ALJDEC decisions subject to certification as final

08F-RF0207-ROC · Registrar of Contractors · 2008-04-29

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 15, 2008 APPEARANCES: Plaintiff: Gordon Bostrom appeared, pro per. Defendant: Defendant failed to appear either by authorized representative or counsel. Registrar of Contractors: Margo Rodriguez 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 September 10, 2007, Plaintiffs Gordon and Barbara Bostrom (“Plaintiffs”) filed the instant claim with the Registrar of Contractors asserting that they were entitled to recover a payout from the Registrar of Contractors’ Recovery Fund (“Fund”).[1] (Exhibit 3) 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 December 19. 2007, Plaintiffs requested a hearing on the Recovery Fund Payout subsequent to their receipt of a Notice of Recovery Fund Ineligibility dated December 14, 2007. (Exhibit 4A) 4. On January 4, 2008, the Registrar of Contractors issued a Notice to Contractor of Claim for Administrative Payout wherein Defendant was apprised of Plaintiffs’ $4,900.27 claim.[2] 5. This hearing convened in accordance with the Notice of Recovery Fund Payout Hearing dated March 10, 2008. 6. Plaintiff Gordon Bostrom (“Bostrom”) testified and submitted Exhibits A and B which were marked, admitted and considered. 7. Defendant I C T Interactive Coating Technologie, LLC (“Defendant”) failed to appear through any authorized representative or counsel. 8. The Recovery Fund submitted Exhibits 1 through 4C which were marked, admitted and considered. Margo Rodriguez (“Rodriguez”), Recovery Fund representative, appeared and testified on behalf of the Fund. 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. On or about March 31, 2005, Plaintiffs contracted with Defendant to “resurface Plaintiffs’ driveway, walkway and garage with granite like appearance” at their residence in Sun City West, Arizona (“premises/property”). (Exhibit 1A) b. Plaintiffs paid Respondent $3,105.00 as payment in full for the resurfacing. c. At the time of the parties entering into the contract and payment thereon, Defendant’s Arizona Contractor’s license No. 142358, Class K-05 was suspended.[3] (Exhibits 4A, 4B and 4C) d. On November 2, 2006, Plaintiffs filed a complaint against Defendant with the Registrar of Contractors wherein they alleged, inter alia, that “very soon [after application] the surface [applied by Defendant] began to peal and discolor.” e. A CITATION AND COMPLAINT was issued by the Registrar of Contractors on March 29, 2007 in Case No. G07-0782 wherein were alleged violations of A.R.S. §32-1154A 7, 18, 23 and 3 (namely, A.A.C. R4-9-108, the workmanship rule). f. Defendant failed to file a timely response to the CITATION AND COMPLAINT and the Registrar of Contractors issued a Decision and Order on June 27, 2007 whereby Defendant was found to be in default and revoke its license effective August 6, 2007. The action by the Registrar of Contractors effectively allowed Plaintiffs to make a claim with the Fund. g. In its December 14, 2007 Notice of Recovery Fund Ineligibility (“Notice of Ineligibility”), the Fund based its denial of Plaintiffs’ claim on A.R.S. §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.] h. The Notice of Ineligibility further provided that Defendant’s residential license (#142358) was suspended August 15, 2004 (lack of bond) and again March 1, 2005 (non-renewal) neither of which was ever lifted or set aside. The Fund then stated that because Plaintiffs contracted with Defendant on or about March 31, 2005 “it appears that the license was suspended at the time of your contract” and, therefore, no recovery from the Fund could be had because of the suspended status of Defendant’s license at that time. i. At the hearing, Bostrom contended that Plaintiffs contracted with Defendant based on referrals and that they were unaware of the need to further investigate a contractor’s license status before contracting therewith. Bostrom acknowledged that Plaintiffs did not check with Registrar of Contractors before contracting with Defendant.

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. §32-1132(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 lack of bond and non-renewal at the time it contracted with Plaintiffs on or about March 31, 2005. Plaintiffs’ assertion that they were unaware of the need to investigate the status of a contractor’s license at the time of contracting is an unpersuasive and untenable argument to permit a payout from the Recovery Fund. 4. The within record supports the Recovery Fund’s denial of an award to Plaintiffs from the Fund due to the fact that Defendant’s license No. 142358 was twice suspended at the time the parties contracted on or about March 31, 2005.

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.[4] Done this day, April 29, 2008.

______________________ Brian E. Smith Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Registrar of Contractors Fidelis V. Garcia 3838 N. Central Ave., Ste. 400 Phoenix, AZ 85012-1906

By ________________________ ----------------------- [1] In the Recovery Fund claim form Plaintiffs failed to indicate the amount they were claiming although they indicate the contract price paid Respondent was $3,100.00. [2] At the hearing, neither Plaintiffs nor the State introduced evidence explaining the mathematical basis for Plaintiffs’ $4,900.27 claim. [3] Respondent’s Class K-05 license was suspended August 15, 2004 for lack of a license bond and on March 1, 2005 for non-renewal. Neither suspension was ever lifted or set aside. [4] 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