ALJDEC - Licensing

2025A-02332-CHC-ROC · Registrar of Contractors · 2025-11-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Paul Gibbs Ryan,

COMPLAINANT,

v.

JML COATING LLC

ROC License No. 269277,

RESPONDENT.

No. 2025A-02332-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: November 18, 2025 at 1:00 PM.

APPEARANCES: Paul Gibbs Ryan (“Complainant”) appeared on his own behalf. Joseph Lovato appeared on behalf of JML Coating LLC (“Respondent”). Mark Nipp 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 Registrar’s attached agency file, October 22, 2025, Hearing Order, and Complainant Exhibit 1 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 December 13, 2010, the Registrar issued ROC License No. 269277 Specialty Dual CR-42 Roofing contracting license to Respondent. The license is active, in good standing with the Registrar, and renewed through December 31, 2026. Joseph Lovato is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 515 E. Carefree Hwy. #192 Phoenix, Arizona 85085. Respondent has an active $6,750.00 surety bond on the license issued by RLI Insurance Company, effective October 26, 2010. The license has no prior disciplinary record. There is, however, one (1) open complaint listed which is presumed to be related to this matter.

On March 07, 2025, the Registrar received a brief narrative licensed complaint from Complainant against Respondent’s License No. 269277 regarding a roofing project. No specific allegations were made in the complaint. The Registrar designated it Complaint No. 2025-02323 and assigned to Mark Nipp (“Investigator Nipp”) for investigation.

On March 19, 2025, Investigator Nipp issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on April 22, 2025. Correspondence was not returned as undeliverable to Respondent.

On April 22, 2025, Investigator Nipp inspected the work that had been performed on the project to date. Respondent was not present. Investigator Nipp also reviewed the contract-related correspondence between the parties, and took 9 photographs of the project site. The inspection was unable to be completed because Investigator Nipp was unable to access or otherwise observe the roof.

On April 24, 2025, Investigator Nipp issued a Dismissal Letter to the parties that advised Complaint No. 2025-02323 there was not sufficient evidence to find that Respondent had failed to meet the Registrar’s minimum workmanship standards, in violation of Arizona Administrative Code (“Ariz. Admin. Code”) R4-9-108.

On or about May 01, 2025, Complainant provided two (2) roof reports, from contractors Roof King and Four Peaks, respectively. Upon review, Investigator Nipp agreed to reopen Complaint No. 2025-02323.

On May 06, 2025, Investigator Nipp issued a Jobsite Inspection Notification Letter to the parties, advising that Complaint No. 2025-02323 was reopened, and that he would conduct a second inspection of the project on May 28, 2025, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On May 09, 2025, Investigator Nipp issued a Jobsite Inspection Reschedule Notice advising that the second project inspection was reset for June 16, 2025, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On June 11, 2025, Investigator Nipp issued a Jobsite Inspection Reschedule Notice advising that the second project inspection was reset for July 2, 2025, at 9:30 a.m. Correspondence was not returned as undeliverable to Respondent.

On June 27, 2025, Investigator Nipp issued a Jobsite Inspection Reschedule Notice advising that the second project inspection was reset for July 16, 2025, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On July 16, 2025, Investigator Nipp resumed his inspection of the underlying project site. Respondent was not present. Investigator Nipp took 19 photographs of the project site. Ultimately, Investigator Nipp substantiated 2 of 2 complaint items against Respondent based on his firsthand observations. Specifically, Investigator Nipp determined Respondent’s workmanship on the project failed to meet the Registrar’s minimum standards, as acrylic roof coating had improperly been applied over silicone roof material, and chalking from the roof had caused damaged to Complainant’s pavers. Investigator Nipp required Respondent to perform corrective and/or completion work to remediate identified deficiencies by appropriate means.

On July 16, 2025, Investigator Nipp issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated both of Complainant’s complaint allegation(s) against ROC License No. 269277. Respondent was put on notice that it had until 5:00 p.m. on August 06, 2025, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

On September 22, 2025, Investigator Nipp forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On September 22, 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 October 07, 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 October 07, 2025, the Registrar received Respondent’s timely Answer whereby Mr. Lovato did not address either Citation charge, but offered that a supplemental response would be forthcoming “in a few days.” No such correspondence was ever received by the Registrar from or on behalf of Respondent.

On October 07, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 29, 2025. Per the October 17, 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 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 his own behalf and called Investigator Nipp as a witness. Mr. Lovato testified on behalf of Respondent. The substantive evidence of record is as follows:

In or around late-2019 or early-2020, Complainant hired Respondent to recoat the foam roof of his residence located at 9344 N. Aerie Cliff Fountain Hills, Arizona 85268. Respondent’s workmanship was contractually-backed by a five (5) year warranty. At that time, Respondent applied a silicone finish on the foam roof.

In or around mid-March 2024, Complainant contacted Respondent to perform work under its warranty. Work commenced on or about March 19, 2024, and was completed by March 21, 2024. Complainant tendered $500.00 for its service. Respondent applied acrylic paint over silicone finish, causing the roof’s surface to “chalk.” Since that time, whenever it has rained, the roof chalking was released onto the pavers from the drain pipes, staining the pavers.

Respondent’s roof coating should have been approximately 26-30mils, but was only about 17mils. Findings substantiated by roofing reports from contractors Roof King and Four Peaks, and firsthand observations made by Investigator Nipp.

Although Respondent’s contracting license was active and in good standing between July 16, 2025, and August 06, 2025, Respondent did not make any attempts to remediate Complainant’s project per the Registrar’s Directive, even though Respondent had obtained an extension from Investigator Nipp on August 18, 2025, to September 08, 2025.

Respondent did not communicate with Complainant in any form during the Directive’s compliance period, nor did Respondent settle the underlying dispute with Complainant by September 08, 2025.

On September 22, 2025, Mr. Lovato confirmed with Investigator Nipp that no materials had been ordered for the project, and that no corrective work had been performed on the project.

Additional Evidence

Mr. Lovato testified that he “dropped the ball” on Complainant’s project and Respondent’s compliance with the Directive, due to personal issues requiring him to be out of town frequently. Mr. Lovato also testified that Respondent did not have funds necessary to secure the materials required to remediate Complainant’s project, despite the extension afforded by the Registrar.

Complainant testified that the state of his project with Respondent remains unchanged, save that it is a worse condition it was in on the last day Respondent performed work due to rains that have exacerbated the damage in the interim.

Closing Arguments

In closing, Mr. Lovato plead that Respondent would “do anything to make it right,” and beseeched the Tribunal not to revoke ROC License No. 269277, as it would undoubtedly prevent the licensee from undertaking any viable solutions.

In closing, Complainant argued that the material facts were not in dispute, and that he should be awarded a favorable decision so that he could access the Registrar’s Residential Recovery Fund and repair the underlying project.

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.

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 from the record that Respondent performed roofing contracting at Complainant’s residence, and that the work Respondent performed failed to meet the Registrar’s minimum workmanship standards. It is also undisputed that Respondent failed to comply with the Registrar’s Directive which required him to address two (2) deficient workmanship items, despite being given an extension.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to comply with the Registrar’s Directive and remediate Complainant’s project, or enter into a settlement agreement. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain its burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction/incompetence. Mr. Lovato offered no evidence to explain or otherwise show cause for why Respondent failed to meaningfully participate in the Registrar’s investigation of Complaint No. 2025-02323, endeavor to perform corrective work on the underlying roofing project, or enter into a settlement agreement prior to the expiration of the Directive’s compliance period. No mitigating evidence exists in the record in favor of Respondent. Mr. Lovato’s admissions indisputably establish Respondent’s lack of workmanship, and harm caused to Complainant.

Notably, Mr. Lovato’s appearance for the administrative proceedings at bar evinces a willingness to submit to the Registrar’s regulation of License No. 269277.

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), 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 JML Coating LLC, ROC License No. 269277, shall be suspended for seven (7) business days.

It is further recommended that the Registrar require Respondent to pay the sum total of two hundred dollars ($200.00) in certified funds 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, November 24, 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]

Paul Gibbs Ryan, Complainant

9344 N. Aerie Cliff

Fountain Hills, AZ 85268

[email redacted]

JML Coating LLC, Respondent

c/o Joseph Lovato, Agent

515 E. Carefree Hwy # 192

Phoenix, AZ 85085

[email redacted]

By: OAH Staff