.

On February 06, 2025, the Registrar received a narrative complaint from Complainant alleging abandonment of residential garage and casita construction project against Respondent’s License No. 312067. The Registrar designated it Complaint No. 2025-01149 and assigned to James Carter. (“Investigator Carter”) for investigation.

On February 07, 2025, Investigator Carter issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on March 03, 2025, at 11:00 a.m. On February 24, 2025, the United States Postal Services returned mailed correspondence issued to Respondent back to the Registrar as undeliverable. Digital correspondence issued to Respondent was not returned as undeliverable.

On March 03, 2025, Investigator Carter inspected the work that had been performed on the project to date. Respondent was not present. Investigator Carter also reviewed the contract-related correspondence between the parties, and took 4 photographs of the project site. When he was finished, Investigator Carter drafted his Inspection Notes. Ultimately, Investigator Carter derived two (2) separate and distinct complaint items from Complaint No. 2025-01149, one (1) of which he substantiated against Respondent based on his firsthand observations. Specifically, Investigator Carter determined that complaint item 1 required corrective work by Respondent. Investigator Carter noted the following:

Respondent applied for the permit in 06/2024. Respondent is the designer of the plans and the local municipality has sent the plans back numerous time for correction. Respondent needs to complete the permitting process

(Emphasis added.)

On March 05, 2025, Investigator Carter issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated one of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on March 26, 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). Correspondence was not returned as undeliverable to Respondent.

On March 27, 2025, Investigator Carter forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On April 03, 2025, the Registrar issued a Citation to Respondent for alleged violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(1) and 32-1154(A)(22). Respondent was given until April 18, 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 18, 2025, the Registrar received Respondent’s timely Answer whereby Respondent generally denied both of the allegations at issue.

On April 21, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on June 11, 2025. Per the May 01, 2025, Notice of Hearing the issue(s) to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violation(s):

Charge 1: A.R.S. § 32-1154(A)(1)

Charge 2: A.R.S. § 32-1154(A)(22)

On September 04, 2025, Respondent submitted a Notice of Voluntary License Cancellation that noted, “Respondent will not appear at the hearing scheduled in this matter for September 5, 2025.”

Hearing Evidence

Complainant testified on his own behalf and called Phillip Clark and Investigator Carter as witnesses. Although afforded a five (5) minute grace period, Respondent failed to appear, request to appear via alternative means, and/or submit a Motion to Continue. The substantive evidence of record is as follows:

Complainant owns residential property located at 12825 W. Rovey Ave. Litchfield Park, Arizona 85340.

On or about September 23, 2023, the parties entered into a $328,828.04 garage and casita construction agreement. Per the terms of the agreement, Respondent was to submit plans and specifications to the local building authority and obtain permits for the project. In return, Complainant tendered $16,100.00 to Respondent for commencement of work.

On May 28, 2024, per Respondent’s request, Complainant tendered an additional $75,000.00 towards the project.

Work on the project never commenced because a building permit was never obtained for the project.

From March 05, 2025, through March 26, 2025, License No. 312067was active and in good standing with the Registrar, and appropriate to address substantiated complaint item 1.

Respondent’s limited communication with Investigator Carter during the investigation of Complaint No. 2025-01149, was an hour after the scheduled jobsite inspection whereby Mr. Garrison alleged he had miscalendared the meeting.

At no point in time did Respondent allege a denial of access to the project site during the Directive’s compliance period, or request an extension thereof.

Additional Evidence

Investigator Carter testified that he contacted the local building authority and confirmed with Mr. Clark, Development and Planning Manager for Maricopa County Planning and Development, that Respondent submitted a plan and five (5) revisions, none of which were approved. This information directly contradicted Mr. Garrison’s avowal to the Registrar on March 05, 2025, that “the county is the reason for the delays,” and because no proof of delay was ever submitted to the Registrar.

Mr. Clark testified that on or about March 11, 2025, Respondent’s permit request was accidentally granted, and withdrawn about ten (10) days later and placed back in queue for review. A permit was finally issued for the project on April 18, 2025.

Complainant testified that he never received a refund from Respondent or entered into a settlement agreement by March 26, 2025, and that Respondent did not perform any substantive work on the project on or after April 18, 2025.

Closing Arguments

In closing, Complainant argued that although Respondent was given $91,100.00 towards the underlying project, it took an unreasonable amount of time for Respondent to obtain a permit, and Respondent’s lack of substantive performance was tantamount to abandonment. Complainant opined that Respondent’s voluntary withdrawal of License No. 312067 was an untoward attempt to shirk its contractual duties and professional duties as a licensee of the Registrar. Complainant opined that due to the egregiousness of Respondent’s conduct, revocation was appropriate.

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)(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)(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 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 entered into garage and casita construction agreement in 2023, and that Respondent received $91,100.00 from Complainant towards the project. It is also undisputed that although Respondent was required to obtain a permit for the project by the Registrar, Respondent failed to comply with the Directive or ask for an extension thereof. It is also undisputed that no substantial work was ever performed on the project. It is further undisputed that Respondent never entered into a settlement agreement with Complainant regarding the underlying dispute.

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 timely obtain a building permit in order to commence Complainant’s project. 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. Respondent did not sustain its burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project. The evidentiary record in this matter reflects that Respondent abandoned the project and failed to comply with the Registrar’s Directive, and had no affirmative defense(s) in the record. Although a permit was issued twenty-three (23) days after the expiration of the Directive, the lateness is neither justified nor excused. Additionally, the record disturbingly reflects that Mr. Garrison was untruthful with Investigator Carter regarding the delay of the permit at issue. Respondent’s absence from this administrative proceeding, in light of its voluntary withdrawal, is a factor in aggravation and establishes Respondent’s unwillingness to submit to regulation by the Registrar.

Because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(1) and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license – which the Registrar maintains personal and subject matter jurisdiction over, regardless of status.

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 Arizona Elite Builders LLC, ROC License No. 312067, shall be revoked.

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, September 12, 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]

James Hanson, Esq.

Christian Lestinsky, Esq.

Lang Thal King & Hanson PC, Counsel for Complainant

6730 N. Scottsdale Rd., Ste. 101

Scottsdale, AZ 85253

[email redacted]

[email redacted]

[email redacted]

Arizona Elite Builders LLC, Respondent

c/o Jacob Floyd Garrison, Agent

1457 W. Harvard Ave., Bldg. 1

Gilbert, AZ 85233

[email redacted]

Courtesy copy issued to:

Chase E. Halsey, Esq.

Murphy Cordier Casale Axel, Counsel for Respondent

4627 N. 32nd St., Ste. 150

Phoenix, AZ 85018

[email redacted]

By: OAH Staff