ALJDEC - Licensing

2025A-12020-CHC-ROC · Registrar of Contractors · 2026-04-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Alfred Heredia,

COMPLAINANT,

v.

ELDER CONTRACTING LLC,

License No. ROC 349755,

RESPONDENT.

No. 2025A-12020-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 8, 2026

APPEARANCES: Attorney Christopher L. Hering represented Complainant Alfred Heredia. Attorney Michael G. Tafoya represented Respondent Elder Contracting LLC. Arizona Registrar of Contractors Investigator Jeremy Rosenthal appeared as a witness.

ADMINISTRATIVE LAW JUDGE: Kay Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: ROC Notice of Hearing Packet (Packet); Complainant Exhibits 1 through 11; Respondent Exhibits 1 through 17.

FINDINGS OF FACT

Elder Contracting LLC (Respondent) is the holder of License No. 349755, KB-1 Dual Building Contractor, issued by the Arizona Registrar of Contractors (Registrar or ROC) on January 1, 2024.

Elder Contracting LLC (Respondent) is the holder of License No. 329399, CR-61 Carpentry, Remodeling and Repairs, issued by the Arizona Registrar of Contractors (Registrar or ROC) on June 17, 2020.

On or about November 17, 2025, the Registrar received a Licensed Complaint Form (Complaint) against Respondent. The Complaint indicated that the parties had contracted on January 2, 2025, and that Respondent had abandoned the project with no work performed, plans not completed, HOA approval not obtained, and no refund of monies paid despite Complainant having paid $232,459.32 to Respondent.

The Registrar assigned the Complaint to Investigator Jeremy Rosenthal (Investigator).

On December 18, 2025, Investigator conducted a Jobsite Inspection and took multiple photographs demonstrating the status of the contracted projects, which were: unfinished as to an addition (Addition) to an existing home; and, no construction of a new building (New Build) on an adjoining lot.

On December 26, 2025, Investigator issued a Written Directive for Respondent to complete corrective work by January 14, 2026. In pertinent part, the Directive stated as follows:

DIRECTIVE REQUIREMENTS

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

Complaint Item: 1 - no work has been completed (addition)

Investigator’s Observation: Upon arrival, there were two job sites. One was an addition to the existing home that was in progress. The Complainant said that the last time crews were on site was 2-3 weeks prior to this site visit. The Respondent shall work on this job by appropriate means in a diligent manner.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(b): A contractor shall perform all work in accordance with any applicable building codes and professional industry standards. For work to be performed in accordance with professional industry standards, a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.

A.R.S. § 32-1154(A)(3) - R4-9-108(B) Building Codes/Prof. Industry Standards

Complaint Item: 9 - no work has been completed (new work)

Investigator’s Observation: The open lot to the East of the main home was empty upon arrival with no work having having been started. The Respondent shall move forward and begin work on this "new" work by appropriate means.

Governing Rule: Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

A.R.S. § 32-1154(A)(1)

On January 27, 2026, Investigator conducted a compliance inspection at the project site. Investigator found that the status of the Addition to the existing residence was the same and that no further work had been done. Investigator found that, on the New Build, construction had been started. As to both items, Investigator determined that the work required to be completed under the Directive had not been performed as directed.

On January 28, 2026, the Registrar issued a Citation against Respondent charging possible violations of:

Charge :1 A.R.S. § 32-1154(A)(1)

Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

Charge :2 A.R.S. § 32-1154(A)(3) – R4-9-108(B)

Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(b): A contractor shall perform all work in accordance with any applicable building codes and professional industry standards. For work to be performed in accordance with professional industry standards, a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.

Charge :3 A.R.S. § 32-1154(A)(22)

Failure to take appropriate corrective action to comply with this chapter or with 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.

On January 29, 2026, Respondent notified the ROC of its Bankruptcy filing and requested the ROC issue a Stay of these administrative proceedings.

Respondent filed its Answer to the Citation to the ROC on February 12, 2026. In its Answer, Respondent explained that the parties had three separate contracts and that certain work fell within each contract. Respondent set forth a timeline of some work that had been performed on the Addition. Respondent indicated that the New Build on the adjoining lot was still in the planning stages.

In its Answer, Respondent indicated that it had filed for Chapter 11 Bankruptcy on November 24, 2025 and further opined that Complainant had no legal authority to require Respondent to perform on the contracts due to the automatic stay under 11 United Stated Code (USC) § 362(a).

On February 10. 2026, the ROC issued its ORDER denying Respondent’s request for a Stay in the matter.

The Registrar subsequently referred the matter to the Office of Administrative Hearings (OAH), an independent State agency, for an evidentiary hearing and issued a Notice of Hearing.

OAH issued an ORDER advising the parties of Virtual meeting information and telephone numbers for the parties’ participation.

Investigator testified regarding the background in this matter; he noted that at the time of the jobsite inspection, he had seen some plans but no permit. Investigator noted that the purpose of a written directive is to have a contractor fulfill the contract terms.

Complainant testified regarding the original plan having been to add to the existing home and regarding the change in those plans to acquire the adjoining lot and complete a New Build on the lot incorporating some of what had originally planned for the existing home as the Addition. Complainant noted that the time frame for the construction seemed to consistently be pushed forward and simply did not match the initial projected time frame for the projects.

Respondent argued that, pursuant to the various contracts and the way in which the project moved forward, it was not responsible for the New Build plans for the adjoining lot and that Complainant needed to have been working with the architect. Respondent indicated that delays occurred based on the adjoining lot purchase and change of concepts (and projected plans) for the New Build which required new submittals of architectural plans to the city jurisdiction and to the HOA approval process, which also called for some previously-unknown approvals by a HOA person who was unavailable. Respondent argued that it could not have proceeded with any construction on the addition absent the HOA inspection and approval or absent the new plans for the New Build.

Respondent argued that it had not abandoned the project. Respondent argued that the ROC Directive did not require Respondent to perform contracting work but only to take action through “appropriate means.” Respondent’s position is that it was unable to proceed for the various reasons, ultimately including the Complainant’s “denial of access” in the circumstances when, in January 2026, Respondent did not know about the HOA approval.

Respondent did not request an extension of the deadline for completion of the Directive items.

Respondent indicated that the company no longer exists because the Chapter 11 Bankruptcy was converted to Chapter 7 and its assets were liquidated.

Administrative notice is taken of Respondent’s ROC License record on April 23, 2026. Both of Respondent’s ROC licenses have been revoked and there are eight open cases, one of which is the instant matter.

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CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. “A preponderance of the evidence means ‘proof which leads the [trier of fact] to find that the existence of the contested fact is more probable than its nonexistence.””

The evidence of record established that Respondent stopped work on the projects and failed to perform work for which it had contracted and for which it took deposits. The hearing record demonstrates that Respondent did not perform, or have any corrective work done, to complete the Directive items. Thus, Respondent’s contracting activities were not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent was in violation of Ariz. Rev. Stat. § 32-1154(A)(1).

The evidence of record established that Respondent had not performed the activities under the parties’ contracts remaining incomplete. Thus, Respondent’s contracting activities were not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A).

The evidence of record established that Respondent’s work was not in conformity with the Registrar’s standards in that Respondent’s failed to perform directed corrective work pursuant to the Directive. The ROC Directive mandated correction of the Investigator-determined workmanship issues. An appropriate period of time was given for the corrective action and there is no evidence that Respondent requested an extension of the time period. Respondent’s argument fails regarding denial of access; this concept applies solely to the Directive’s time frame within which corrective action is directed to be taken. Therefore, Complainant established that Respondent failed to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the Registrar in violation of Ariz. Rev. Stat. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, the Registrar shall revoke Respondent’s License No. 349755.

It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 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 final 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 A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

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 Administrative Law Judge Decision. If the licensee accepts the Administrative Law Judge Decision, the Administrative Law Judge 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, April 24, 2026.

/s/ Kay Abramsohn

Administrative Law Judge

Transmitted electronically to:

Tom Cole

Registrar of Contractors

Jeremy Rosenthal

[email redacted]

Christopher L Hering, Esq

[email redacted]

[email redacted]

Michael G. Tafoya, Esq.

[email redacted]

[email redacted]

[email redacted]

By: OAH Staff