ALJDEC - Licensing
2025A-07382-CHC-ROC · Registrar of Contractors · 2026-02-28
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Dave Lafferty,
COMPLAINANT,
v.
Magnolia Home Builder PLLC
ROC License No. 322613,
RESPONDENT.
No. 2025A-07382-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: February 10, 2026 at 9:00 AM.
APPEARANCES: Dave Lafferty (“Complainant”) appeared on his own behalf. Charles Riddlehoover appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Christine Miller appeared on behalf of Magnolia Home Builder PLLC (“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, Complainant Exhibits 8-9, and December 24, 2025, Hearing Order were admitted into the evidentiary record.
_____________________________________________________________________
Having reviewed 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 November 14, 2018, the Registrar issued License No. 322613 for General Residential B contracting to Respondent. Although the license was renewed through November 30, 2026, it was revoked by the Registrar effective December 26, 2025, as disciplinary action in Registrar Complaint Nos. 2024-13651 and 2025-06715. Zachary Miller is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is 13794 W. Waddell Rd., Ste. 203-190 Suprise, Arizona 85388. Respondent has a $15,000.00 active surety bond on the license issued by Old Republic Surety Company, effective January 18, 2024. The license has been disciplined on three (3) prior occasions, and has had three (3) additional complaints settled or otherwise resolved against it. Currently, there are four (4) open complaints against the license; one of which is presumed to be related to the case at bar.
On August 01, 2025, the Registrar received a 6-item complaint from Complainant against Respondent’s License No. 322613 alleging poor work regarding a new residential construction project. The Registrar designated it Complaint No. 2025-07382 and assigned it to Charles Riddlehoover (“Investigator Riddlehoover”) for investigation.
On August 29, 2025, Investigator Riddlehoover issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on October 01, 2025, at 11:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On October 01, 2025, 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, and took 40 photographs of the project site. When she was finished, Investigator Riddlehoover drafted his Jobsite Inspection Notes. Based on his firsthand observations, Investigator Riddlehoover substantiated five (5) complaint items. Specifically, Investigator Riddlehoover determined that complaint items 1-5 required Respondent to perform corrective work sufficient to remedy the identified deficiencies, by appropriate means.
On October 17, 2025, Investigator Riddlehoover issued a Written Directive from the Registrar (“Directive”) to Respondent due to his substantiation of Complainant’s complaint allegation(s) against License No. 322613. Respondent was put on notice that it had until 5:00 p.m. on November 16, 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 November 20, 2025, Investigator Riddlehoover contacted Mr. Miller by phone but was unable to reach him. Although a voicemail message was left, Mr. Miller did not return Investigator Riddlehoover’s call.
On November 21, 2025, Investigator Riddlehoover forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On November 21, 2025, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). Respondent was given until December 06, 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 December 06, 2025, the Registrar received Respondent’s timely Answer whereby Mr. Miller denied abandoning the project and argued that Respondent’s subcontractors refused to perform, and that Respondent suffered from “severe financial strain.” Mr. Miller denied the poor workmanship allegation and argued that complaint items involved incomplete work. Mr. Miller opined, essentially, that Respondent’s failure to comply with the Directive was excused due to financial strain caused by (a) underbidding of the project, and subcontractors demanding additional compensation, (b) untimely and/or poor work performed by subcontractors, (c) disruption of scheduling due to subcontractors communicating directly with the project owner, and (d) vendor-supplied damaged materials and delays.
On December 15, 2025, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on February 05, 2026. Per the December 22, 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)(1)
Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(A)
Charge 3: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on his own behalf and called Investigator Riddlehoover as a witness. Mrs. Miller testified on behalf of Respondent. The substantive evidence of record is as follows:
Complainant owns a residential property located at 8985 W. Eagle Talon Dr. Peoria, Arizona 85382.
On or about January 24, 2021, the parties entered into a $828,274.15 construction agreement for an approximate 3,628 square foot single family residential structure.
On April 13, 2021, a Change Order was executed to increase overall square footage to 3,746, modify window framing to adhere to Homeowner Association requirements, modify flooring, garage door, countertops, exercise room trim, and interior doors.
Complainant tendered a total of $813,203.57 on the contract.
Work on the project commenced on or about April 11, 2023, and stopped on or about July 19, 2025.
Between October 17, 2025, and November 16, 2025, Respondent did not attempt to remediate substantiated complaint items 1-5, request an extension of the Directive’s compliance period, or enter into a financial settlement agreement with Complaint.
License No. 322613 was suspended by the Registrar, and legally ineligible from engaging in construction or hiring appropriately licensed subcontractors, October 17, 2025, through and until November 01, 2025.
At no point in time during the Directive’s compliance period did Respondent allege a denial of access to the project site.
Additional Evidence
Complainant testified that he had asked Respondent to provide a Statement of Financials to identify what, if any, discrepancies there were in the financing of his project, but that Respondent failed to reply. Per Complainant, as of the hearing date, his project with Respondent remained unchanged.
Mrs. Miller is married to Mr. Miller and has served as Respondent’s Office Manager since 2018. Mrs. Miller assisted Mr. Miller in the drafting of Respondent’s Answer to the Registrar. Per Mrs. Miller, she and her husband built a healthy construction company but suffered operationally in 2022 to the point the business could no longer function. Mrs. Miller also testified that Respondent was unable to proceed with Complainant’s project due to a “perfect storm” of uncooperative tradesmen and insolvency.
Closing Arguments
Respondent declined to provide a closing argument.
In closing, Complainant argued that he had suffered a significant financial loss due to Respondent’s nonperformance on their contract and beseeched the Tribunal to recommend the maximum discipline permissible.
CONCLUSIONS OF LAW
The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.
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)(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)(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 Registrar 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 undisputed.
The credible evidence of record clearly reflects that the parties had a new residential build contract and that Complainant substantially paid on the agreement. It is also undisputed that Respondent did not complete the underlying project, and took no action to address the Directive during the time its license was active or request an extension for compliance. It is further undisputed that the parties did not settle their dispute by November 16, 2025.
Therefore, the only remaining issue to address is whether Respondent raised sufficient justification or excuse for failing to appropriately correct substantiated complaint items 1-5 in the case at bar, enter into a settlement agreement with Complainant to satisfy the Directive, or enter ask for an extension of the Directive 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. Respondent did not provide an indicia of evidence to establish insolvency during the relevant time period or any evidence to substantiate its allegations against unnamed trades hired for the project. Ultimately, the record is devoid of exigent or otherwise mitigating evidence in favor of Respondent.
Because Complainant has established Respondent’s statutory violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(1), 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 License No. 311649.
Complainant may petition the Registrar’s Recovery Fund for financial recompense in this matter.
RECOMMENDED ORDER
In consideration of the foregoing conduct,
IT IS RECOMMENDED that five (5) days after the effective date of the Final Order in this matter ROC License No. 322613, General Residential B contracting license, be suspended seven (7) days by the Registrar.
IT IS FURTHER RECOMMENDED that the Registrar requires Respondent to pay the sum total of $300.00 (three hundred dollars) in certified funds as a civil penalty in this matter.
IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s Final Order, the Registrar shall 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, March 02, 2026.
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]
Dave Lafferty, Complainant
18248 W. Banff Ln.
Surprise, AZ 85388
[email redacted]
Magnolia Home Builder PLLC
c/o Christina Miller, Office Manager
13794 W. Waddell Rd., Ste. 203-190
Surprise AZ, AZ 85379
[email redacted]
By: OAH Staff