ALJDEC

02F-RF0127-ROC · Registrar of Contractors · 2002-04-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 23, 2002 APPEARANCES: Benjamin Denison appeared on behalf of Plaintiffs Benjamin and Helga Denison. Defendant CSC Construction Services Corporation appeared through its qualifying party, Robert Watt. ADMINISTRATIVE LAW JUDGE: Daniel G. Martin _____________________________________________________________________

The question presented by this matter is whether Plaintiffs Benjamin and Helga Denison are entitled to an award and payment from the Residential Contractors’ Recovery Fund pursuant to A.R.S. § 32-1132(A). Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order: FINDINGS OF FACT 1. On July 16, 2001, Plaintiffs Benjamin and Helga Denison filed a complaint against Defendant CSC Construction Services Corporation (“CSC”) with the Registrar of Contractors (“ROC”). The Denisons alleged that CSC was responsible for a number of construction-related deficiencies at their home in Mesa, Arizona. 2. ROC Inspector Paul Terek investigated the Denisons’ complaint.

3. On August 2, 2001, Inspector Terek issued a Corrective Work Order (“CWO”) under which the ROC gave CSC fifteen days to complete corrective work at the Denisons’ home. Among other things, the CWO directed CSC to correct the following deficiencies: (i) drywall defects; (ii) incomplete landscaping; (iii) fence and side gate missing; and (iv) electrical panel door latch missing. 4. On July 30, 2001, before Inspector Terek had issued the CWO and before CSC had corrected any of the items set forth in the CWO, the ROC revoked CSC’s Class B license (No. 107305) in ROC Case No. G01- 0872. 5. By letter dated August 6, 2001, the ROC advised the Denisons that CSC’s license had been revoked and that the ROC was therefore closing the Denisons’ complaint. The ROC’s August 6, 2001 letter further advised the Denisons that they may be eligible to file a claim against from the Residential Contractors’ Recovery Fund (the “Fund”). 6. On August 16, 2001, the Denisons filed a claim with the ROC seeking payment from the Fund in the amount of $2,800.00 for damages they alleged to have incurred as a consequence of the construction deficiencies in their home attributable to CSC. 7. ROC Inspector Ted Gerold investigated the Denisons’ claim against the Fund. 8. Upon the conclusion of his investigation, Inspector Gerold determined that the Denisons had incurred damages in the amount of $1,700.00 that were attributable to construction deficiencies at their home for which CSC was responsible, and which were therefore payable from the Fund. 9. Inspector Gerold calculated the Denisons’ damages as follows: a. Landscaping: $ 750.00 b. Block Fence: $ 400.00 c. 48” Gate: $ 250.00 d. Drywall Repairs: $ 250.00 e. Electrical Panel Latch: $ 50.00 TOTAL: $1,700.00

At hearing, neither the Denisons nor CSC disputed Inspector Gerold’s determination as to the amount of the Denisons’ damages. However, both parties presented further evidence with regard to the block fence and gate, as follows: a. On the eastern side of the Denisons’ lot is another lot (No. 85) that is only partially developed. At present, stem walls are the only visible construction on lot 85. [See Exhibits 2 and 4] b. The development plan for the Denisons’ subdivision contemplates homes in close proximity to each other. In the case of the Denisons’ lot, the plan is such that the western exterior wall of the adjacent home (i.e., the home that is as yet to be constructed on lot 85) will be set back from the Denisons’ property line by only five feet. [See Exhibit A, a copy of which is attached hereto for reference] c. For reasons not made clear at hearing, the developer of the Denisons’ subdivision elected to establish a use and benefit easement over a section of the five foot setback between the Denisons’ eastern property line and lot 85. The result of this particular planning device is that for all intents and purposes, the western exterior wall of the home to be constructed on lot 85 will function as a dividing wall between the Denisons’ property and their neighbors’ property. [See Exhibit A] d. In the rear of the Denisons’ lot, the development plan calls for construction of a ten foot long masonry fence that extends north from the house (as yet to be built) on lot 85, along the line of the use and benefit easement, to an existing masonry fence that extends along the rear property line. [See Exhibit A] e. Towards the front of the Denisons’ lot, the development plan calls for construction of a second ten foot long masonry fence, including a four foot gate, between the Denisons’ home and the house on lot 85. [See Exhibit A] f. According to CSC, the above-referenced masonry fences and gate have not yet been constructed because the proper time to build those features is during the construction of the home on lot 85. Inspector Gerold’s testimony at hearing corroborated this position. g. Because the home on lot 85 (and in turn the masonry fences in issue) has not yet been built, the eastern side of the Denisons’ property is open to public view. Mr. Denison has partially remedied this situation by constructing a temporary block wall that encloses the Denisons’ rear yard. After discussion on the record regarding the foregoing, the parties agreed to resolve the Denisons’ claim against the Fund with regard to the masonry fences as follows: a. The Denisons withdrew their claim against the Fund for damages incurred as a result of CSC not yet having constructed their masonry fences; and b. Mr. Watt agreed to record an encumbrance against lot 85 to the effect that the masonry fences indicated on Exhibit A (as described herein) would be built upon construction of the home on lot 85. The parties did not specify that the gate would be included as part of the foregoing agreement, and the Administrative Law Judge finds that damages for the cost of the gate are properly awardable to the Denisons. Based on this finding, the Denisons will be responsible to pay the costs of installing the gate when the house on lot 85, and therefore the masonry fence between that home and the Denisons’ home, is constructed. Upon consideration of all of the evidence, and in light of the Denisons’ withdrawal of their claim for damages in regard to the masonry fences, the Administrative Law Judge finds that the Denisons established damages in the amount of $1,300.00 that are attributable to conduct by CSC in violation of A.R.S. § 32-1154. Therefore, the Denisons are entitled to an award from the Fund in the amount of $1,300.00. CONCLUSIONS OF LAW 1. Under A.R.S. § 32-1132, the ROC is empowered to determine and award payment to the Denisons from the Fund. 2. The Denisons meet all the requirements of a “person injured” as that term is defined in A.R.S. § 32-1131(3). 3. The weight of the evidence presented at hearing demonstrated that the Denisons are entitled to a payout from the Fund in the amount of $1,300.00. 4. Based on the foregoing, the Denisons should be awarded a total payout from the Fund in the amount of $1,300.00, all of which should be charged against CSC and/or persons named on CSC’s Class B license as set forth in A.R.S. § 32-1139(B). RECOMMENDED ORDER The Administrative Law Judge makes the following Recommended Order: On the effective date of the Order entered in this matter, the ROC shall commence and finalize payment procedures from the Fund to Benjamin and Helga Denison in the amount of One Thousand Three Hundred Dollars and No Cents ($1,300.00).

Done this day, May 7, 2002.

______________________________________ Daniel G. Martin Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2002, to:

Michael P. Goldwater, Director 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