ALJDEC - Licensing

2025A-12509-CHC-ROC · Registrar of Contractors · 2026-05-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ruta Boyd,

COMPLAINANT,

v.

Innovative Flooring LLC

ROC License No. 253526,

RESPONDENT.

No. 2025A-12509-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 21, 2026 at 9:00 AM.

APPEARANCES: Ruta Boyd (“Complainant”) appeared on her own behalf. Kevin Bauch appeared on behalf of Innovative Flooring LLC (“Respondent”). John “Joey” Chester 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 referring agency’s administrative file, and the April 21, 2026, Amended 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 March 19, 2009, the Registrar issued License No. 253526 for Specialty Dual CR-8 Floor Covering contracting to Respondent. The license is active, in good standing with the Registrar, and has been renewed through March 31, 2027. Kevin Michael Bauch is listed as the Qualifying Party and Member on the license. Respondent’s address of record for the license is P.O. Box 30934 Phoenix, Arizona 85046. Respondent has a $6,750.00 active surety bond on the license issued by RLI Insurance Company, effective April 14, 2015. The license has not previously been disciplined by the Registrar but does have one (1) pending complaint against it which is presumed to be related to the case at bar.

On December 02, 2025, the Registrar received a brief narrative complaint from Complainant against Respondent’s License No. 253526 alleging poor work of a residential remodel project. The Registrar designated it Complaint No. 2025-12509 and assigned it to Joey Chester (“Investigator Chester”) for investigation.

On December 15, 2025, Investigator Chester issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 13, 2026, at 1:00 p.m. Correspondence was not returned as undeliverable to Respondent.

On December 15, 2025, Investigator Chester issued a Warning Letter to Respondent to advise that some of Respondent’s work on the underlying project required possession of a R-48 Ceramic, Plastic and Metal Tile and R-37 Plumbing license that Respondent did not possess during the relevant time period, in violation of Ariz. Rev. Stat. § 32-1154(A)(16), which could result in discipline against Respondent’s license including suspension or revocation. Correspondence was not returned as undeliverable to Respondent.

On January 13, 2026, Investigator Chester inspected the work that had been performed on the project to date. Respondent was present. Investigator Chester also reviewed the contract-related correspondence between the parties, and took 34 photographs of the project site. When he was finished, Investigator Chester drafted his Jobsite Inspection Notes. Investigator Chester derived a total of 6 complaint items from Complaint No. 2025-12509. Based on his firsthand observations, Investigator Chester substantiated five (5) complaint items. Specifically, Investigator Chester determined that complaint items 1-2 and 4-6 required Respondent to perform corrective work sufficient to remedy the identified deficiencies, by appropriate means.

On January 27, 2026, Investigator Chester issued a Written Directive from the Registrar (“Directive”) to Respondent due to his substantiation of Complainant’s complaint allegation(s) against License No. 253526. Respondent was put on notice that it had until 5:00 p.m. on February 27, 2026, 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). Respondent was specifically advised as follows, in pertinent parts:

Respondent will need to correct this issue by the appropriate means. Since [Respondent] is not appropriately licensed to do this work, the appropriate means will be the two parties coming to a resolution to have an appropriately licensed contractor obtain permits and to construct or reconstruct the corrective work as required by the building official.

(Emphasis in original.)

Correspondence was not returned as undeliverable to Respondent.

On March 02, 2026, because Complainant verified that Respondent failed to address the Directive, Investigator Chester forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On March 03, 2026, 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 March 18, 2026, 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 March 13, 2026, the Registrar received Respondent’s timely Answer whereby Mr. Bauch did not address either alleged statutory violation but instead argued that Respondent was not the general contractor on the underlying project. Per Mr. Bauch, due to work performed by other trades Respondent was unable to seal and grout certain portion of installed shower tile. However, Complainant paid Respondent the licensee was not informed about any punch items or corrective work that needed to be completed.

On April 01, 2026, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on May 21, 2026. Per the April 10, 2026, 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)(22)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Chester as a witness. Mr. Bauch testified on behalf of Respondent. The substantive evidence of record is as follows:

Complainant owns a residential property located at 222 E. Sharon Ave. Phoenix, Arizona 85022.

On or about November 16, 2025, the parties entered into a $8,400.00 construction agreement to demolish and remodel two (2) bathrooms in Complainant’s residence. Respondent agreed to “provide all setting materials and moisture barriers,” and Complainant agreed to “furnish metals, grout, and tile.”

Complainant paid for the contract in full via cashier’s check.

Work on the project commenced on or about November 10, 2025, and stopped on or about November 24, 2025.

Between January 27, 2026, and February 27, 2026, Respondent did not become appropriately licensed to remediate complaint items 1-2 and 4-6, secure an appropriately licensed contractor to perform the corrective work at issue, or enter into a financial settlement agreement with Complainant to resolve the dispute between the parties.

At no point in time during the Directive’s compliance period did Respondent allege a denial of access to the project site or request an extension of thereof.

Additional Evidence

Complainant testified that she did not check the status of License No. 253526 with the Registrar prior to entering into their construction agreement. Per Complainant, as of May 11, 2026, a new contractor commenced remediation of the underlying project. Work has not been completed as of the date of the hearing.

Mr. Bauch testified that he presumed he was performing work under the license of the general contractor, of whom he did not provide a license number. Per Mr. Bauch, Respondent did not perform corrective work during the Directive’s compliance period because there was insufficient materials available statewide and nationwide, and because he learned that the general contractor was also not appropriately licensed to perform the corrective work at issue.

Closing Arguments

In closing, Respondent opined that the evidence of record did not warrant discipline against License No. 253526.

In closing, Complainant argued that discipline against License No. 253526 was reasonable because it was established that she was damaged by Respondent’s conduct.

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)(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 Respondent contracted with Complainant beyond the scope of his license. There is no evidence in the record that supports a finding that Respondent was “working under” another contractor’s license on the underlying project. The record also credibly reflects that Complainant paid for the project in full, and that the work Respondent performed on the project failed to meet the Registrar’s minimum workmanship requirements. It is also undisputed that Respondent did not enter into a settlement agreement with Complainant or hire an appropriately licensed contractor to obtain requisite building permits and perform corrective work on substantiated complaint items 1-2 and 4-6 in compliance with the Directive by February 27, 2026.

Therefore, the only remaining issue to address is whether Respondent raised sufficient justification or excuse for failing to address the Registrar’s Directive or ask for an extension prior to the expiration of the corrective order’s compliance period. These are 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 support any of Mr. Bauch’s assertions. 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)(3) and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established cause for the Registrar to discipline License No. 253526.

Complainant may petition the Registrar’s Recovery Fund for financial recompense in this matter.

ORDER

In consideration of the foregoing conduct,

IT IS ORDERED that five (5) days after the effective date of the Final Order in this matter ROC License No. 253526, Specialty Dual CR-8 Floor Covering contracting license, be suspended seven (7) days by the Registrar.

IT IS FURTHER ORDERED that the Registrar requires Respondent to pay the sum total of $200.00 (two hundred dollars) in certified funds as a civil penalty in this matter.

IT IS FURTHER ORDERED 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, May 28, 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]

Ruta Boyd, Complainant

222 E. Sharon Ave.

Phoenix, AZ 85022

[email redacted]

Innovative Flooring LLC, Respondent

c/o Kevin Bauch, Agent

P.O. Box 30934

Phoenix, AZ 85046

[email redacted]

[email redacted]

By: OAH Staff