ALJDEC decisions subject to certification as final

07F-RF0241-ROC · Registrar of Contractors · 2007-07-16

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 12, 2007 APPEARANCES: Plaintiff: Richard Werner appeared, pro per. Defendant: Defendant failed to appear either by authorized representative or counsel. Registrar of Contractors: Eugenia Kanon, Recovery Fund Supervisor, appeared on behalf of the Registrar of Contractors and was represented by Assistant Attorney General Mona Baskin. 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 6, 2006, Plaintiffs Richard and Robyn Werner (“Plaintiffs”) filed the instant claim with the Registrar of Contractors asserting that they were entitled to recover $5,567.00 from the Registrar of Contractors’ Recover Fund (“Fund”). 2. 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. 3. On January 18, 2007, Plaintiffs requested a hearing on the Recovery Fund Payout subsequent to their receipt of Notice of Recovery Fund Ineligibility dated January 12, 2007 (Exhibit 4A). 4. On February 5, 2007, the Registrar of Contractors issued a Notice to Contractor of Claim for Administrative Payout wherein Defendant was apprised of Plaintiffs’ $5,567.00 claim 5. This hearing convened in accordance with the Notice of Recovery Fund Payout Hearing dated June 6, 2007. 6. Plaintiffs seek to recover $5,567.00 from the fund which represents the full contract price paid to Defendant for shutters to be provided and installed by Defendant in Plaintiffs’ residence. 7. Plaintiff Richard Werner (“R. Werner”) testified and submitted Exhibit A which was marked, admitted and considered. 8. Defendant Blind and Shade Factory, Inc. dba Discount Blind and Shade Factory (“Defendant”) failed to appear through any authorized representative or counsel. 9. The Recovery Fund submitted Exhibits 1 through 4A which were marked, admitted and considered. Eugenia Kanon (“Kanon”), Recovery Fund Supervisor, appeared and testified on behalf of the Fund. 10. 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. On November 16, 2005, Plaintiffs contracted with Defendant to provide shutters for Plaintiffs’ residence in Gilbert, Arizona (“premises/project”). (Exhibit 2) b. On November 22, 2005, Plaintiffs paid Defendant $5,567.00 as payment in full for the shutters. (Exhibits 1 and 2A) c. At the time of the execution of the contract and payment thereon, Defendant’s Arizona Contractors’ License No. 189833, Class C-65R was suspended.[1] (Exhibit 3) d. Subsequent to the execution of and payment on the contract, Defendant performed no work on and did not deliver the subject shutters to Plaintiffs. e. On April 14, 2006, Complainants filed a complaint against Defendant with the Registrar of Contractors wherein they alleged, inter alia, Defendant’s failure to complete its obligations under the contract and/or refund the $5,567.00 contract amount. f. A CITATION AND COMPLAINT was issued by the Registrar of Contractors on July 27, 2006 in Case No. M06-2013 wherein were alleged violations of A.R.S. Sec. 32-1154A 1, 7 and 3 (namely, A.A.C. R4-9-108, the workmanship rule). (Exhibit 1A) g. Defendant failed to file a timely response to the CITATION AND COMPLAINT and the Registrar of Contractors issued a Decision and Order on August 22, 2006 whereby Defendant was found to be in default and revoked its license effective October 1, 2006. The action by the Registrar of Contractors effectively allowed Plaintiffs to make a claim with the Fund. h. In its January 12, 2007 Notice of Recovery Fund Ineligibility (“Notice of Ineligibility”), the Fund based its denial of Plaintiffs’ claim on A.R.S. Sec. 32-1132(A) which provides that “[a]n 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 status, expired, cancelled, revoked, suspended or not issued at the time of the contract.” [Emphasis in original.] i. The Notice of Ineligibility further provided that Defendant’s residential license (#189833) was suspended November 1, 2005 through January 11, 2006 for non-renewal. The Fund then stated that because Plaintiffs contracted with Defendant on November 16, 2006, paid the contract amount in full on November 22, 2006 and Defendant performed no work on the contract, no recovery from the Fund could be had because of the suspended status of Defendant’s license at the time of these events. j. At the hearing, R. Werner contended that Plaintiffs received a bid for the subject shutters from Defendant in October 2006 at which time Defendant’s license was in good standing with the ROC. In support of such contention, Plaintiffs submitted an affidavit from Manley Mark (Exhibit A), the sales representative who executed the contract on behalf of Defendant. As a result, Plaintiffs assert that they contracted with Defendant at the time the latter’s license was in full force and effect which entitles them to a payout from the Fund.

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. Although the Plaintiffs herein appear to be innocent victims in the instant scenario, A.R.S. §32-11323(A) provides that no award from the Recovery Fund will be made if the contractor’s license was “suspended…at the time of the contract.” Here, Defendant’s license was suspended due to non-renewal at the time it contracted with Plaintiffs on November 16, 2006 and when it received full payment for the shutters on November 22, 2006. Moreover, Defendant performed no work pursuant to the contract. Plaintiffs’ assertion that it negotiated with and/or received a bid from Defendant’s representative, Manley Mark, in October 2006 was unsupported by any credible or probative evidence and, therefore, is unpersuasive.[2] 4. The within record support’s the Recovery Fund’s denial of an award to Plaintiffs from the Fund due to the fact that Defendant’s license no. 189833 was suspended at the time of the execution of the November 16, 2006 contract and Defendant’s receipt of full payment thereunder on November 22, 2006. RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Recovery Fund’s denial of an award from the Fund to Plaintiffs be sustained.[3] Done this day, July 16, 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] Respondent’s Class C-65R license was suspended November 1, 2005 through January 11, 2006 due to non-renewal. [2] Mr. Mark did not appear and the hearing and his affidavit does not indicate when the purported bid was made or what the terms thereof were. [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.

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