ALJDEC

00F-RF0259-ROC · Registrar of Contractors · 2000-11-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 29, 2000. APPEARANCES: PLAINTIFF: Al Shefler, on his own behalf. DEFENDANT: by Maria Gotzev, president and authorized representative. INTERVENOR: Registrar of Contractors Residential Recovery Fund, by Montgomery Lee, Assistant Attorney General.

ADMINISTRATIVE LAW JUDGE: Anthony Halas _____________________________________________________________________ This matter came to hearing on November 29, 2000, to determine whether Plaintiff is eligible to recover from the Residential Contractors’ Fund, and if so, the amount, pursuant to A.R.S. § 32-1132.A. Evidence and testimony were presented, and based upon the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT 1. Arizona Contractors License No. 13185, Class C-05, held be Defendant Eurostone, Inc., has been previously suspended, effective December 14, 2000, by final ORDER of the Registrar of Contractors issued on December 6, 1999 in Case No. 99-2529. Pursuant to A.R.S. § 32-1154.E, such suspension is determined to render this Defendant unable to remedy the violation of the State’s residential contracting laws as previously determined in that case and which gave rise to the instant claim for damages by Plaintiff Al Shefler (Shefler). 2. The Registrar of Contractors has received advance notification of the existence and amount of the claim of Plaintiff Shefler for an administrative payout of $1400.00 from the Registrar of Contractors Residential Contractors’ Recovery Fund (Recovery Fund). 3. On June 22, 2000, the manager of the Registrar of Contractors Recovery Fund issued NOTICE OF RECOVERY FUND INELIGIBILITY, after which this hearing was convened following express request for such by Plaintiff Shefler on August 28, 2000, and the Registrar of Contractors on September 12, 2000. 4. The Registrar issued NOTICE TO CONTRACTOR OF CLAIM FOR ADMINISTRATIVE PAYOUT on September 12, 2000, and NOTICE OF RECOVERY FUND PAYOUT HEARING on October 20, 2000. 5. On November 8, 2000, Maria Gotzev (Gotzev) filed correspondence with the Registrar expressing disagreement with any payout from the Recovery Fund. 6. At hearing, counsel for the Recovery Fund stated that, upon further review, and pursuant to A.R.S. § 32-1132, the Fund no longer opposed payout of the amount of $1400.00 as claimed by Plaintiff Shefler. 7. On the basis of the testimony of Mr. Shefler and Ms. Gotzev at this hearing, as well as administrative notice of certain documents compiled and maintained by the Registrar of Contractors, the following facts are found relevant to a determination of this issue: A. Al Shefler is the owner and resident of a home at 11457 East Juan Tabo, in Scottsdale, Arizona. B. Shefler contracted to have Eurostone, Inc. (an Arizona contractor with License No. 133185, Class C-05 in good standing at the time) perform certain “honing” and refinishing of a travertine stone tile floor in the residence, after which the work was complained of to the Registrar of Contractors. On the basis of that complaint, in Case No. 99- 2549, the Registrar’s final ORDER, issued December 6, 1999, adopted an administrative law judge RECOMMENDED DECISION issued October 19, 1999, which determined that Eurostone Inc. was to have its license suspended until it paid reimbursement of $1400.00 to Shefler. C. To this date, Eurostone, Inc. has not complied with the Registrar’s Order, and License No. 133185, Class C-05 was suspended, effective December 14, 1999. D. On December 30, 1999, Shefler filed a claim with the Recovery Fund in the amount of $1400.00. E. Shefler testified to explain why the claimed sum of $1400.00 was included in the amount he had paid Eurostone, Inc. to have it complete its contract to refinish his travertine stone floor, but that as a direct result of the contracting law violation by Eurostone, Inc., it was necessary that he be reimbursed that amount. F. Gotzev testified to explain why she believed that Eurostone, Inc. had satisfactorily completed the contract to refinish Shefler’s travertine stone floor, notwithstanding the Registrar’s Order.

8. Based on the evidence of record, it is found that, pursuant to A.R.S. § 32-1132.A, the actual damages to Plaintiff Shefler necessary to complete or repair the residential structure are $1400.00.

APPLICABLE LAW A.R.S. §§ 32-1131 through 32-1140 provide for laws relating to the Residential Contractors’ Recovery Fund. In pertinent part, particular sections of that article state:

A.R.S. § 32-1131: In this article, unless the context otherwise requires: 1. "Assessment" means the contribution by a contractor to the residential contractors' recovery fund. 2. "Fund" means the residential contractors' recovery fund. 3. "Person injured" means any owner of residential real property which is classified as class five property under section 42-162, subsection A, paragraph 5 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. Included in this definition are lessees of residential real property who contract directly with a residential contractor or indirectly with a subcontractor of that contractor and homeowners' or unit owners' associations after transfer of control from the builder or developer for damages to the common elements within the complex. 4. "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.

A.R.S. § 32-1132: A. There is established the residential contractors' recovery fund, to be administered by the registrar, from which any person injured by an act, representation, transaction or conduct of a residential contractor, which is in violation of this chapter or the rules adopted pursuant to this chapter, may be awarded in the county where the violation occurred an amount of not more than twenty thousand dollars for damages sustained by the act, representation, transaction or conduct. An award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines, except that an 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. No more than the maximum individual award from the fund shall be made on any individual residence or to any injured person. Notwithstanding any other provision of law, monies in the contractors' recovery fund shall not be directly awarded for attorneys' fees or costs except in contested cases appealed to the superior court.

CONCLUSIONS OF LAW 1. Under the facts and circumstances of this case, the Registrar of Contractors is empowered to determine and award proper payment to Plaintiff from the Contractors’ Recovery Fund pursuant to A.R.S. § 32-1154(E). 2. This record supports an award to Plaintiff in the amount of $1400.00, all of which shall be appropriately chargeable against Defendant and/or persons on the license as set forth in A.R.S. § 32-1139(B). // // // // //

RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that, on the effective date of this Order the Registrar of Contractors shall commence and finalize payment procedures from the Contractors’ Recovery Fund to Plaintiff in the amount of $1400.00. Done this day, November 29, 2000.

______________________________________ Anthony Halas Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2000, to:

Registrar of Contractors Michael P. Goldwater Attn: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

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