ALJDEC

01F-RF0244-ROC · Registrar of Contractors · 2001-05-22

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 22, 2001 APPEARANCES: Plaintiffs: Raymond and Maryann Ringley appeared at the hearing pro se. Defendant : Scott Coker Ellsworth appeared for Diamond Development. Respondent : Victoria Martin, Assistant Attorney General State of Arizona, represented the Registrar of Contractors Recovery Fund; witness William Redman, Inspector. ADMINISTRATIVE LAW JUDGE: Gary B. Strickland _____________________________________________________________________

Evidence and testimony were presented at the hearing of this matter held on May 22, 2001 at the Office of Administrative Hearings in Phoenix, Arizona. Based upon the entire record, the following Finding of Facts are made, Conclusions of Law rendered, and Recommended Decision and Order issued.

FINDINGS OF FACT 1. Plaintiffs have brought this matter before the Office of Administrative Hearings in an effort to recover the maximum to which they may be entitled from the Recovery Fund in accordance with the provisions of Article 2.1, Title 32 ( 1131, et seq., of the Arizona Revised Statutes.

2. Defendant’s privilege to operate as a contractor within the state of Arizona has been suspended, Defendant Scott Coker Ellsworth, dba Double Diamond Development having failed to satisfy the requirements imposed upon it by the Registrar’s Order of February 15, 2000.

3. The undisputed evidence reveals that Plaintiffs filed a complaint with the Registrar of Contractors on or about May 13, 1999 concerning the workmanship of Defendant in the construction of their home. Defendant not having performed the necessary replacement and/or repair indicated by the subsequently issued Corrective Work Order, a hearing was conducted on January 27, 2000 at the Office of Administrative Hearings. The Administrative Law Judge issued a Recommended Decision on February 4, 2000 determining that repairs should be performed by the Defendant contractor and directing that Defendant’s license be suspended should the directive not be followed.

4. Defendant performed its contractual responsibilities on this job in a manner that has been determined substandard by the Registrar of Contractors, an Order having been issued by the Registrar on February 15, 2000 directing Defendant to perform appropriate and effective remediation of the deficiencies noted therein. Although provided to March 26, 2000 to comply with the Order, Defendant failed to satisfactorily make the requisite correction/repair/replacement.

5. Plaintiffs fall within the class of persons concerning which Article 2.1 of Title 32 was enacted to protect.

6. On April 10, 2000, Plaintiffs filed a claim with the Recovery Fund seeking compensation for losses sustained as a result of Scott Coker Ellsworth, dba Double Diamond Development’s failure to perform as originally agreed under its contract with Plaintiffs and pursuant to the Registrar’s directive. Plaintiffs requested compensation of $7,500.

7. Plaintiffs supported their claim for recovery from the Fund with a bid that they had obtained from Silverwood Construction. In the interim, Defendant made arrangements with another company, Silverwood no longer engaged in this business, K & M Plastering and Drywall, Inc., to perform the work. Thereafter, the Registrar’s Inspector conducted a Compliance Inspection on January 2, 2001 and issued a report (the “Recovery Fund Inspection Report”)[1] recommending payment of $3,100. from the Fund, the Plaintiffs’ request for the greater amount including items that were determined stale under the two year statute[2] and, therefore, excluded from consideration.

8. On January 12, 2001, the Registrar of Contractors provided notice to Plaintiffs of its intent to release $3,100. to Plaintiffs from the Fund, delineated its rationale therefor, and notified Plaintiffs of their right to a hearing should they decide not to accept the Fund’s offer.

9. The maximum restitutionary award available from the Recovery Fund is $20,000., limited to actual damages. A.R.S. ( 32-1132 (A). 10. A.R.S ( 32-1132 sets forth as a condition to recovery that the contractor licensee be in active license status at the time of the relevant contract’s execution. This contractor’s license was in active status at the time of the execution of the contract between the Plaintiff/homeowners and the Defendant/builder.

11. Title 32, Article 2.1 does not allow recovery to the injured homeowner for attorney’s fees or costs, except when a matter is successfully appealed to Superior Court.

12. At the hearing, Plaintiffs determined to accept the original offer made to them by the Recovery Fund Manager on January 12, 2001, $3,100.; the Plaintiffs were made more fully informed having had the opportunity to interact with the Assistant Attorney General. Mr. and Mrs. Ringley advised that they now better understand the statutory two year proviso and its impact on their claim.

13. Defendant Ellsworth testified in objection to the Fund’s offer declaring that the subcontractor, K & M Plastering and Drywall, Inc., had performed stucco work in an effort to make the necessary repairs, as directed by the Registrar’s Compliance Inspection Report, beyond that which had been authorized by Defendant.

14. The weight and sufficiency of the evidence demonstrates that Plaintiffs are entitled to a payout from the Recovery Fund totaling $3,100., despite Defendant’s remonstrance to the contrary. If Defendant’s subcontractor’s performance exceeded the scope of its authorization, Defendant’s recourse is to take up the issue with its subcontractor, not to seek to penalize these homeowners again for Defendant’s deficiencies in workmanship, deficiencies concerning which Defendant readily concedes. CONCLUSIONS OF LAW 1. The issues presented fall within the jurisdiction of the Office of Administrative Hearings.[3] The threshold question posed concerns whether Plaintiffs are entitled to a compensation for their loss as a result of action(s) and/or omissions contractually undertaken by one licensed by the Registrar of Contractors. The further question posed concerns the amount of damage recovery that should be paid Plaintiffs from the Fund.

2. Based upon the evidence presented and arguments made, it is determined that Plaintiffs are entitled to recover an amount from the Fund that will address their loss incurred due to Scott Coker Ellsworth, dba Double Diamond Development’s violations of the statutory provisions for which the contractor was cited by the Registrar on February 15, 2000. The claim made by Plaintiffs, supported as it was by the bid from Silverwood Construction, represents a reasonable and necessary consideration for the labor and materials that were reasonably necessary to compensate these Plaintiffs for the actual damages they suffered as a direct result of Scott Coker Ellsworth, dba Double Diamond Development’s violations, $3,100.

3. The burden of proof generally at an administrative hearing falls to the party asserting a claim, right or entitlement or seeking to impose a penalty. [4]Further, the standard of proof is that of the “preponderance of the evidence”. [5]Proof by a preponderance means that the evidence is sufficient to persuade the finder of fact that the proposition is “…more likely true than not.”[6] The evidence taken as a whole must convince the decision maker that the party who bears the burden, in this case the Plaintiffs, is more probably correct on the issue(s) in dispute.

4. The evidence of record sufficiently established that the Defendant contractor took actions, or failed to act, all to the detriment of the Plaintiffs. The evidence further established that Plaintiffs have been damaged to a degree and in an ascertainable amount of $3,100.

RECOMMENDED ORDER In view of the foregoing, and in light of Plaintiffs’ expression of acceptance of the offer previously made by the Recovery Fund, it is recommended that the Registrar of Contractors enter an Order releasing to the Plaintiffs herein $3,100. from the Recovery Fund, payable commencing on the effective date of this Order in accordance with the Registrar’s policies and procedures for such payout.

Set forth this 22nd day of May in the year 2001.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Gary B. Strickland Administrative Law Judge

Original transmitted by mail this ____ day of May, 2001, to:

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

By _______________________________

----------------------- [1] Hearing Exhibit 3-B. [2] A.R.S. ( 32-1136(A). [3] A.R.S. (( 41-1092.02 and 41-1092.07. [4] Culpepper v. Arizona Board of Nursing, 187 Ariz. 431, 930 P.2d 508 (App. 1997); See also Ariz. Admin. Code R2-19-119 (B). [5] Smith v. Arizona Department of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); See also Ariz. Admin. Code R2-19-119 (A). [6] In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). See also, J. Livermore, R. Bartels, & A. Hameroff, LAW OF EVIDENCE ( 301.1(4th ed. 2000).

-----------------------

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