ALJDEC decisions subject to certification as final

2008A-7090202-ROC · Registrar of Contractors · 2011-04-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 15, 2011, at 8:00 a.m. APPEARANCES: The Complainant appeared through his attorney, Gary W. Kazragis. The Respondent failed to appear. The Registrar of Contractors appeared through Assistant Attorney General, Mary DeLaat Williams. ADMINISTRATIVE LAW JUDGE: M. Douglas

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. On August 16, 2010, the Recovery Fund Administrator with the Registrar of Contractors issued a Notice of Denial of Recovery Fund Ineligibility advising the Complainant that he had been found ineligible for payment from the Contactors’ Recovery Fund. The Notice provides, in pertinent part, as follows: On September 17, 2008, we received your client’s Recovery Fund claim. Your client submitted various invoices and proofs of payments with the claim; however, the invoices and proofs of payments were to/from Diamond Sky Custom Homes. On September 29, 2008, December 9, 2008, and September 10, 2009, the Recovery Fund requested a copy of the contract and proofs of payments between your client, Mr. Thomas Vulpis, and Diamond Sky Custom Homes. Even after allowing extensions of time to submit the documentation, such was not submitted. As a result, the Recovery Fund is unable to assess “actual damages” due to a lack of valid supporting documentation that your client entered into a contract with Diamond Sky Custom Homes, who was the primary contractor at the jobsite. All invoices and proofs of payments indicate that Diamond Sky Custom Homes was responsible for the contracting and payments to all subcontractors that were utilized at the jobsite. In sum, your client has not provided documentation that he is a “Person Injured”, as is contemplated under A.R.S. § 32-1131(3). Based on the above, the agency is taking the position that this claim be closed with no payment from the Fund. 2. On August 30, 2010, the Complainant filed a request for an administrative hearing. 3. Credible testimony and evidence established that on February 11, 2011, the Recovery Fund received a copy of the contract between the Complainant and Diamond Sky Custom Homes. 4. Credible testimony and evidence established that the original contract price for the agreed upon construction project was the total sum of $122,000.00. 5. There was no dispute that there was a Change Order for additional work for an additional $16,635.00 which increased the total cost of the agreed upon construction project to the sum of $137, 635.00. 6. Credible testimony and evidence established that the Complainant had paid the Respondent a total of $37,499.14, at the time the Respondent abandoned the construction project. 7. Credible testimony and evidence established that the contractual sum of $100,135.86 was still due under the terms of the parties’ construction agreement when the Respondent abandoned the construction project. 8. Credible testimony and evidence established that the Complainant completed the construction project as an owner-builder. 9. Credible testimony and evidence established that the Complainant produced paid invoices from licensed contractors for completing the construction project at issue totaling the sum of $18,242.75 leaving a balance of $81,893.11 remaining unpaid to the Respondent under the terms of the parties’ construction agreement. 10. The credible testimony and evidence of record is insufficient and fails to support a finding that the Complainant suffered actual damages in this matter. CONCLUSIONS OF LAW 1. The Complainant has the burden of demonstrating by a preponderance of the evidence to establish eligibility pursuant to A.R.S. § 32-1131 et seq. See Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). 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). 3. Proof by preponderance of the evidence “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). 1. A.R.S. 32-1132(A) provides, in pertinent part, as follows: The residential contractors’ recovery fund is established, to be administered by the registrar, from which any person injured by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter may be awarded in the county where the violation occurred an amount of not more than thirty thousand dollars for damages sustained by the act, representation, transaction or conduct. An award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor’s violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. 2. A.R.S. § 32-1131 (3) provides as follows: “Person injured” means any owner of residential real property which is classified as class three property under section 42- 12003 and which is actually occupied or intended to be occupied by the owner as a residence including community property, tenants in common or joint tenants who are damaged by the failure of a residential contractor or a dual licensed contractor to adequately build or improve a residential structure or appurtenance on that real property. Included in this definition are lessees of residential real property who contract directly with a residential contractor or indirectly with a subcontractor of that contractor and homeowners’ or unit owners’ associations after transfer of control from the builder or developer for damages to the common elements within the complex. 3. The credible testimony and evidence of record failed to support a finding that the Complainant is an “injured person “as defined by A.R.S. § 32-1131 (3). 4. The credible testimony and evidence of record failed to support a finding that the Complainant has suffered actual damages in this matter. RECOMMENDed order In view of the foregoing, it is recommended that the Denial of Recovery Fund Ineligibility be affirmed and that this matter be closed with no payment from the Contractors’ Recovery Fund. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of the certification.

Done this day, April 18, 2011.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

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