ALJDEC decisions subject to certification as final

2009A-49046206-ROC · Registrar of Contractors · 2012-05-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 24, 2012, at 8:00 a.m. APPEARANCES: Complainant appeared through his attorney, Michael Rubin, Esq., Mariscal, Weeks, McIntyre & Friedlander P.A. Respondent failed to appear. The Registrar of Contractors appeared by and through Assistant Attorney General, Elizabeth Campbell. 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 or about March 12, 2009, Complainant filed a Complaint against Respondent with the Registrar of Contractors resulting in a Citation and Complaint (Case No. 09-4904) being issued against Respondent. The complaint form provides that the contract amount was $12,000.00, with $6,000.00 paid to the Respondent. Respondent did not answer the complaint, and on November 4, 2009, the Registrar of Contractors issued a Default Decision and Order revoking License No. K-11.206739-D of Clark Cable Services LLC. in Case No. 09-4904 2. Complainant filed a claim with the Residential Contractors’ Recovery Fund (the “Fund”) on December 19, 2011. Complainant stated that the contract date with Respondent was April 17, 2008, and that the contract amount was $6,000.00 and that Respondent had been paid the entire $6,000.00. 3. Complainant stated that he had moved into the residence at 4238 N. 18th Place, Phoenix, Arizona on March 12, 2004 and moved out of the residence on February 10, 2010. 4. There was no dispute that Complainant had sold the residence at issue at 4238 N. 18th Place, Phoenix, Arizona, before filing the claim at issue. 5. On January 9, 2012, the Registrar of Contractors issued a Notice of Denial of Recovery Fund Claim. 6. The Notice of Denial of Recovery Fund Claim provides, in pertinent part, as follows: Due to a number of inconsistencies between the complaint form and the claim form filed, a call was made by Marc A. D’Amore, the Administrator of the Recovery Fund, with Glenn Hawkins, Recovery Fund Supervisor, and Ruby Gonzalez, a temporary adjuster for the Recovery Fund; and later in the call, Doug Ulmer, present for the call. Mr. D’Amore asked about an invoice dated April 17, 2008, from Clark Cable Services LLC, ROC #206739, showing work at 4238 N. 18th Pl, Phoenix, AZ to be paid in full for an amount of $3,000.00. The handwriting on the invoice matched the handwriting on the complaint and claim form, with certain distinctive letters and numbers. The handwriting did not match the handwriting on file in the license jacket for the Respondent. Interestingly, this inauthentic invoice incorrectly spelled Complaint’s [sic] first name (“Mark” rather than the correct “Marc”).

The Complainant initially stated that he did not create of [sic] fill out the invoice, but later in the conversation, stated that he could have “possibly filled out parts of the invoice,” and yet later, fully admitted to having filled out the entire invoice. The Complainant had no explanation as to why he would change the date and the amount, spell his own first name wrong, nor did Complainant have any reasonable explanation for generating an inauthentic invoice purported to be from the contractor.

Complainant did state during this conversation that that another house that the Respondent had worked on was located at 1701 E. Amelia, Phoenix, AZ 85016. He stated that the Respondent had finished that project with no problems.

A proof of payment was submitted by Complainant only for $6,000.00 cash from his account deposited, on the same day of March 13, 2007, to the checking account of the Respondent. No documentation was submitted distinguishing what monies were paid towards the work at the 1701 E. Amelia project, or at the 4238 N. 18th Pl., project. No proof of payment for the inauthentic invoice was received, despite request. Further, despite a request for proof of occupancy of the job-site address, Complainant has not provided proof that he occupied the job site property, which, as referenced above, is located directly next door to Complainant’s residence which he has maintained since 1991. Due to major inconsistencies with representations made to the Registrar of Contractors in this matter, along the notable lack of documentation in support of his claim, Complainant’s credibility is highly suspect. Complainant has not provided evidence that he is eligible to access the Recovery Fund, and further, has failed to provide proof that he has suffered any compensable damages from the Fund, even if he were to be found eligible. His claim must therefore be denied.[1]

7. Complainant disagreed with the denial of his claim for damages from the Recovery Fund and requested an administrative hearing. 8. At the onset of the scheduled hearing, the Registrar of Contractors confirmed that it was contesting Complainant’s eligibility for payment from the Recovery Fund and also whether Complainant had suffered any compensable damages even if he were found to be eligible. 9. Credible testimony and evidence established that during most of the time period Complainant owned the residence at 4238 North 18th Place, Phoenix, Arizona, he also owned a residence located at 4242 North 18th Place, Phoenix, Arizona. 10. There was no dispute that Complainant utilized the 4242 North 18th Place address as his address for the original complaint filed in this matter. 11. Complainant testified that while he owned both properties, he utilized the 4242 North 18th Place address for his business office and actually lived at the 4238 North 18th Place property. Complainant stated that, at all times pertinent to his construction agreement with Respondent, he occupied the house located at 4238 N. 18th Place, Phoenix, Arizona as his full time residence. 12. Complainant’s ex-wife testified that during the time period between March 2004 and February 2010 she personally observed Complainant living in the residence at 4238 N. 18th Place, Phoenix, Arizona on several different occasions and that she regarded the residence located at 4238 N. 18th Place, Phoenix, Arizona as Complainant’s residence. 13. Credible testimony and evidence established that on all dates pertinent hereto, Complainant either intended to occupy or physically occupied the residence located at 4238 N. 18th Place, Phoenix, Arizona. 14. Complainant is found to be an “injured person” as defined by statute and is found to be eligible to receive payment from the Recovery Fund for any actual damages sustained as a result of Respondent’s acts or omissions. 15. In the original complaint in this matter, Complainant asserted that the date of his contract with Respondent was March 13, 2007. The contract amount was claimed to be $12,000.00. Complainant asserted that he had paid Respondent the sum of $6,000.00 for the work to be performed at 4238 North 18th Place, Phoenix, Arizona. 16. In his Recovery Fund Claim, Complainant stated that the date of the contract was April 17, 2008, and that he had paid Respondent the full amount of the $6,000.00 contract. Complainant submitted a written invoice (No. 206739) dated April 17, 2008, from Respondent allegedly showing Respondent had been paid the sum of $3,000.00 as payment in full for Respondent’s construction work in the residence located at 4238 N. 18th Place, Phoenix, Arizona. 17. In his testimony, Complainant admitted that he had prepared the April 17, 2008 Invoice. Complainant asserted that he had prepared the invoice as a consideration for the Respondent who was unable to write on said date and that the written invoice was required to help resolve a rabbinical dispute with Respondent. Complainant stated that he had purposefully misspelled his name on the invoice because Respondent customarily misspelled his name and he was preparing the invoice for Respondent. 18. There was no dispute that Complainant owned a third residence located at 1701 E. Amelia, Phoenix, Arizona. 19. Complainant testified that Respondent had also performed construction work for Complainant on the residence located at 1701 E. Amelia, Phoenix, Arizona. Complainant stated that Respondent’s construction work on the 1701 E. Amelia property had been acceptable and that he had paid Respondent in full for the construction project. 20. Complainant provided written documentation that on March 13, 2007, he had deposited $6,000.00 in Respondent’s bank account. Complainant stated that $3,000.00 of the $6,000.00 amount was for electrical work on his residence located at 4238 N. 18th Place, Phoenix, Arizona and that the remaining $3,000.00 was for construction work that had been completed by Respondent at the residence located at 1701 E. Amelia, Phoenix, Arizona. 21. The credible evidence of record is insufficient and fails to support a finding as to whether any of the money deposited in the Respondent’s bank account was for construction work that allegedly was going to be performed by Respondent on any of the residences owned by Complainant at that time. 22. No credible documentation was presented in support of Complainant’s assertion that he had paid Respondent $3,000.00 for construction work that Respondent had agreed to perform on the residence located at 4238 N. Place, Phoenix, Arizona. 23. The credible evidence of record is insufficient and fails to support a finding that Complainant suffered any actual compensable damages in this matter. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in this matter is by a preponderance of the evidence. Specifically, Complainant has the burden of demonstrating by a preponderance of the evidence to establish (1) eligibility pursuant to A.R.S. § 32-1131, et seq., and (2) actual damages pursuant to A.R.S. § 32- 1132(A). See A.A.C. R2-19-119. 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 (6th ed. 1990). 3. A.R.S. § 32-1131(3) provides, in pertinent part 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. 4. In the case of McMurren v. JMC Builders Inc., 204 Ariz. 345, 63 P.3d 1082, the Arizona Supreme Court held, in pertinent part, as follows: An award from the Fund is limited, therefore, to damages resulting from a violation of the chapter. It follows that the legislative intent is satisfied by our interpretation that an owner is injured, and the claim accrues, when a contractor inadequately builds or improves the property, thereby violating the chapter. If this occurs when the owner actually occupies or intends to occupy the property as a residence, then the owner qualifies as a person injured. 5. Complainant met his burden to establish eligibility pursuant to A.R.S. § 32-1131, et seq. 6. 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. 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. 7. Complainant failed to sustain his burden of proof to establish by a preponderance of the evidence his actual damages in this matter pursuant to A.R.S. § 32-1132(A). RECOMMENDed order In view of the foregoing, it is recommended that the Denial of Recovery Fund Claim issued in this matter be affirmed and that Complainant’s claim for damages from the Residential Contractors’ Recovery Fund be denied. 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, May 14, 2012.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] Notice of Denial of Recovery Fund Claim (January 9, 2012)

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