ALJDEC decisions subject to certification as final

2009A-2392793-ROC · Registrar of Contractors · 2011-09-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 14, 2011, at 8:00 a.m. APPEARANCES: The Complainants appeared through Karen Koebel. The Respondent failed to appear. 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. The Respondent failed to appear at the time scheduled for the hearing of this matter. 2. This tribunal and the Complainants waited for an additional fifteen minutes but no one appeared on behalf of the Respondent. 3. The Respondent’s Class K-48 (No. 234208) was revoked by the Registrar of Contractors on April 19, 2011 in Case No. 2009-2392793 (formally L09- 0239) for the Respondent’s failure to pay a civil penalty imposed by the Registrar in the Default Decision and Order issued in said matter on November 24, 2009. 4. The Complainants are found to be a “person injured” as defined by statute and are found to be entitled to receive payment from the Contractors’ Recovery Fund for damages sustained as a result of the Respondent’s acts or omissions. 5. The Complainants produced three bids from licensed contractors for the proper correction of their tile floor. The first bid was from Oasis Floors & Design Center in the sum of $33,771.60, the second bid was from Cyndi’s Floors-N-More in the sum of $28, 086.80, and the third and lowest bid was from Desert Floors Carpet One Inc., in the total sum of $27, 458.47. 6. Credible testimony and evidence established that Desert Floors Carpet One Inc. is a licensed contractor within the State of Arizona. 7. Based upon credible evidence produced at hearing, it is found that a proper and reasonable amount payable to the Complainants from the Contractors’ Recovery Fund, for the Complainants’ actual damages in this matter, is the sum of $27, 458.47 representing the amount of the lowest bid from a properly licensed contractor for the proper correction of the Complainants’ floor. CONCLUSIONS OF LAW 1. A.R.S. § 32-1132 (A) provides, in pertinent part, as follows: A. 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. Actual damages shall not be established by bids supplied by or the value of work performed by a person or entity that is not licensed pursuant to this chapter and that is required to be licensed pursuant to this chapter. If the claimant has paid a deposit or down payment and no actual work is performed or materials are delivered, the award of actual damages shall not exceed the exact dollar amount of the deposit or down payment plus interest at the rate of ten per cent a year from the date the deposit or down payment is made or not more than thirty thousand dollars, whichever is less. Interest shall not be paid from the fund on any other awards under this chapter unless ordered by a court of competent jurisdiction. An 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. No more than the maximum individual award from the fund shall be made on any individual residence or to any injured person. Notwithstanding any other provision of law, monies in the residential contractors' recovery fund shall not be directly awarded for attorney fees or costs except in contested cases appealed to the superior court. 2. A.R.S. § 32-1131 (3) provides, in pertinent part, as follows: 3. "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. A.R.S. § 32-1154 (F) provides, in pertinent part, as follows: F. Notwithstanding any other provisions in this chapter, if a contractor's license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter the registrar may order payment from the residential contractors' recovery fund to remedy the violation. The registrar shall serve the contractor with a notice setting forth the amount claimed or to be awarded. If the contractor contests the amount or propriety of the payment, the contractor shall respond within ten days of the date of service by requesting a hearing to determine the amount or propriety of the payment. Failure by the contractor to respond in writing within ten days of the date of service shall be deemed a waiver by the contractor of the right to contest the amount claimed or to be awarded. Service may be made by personal service to the contractor or by mailing a copy of the notice by registered mail with postage prepaid to the contractor's latest address of record on file in the registrar's office. If service is made by registered mail, it is effective five days after the notice is mailed. Except as provided in section 41-1092.08, subsection H, the contractor or injured person may seek judicial review of the registrar's final award pursuant to title 12, chapter 7, article 6 [sic]. 4. A.R.S. § 32-1139 (B) provides, in pertinent part, as follows: B. If any amount is paid from the fund in settlement of a claim arising from the act, representation, transaction or conduct of a residential contractor, the license of the contractor shall be automatically suspended by operation of law until the amount paid from the fund is repaid in full, plus interest at the rate of ten per cent a year. Any person who is or was, at the time of the act or omission, named on a license that has been suspended because of a payment from the recovery fund is not eligible to receive a new license or retain another existing license that also shall be suspended by operation of law, nor shall any suspended license be reactivated, until the amount paid from the fund is repaid as provided in this subsection. 5. Under the facts and circumstances of this matter, the Registrar of Contractors is empowered to determine and award proper payment to the Complainants from the Contractors’ Recovery Fund pursuant to A.R.S. §. 32- 1154 (F). 6. Credible testimony and evidence supported findings which support an award from the Contractors’ Recovery Fund to the Complainants in the total sum of $27,458.47 for their actual damages in this matter all of which shall be appropriately chargeable against the Respondent and/or persons on the Respondent’s License as set forth in A.R.S. § 32-1139 (B) RECOMMENDed order In view of the foregoing, it is recommended that the Registrar of Contractors shall commence and finalize payment procedures from the Contractors’ Recovery Fund to the Complainants in the total amount of $27, 458.47 for the Complainants’ actual damages in this matter. 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, September 14, 2011. /s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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