ALJDEC decisions subject to certification as final

07F-RF0185-ROC · Registrar of Contractors · 2007-08-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 6, 2007. APPEARANCES: Jun Shen appeared personally. Sierra Southwest Pools, L.L.C. did not appear. The Registrar of Contractors was represented by Assistant Attorney General Mona Baskin. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT

1. Sierra Southwest Pools, L.L.C. (“Defendant”) is the holder of License No. 210845, a Class C-05 contracting license. That license was issued by the Registrar of Contractors (“Registrar”) on August 15, 2005. 2. On or about July 3, 2003, Sierra Southwest Landscape Development, Inc. entered into a written contract with Jennie Si and Jun Shen (“Plaintiffs”) for a pool construction project at Plaintiffs’ residence. 3. The contract price for the project was $33,801.82. Plaintiffs paid Sierra Southwest Landscape Development, Inc. the sum of $33,301.82. The last draw was paid on June 24, 2004. Plaintiffs retained $500.00 until completion of the project. 4. Sierra Southwest Landscape and Design, Inc. had previously been issued License No. 140994, a Class K-21 contracting license, on December 15, 1998. It expired on January 1, 2002. 5. Plaintiffs moved into their new residence on April 18, 2004. 6. Defendant and Sierra Southwest Landscape Development, Inc. appear to be separate legal entities that share a similar address. 7. On December 7, 2005, Plaintiffs filed a written complaint with the Registrar alleging that the hot spa installed by Defendant did not work and an ocotillo supplied and planted by Defendant had died. Plaintiffs’ complaint was assigned Case No. M06-1126 by the Registrar. 8. Plaintiffs’ complaint did not disclose the last date of Defendant’s work. Also, the complaint states that Defendant has been paid the whole contract price. There is no mention of Plaintiffs retaining any funds. 9. In response to the filed complaint, the Registrar’s assigned inspector performed a jobsite inspection to view the complaint items. That inspection resulted in the inspector issuing a Corrective Work Order dated February 10, 2006 directing Defendant to timely perform corrective work to the spa. 10. The assigned inspector issued a second Corrective Work Order dated April 24, 2006 directing Defendant to timely perform remedial work to the negative edge pool. 11. On June 21, 2006, the Registrar issued a Citation and Complaint in Case No. M06-1126 alleging possible violations by Defendant of A.R.S. § 32-1154(A)(2), (7), (23) and (3); namely A.A.C. R4-9-108. The Citation and Complaint directed Defendant to timely file a written answer. Defendant was informed that a failure to timely file a written answer would be deemed an admission by it to the charges resulting in the imposition of discipline by the Registrar. 12. On July 19, 2006, the Registrar issued a Decision and Order in Case No. M06-1126 as a result of Defendant’s failure to timely file a written answer to the Citation and Complaint. The Registrar ordered that Defendant’s contracting license be revoked and imposed a $250.00 civil penalty. 13. On September 6, 2006, Defendant’s Class B-05 contracting license was revoked in Case No. M06-1126. 14. On September 20, 2006, Defendant’s Class B-05 contracting license was again revoked in Case No. M06-1126 due to Defendant’s failure to pay the civil penalty. 15. On September 25, 2006, Plaintiffs filed a Recovery Fund Claim against Defendant for an administrative payout from the Residential Contractors’ Recovery Fund. Plaintiffs’ application seeks a payout of $25,000.00. Plaintiffs’ Fund claim was assigned Case No. RF06-0185 by the Registrar. Plaintiffs’ transmittal letter dated September 20, 2006 filed with their claim requests a payout of $30,000.00. 16. By letter dated February 9, 2007, the Fund’s manager sent a Notice of Recovery Fund Ineligibility to Plaintiffs. 17. Plaintiffs requested an administrative hearing concerning the Fund’s determination that they were ineligible for a Fund payout. 18. The Registrar forwarded Case No. RF06-0186 to the Office of Administrative Hearings, an independent agency, for formal hearing. The Registrar issued a Notice of Recover Fund Hearing advising the parties of the time, place and location of the formal hearing. The notice was sent to the parties at their addresses of record with the Registrar. 19. The commencement of the scheduled hearing was delayed approximately 15 minute to allow for the late arrival of an authorized representative or attorney for Defendant. After the delay, the Administrative Law Judge conducted the hearing in Defendant’s absence. 20. Plaintiffs contracted with Sierra Southwest Landscape Development, Inc. after its license had expired. Plaintiffs did not contract with Defendant.

CONCLUSIONS OF LAW

1. The Registrar is empowered to award proper payment from the Fund to remedy a violation pursuant to A.R.S. § 32-1154(F). 2. Pursuant to A.A.C. R2-19-119(B), Plaintiffs have the burden of proof in this matter. The standard of proof is preponderance of the record. A.A.C. R2-19-119(A). 3. At the time Sierra Southwest Landscape and Design, Inc. contracted with Plaintiffs, it was not a “residential contractor” as defined in A.R.S. § 32-1131(4) because it was not licensed to perform work on residential property at the time. 4. Plaintiffs are not “injured persons” as that term is defined in A.R.S. § 32-1131(3). Plaintiffs did not contract with a licensed contractor for their pool project because Sierra Southwest Landscape and Design, Inc.’s contracting license had expired prior to entering into the parties’ contract. 5. The following provision of A.R.S. § 32-1133(A) prohibits the award of an administrative payout from the Fund to Plaintiffs as a result of the unlicensed contracting by Sierra Southwest Landscape and Design, Inc.:

An award from the fund shall not be available to persons injured by an act, representation, transaction or conduct of a residential contractor who was not licensed pursuant to this chapter or whose license was in an inactive, expired, cancelled, revoked, suspended or not issued at the time of the contract.

6. Plaintiffs failed to sustain their burden of proof in this matter.

RECOMMENDED ORDER Plaintiffs’ Recovery Fund Claim is denied on the effective date of the entered Order in Case No. RF07-0185. In the event certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order in this matter will be 40 days from the date of that certification.

Done this day, August 21, 2007.

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

Registrar of Contractors Fidelis V. Garcia Legal Department 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