ALJDEC decisions subject to certification as final

2009A-565982-ROC-rf · Registrar of Contractors · 2013-11-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 12, 2013, at 8:15 a.m. APPEARANCES: Guadalupe M. Duarte (hereinafter “Ms. Duarte” or “Complainant”) appeared on her own behalf. Rubio General Contractor LLC (hereinafter “Rubio” or “Respondent”) appeared through its qualifying party/member Manual Leonardo Rubio. A Spanish/English speaking interpreter was present for the hearing. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Rubio challenges a proposed payout by the Residential Contractors’ Recovery Fund (“the Fund”). The Fund has issued notice that it intends to make a payout to Ms. Duarte in the sum of $5,068.29. Rubio challenges the proposed payout amount as being too high. Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law, and Recommended Order are made: BACKGROUND AND PROCEDURE Rubio is the holder of License No. B-3.242789-R issued by the Registrar of Contractors. On or about September 16, 2008, Ms. Duarte filed the underlying complaint against Rubio alleging numerous workmanship issues. Pursuant to the filing of the formal complaint, the Registrar of Contractors issued a Citation and Complaint charging Rubio with possible violations of A.R.S. § 32- 1154(A)(1), A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154(A)(3), namely, A.A.C. R4-9-108, A.R.S. § 32-1154(A)(7), A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1158, and A.R.S. § 32-1154(A)(23). A hearing was held in the underlying disciplinary matter on September 10, 2009. The Administrative Law Judge found, in relevant part, as follows: 2. Respondent is charged in the instant Citation and Complaint with possible violations of A.R.S. §§ 32-1154.A.1, 2, 7, 23 and 3 (namely, A.A.C. R4-9-108, Workmanship Standards), and 13 (namely, A.R.S. § 32-1158, Minimum Elements of a Contract).

3. The greater weight of evidence proved that Respondent abandoned the project and deviated from plans and specifications in violation of A.R.S. § 32-1154.A.1 and 2.

4. The greater weight of evidence proved that Respondent’s workmanship was below minimum standards at A.A.C. R4-9-108, and therefore in violation of A.R.S. § 32-1154.A.3.

5. The greater weight of evidence proved that Respondent violated A.R.S. § 32-1154.A.23 by failing to take appropriate corrective action as set forth in the Inspector’s CWO.

6. The greater weight of evidence proved that Respondent violated A.R.S. § 32-1154.A.13 by failing to include the minimum elements of a contract in the parties’ written contract in this case in violation of the requirements at A.R.S. § 32-1158.

7. There are no wrongful or fraudulent actions by the Respondent in this case in violation of A.R.S. § 32-1154.A.7 independent of the other violations already concluded to have occurred.

The Administrative Law Judge recommended that Rubio’s License No. B- 3.242789-R be suspended until such time as the Registrar received written proof that was acceptable to the Registrar that Rubio had hired other appropriately licensed contractors to perform the corrective work set forth in the Inspector’s Corrective Work Order and to make necessary repairs to the damage caused by Rubio. The Registrar adopted the Administrative Law Judge’s recommendation on October 19, 2009. A Compliance Hearing was held on July 7, 2011. The Administrative Law Judge found that Rubio had failed to comply with the Registrar’s Order in Case No. 2009-565982 (formerly Y09-0056). The Administrative Law Judge recommended that Rubio’s License No. No. B-3.242789-R be immediately revoked. The Registrar adopted the Administrative Law Judge’s recommendation on August 31, 2011. On December 9, 2011, the Registrar of Contractors issued an Order Denying Rubio’s Petition for Rehearing. On August 12, 2013, the Registrar of Contractors issued a Notice of Claim for Administrative Payout that provided, in relevant part, as follows: The Complainant named above filed a claim for payment with the Residential Contractors’ Recovery Fund pursuant to A.R.S. § 32- 1154(F). After a review of the claim and all supporting documentation, the Fund has determined that Complainant is to be awarded $5,068.29 in the form of a payment issued by the Fund.

In accordance with A.R.S. § 32-1154(F), both Complainant and Respondent have fifteen (15) days from the date of mailing of this Notice to file an administrative hearing request to contest the amount and/or propriety of the payment. Such request must be received by the Registrar no later than 5:00 p.m. on August 9, 2013. As provided in A.R.S. § 32-1154(F), the failure of Complainant and/or Respondent to file a timely written request for a hearing shall be deemed a waiver to contest the amount and/or propriety of the payment awarded.

On or about August 8, 2013, Rubio filed a request for an administrative hearing to contest the amount of the payment. FINDINGS OF FACT Testimony of Guadalupe M. Duarte

Ms. Duarte testified that Rubio had performed no corrective work at her residence. Ms. Duarte stated that corrective work was necessary to bring her residence to within applicable workmanship and code requirements. Ms. Duarte testified that the low bid from a licensed contractor for the necessary corrective work on her residence was in the sum of $5,568.29.[1] Ms. Duarte testified that she was willing to accept the sum of $5,068.29, for her damages in this matter as determined by the Fund. Testimony of Manual Leonardo Rubio Manual Leonardo Rubio (hereinafter “Mr. Rubio”) testified that Rubio only charged Ms. Duarte the sum of $4,500.00 for the entire construction project. Mr. Rubio stated that there were “only a few cracks and a poor job.” Mr. Rubio testified that it was unfair for Ms. Duarte to receive the benefit of Rubio’s work and an additional $5,068.29 to correct Rubio’s work and to repair the damage to Ms. Duarte’s residence caused by Rubio. 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 these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. The Notice of Claim for Administrative Payout states that Ms. Duarte bears the burden of showing, by a preponderance of the evidence, that the proposed payout amount of $5,068.29 is reasonable and proper. Ms. Duarte has met that burden. 4. Ms. Duarte is an injured person within the definition in A.R.S. § 32- 1131(3)[2] and is, therefore, entitled to recover her damages from the Fund. 5. Under the facts and circumstances of this case, the Registrar is empowered to determine and award, based on actual damages, an appropriate payment to Ms. Duarte from the Fund pursuant to A.R.S. § 32-1132[3] and A.R.S. § 32-1154(F).[4] 6. The credible evidence of record supports an award to Ms. Duarte in the sum of $5,068.29, all of which shall be chargeable against Rubio and the persons on License No. B-3.242789-R of Rubio. RECOMMENDed order In view of the foregoing, it is recommended that the Registrar authorize a payment from the Residential Contractors’ Recovery Fund to Ms. Duarte in the amount of $5,068.29. 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, November 22, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] One Construction Inc. (License No. 213571). [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] A.R.S. § 32-1132 provides, in relevant 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.

[4] A.R.S. § 32-1154(F) provides as follows:

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. An applicant to the residential contractors' recovery fund pursuant to this subsection must show that the applicant has proceeded against any existing bond covering the residential contractor and has not collected on the bond in an amount of thirty thousand dollars or more.

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