ALJDEC - Licensing

2025A-02092-CHC-ROC · Registrar of Contractors · 2025-08-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Hannah Robertson,

COMPLAINANT,

v.

New Modern LLC

ROC License No. 324446,

RESPONDENT.

No. 2025A-02092-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 24, 2025 at 9:00 AM.

APPEARANCES: Hannah Robertson (“Complainant”) appeared on her own behalf. No appearance(s) by or on behalf of New Modern LLC (“Respondent”). Charles Riddlehoover appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

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, Complainant Exhibits 1-3 & 5, and June 16, 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 02, 2019, the Registrar issued License No. 324446 General Residential B-3 Remodeling and Repair contracting license to Respondent. The license has been renewed through May 31, 2027. Schulyer C. Pierce is listed as the Qualifying Party, Manager, and Signer on the license. Respondent’s address of record for the license is 1640 W. Friess Dr. Phoenix, Arizona 85023. Respondent has an active $9,000.00 surety bond on the license issued by American Contractors Indemnity Company, effective August 29, 2024. The license has not been previously disciplined by the Registrar, nor have there been 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 March 01, 2025, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 324446 alleging poor work of an $8,850.00 residential flooring installation project. Attached to her complaint, Complainant included a brief summery explaining that she was not provided a written contract by Respondent, and proof of payment to Respondent for the work performed. The Registrar designated it Complaint No. 2025-02092 and reassigned the matter to Charles Riddlehoover (“Investigator Riddlehoover”) for investigation.

On March 12, 2025, Investigator Riddlehoover issued a Complaint Notification Letter to Respondent to advise that the Registrar received Complaint No. 2025-02092, and to request that Respondent submit a written response within ten (10) days.

On April 08, 2025, Investigator Riddlehoover issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on April 15, 2025, at 9:30 a.m. Correspondence was not returned as undeliverable to Respondent.

Respondent did not provide a written reply to the underlying complaint, or request to inspect the complained-of work.

On June 11, 2024, Investigator Riddlehoover inspected the work that had been performed on the project to date. Respondent was not present. Investigator Riddlehoover also reviewed the contract-related correspondence between the parties, material installation guide, and took 25 photographs of the project site. When he was finished, Investigator Riddlehoover drafted his Inspection Notes. Ultimately, Investigator Riddlehoover derived a single distinct complaint item from Complaint No. 2025-02092, which he substantiated based on his firsthand observations. Specifically, Investigator Riddlehoover determined that complaint item 1 fell below the Registrar’s minimum workmanship standards, as the flooring was lifting and cupping in several areas and was missing underlayment and a vapor barrier, which required correction and/or completion by Respondent.

On April 16, 2025, Investigator Riddlehoover issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on May 02, 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 or about May 05, 2025, Investigator Riddlehoover forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On May 09, 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 May 24, 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 May 24, 2025, the Registrar received an untimely Answer on behalf of Respondent whereby Mr. Pierce denied all alleged statutory violations and argued that Respondent only provided labor on the project, and blamed the flooring seller for failure to advise Complainant on the need for underlayment and/or a vapor barrier. Additionally, Mr. Pierce alleged that he warned Complainant about the need for both, but that Complainant had denied due to cost-related concerns. Per Mr. Pierce, Respondent offered to remove and reinstall the flooring at no cost, if Complainant had agreed to purchase more flooring material(s).

On June 02, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on July 24, 2025. Per the June 16, 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 Riddlehoover as a witness. The substantive evidence of record is as follows:

Complainant owns residential property located at 12465 E. Mingus Vista Dr. Prescott Valley, Arizona 86315.

On or about March 15, 2023, the parties entered into an $8,850.00 floor installation agreement whereby Complainant agreed to supply Respondent with flooring materials, and Respondent agreed to perform demolition of Complainant’s prior floor and install new flooring and baseboards.

On April 04, 2023, Complainant purchased $5,846.29 worth of luxury vinyl plank flooring from Carpet Closeouts in Phoenix, Arizona.

On or about April 06, 2023, Respondent commenced work on the project.

On or about April 13, 2023, Respondent completed the project.

On April 14, 2023, Complainant tendered a $3,500.00 payment to Respondent for the project.

On April 17, 2023, Complainant tendered a $3,500.00 payment to Respondent for the project.

On April 20, 2023, Complainant tendered a $1,850.00 payment to Respondent for the project, paying for the project in full.

License No. 324446 was active and in good standing with the Registrar between April 16, 2025, and May 02, 2025.

Respondent did not schedule or perform any corrective work on substantiated complaint item 1 during the Directive’s compliance period. Respondent did not request an extension of the Directive’s compliance period prior to May 02, 2025, allege a denial of access to the project site by that date, or enter into a settlement agreement with Complainant.

On May 03, 2025, Complainant contacted Investigator Riddlehoover to provide notice of Respondent’s noncompliance with the Directive, and to request that the matter be escalated to the Registrar’s legal department.

Additional Evidence

From March 12, 2025, through May 02, 2025, neither the Registrar nor Complainant had received any communication(s) from or on behalf Respondent.

Investigator Riddlehoover testified that as the licensed party, Respondent was responsible for performing construction in compliance with the Registrar’s minimum workmanship standards; including, utilizing underlayment and a vapor barrier to install flooring, or refusing to undertake the project because the owner declined to move forward in an appropriate manner. Per Investigator Riddlehoover, Respondent adopted the surface area of the project once the underlying work commenced, and as such, Respondent was required to make the area sound for construction before commencing substantive work. Respondent could not discharge its workmanship duties due to budget concerns of a project owner, or transfer its duties on to retailer for not selling said owner supplementary materials necessary to ensure the flooring at issue was installed in a workmanlike manner. No evidence existed to substantiate an allegation that the flooring Complainant purchased was defective.

Complainant testified that although she had provided Mr. Pierce with the flooring manufacturer’s installation guidelines and specifications, Respondent never advised her that underlayment and/or a vapor barrier were required elements of the project. Complainant denied ever telling Mr. Pierce that her flooring project was “on a budget” that she could not “go over.”

Closing Arguments

In closing, Complainant argued that she would have paid additional monies for the installation of underlayment and a vapor barrier, had Respondent advised her to do so in order for her project to be successful. Complainant opined that because Respondent’s flooring installation was not per the manufacturer’s specifications, which resulted in damage throughout project site, Respondent should be required to cover the cost of work required to remediate its deficiencies.

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) 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 an $8,850.00 residential flooring installation agreement, which Complainant paid in full. It is also undisputed that the work Respondent did perform failed to meet the Registrar’s minimum workmanship standards. It is further undisputed that Respondent did not attempt comply with the Registrar’s Directive, or request an extension thereof.

Therefore, the only remaining issue to address is whether Respondent raised sufficient justification or excuse for failing to enter into a settlement agreement with Complainant to satisfy the Registrar’s Directive, or enter ask for an extension thereof prior to the expiration of the corrective order’s compliance period. 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 act in any degree and had no affirmative defense(s) for doing so. It is clear from the record that Respondent had no communication whatsoever with the Registrar during the entire pendency of Complaint No. 2025-02092 before the underlying Citation was issued by their legal department, which is a factor in aggravation. 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 violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 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 New Modern LLC, ROC License No. 324446, shall be suspended for five (5) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

It is further recommended that the Registrar require Respondent to pay the sum total of $500.00 (five hundred dollars) 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(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 06, 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]

Hannah Robertson, Complainant

1031 E. Monona Dr.

Phoenix, AZ 85024

[email redacted]

New Modern LLC, Respondent

c/o Schulyer C. Pierce, Agent

1640 W. Friess Dr.

Phoenix, AZ 85023

[email redacted]

By: OAH Staff