ALJDEC - Licensing

2025A-02369-CHC-ROC · Registrar of Contractors · 2025-06-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Sarah Strachan,

COMPLAINANT,

v.

Arizona Skylight Specialists LLC

ROC License No. 333554,

RESPONDENT

No. 2025A-02369-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 24, 2025 at 1:00 PM.

APPEARANCES: Sarah Strachan (“Complainant”) appeared on her own behalf. Marlene Elias appeared on behalf of Arizona Skylight Specialists LLC (“Respondent”) with William Elias as a witness. Arlo Houston appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Marty Riesgo and Stan Maxam observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the referring agency’s administrative file, and May 28, 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 June 02, 2021, the Registrar issued License No. 333554 Specialty Dual CR-65 Glazing contracting license to Respondent. The license has been renewed through June 30, 2025. Marlene Gail Elias is listed as the Qualifying Party and Manager on the license. Respondent’s address of record for the license is 1245 W. Wetmore Rd. Tucson, Arizona 85705. Respondent had a $6,750.00 surety bond on the license issued by Merchants Bonding Company, effective April 09, 2021. 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; one of which is presumed to be related to this matter.

On March 07, 2025, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 333554 alleging poor work of a skylight installation project. The Registrar designated it Complaint No. 2025-02369 and reassigned the matter to Arlo Houston (“Investigator Houston”) for investigation.

On March 14, 2025, Investigator Houston issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on April 08, 2025, at 11:00 a.m. Correspondence was not returned as undeliverable to Respondent.

Pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) § 32-1155(D), Respondent availed itself of the opportunity to inspect the complained of work prior to the scheduled jobsite inspection.

On April 08, 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 6 photographs of the project site. When he was finished, Investigator Houston drafted his Inspection Notes. Ultimately, Investigator Houston derived four (4) distinct complaint items from Complaint No. 2025-02369, three (3) of which he substantiated based on his firsthand observations. Specifically, Investigator Houston determined that complaint items 1-3 below the Registrar’s minimum workmanship standards and required correction and/or completion by Respondent.

Investigator Houston specifically noted that there was poorly installed flashing around the curb for the skylights, which resulted in an active water leak that caused damage to Complainant’s insulation and ceiling drywall.

Investigator Houston also noted that Respondent “accepted responsibility” and agreed to work with Complainant to repair the work.

On April 10, 2025, Investigator Houston issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated most of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on April 29, 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). Investigator Houston also included the following advisement to Respondent regarding the remediation of substantiated complaint items 1-3, in pertinent parts:

RESTRICTIONS

You may not perform or hire other contractors to perform work that is outside the scope of your license.

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

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.

(Emphasis in original.)

Correspondence was not returned as undeliverable to Respondent.

On an unknown date, 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 its contracts, including its contract with Complainant. Correspondence was not returned as undeliverable to Respondent.

On April 28, 2025, Investigator Houston issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on April 30, 2025, at 1:00 p.m. Correspondence was not returned as undeliverable to Respondent.

On April 30, 2025, Investigator Houston inspected the corrective work that had been performed on the project and took 5 photos. Respondent was not present. When he was finished, Investigator Anderson drafted his Compliance Notes. Ultimately, Investigator Anderson determined that Respondent had not satisfactorily remediated complaint items 1-3, or submitted an updated contract template that adhered to Ariz. Rev. Stat. §§ 32-1154(A)(12); 32-1158. Investigator Anderson included the following observations in his Compliance Notes:

Email from Respondent dated Monday, April 7, 2025 at 11:48 AM specified that [Respondent] agreed to have Tovar Roofing repair around the skylights and to have the Complainant send the written quote to them. This represents a settlement agreement between parties for which the Respondent took no further action and did not actually settle with [Complainant] in order to remedy items in the [Directive]. Additionally, no action taken by Respondent for interior damage resultant from active water leak.

(Emphasis in original.)

On or about May 02, 2025, Investigator Houston forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On May 08, 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), 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until May 22, 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 12, 2025, the Registrar received a timely Answer on behalf of Respondent whereby Mrs. Elias requested a “compassionate reprieve” due to breaking her right elbow, which prevented her from working. She noted her intent to complete the underlying project, but noted that as of the date of her Answer, she still had not regained use of her right arm. Mrs. Elias also reported that use of prescription pain medication was clouding her mind.

On May 16, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on June 24, 2025. Per the May 21, 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)(12) – A.R.S. § 32-1158

Charge 3: A.R.S. § 32-1154(A)(22)

Hearing Evidence

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

Complainant owns residential property with located at 4773 N. Via Entrada Tucson, Arizona 85718.

On or about February 28, 2023, the parties entered into a $6,020.00 residential construction contract with Respondent to install a set of skylights in Complainant’s residence and perform drywall. The project came with a “no leak guarantee.”

Work on the project commenced on or about May 26, 2023, and was completed that same date.

On May 26, 2023, a $2,600.00 Change Order was issued by Respondent for the installation of “5 new curbs using only compatible materials with the Hypalon roof material,” which brought Complainant’s outstanding balance on the project to $5,610.00.

Complainant tendered a $3,010.00 down payment to Respondent towards the project, and paid the remaining balance owed on the project in full.

Between March 17, 2025, and March 21, 2025, Southwest Hazard Control performed mold mitigation at Complainant’s residence due to rain that leaked through Respondent’s skylights.

On April 09, 2025, Tovar Roofing performed corrective work per the parties’ agreement, however, Respondent did not reimburse Complainant for the $2,660.00 paid to the subcontractor.

Although License No. 333554 was active and in good standing with the Registrar between April 10, 2025, and April 29, 2025, and the project site remained accessible throughout this period of time, Respondent was unable to perform corrective work on substantiated complaint items 1-3 because the work was outside the scope of its license. Respondent was also unable to subcontract the work out to an appropriately licensed subcontractor due to the inherent restriction of its license type.

At no point in time prior to the expiration of the Directive’s compliance period, or anytime thereafter, did Respondent request an extension thereof.

The parties did not enter into a financial settlement agreement regarding substantiated complaint items 1-3 by April 29, 2025.

Additional Evidence

On or about April 20, 2025, Mrs. Elias broke her right elbow and had it placed in a cast. Mrs. Elias did not explain the severity of her injury to Investigator Houston.

Mr. and Mrs. Elias testified that they were unaware of the restrictions of Respondent’s Specialty Dual CR-65 Glazing contracting license, and thought Respondent could perform roof and drywall work.

Mrs. Elias testified that she never petitioned the Registrar for reassessment of the license issued to Respondent, based on the description of intended work listed on her license application, or applied for an additional construction license from the Registrar because she was never aware of the limitations associated with the CR-65 license.

Mr. Elias testified that Complainant was not required to authorize the $2,600.00 Change Order on the project because the parties’ contract noted the price was subject to change after construction commenced based on what Respondent discovered. Per Mr. Elias, Complainant’s framing was “a mess,” “out of square,” and “dangerously unsafe.”

Closing Arguments

Respondent declined to provide a closing argument.

In closing, Complainant argued that she relied on Respondent’s expertise when entering into their contract, and that her home sustained serious damage as a direct result of Respondent’s poor workmanship and failure to swiftly address the work. Complainant beseeched the Tribunal for an order of restitution and asked that disciplinary action be taken against License No. 333554.

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)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Failure in any material respect to comply with this chapter.”

Ariz. Rev. Stat. § 32-1158(A) provides that a contract between a contractor and property owner amounting to more than $1,000.00 must contain the following information in writing:

The name of the contractor and the contractor's business address and license number.

The name and mailing address of the owner and the jobsite address or legal description.

The date the parties entered into the contract.

The estimated date of completion of all work to be performed under the contract.

A description of the work to be performed under the contract.

The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.

The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.

The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.

That the property owner has the right to file a written complaint with the Registrar for an alleged violation of Ariz. Rev. Stat § 32-1154(A). The contract shall contain the Registrar's telephone number, website address, and shall state that complaints must be made within the applicable time period as set forth in Ariz. Rev. Stat § 32-1155(A). The information must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor.

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.”

Ariz. Rev. Stat. § 32-1156.01 states, in pertinent part, that after a hearing an Administrative Law Judge may provide restitution to any person who is injured by an action of a 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 substantive facts of record in this matter are not in dispute.

It is undisputed that the parties had a $6,020.00 skylight installation construction agreement that Complainant paid Respondent $8,620.00 for, after Respondent increased the project cost by $2,660.00. It is also undisputed that some of the work Respondent performed on the project fell below the Registrar’s minimum workmanship standards. It is further undisputed that Respondent failed to address the Directive prior to the expiration of its compliance period, or provide the Registrar with an updated contract template.

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 remediate Complainant’s project. 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 and/or lack of performance on this project. While it is true that Investigator Houston failed to issue a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(16) for performing work that was outside the scope of its license, Respondent was nonetheless unable to lawfully perform corrective work on substantiated complaint items 1-3 April 10-29, 2025, despite Mrs. Elias’ unfortunate elbow injury. The record clearly reflects that as of the date of the jobsite inspection, Respondent entered into a settlement agreement with Complainant but failed to execute or otherwise honor it by April 29, 2025. The record further reflects that Respondent did not ask for an extension of time in order to satisfy the terms of the parties’ agreement. 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 is devoid of any evidence that would tend to suggest Respondent was unable to settle the dispute at issue with Complainant, or ask for the Directive’s compliance period to be reasonably extended.

Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R2-19-108(a), 32-1154(A)(12); 32-1158, 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

In light of the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Arizona Skylight Specialists LLC, License No. 333554, be suspended three (3) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3), (A)(12), and (A)(22).

IT IS FURTHER RECOMMENDED that the Registrar shall require Respondent to tender Complainant $2,660.00 in certified funds as restitution on or before thirty (30) days following the effective date of the Registrar’s Final Order in this matter pursuant to Ariz. Rev. Stat. § 32-1156.01. Failure to timely comply shall result in License No. 333554 being placed in inactive status until the licensee provides the Registrar with sufficient proof of compliance.

IT IS FURTHER RECOMMENDED that the Registrar assess a $100.00 (one hundred dollar) civil penalty against License No. 333554 pursuant to Ariz. Rev. Stat. § 32-1154(E), within ten (10) days from the effective date of the Final Order in this matter, if Respondent fails to provide the Registrar with a construction contract template that fully complies with Ariz. Rev. Stat. § 32-1158.

It is further recommended that if Respondent fails to timely provide the Registrar with a construction contract template that fully complies with Ariz. Rev. Stat. § 32-1158 and/or fails to pay the entire amount of the civil penalty in certified funds for failing to timely provide a contract template pursuant to Ariz. Rev. Stat. § 32-1154(E) on or before thirty (30) days following the effective date of the Registrar’s Final Order in this matter, the Registrar revoke License No. 333554, 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).

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, June 30, 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]

Sarah Strachan, Complainant

4773 N. Via Entrada

Tucson, AZ 85718

[email redacted]

Arizona Skylight Specialists LLC, Respondent

c/o Marlene Elias, Agent

1245 W. Wetmore Rd.

Tucson, AZ 85705

[email redacted]

By: OAH Staff