ALJDEC decisions subject to certification as final

2008A-2139974-ROC · Registrar of Contractors · 2012-02-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 15, 2012, at 8:15 a.m. APPEARANCES: The Complainants appeared by and through Matthew Lukaszewski. Respondent Arc Tech Welding Inc (Corp) (“Arc Tech”) failed to appear. Respondent NAUS Construction Inc (Corp) (“NAUS”) failed to appear. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________ Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Orders are made: FINDINGS OF FACT 1. Respondent Arc Tech is the holder of License No. C17R.154729-R, issued by the Registrar of Contractors. 2. Respondent NAUS is the holder License No. B.093322-R, issued by the Registrar of Contractors. 3. This is a residential matter where the Complainants purchased a residence in the State of Arizona wherein Respondent NAUS had performed construction work in its capacity of a licensed general contractor and Respondent Arc Tech had performed work in its capacity as a licensed subcontractor. 4. The Registrar’s Order Granting Complainant’s Request for Reconsideration/Order Setting Limited Hearing Re Statute of Limitations provides, in pertinent part, as follows: If it is determined that that the Complaints were timely filed, then Citations and Complaints will be issued in these matters. If it [sic] determined that the Complaints were not timely filed, then these matters will be dismissed with prejudice. Complainants will bear the burden of proof with regard to whether or not the Complaints were timely filed. Note: A.R.S. § 32-1155 was amended in 2007 to include the last sentence of subsection A. The amendment went into effect on September 19, 2007. Because the cause of action occurred prior to the amendment going into effect, the Registrar does not dispute that the pre- amendment version of A.R.S. § 32-1155 (A) applies. However, a fact issue remains as to whether the two years runs form the date of “actual” occupancy or the “ability to occupy.” It is undisputed that as of July 25, 2005, Complainants had the ability to occupy the residence at issued, [sic] but chose not occupy.

5. The only issues presented in this limited hearing are when the applicable two year time period began to run and if the two separate complaints at issue were filed within the two year period prescribed by statute. 6. There was no dispute that the Complainants purchased their home located on 1130 McDonald Drive, Prescott, Arizona, on July 25, 2005. 7. There was no dispute that the residence was tendered to the Complainants and that the Complainants had the right to occupy their new residence as of July 25, 2005. 8. Credible testimony and evidence established that the Complainants chose not to move to their new residence until they sold their residence in another state and earned additional income for their retirement. 9. There was no dispute that the residence at issue was unoccupied from July 25, 2005 through September 22, 2006. 10. There was no dispute that the Complainants actually occupied their residence on September 23, 2006. 11. There was no dispute that the Complainants filed the two Complaints at issue with the Registrar of Contractors on November 9, 2007. 12. The Complainants assert that, pursuant to the wording of A.R.S. § 32- 1155 (A) as in effect in July 25, 2005, the two year period in which to file complaints with the Registrar of Contractors would not begin until the Complainants chose to physically occupy their residence. 13. Undisputed credible testimony and evidence established that the two Complaints at issue were filed more than two years after the residence at issue was tendered to the Complainants for their occupancy of the residence. 14. The credible testimony and evidence of record is insufficient and fails to support a finding that a homeowner can extend the applicable two year time period in which to file a complaint with the Registrar of Contractors provided by the terms of the pre-amendment version of A.R.S. § 32-1154 (A) by choosing not to physically occupy their new residence. 15. Credible testimony and evidence established that the two Complaints at issue were not timely filed and that both matters should be dismissed as having been filed beyond the applicable two year time period provided by the terms of the pre-amendment terms of A.R.S. § 32-1154 (A). CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally on the Complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285 P.2d 367 (1949). 2. Proof by “preponderance of the evidence” means that it is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). It “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (rev. 6th ed. 1990). 16. The pre-amended version of A.R.S. § 32-1155 (A) provides, in pertinent part, as follows: Upon the filing of a written complaint with the registrar charging a licensee with the commission, within two years prior to the date of filing the complaint, of an act that is cause for suspension or revocation of a license, the registrar after investigation may issue a citation directing the licensee, within ten days after service of the citation upon the licensee, to appear by filing with the registrar the licensee's written answer to the citation and complaint showing cause, if any, why the licensee's license should not be suspended or revoked. 3. The seminal case regarding when the statute of limitations begins to run is Lyon v. Great American Insurance Company, 4 Ariz. 596, 422 P.d 724 (Ariz. App. 1967). This case states that “… the one year statute of limitations began to run in favor of the surety and against the building contractee upon the contractee’s occupancy of the structure or upon the contractee’s discovery of the breach of the contract whichever shall first occur.” The Office of the Attorney General, in a published opinion at 1979 WL 23188 (Ariz. A.G.), discussed and interpreted the Lyon case:

The court implied that this critical point occurs when the structure is tendered for occupancy or when the homeowner discovers the defect. Significantly, the Court made no reference to the close of escrow. Even though the Lyon case involved a surety, its holding is persuasive and should be applied in lieu of the standard formulated in our previous opinion. (Emphasis added)

4. The Complainants failed to support their burden of proof to establish that the two complaints at issue were filed within the two year period provided by applicable statute. RECOMMENDed orderS docket no. 2008a-2139974-roc 1. In view of the foregoing, it is recommended that the prior determination of the Registrar that the complaint against Arc Tech Welding Inc (Corp) was not timely filed be affirmed and that that this matter be dismissed with prejudice. / / / / / /

DOCKET NO. 2008A-[number redacted]-ROC 2. In view of the foregoing, it is recommended that the prior determination of the Registrar that the complaint against Naus Construction Inc (Corp) was not timely filed be affirmed and that this matter be dismissed with prejudice. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of these Orders will be 40 days from the date of the certification. Done this day, February 28, 2012. /s/ M. Douglas Administrative Law Judge

Originally transmitted electronically on March 6, 2012, to:

William A. Mundell, Director Registrar of Contractors

Resubmitted electronically with corrections on March 19, 2012

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