ALJDEC

00F-RF0239-ROC · Registrar of Contractors · 2000-05-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 1, 2000; 9:15 A.M.; Phoenix, Arizona APPEARANCES: Complainants: Pietro Amoroso and Pietra Amoroso Construction Ventures, L. L. C.: No Appearance Arizona Registrar of Contractors: Montgomery Lee, Esq. Assistant Attorney General ADMINISTRATIVE LAW JUDGE: George A. Schade, Jr.

This matter concerns a claim for recovery from the Residential Contractors’ Recovery Fund (“Fund”) pursuant to Arizona Revised Statutes (“A.R.S.”) § 32-1132(A). Based upon the evidence presented at the hearing, Administrative Law Judge (“ALJ”) George A. Schade, Jr. submits this Recommended Decision and Order to the Arizona Registrar of Contractors (“Registrar”). FINDINGS OF FACT PROCEDURAL BACKGROUND 1. On December 13, 1999, Complainants Mr. and Mrs. Pietro Amoroso filed an application for payment from the Fund in the amount of $11,240.00, for monies paid to Respondent Construction Ventures, L. L. C. (“Construction Ventures”) for which no work was done pursuant to a construction contract. 2. On February 9, 2000, the Registrar made an offer of payment from the Fund in the amount of $4,040.00. 3. On February 15, 2000, Mr. and Mrs. Amoroso requested a hearing. 4. On March 1, 2000, the Registrar issued a Notice to Contractor of Claim for Administrative Payout. 5. On March 20, 2000, the Registrar issued a Notice of Recovery Fund Payout Hearing setting a hearing on May 1, 2000. 6. On May 1, 2000, a hearing was held. Mrs. Amoroso testified, presented the testimony of Messrs. Sammy F. Ciorciari and Nicolo Amoroso. Construction Ventures did not appear at the hearing. Assistant Attorney General Montgomery Lee, Esq. represented the Registrar. The ALJ took official notice of the entire contents of the Registrar’s file, submitted to the Office of Administrative Hearings, related to Mr. and Mrs. Amoroso’s application for recovery from the Fund. THE EVIDENCE OF DAMAGES IN SUPPORT OF THE PAYOUT CLAIM 7. On January 11, 1999, the Registrar issued to Respondent Construction Ventures, L. L. C. (“Construction Ventures”) License No. 141435, Class B. Mr. Frank Lowell Horton and Mr. Donald Gene Horton were the principals. 8. On September 2, 1999, the Registrar suspended Construction Ventures’ License No. 141435, Class B, for lack of a contractor’s bond. 9. On October 7, 1999, the Registrar revoked Construction Ventures’ License No. 141435, Class B, in a disciplinary proceeding in Case No. 99- 3169. 10. On or about September 23, 1998, Mr. and Mrs. Amoroso negotiated a contract with Construction Ventures for the construction of a residence in Scottsdale, Arizona. 11. On October 2, 1998, Mr. and Mrs. Amoroso executed a written construction contract and paid Construction Ventures $7,500.00. Construction Ventures gave a discount and rebate for the cash payment, so the actual payment made was $7,200.00. 12. Thereafter, Construction Ventures did not do any work pursuant to the contract in spite of numerous requests from Mr. and Mrs. Amoroso. 13. On February 12, 1999, Mr. and Mrs. Amoroso paid Construction Ventures a check in the amount of $1,240.00. Mr. Donald G. Horton cashed the check. 14. On February 25, 1999, Mr. and Mrs. Amoroso paid Construction Ventures a check in the amount of $2,800.00. Mr. Donald G. Horton cashed the check. 15. Construction Ventures did not do any work pursuant to the parties’ contract. The house was not built, and the lot remains vacant. 16. Construction Ventures has not returned any part of the $11,240.00 Mr. and Mrs. Amoroso paid to Construction Ventures. CONCLUSIONS OF LAW 1. Mr. and Mrs. Amoroso timely filed their application for a recovery from the Fund. 2. Construction Ventures was notified of Mr. and Mrs. Amoroso’s application. 3. Mr. and Mrs. Amoroso meet all the requirements of a “person injured” as that term is defined in A.R.S. § 32-1131.3.[1] 4. At the time the parties negotiated their contract (September 23, 1998) and at the time Mr. and Mrs. Amoroso signed the contract and paid the initial deposit of $7,200.00 (October 2, 1998), Construction Ventures was not a “residential contractor” as that term is defined in A.R.S. §§ 32- 1131.4 and 32-1101(A)(3).[2] 5. Construction Ventures was a “residential contractor,” as that term is defined in A.R.S. §§ 32-1131.4 and 32-1101(A)(3), when Mr. and Mrs. Amoroso paid it $1,240.00 and $2,800.00 in February, 1999. 6. The explicit language and statutory structure of the Fund’s provisions is that a payout is to compensate aggrieved parties for damages suffered by the failure of a licensed contractor. A.R.S. § 32-1132(A) states in pertinent part: “[a]n award from the fund shall not be available to persons injured by an act, representation, transaction or conduct of a residential contractor whose license was in an inactive status, expired, canceled, revoked or suspended pursuant to section 32-1154, subsection A at the time of the contract.”

This exception shows the legislative intent that the Fund’s benefits are available to those who have been damaged by a licensed contractor. 7. Mr. and Mrs. Amoroso are entitled to a recovery from the Fund in the total amount of $4,040.00, consisting of the payments of $1,240.00 and $2,800.00 made in February, 1999, or after Construction Ventures became a licensed contractor. RECOMMENDED ORDER It is recommended that the Registrar, on the effective date of this order, commence and finalize payment procedures from the Fund to Mr. and Mrs. Amoroso in the amount of Four Thousand Forty Dollars and No Cents ($4,040.00). SUBMITTED this 2d day of May, 2000.

George A. Schade, Jr. Administrative Law Judge

The original Recommended Decision and Order of the Administrative Law Judge was mailed on May 2, 2000, for distribution to the parties, to:

Michael P. Goldwater Arizona Registrar of Contractors 800 West Washington, 6th Floor Phoenix, Arizona 85007

George A. Schade, Jr. ----------------------- [1] A.R.S. § 32-1131.3 states that the term "person injured" means “any owner of residential real property which is classified as class three property under section 42-12003 and which is actually occupied or intended to be occupied by the owner as a residence including community property, tenants in common or joint tenants who are damaged by the failure of a residential contractor or a dual licensed contractor to adequately build or improve a residential structure or appurtenance on that real property.” [2] A.R.S. § 32-1131.4 states that the term "residential contractor" means “a contractor as defined in section 32-1101 who is licensed to perform work on residential property pursuant to this chapter and who engages in residential contracting.”

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826