ALJDEC

01F-RF0322-ROC · Registrar of Contractors · 2001-05-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On May 17, 2001, a hearing was held to determine if the Plaintiffs are entitled to an award of damages from the Residential Contractors’ Recovery Fund pursuant to A.R.S. §§ 32-1154(E) & 32-1132(A). Plaintiffs Joseph and Gloria Witek appeared on their own behalf. Richard Adams, the Defendant’s president and qualifying party, appeared on behalf of the Defendant. Evidence and testimony were presented. Based upon a review of the entire record, the undersigned Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Decision.

FINDINGS OF FACT 1. On September 15, 1999, Mr. Witek filed a complaint against Pacific States Construction (the “Defendant”). On August 3, 2000, a disciplinary hearing was held before Administrative Law Judge Gregory Hanchett. Joseph Witek and Richard Adams appeared for this hearing.

2. At the August 3, 2000 disciplinary hearing before Judge Hanchett, Mr. Witek proved that the Defendant had failed to complete a stucco job at Mr. Witek’s home (the “Home”). Judge Hanchett concluded that the Defendant had violated A.R.S. §32-1154(A)(1),(7)&(23). On August 22, 2000, Judge Hanchett recommended that the Defendant’s license be revoked unless the Defendant paid $7,270.00 plus interest to Mr. Witek.

3. On September 21, 2000, Deputy Director Stephen M. Drollinger adopted Judge Hanchett’s recommended decision. Deputy Director Stephen Drollinger also ordered that the Defendant’s license be placed on probation and that the Defendant post an additional surety bond. The effective date of the Deputy Director’s Order was October 31, 2000.

4. The Defendant failed to pay the $7,270.00 to Mr. Witek by October 31, 2000. On November 6, 2000, the Defendant’s Class B- license was revoked.

5. On or about November 11, 2000, Mr. Witek filed a Recovery Fund Claim with the Registrar of Contractors (“ROC”). On or about February 7, 2001, the Defendant requested a hearing.

6. During the recovery fund hearing, Mr. Witek requested $7,270.00 from the Residential Contractors’ Recovery Fund. Mr. Witek testified that he was willing to waive the interest.

7. Mr. Adams testified that he received $7,270.00 from a potential customer in October of 2000. Mr. Adams testified that he was fully prepared to pay the Plaintiffs in October of 2000. However, Mr. Adams testified that the ROC revoked his license so he had to return the $7,270.00 to the potential customer.

8. Mr. Adams testified that he believed that he had until December 2000 to pay the $7,270.00 to the Plaintiffs pursuant to the terms of a promissory note executed between the Plaintiffs and the Defendant. However, the Defendant was contractually obligated to make 12 monthly installment payments pursuant to the terms of the promissory note. The Defendant made no installment payments. 9. More importantly, the terms of the promissory note are not relevant to this recovery fund hearing because it was the Deputy Director’s Order (and not the promissory note) that set the deadline for the payment of the amount owed to the Plaintiffs to avoid license revocation. The Defendant was ordered to pay $7,270.00 to the Plaintiffs by October 31, 2000 (regardless of the terms of the promissory note). The Defendant failed to abide by the Deputy Director’s Order resulting in the revocation of the Defendant’s license.

CONCLUSIONS OF LAW 1. The Plaintiffs have the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A "preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not." Morris K. Udall, Arizona Law of Evidence, §5 (1960). It "is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not." Black's Law Dictionary, 1182 (6th ed. 1990).

2. At a minimum, A.R.S. §32-1132(A) requires the following: A. The Defendant's actions must violate Chapter 10 ("Chapter"), Title 32 of the Arizona Revised Statutes (and any rules adopted pursuant to this Chapter). B. The Plaintiffs must be an owner, tenant in common or joint tenant of the Home who is damaged by the failure of the Defendant to adequately build or improve the Home. See A.R.S. §32-1131(3). C. The Plaintiffs must suffer actual damages not to exceed "an amount necessary to complete or repair” the Home.

3. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that the Defendant has violated provisions of the above referenced Chapter (i.e., A.R.S. §32-1154(A)). See Deputy Director Drollinger’s Order, dated September 21, 2000.

4. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that the Plaintiffs are the owner of the Home at issue in this matter.

5. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that the Plaintiffs have suffered actual damages in the amount of $7,270.00. This amount does not exceed an amount necessary to complete or repair the Home.

6. Based upon the foregoing, the undersigned Administrative Law Judge concludes that the Plaintiffs are entitled to payment from the Residential Contractors’ Recovery Fund in the amount of $7,270.00. A.R.S. §32-1132(A).

RECOMMENDED DECISION

Based upon the foregoing, the undersigned Administrative Law Judge recommends that the Plaintiffs be granted payment in the amount of $7,270.00 from the Residential Contractors’ Recovery Fund.

Done this day, May 24, 2001.

______________________________________ Casey J. Newcomb Administrative Law Judge

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

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

By ___________________________ -----------------------

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