ALJDEC

01F-RF0422-ROC · Registrar of Contractors · 2001-05-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: 23 May 2001 APPEARANCES: Plaintiffs: Robert and Dixie Layne, Plaintiffs; Jerry Layne, son of Plaintiffs. Defendant: None. Others: Mel Purchase, Inspector, Arizona Registrar of Contractors ADMINISTRATIVE LAW JUDGE: Maurice McWhirter _____________________________________________________________________ This hearing was held to hear Plaintiffs’ request that an award be paid to Plaintiffs out of the Arizona Registrar of Contractors’ (the “ROC”) residential contractors’ recovery fund (the “Fund”). Having heard the testimony of the witnesses and having read and considered the entire record in this matter, including the post-hearing memoranda submitted by the parties, the undersigned Administrative Law Judge hereby issues the following Findings of Fact, Conclusions of Law and Recommended Decision to the ROC.

FINDINGS OF FACT 1. The above-entitled case was called to hearing on 23 May 2001 at 9:00 AM at the Office of Administrative Hearings in Phoenix, Arizona, pursuant to a duly promulgated Notice of Hearing issued to the parties on April 2001, for the purpose of hearing Plaintiffs’ request for an award to be paid out of the Fund. Defendant failed to appear and, consequently, no evidence was presented in support of Defendant’s case. 2. Plaintiffs and Defendant entered into a contract whereby Defendant agreed to build a sunroom, bathroom and laundry room addition to Plaintiffs’ residence for the sum of $4544. Plaintiffs paid Defendant all but $1797 on the contract. 3. Defendant’s work on the project was far below the minimal standards of workmanship set forth in AAC R4-9-108. As a result, Plaintiffs filed a complaint with the ROC. Mel Purchase, an ROC inspector, was assigned to complete an investigation of the complaint. As a result of his job site inspection, Mr. Purchase issued a Corrective Work Order (“CWO”) dated 11 September 2000 directing Defendant to repair or complete the items listed in the CWO. 4. Defendant failed to satisfactorily complete all the repairs and work listed in the CWO. As a result, ROC Citation 01-0627 was issued to Defendant on 2 November 2000 ordering Defendant to answer and show cause as to why Defendant’s license should not be disciplined. Defendant did not answer. As a result, the ROC ordered that Defendant’s license be revoked effective 1 January 2001. 5. As a result of the revocation, Plaintiffs sought to recover an award for damages from the Fund. Plaintiffs obtained three bids to complete the repairs and complete the work which Defendant had failed to repair and/or complete properly. Plaintiffs obtained bids in the amount of $23,368.12 from Trinity Design Builders, $12,705 from Lange Remodeling and Building, Inc., and $10,625.43 from Kellyn’s Development. According to Mr. Purchase’s testimony, he took the lowest bid ($10,625.43) and subtracted the amount Plaintiffs still owed Defendant on the contract ($1797) as a setoff, which resulted in an ROC recommended award of $8828.43. Plaintiffs agreed that this was an equitable and appropriate award, and requested that such amount be paid to Plaintiffs from the Fund. 6. At the time that Defendant entered into its contract with Plaintiffs and completed the poor workmanship, Defendant was properly licensed to contract in Arizona. Plaintiffs have been injured as a result of Defendant’s failure to perform its work in accord with the workmanship standards set out in A.A.C. R4-9-108.

CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the ROC pursuant to ARS §32-1104 and Title 4, Chapter 9, Article 1 of the Arizona Administrative Code. 2. Plaintiffs is an injured person as that term is defined in A.R.S. §32-1131(3). 3. The provisions of ARS §32-1132(A) create the Fund “from which any person injured by an act, representation, transaction or conduct of a residential contractor . . . may be awarded . . .an amount of not more than $20,000.” Arizona Revised Statute § 32-1154(E) provides that the ROC “may” order a award from the Fund where a contractor’s license has been revoked or suspended as a result of a violation and the contractor is unwilling or unable to remedy the violation. 4. The bids obtained by Plaintiffs to repair the poor workmanship of Defendant are reasonable and, in addition to Mr. Purchase’s testimony, demonstrate that the amount necessary to correct Defendant’s poor workmanship will cost at least $10,625.43. It is important to note that Plaintiffs did not pay the original contract in full, leaving the sum of $1797 unpaid on the contract. This unpaid portion of the contract should be applied as a deduction from Plaintiff’s claim for damages. This leaves the amount of $8828.43 as an appropriate award to be paid from the Fund ($10,625.43 - $1797 = $8828.43). This award is supported by the record in this case, and is appropriately chargeable against Defendant and/or persons on the license as set forth in A.R.S. §32-1139(B). 5. The burden of proof generally at an administrative hearing falls to the Plaintiffs. Culpepper v. Arizona Board of Nursing, 187 Ariz. 431, 930 P.2d 508 (App. 1997). Further, the standard of proof at hearing is by a “preponderance of the evidence”. Smith v. Arizona Department of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). Plaintiffs have demonstrated by a preponderance of the evidence that the appropriate award to be paid from the Fund in this case should be $8828.43. Accordingly, Plaintiffs should be awarded $8828.43 from the Fund.

RECOMMENDED DECISION It is recommended to the ROC that, on the effective date of the ROC’s Order entered in this matter, the ROC commence and finalize payment procedures from the Fund to the Plaintiffs in the amount of $8828.43. Done this day: 23 May 2001

______________________________________ Maurice McWhirter 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 ___________________________

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