ALJDEC decisions subject to certification as final

07F-RF0239-ROC · Registrar of Contractors · 2007-10-22

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 3, 2007 APPEARANCES: Complainant: Parag Rami appeared, pro per. Respondent: Chad Alexander, qualifying party, appeared and was represented by counsel, Ernest Shaver. Registrar of Contractors: Inspector Phil Pettice appeared on behalf of the Registrar of Contractors Recovery Fund. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. On or about October 10, 2006, Plaintiffs Parag and Deborah Rami (“Plaintiffs”) filed the instant claim with the Registrar of Contractors asserting that they were entitled to recover $34,127.86 from the Registrar of Contractors’ Recovery Fund (“Fund”). 2. Based on Plaintiffs’ claim, Registrar of Contractors Inspector Phil Pettice (“Pettice”) investigated and analyzed the underlying facts and documentation provided by Plaintiffs, prepared a Recovery Fund Claim Worksheet/Checklist and Financial Loss Worksheet and concluded that Plaintiffs were entitled to a Recovery Fund of $15,512.49.[1] 3. The Registrar of Contractors (“ROC”) received advance notice of the existence and amount of the above-named Plaintiffs’ claim for an administrative payout from the fund. 4. On May 3, 2007, the Registrar of Contractors issued a Notice to Contractor of Claim for Administrative Payout (“Notice to Contractor”) wherein Defendant was apprised of Plaintiffs’ $15,512.49. 5. On May 18, 2007, Defendant, by and through Chad Alexander (“Alexander”) filed a response with the Registrar of Contractors wherein it objected to the $15,512.49 payout on the basis, inter alia, that it had been fired from the subject project by Plaintiffs at which time “there was an outstanding balance on the job of $13,470.47” and the project was over 90% complete. Defendant further alleged that Plaintiffs also made changes to the original contract between them which resulted in added costs for which it should not be held responsible. 6. The matter was scheduled for hearing pursuant to the Registrar of Contractors’ Notice of Recovery Fund Payout Hearing dated August 31, 2007 (“Notice of Hearing”) and convened in accordance therewith. 7. Plaintiff Parag Rami (“Rami”) testified but submitted no exhibits. 8. Defendant appeared by and through Chad Alexander (“Alexander”), its qualifying party, and was represented by counsel, Ernest Shaver. Alexander did not testify but submitted Exhibit D-1 which was marked, admitted and considered. 9. The following salient facts were adduced at the hearing and/or were established by taking administrative notice of this tribunal’s receipt of the Registrar of Contractors’ file and are important to note: a. Inspector Pettice reviewed all receipts for work required to complete the project and paid for by Plaintiffs to determine what, if anything, was to properly be considered for a Recovery Fund payout. Said receipts totaled $28,622.96 and did not include $7,80.69 paid to Jorge Baca Morales, an unlicensed contractor. b. Inspector Pettice deducted $13,110.49, the amount remaining to be paid Defendant on its contract with Plaintiffs, from the above-referenced $28,622.96 to arrive at the $15,512.49 recommended Recovery Fund payout amount.[2] c. Defendant presented no witnesses at the hearing other than Mr. Rami. d. Asserting res judicata, Defendant, through counsel, argued that Plaintiffs should be limited to a Recovery Fund payout of $13,470.47 which is the amount set forth in the instant complaint and to which Defendant allowed a “judgment” to be taken against it. e. Counsel further argued that any Recovery Fund payout should further be reduced by amounts which could be recovered by Plaintiffs against Defendant’s bond and other assets pursuant to A.R.S. §32-1136 (D) (3) and (4). 10. Based on the findings in the underlying case, as well as the findings set forth in the instant matter, it is adjudicated and determined that Plaintiff is entitled to an award from the Fund in the amount of $15,512.49.

CONCLUSIONS OF LAW 1. Plaintiffs are determined to be injured persons as that term is defined in A.R.S. §32-1131(3). 2. Under the facts and circumstances of this case, the Registrar of Contractors is empowered to determine and award proper payment to Plaintiffs from the Contractors’ Recovery Fund pursuant to A.R.S. §32-1154 (E). 3. The within record supports an award to Plaintiffs in the amount of $15,512.49 all of which shall be appropriately chargeable against Defendant and/or persons on the license as set forth in A.R.S. §32-1139(B). 4. Defendant’s assertion of res judicata to establish a limit of the payout from the Recovery Fund is without merit. As Rami credibly testified, the $13,470.47 amount set forth in the complaint reflected the amount due on the contract which he expected to have to pay to complete the project to which was to be augmented by “additional funds paid to subcontractors directly to finish the project.” Thus, Plaintiffs are not limited to the $13,470.47 stated in paragraph 4(f) of the complaint. 5. Similarly, Defendant’s assertion that Plaintiffs must first seek compensation from Defendant’s bond and/or other assets pursuant to A.R.S. §32-1136(D) (3) and (4) is misplaced. A.R.S. §32-1136 deals with a Plaintiff’s securing a “ final judgment” from a “court” in order for Defendant’s argument to obtain. In point of fact, subparagraph (D) (3) specifically provides that the injured person, i.e., Plaintiffs herein, “is required to show that he has proceeded against any existing bond covering the residential contractor…except when the award is made pursuant to subsection E of this section or section 32-1154.” [Emphasis supplied.] In this matter, Plaintiff obtained no judgment from a court and is seeking a Recovery Fund payout under A.R.S. §32-1154.

RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that, on the effective date of the Order entered in this matter, the Registrar of Contractors shall commence and finalize payment procedures from the Contractors’ Recovery Fund in the amount of $15,512.49.[3] Done this day, October 22, 2007.

_______________________ Brian E. Smith 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 __________________________ ----------------------- [1] The Administrative Law Judge took administrative notice of these documents as well as the entire file provided the Office of Administrative Hearings by the ROC. [2] The amount due Defendant on the parties’ contract according to Plaintiffs’ complaint was $13,470.47. No evidence to explain the discrepancy with the $13,110.49 determined by Inspector Pettice to be due on the contract was presented by either party at the hearing. [3] In the event of 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 forty (40) days from the date of that certification.

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

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