ALJDEC decisions subject to certification as final

09F-RF0619-ROC · Registrar of Contractors · 2009-09-15

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 10, 2009.

APPEARANCES: >The Plaintiff appeared in his own behalf. >The Defendant appeared through Stephen Ripley, Jr., its general manager, construction manager and sales manager.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law, Recommended Order and Award are made.

FINDINGS OF FACT

1. Plaintiff, the owner and occupant of his residence, is found to qualify as an “injured person” as that term is defined in A.R.S. § 32- 1131(3), and he is entitled to pursue claims for recovery of a monetary award from the Residential Contractor’s Recovery Fund (herein called the “Fund” or the “Recovery Fund”) for provable damages sustained as a result of acts or omissions of Defendants.

2. Defendant’s contracting license has been previously revoked for cause by final Order of the Registrar of Contractors (herein called the “Registrar”) in Case Number G08-0653 that was allowed to become final in the absence of any further

administrative or judicial appeal therefrom. Such license revocation was the result of a prior default Decision and Order entered following the failure of Defendant to file a timely written answer to the formal Citation that had been issued based upon a formal complaint filed by this same Plaintiff. Such default in answering generated a statutorily mandated treatment to deem the allegations contained in the filed complaint to be true and correct,[1] thereby effectively proving violations by Defendant of the State’s contracting laws.

3. A claim for an administrative award from the Recovery Fund was filed by Plaintiff in the amount of $3,828.00, such sum approximately coinciding with the amount of the lowest of three separate bids or proposals obtained by Plaintiff and submitted with his application for a Fund Award.

4. The Registrar had received advance notification of the existence and amount of the above-named Plaintiff’s claim for an administrative payout from the Fund and had neither objected nor requested a hearing as to such filed claim, thereby effectively consenting to Plaintiff’s entitlement to the entire claim.

5. This hearing was convened following a filed express request by or on behalf of Defendant, through Stephen Ripley, Jr., subsequent to having received the formal notice of claim for $3,828.00 sent to all parties, thereby indicating its objection to the payment of any portion of the claimed amount.

6. The within Fund claim related to the probable expenses to be incurred by Plaintiff in arranging for and accomplishing proper repairs to his concrete driveway that sustained cracking damage caused by or attributable to acts or omissions of Defendant. The determination on the issue of Defendant’s responsibility for such driveway damage was incorporated within the Registrar’s previously entered default Order and may not

be collaterally attacked by Defendant in the instant administrative action initiated by Plaintiff seeking an award from the Fund. Moreover, the prior findings, conclusions and the entered Registrar’s default Order must be accorded a res judicata effect on these subsequent Recovery Fund proceedings. The possibility or even a probability that Defendant could have successfully interposed a defense to the charged contracting law violations may not be equated with the actual timely raising of any such defenses before the Registrar’s entered Order became final and non- appealable.

7. Little or no merit is found to Defendant’s contention that it was not given the opportunity to view the damaged driveway and to obtain various proposals for the correction of any damaged portions of the concrete. On the contrary, the overall elapsed time during which the underlying complaint as well as the subsequent Recovery Fund application have been pending more than allowed for ample opportunities for Defendant to view and to obtain corrective proposals for repair of the driveway. More importantly, there was no credible evidentiary indication that Plaintiff had received any communicated requests by or on behalf of Defendant for entry onto the property or had refused access to any appropriately identified contractor visiting the property without advance notice and attempting to formulate a bid for repair work.

8. Defendant did belatedly obtain and submit at the hearing one unsigned proposal from another unrelated licensed contractor that was in the amount of $1,633.81, substantially less than any of the three separate bids obtained by Plaintiff, all of which were not only for the same approximate amount of square footage to be removed and replaced but also were extremely close to the monetary sum reflected in the low bid. It appeared likely that the bid obtained by Defendant contemplated a far less extensive treatment of the concrete damage problem than did any of the other viable proposals.

9. Defendant’s obtained bid envisioned saw cutting the driveway concrete only around and along the sides of two significant cracks running through four separate driveway sections. The removed concrete would then be replaced only in the locations immediately adjacent to the cracks in a somewhat long, thin new slab section, thereby effectively creating additional but unnecessary control joints through each of the driveway slab sections. The existing number and size of control joints were shown to have been fully appropriate for the sizes of the separate driveway sections. Conversely, all of Plaintiff’s bids uniformly contemplated the removal and replacement of the entire four slab sections containing the cracks, such remedial work shown to be more appropriate and effective as a corrective measure, not only by the various contractors bidding the repair work but also by the Registrar’s assigned Inspector.

10. Based upon the credible evidentiary presentations at the hearing, it is found and determined that the scope of remedial work envisioned under all of the several separate bids obtained by Plaintiff, including the low bid, would almost certainly tend to produce a more appropriate end result, aesthetically and structurally, than the far lesser treatment contemplated under the bid obtained by Defendant. However, despite the fact that the need for a hose bib movement had been one of the original complaint item subjects of the prior statutory admission, none of the submitted bids addressed the cost of such hose bib relocation work, and the low bid amount should not be increased by any projected expense element. The actual monetary amount set forth in the lowest of the bids obtained by Plaintiff relating solely to the driveway repair work was $3,728.00.

11. It is found and determined that the amount of damages sufficiently proven to have been sustained by Plaintiff arising from and caused by Defendant’s prior acts or omissions are in the amount of $3,728.00 representing almost the entire sum claimed hereunder. Such sum is further found to represent a proper and fully warranted monetary Fund Award to be paid to Plaintiff in this case.

CONCLUSIONS OF LAW

1. Under the facts and circumstances of this case, the Registrar of Contractors is empowered to determine and award proper payment to Plaintiffs from the Residential Contractor’s Recovery Fund pursuant to A.R.S. § 32-1154(E).

2. The manifest purpose of the statutory Recovery Fund process is to compensate homeowner/occupants of residential property for damages or losses sustained as a result of dealings with licensed contractors.

3. Legally applicable principles of res judicata and collateral estoppel, mandating finality to previously deemed admitted facts and issues between the same parties, effectively prevent Defendant from attacking the validity or binding effect of the previously determined or admitted issues before the Registrar of Contractors that are the same issues underlying the within Fund claim.

4. The entire case record adequately supports an entitlement by Plaintiff to a monetary Recovery Fund Award to Plaintiff in the amount of $3,728.00, 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).

RECOMMENDED ORDER

In view of the foregoing, it is recommended that on the effective date of this Order the Registrar of Contractors shall commence and finalize payment procedures from the Residential Contractor’s Recovery Fund to Plaintiffs in the amount of $3,728.00 for damages.

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 will be forty (40) days from the date of that certification.

Dated: September 16, 2009. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

William A Mundell, Director Registrar of Contractors Legal Department 3838 North Central Avenue (Suite 400) Phoenix, AZ 85012 - 1906 ----------------------- [1] See A.R.S. §32-1155(B).

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