ALJDEC - Licensing

2025A-10397-CHC-ROC · Registrar of Contractors · 2026-03-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jocelyn Passe,

COMPLAINANT,

Diversified Remodel & Design, LLC,

License No. ROC 345021,

RESPONDENT.

No. 2025A-10397-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 3, 2026

APPEARANCES: Attorney Thomas S. Moring appeared representing Jocelyn Passe. Attorney Nicholas J. Walter appeared representing Diversified Remodel & Design, LLC. Investigator John Peru appeared from the Registrar of Contractors.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: ROC Notice of Hearing Packet (“Packet”); Complainant Exhibits A through N; Respondent Exhibits 1 through 24. _____________________________________________________________________

FINDINGS OF FACT

Diversified Remodel & Design, LLC (“Respondent”) is the holder of License No. 345021, a KB-2 Dual Residential & Small Commercial license, issued by the Arizona Registrar of Contractors (“Registrar” or “ROC”) in May 2023.

From February of 2024 through May of 2024, Respondent remodeled a residential property (“Property”) located at 1001 W. Las Palmaritas Drive in Phoenix, Arizona.

Property was purchased in February 2024 by Silver State Rentals VI LLC (“Silver State”).

Respondent is the Manager of Silver State. Respondent’s Qualifying Party, Rodrigo Munoz, is a manager of Silver State.

The Silver State purchase of Property was a cash as-is purchase. Respondent provided several photographs of Property, indicating that the photographs were obtained from the prior seller’s listing (from 2023).

Other construction work was also performed on Property by the following companies or persons:

Badilla Construction, an unlicensed company;

Hugo's Landscaping, an unlicensed company;

Sonorian Pool Plaster, a licensed entity; and,

Aristeo Araujo Marquez, an unlicensed person.

Respondent did not provide information on any other contractors, licensed or unlicensed, who performed work on Property.

Hugo’s Landscaping invoiced Silver State for its work on March 28, 2024. That invoice listed multiple and various services. Front Yard: Demolition were needed, Boarder Pavers, Add 25 tons rock, Boarder pathway, Repair front lawn client to provided sod and mulch. Rear Yard: Demolition were needed, Remove shed, Add 25 tons rock, Border pavers, Boarder pathway, Artificial grass 15x21 350 ft client provided.

Respondent invoiced Silver State for remodeling work on May 14, 2024. That invoice listed the following various services: Remove and install windows and existing openings; apply stucco and lath; exterior painting; interior drywall patching and painting; install doors, casing, and base molding; install kitchen and bathroom cabinets; install kitchen and bathroom countertops; install flooring throughout main house; install tile in all bathrooms; and install all door hardware.

Silver State offered the Property for sale, indicating, among other items: complete interior demolition and remodeling; complete new roof and facia, and R30 attic insulation; and new 200 Amp electrical panel, breakers and new master sub-panel. Regarding the electrical, Silver State indicated that it was updated to fit new design. Regarding the front yard, Silver State indicated: “New front yard design for entire exterior, new concrete pavers, new rock hardscape, new painting and new sod.” Regarding the back yard, Silver State indicated: “New back yard design for entire exterior, new concrete pavers, new rock hardscape, and new artificial turf.”

On the July 23, 2024, Residential Seller’s Property Disclosure Statement (“SPDS”), Silver State indicated that it was aware of work performed on Property but was not aware if permits had been obtained. Silver State further indicated that the work was performed by a licensed contractor. Silver State listed Respondent as that licensed contractor.

At hearing, Mr. Munoz indicated that Silver State had only listed Respondent as the licensed contractor on the SPDS because not all the subcontractors were required to be licensed.

Jocelyn Passe (“Complainant”) purchased the Property from Silver State as of August 8, 2024.

At hearing, Mr. Munoz indicated that, regarding Complainant’s purchase of Property, there had been a lot of back-and-forth regarding items Complainant wanted Silver State to fix, but Silver State had “walked away” (inferring here, from additional repairs) by giving Complainant a $41,000.00 credit and a $2,500.00 credit for main sewer issues.

On or about October 16, 2025, the Registrar received a Licensed Complaint Form (“Complaint”) against Respondent from Complainant. The Complaint alleged multiple general items of concern: “buried demolition debris causing sinkholes, unsafe old wiring despite ‘new electrical’ claims, and collapsing sewers – unsafe, concealed and misrepresented work.”

The Registrar assigned the Complaint to Investigator John Peru (“Investigator”), who scheduled a jobsite inspection for November 13, 2025.

Both parties were present at the jobsite inspection. At the inspection, Investigator determined that Respondent “was the Contractor & Managing Party for [Silver State] ... per AZ Corporate Commission.”

Investigator reviewed the Complainant items with the parties and took multiple photographs to document the conditions at Property. The photographs taken by Investigator at the jobsite Inspection depicted the-then current condition of Property backyard showing a large pile of construction material/debris that had been dug up from underneath the new rear yard landscaping installed by the Respondent and sink holes in other gravel areas showing debris.

On November 24, 2025, Investigator issued a Written Directive to Respondent, which provided as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on Friday, December 12, 2025.

RESTRICTIONS

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

• If your license is currently suspended for administrative reasons, or is inactive, expired, or cancelled, you may not perform any corrective work nor contract in any manner, which includes hiring other contractors to perform work, until the suspension of your license(s) has been lifted or your license(s) has been reactivated.

DIRECTIVE REQUIREMENTS

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

Complaint Item: 1 - Diversified Remodel & Design (ROC 345021) did full remodel for Silver State Rentals, VI, LLC

Investigator’s Observation: Verified. At the time of this inspection, it has been determined that Diversified Remodel & Design ROC 345021 (Rodrigo Munoz), was the Contractor & Managing Party for Silver State Rentals LLC (seller of property), per AZ Corporate Commission. REF: (JSI PICS)

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner. A.R.S. § 32-1154(A)(3) - R4-9-108(A) Workmanship

Complaint Item: 2 - Work included demolition of detached casita and site regrading before resale.

Investigator’s Observation: See Complaint Item (3).

Complaint Item: 3 - Contractor buried demolition debris approx. 6 ft deep under landscaped yard.

Investigator’s Observation: Verified.

At the time of this inspection, I observed a large pile of construction material/debris that was dug up from underneath the new rear yard landscaping installed by the respondent. The complainant stated that a sink hole began to form shortly after the rains, and exposing debris from the recent remodel of the property. The complainant added, due to the safety concerns (sink hole, active gas line), a third party entity was hired to open up the sink hole for observation. All parties acknowledged that the third party entity only removed the debris from the sink hole for safety concerns and did not initiate any corrective work thereafter. Upon inspection of the construction material /debris, it is more likely than not, material/debris from the specific remodel of this property prior to/during the sales transaction of this home. The respondent Diversified Remodel & Design LLC, has been determined to be the Contractor & Managing Party for Silver State Rentals, VI LLC (seller of the property). The respondent shall perform further inspection of the site, and correct by appropriate means. REF: (JSI PICS).

Complaint Item: 4 - After heavy rain, several surface cavities appeared in the backyard.

Investigator’s Observation: See Complaint Item (3).

Complaint Item: 5 - Contractor investigation revealed a large buried debris pit about 6 ft deep × 11 ft wide.

Investigator’s Observation: See Complaint Item (3).

Complaint Item: 6 - Buried materials include concrete, bricks, wood,drywall, metal, paint cans, plastics, and other construction debris

Investigator’s Observation: See Complaint Item (3).

Complaint Item: 7 - Collapse created unsafe and unstable soil conditions behind the residence.

Investigator’s Observation: See Complaint Item (3).

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4 -9-108(a): A contractor shall perform all work in a professional and workmanlike manner. A.R.S. § 32-1154(A)(3) - R4-9-108(A) Workmanship

Complaint Item: 9 - No disclosure in Seller Property Disclosure Statement (SPDS) about buried debris.

Investigator’s Observation: Verified. Upon further review of the (SPDS) document, there was no disclosure noting buried construction material/debris in the rear yard.

Complaint Item: 10 - Indicates improper demolition, grading, and debris disposal practices.

Investigator’s Observation: See Complaint Item (3).

Complaint Item: 11 - Unsafe workmanship caused ground instability and dangerous sinkhole.

Investigator’s Observation: See Complaint Item (3).

Complaint Item: 14 - Buyer discovered defect one year post-sale after heavy rainfall.

Investigator’s Observation: See Complaint Item (3).

Complaint Item: 15 - Condition was latent and not discoverable during normal home inspection.

Investigator’s Observation: See Complaint Item (3).

Complaint Item: 16 - Request ROC investigation of Diversified Remodel & Design LLC (ROC 345021).

Investigator’s Observation: See Complaint Item (3).

Complaint Item: 17 - Determine responsibility for buried debris and require corrective action.

Investigator’s Observation: See Complaint Item (3) & (1).

Complaint Item: 18 - Request enforcement for unsafe and deceptive construction practices.

Investigator’s Observation: See Complaint Item (3) & (1).

Complaint Item: 19 - Evidence: photos, video, contractor statement, and SPDS on file

Investigator’s Observation: See Complaint Item (3)

Complaint Item: 28 - Request order for responsible party to properly excavate and remediate unsafe area and replace landscaping loss.

Investigator’s Observation: See Complaint Item (3) & (1).

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Complaint Item: 8 - No demolition or grading permit found in City records for this address.

Investigator’s Observation: The Registrar does not supersede the Municipality Building Dept. The Municipality Building dept. will have to make a determination.