ALJDEC decisions subject to certification as final

2025A-02106-RFA-LS-ROC · Registrar of Contractors · 2026-07-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Mona Madani,

COMPLAINANT,

v.

A.F.O.N. Builder, LLC

ROC License No. 325803,

RESPONDENT.

No. 2025A-02106-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 16, 2026 at 1:00 PM.

APPEARANCES: Assistant Attorney General Mona Baskin, Esq. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with Tedi Quezada as a witness. Mona Madani (“Complainant”) appeared on her own behalf. No appearance(s) by or on behalf of A.F.O.N. Builder, LLC (“Respondent”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Appealable Agency Action (“Notice of Action”), Hearing Order issued April 01, 2026, Continued Hearing Order issued May 05, 2026, Registrar Exhibits 1-13, and Complainant Exhibit D 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 August 14, 2019, the Registrar issued License No. 325803 to Respondent for General Dual KB-2 Residential and Small Commercial contracting. Although the license was renewed through August 31, 2027, it was suspended by the Registrar on August 05, 2025, due to an insufficient surety bond. Amando Olivarria is the Qualifying Party and Member on the license. Respondent’s address of record for the license is 2051 E. Canada St. Tucson, Arizona 85706. Respondent had a $14,000.00 surety bond for the license issued by Merchants Bonding Company on July 01, 2019, but it was cancelled after a $9,000.00 payout. The license reflects discipline by the Registrar on one (1) prior occasion, which is presumed to be related to this matter.

On or about March 02, 2025, the Registrar received a complaint from Complainant against Respondent’s License No. 325803 alleging abandonment and poor workmanship of a $500,000.00 residential remodel project. The Registrar designated it Complaint No. 2025-02106 and assigned to Arlo Houston (“Investigator Houston”) for investigation.

On March 21, 2025, Investigator Houston issued a 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 March 31, 2025, Investigator Houston issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s alleged 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 March 31, 2025, Investigator Houston issued a Warning Letter to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(9) and (13) for aiding and abetting and knowingly entering into a contract for unlicensed work, a potential class 1 misdemeanor per Ariz. Rev. Stat. § 32-1164(A)(1).

On April 21, 2025, Investigator Houston conducted a review of the contract executed between the parties. Respondent was not present. However, Investigator Houston was unable to complete the inspection as noted as follows in his Jobsite Inspection Notes:

Upon inspection at the initial JSI the respondent was not present as [Complainant] had called the Pima County Sheriff’s Dept. (PCSD) on [Respondent] and alleged fraud by [Respondent]. The PCSD responded during the JSI and the JSI was cut short without being able to visually inspect all allegations at the initial JSI as [Complainant] decided to disengage from the scheduled JSI to file a report with PCSD. Since [Complainant] had filed addendum items the remainder of the allegations and the addendum items were visually inspected at the AJSI. [Respondent] designated his brother, Gilberto Olivarria, to be present for him at the AJSI.

On May 13, 2025, Investigator Houston completed an addendum jobsite inspection of the project and took 9 photographs. When he was finished, Investigator Houston drafted his Addendum Jobsite Inspection Notes. Ultimately, Investigator Houston derived a total of eleven (11) separate and distinct complaint items from Complaint No. 2024-12218, three (3) of which he was able to substantiate based on his firsthand observations. Specifically, Investigator Houston concluded that the work Respondent had performed on complaint items 5 and 9-10 failed to meet the Registrar’s minimum workmanship standards, and specifically noted the following:

Complaint Item 5: Verified for remaining doors not being installed. Not verified for money amount as that part of this item represents a disputed money amount which the Registrar lacks the authority and jurisdiction to resolve.

Upon inspection at the addendum JSI conducted on 5/13/2025 I observed that the complainant already much of the work performed by others for this item as they had many doors installed by separately hired contractors.

However, there were closet doors and a pantry door which were not yet installed by the respondent.

Additionally, subcontracted work for this item by unlicensed entity/individual represents aiding and abetting by the respondent

Complaint Item 9: Verified. [A]rea of crooked/misaligned glass tile in the bathroom. [W]ork performed for this item by unlicensed entity/individual represents aiding and abetting by the respondent.

Complaint Item 10: Verified. The remodeling activity/work at the property are all building permit required activities which respondent did not obtain building permits for before performing work.

(Emphasis in original.)

On May 21, 2025, Investigator Houston issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegations against License No. 325803. Respondent was further put on notice that it had until 5:00 p.m. on June 13, 2025, to notify the Registrar of its compliance with the Directive by remedying the identified deficiencies by “appropriate means” or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A), 32-1154(A)(22), and 32-1154(E). Respondent was specifically advised as follows:

The Respondents invoices (contracts) do not include all of the items of the provisions of A.R.S. § 32-1158. The Respondent is required to submit an updated version of a contract template for future use to the Registrar that complies with the provisions of A.R.S. § 32-1158.

The Respondent is to obtain the required building permit(s) from Pima County Development Services (PCDS) for the remodeling activities performed by the Respondent, correct work as required by PCDS, and provide record of passed inspections to the Registrar.

If the Respondent uses subcontractors for any work at the Complainants property the subcontractors must be appropriately licensed by the Registrar.

(All emphasis and errors in original.)

Correspondence was not returned as undeliverable to Respondent.

On May 22, 2025, Investigator Houston issued an Amended Written Directive from the Registrar (“Amended Directive”) to make corrections to instructions for substantiated compliant item 5.

On June 20, 2025, the Registrar issued a Citation to Respondent for an 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)(9)(a), 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until July 05, 2025, to respond with its Answer. Respondent was specifically instructed that failure to file a timely Answer would be deemed an admission of the acts charged per Ariz. Rev. Stat. § 32-1155(C), which could result in the suspension or revocation of Respondent’s license.

On an unknown date, Respondent submitted a timely Answer to the Registrar.

On July 16, 2025, the Registrar referred 2025A-02106-CHC-ROC to the Office of Administrative Hearings (“OAH”), an independent state agency, for adjudication. Per the Notice of Hearing on Contested Case (“Notice of Hearing”) the issue(s) to be determined were whether the Registrar had cause to discipline Respondent’s license based on the following charges:

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)(9)(a)

Charge 4: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158

Charge 5: A.R.S. § 32-1154(A)(22)

On September 04, 2025, an administrative evidentiary hearing took place at OAH before ALJ Vanella.

On August 02, 2023, ALJ Vanella issued a Recommended Decision suggesting that the Director of the Registrar suspend Respondent’s contracting license for ten (10) days due to established violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(b), 32-1154(A)(3), 32-1154(A)(9)(a), and 32-1154(A)(12); 32-1158. Respondent’s violation of Ariz. Rev. Stat. § 32-1154(22) was legally excused due to Complainant’s impermissible requirements and her threats to contact local law enforcement, and the United States Internal Revenue Service and Immigration and Customs Enforcement on Respondent’s tradesmen.

On September 26, 2025, OAH issued a Certification of Decision of Administrative Law Judge to the parties under Ariz. Rev. Stat. § 41-1092.08(I) which affirmed the Administrative Law Judge’s Recommended Decision per Respondent’s September 24, 2025, request. Neither party appealed the decision to a higher court of competent jurisdiction.

On or about January 31, 2026, the Registrar received Complainant’s petition for payment from the Residential Contractors’ Recovery Fund (“Fund”), pursuant to Ariz. Rev. Stat. §§ 32-1132(A) and 32-1154(G). Complainant listed the underlying contract date as August 10, 2023, totaling $500,000.00, which she paid in full, and avowed she received $9,000.00 from Respondent’s surety bond. Attached was a copy of Complainant’s Warranty Deed and affidavit from Complainant regarding the parties’ underlying contract, and a copy of the parties’ contract through Red Sky Consultants LLC with accompanying invoices and proof of payments. Complainant also attached a $31,758.23 repair bid from OpenEnclose and $28,630.00 repair bid from Window World Tucson.

On March 04, 2026, Complainant provided the Registrar with a $26,642.15 revised repair bid from OpenEnclose, and an additional $30,948.85 repair bid from Dales Company Inc.

On March 20, 2026, the Registrar issued a Notice of Administrative Award (“Notice of Award”) to the parties which held that Complainant was eligible to receive a $15,509.92 award from the Fund.

On March 20, 2026, the Registrar received a Request for Reconsideration/Administrative Review from Complainant wherein Complainant argued that $9,000.00 had been erroneously deducted from her proposed administrative award because the money was issued regarding a different contract she had with Respondent.

On March 25, 2026, the Registrar referred 2025A-02106-RFA-LS-ROC to OAH for an independent evidentiary hearing. Per the Notice of Action the issue for hearing was to determine whether Complainants’ award from the Fund was properly determined pursuant to Ariz. Rev. Stat. §§ 32-1132 to 32-1133.01 and 32-1154(F), as justified by the evidence.

On June 16, 2026, an administrative hearing in the above-captioned matter took place before OAH.

Hearing Evidence

At the hearing, the Registrar called Tedi Quezada as a witness. Complainant testified on her own behalf. The substantive evidence is as follows:

Complainant owns single family residential property located at 6540 N. Campbell Ave. Tucson, Arizona 85718.

On or about February 20, 2024, the parties entered into a $500,000.00 residential remodel contract. Complainant paid for the project in full.

Additional Evidence

Ms. Quezada is Legal Assistant II for the Registrar. Ms. Quezada testified that she made the determination that Complainants were eligible to access the Fund and also qualified for an administrative payout from the Fund because she had suffered “actual damages.” Specifically, Ms. Quezada determined the following:

Complainant owns and occupies the residential property at issue.

Respondent’s license was active and in good standing with the Registrar when the underlying contract was entered into, when Respondent performed the underlying work in question, as well as when Respondent first received payment from Complainant for the project.

Complainant paid the contract in full. There is no unpaid balance remaining.

As a result of Complaint No. 2025-02106 and being filed with the Registrar, ROC License No. 325803 was suspended for a period of ten (10) days by the Registrar. A civil penalty was not assessed.

Complainant’s assertion that she had multiple individual contracts with Respondent was not supported by documentation she provided in 2025A-02106-CHC-ROC. Said documents established that Complainant and Respondent executed a number of Change Orders that increased the scope of the underlying remodeling project. As such, the bond payout Complainant received from Respondent’s surety company was deducted from her actual damages calculation.

Ms. Quezada also verified with Investigator Houston that five (5) closet doors and one (1) pantry door were to be addressed by Respondent in the Directive, and that per Invoice #20 issued November 27, 2024, Douglas Fir 13⁄4 6-panel mirrorless doors were to be utilized for installation. Investigator Houston opined that inclusion of mirrored doors would be “excessive” and outside the scope of the parties’ agreement.

Ultimately, Ms. Quezada calculated Complainant’s compensable damages by deducting $7,248.31 from the $31,758.23 OpenEnclose repair bid to match the existing 12 interior doors of Complainant’s residence, and by deducting another $9,000.00 as a portion of the loss from other sources as required by Ariz. Rev. Stat. § 32-1132.01(F), resulting in an award amount of $15,509.92.

Ms. Quezada also testified that the purpose of the Fund was to make homeowners aggrieved by licensees “whole,” and that Ariz. Rev. Stat. § 32-1131 et seq. was specifically limited to the cost of actual construction labor and materials.

Complainant testified that she had multiple contracts with Respondent and denied having one large project with Respondent comprised of numerous subparts or subagreements. Complainant could not, however, articulate the dates of separate contracts, their specific scope(s) of work or amounts, or any documentation to corroborate her assertions.

Closing Arguments

In closing, Complainant argued that Respondent had been unjustly enriched by payments she tendered on their project and opined that the Registrar should award her $30,000.00 from the Fund.

In closing, the Registrar opined that Complainant failed to sustain her burden of proof and argued that the Notice of Award had been properly calculated and lawfully issued.

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 Notice of Action 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 OAH 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 OAH as well.

Complainant bears the burden of establishing by a preponderance of the evidence that the Registrar’s Recover Fund award was incorrect and/or improperly issued. Both the Registrar and Respondent bear the burden to establish factors in mitigation 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.”

Pursuant to Ariz. Rev. Stat. § 32-1131 et seq., in order to be eligible to access the Recovery Fund an applicant must meet specific eligibility criteria. An individual is eligible for an award from the residential contractors’ recovery fund if they both: (1) own residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance, and (2) actually occupy or intend to occupy the residential real property as the individual’s primary residence. Additionally, the applicant must have contracted with a residential contractor who was appropriately licensed either at the time of contract execution, when the first payment on the project was made, or when the work on the project first began.

Ariz. Rev. Stat. § 32-1154(F) provides that “if a contractor’s license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter the registrar may order payment from the residential contractors’ recovery fund to remedy the violation.”

Ariz. Rev. Stat § 32-1132.01 provides, in pertinent part, that an award from the Recovery Fund “[m]ay not exceed the actual damages suffered” and also “[m]ay not exceed an amount necessary to complete or repair a residential structure.” “Actual damages” means the reasonable cost of completing the contract and repairing the contractor’s defective performance, minus the part of the contract price still unpaid. The maximum individual award from the Recovery Fund is $30,000.00.

Statutes should be interpreted to provide a fair and sensible result. 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.” “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.

In the case at bar, however, a detailed factual analysis is not necessary because Complainant failed to present any compelling evidence at hearing. While it is accurate that the underlying property in question is owned by Complainant as a primary residence, that she paid for the underlying project in full, that Respondent’s license was active and in good standing with the Registrar during all relevant times, and License No. 325803 was disciplined by the Registrar in 2025A-02106-CHC-ROC, there is no credible or otherwise reliable evidence in the record to support a finding that Complainant’s compensable damages were miscalculated by the Fund.

Therefore, the undersigned Administrative Law Judge must conclude that Complainant was properly and lawfully awarded an administrative payout from the Fund.

Thusly, Complainant’s appeal must be denied.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that the Registrar affirm the Fund’s March 20, 2026, Notice of Award.

IT IS FURTHER RECOMMENDED that the Registrar dismiss Complainant’s appeal, with prejudice.

NOTICE

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, July 06, 2026.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

[email redacted]

Mona Baskin Esq., Assistant Attorney General

Office of the Attorney General, Counsel for the Registrar

2005 N. Central Ave.

Phoenix, AZ 85004

[email redacted]

[email redacted]

Mona Madani, Complainant

6540 N. Campbell Ave.

Tucson, AZ 85718

[email redacted]

A.F.O.N. Builder, LLC, Respondent

c/o Amado Olivarria, Agent

2051 E. Canada St.

Tucson, AZ 85706

[email redacted]

By: OAH Staff