ALJDEC decisions subject to certification as final

2009A-56680559-ROC · Registrar of Contractors · 2011-08-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

RECOVERY FUND PAYOUT HEARING: July 18, 2011, at 8:00 a.m. APPEARANCES: Complainants Perry and Turee Toro appeared on their own behalf; Respondent Theodore C. Wagner, L.L.C. dba Canyon Creek Custom Interiors did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. In July 2005, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC209829, Class B for residential general contracting to Theodore C. Wagner, L.L.C. doing business as (“dba”) Canyon Creek Custom Interiors (“Respondent”). Respondent’s address of record is 3971 East Cody Avenue, Gilbert, Arizona 85234-3005. 2. The Registrar received a complaint against Respondent from Perry and Turee Toro (“Complainants”) alleging that Respondent’s workmanship on a kitchen remodel and laundry room/pantry addition was deficient. According to the complaint, the amount of the contract was $29,478.91, Complainants had paid Respondent $28,765.76, and Complainants had not paid $713.15 of the contract amount. The Registrar designated Complainants’ complaint as Case No. 09-5668. 3. The Registrar assigned Case No. 09-5668 to its inspector, Geoffrey Galgan, for investigation. Inspector Galgan performed a jobsite inspection and issued a Corrective Work Order. 4. Complainants requested a hearing. In February 2010, the Registrar issued a Citation and Complaint in Case No. 09-5668 against Respondent, charging violations of A.R.S. § 32- 1154(A)(2), (23), and (3), namely A.A.C. R4-9-108. 5. Respondent failed to file a timely written answer to the Citation and Complaint in Case No. 09-5668. In August 2010, the Registrar issued a Decision and Order, deeming Respondent’s failure to answer the Citation and Complaint to be an admission of the charges contained therein under A.R.S. § 32-1155(B). As a result of Respondent’s admitted statutory violations in Case No. 09-5668, after it failed to provide written proof that it had rectified Complainants’ complaint, the Registrar suspended Respondent’s license. 6. Complainants subsequently made a claim to the Residential Contractors’ Recovery Fund (“the Fund”). Complainants provided a low bid in the amount of $3,356.00 from Buckeye Interior Sales, L.L.C., License No. ROC268517, to correct the items of complaint. Complainants acknowledged on the claim form that they had not paid $713.15 of the contract amount to Respondent. The Registrar designated Complainants’ claim to the Fund as Case No. 2009-56680559. 7. On March 22, 2011, Inspector Galgan performed a jobsite inspection in Case No. 2009-56680559. Based on his inspection and Complainants’ documentation, Inspector Galgan recommended that the Fund pay the amount of the low bid, less the amount that Complainants had not paid under the contract, for a total payout in the amount of $2,642.85. 8. The Registrar issued a Notice of Claim for Administrative Payout in Case No. 2009-56680559 in the amount of $2,642.85. 9. On or about April 18, 2011, Respondent requested a hearing on the amount and the propriety of the proposed payout in Case No. 2009-56680559. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. 10. On June 7, 2011, the Registrar issued a Notice of Recovery Fund Eligibility/ Payout Hearing in Case No. 2009-56680559, setting a hearing at the OAH on July 18, 2011, at 8:00 a.m. The Registrar sent a copy of the Notice of Recovery Fund Eligibility/ Payout Hearing to Respondent at its address of record. 11. A Recovery Fund Eligibility/Payout Hearing was held on July 18, 2011. Complainants appeared. 12. Respondent did not request to appear telephonically at the hearing and did not request that the hearing be continued. Although the start of the hearing was delayed fifteen minutes, Respondent did not appear, through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to dispute Complainants’ claim to the Fund. 13. Complainants requested that the Registrar not deduct from their payout the amount that they owed on the contract amount, in light of the delay and aggravation occasioned by Respondent’s failure to perform repairs in Case No. 09-5668 and request for hearing in Case No. 2009-56680559. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[1] 2. The Notice of Recovery Fund Eligibility/Payout Hearing that the Registrar sent to Respondent at its address of record was reasonable and it is deemed to have received notice of the hearing.[2] 3. Complainants bear the burden of proof and must establish their eligibility for a payout and the amount of the payout from the Fund by a preponderance of the evidence.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] 4. The Registrar’s final decision in Case No. 09-5668 established that Respondent violated the charged statutes and, therefore, that Complainants are eligible to receive a payout from the Fund. 5. The legislature has imposed the following limitations on the amounts of the payouts that the Registrar may award from the Fund: 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. . . .

A.R.S. § 32-1132(A). 6. The legislature has not authorized the Registrar to provide a payout from the Fund for a contractor’s delay or a homeowner’s aggravation. Therefore, Complainants established that they are entitled to a payout from the Fund in the amount of $2,642.85, the low bid to complete and repair Respondent’s poor workmanship less the amount that Complainants did not pay under the contract. RECOMMENDED ORDER In view of the foregoing, it is recommended that on the effective date of the Registrar’s final order, the Registrar order the Residential Contractors’ Recovery Fund to pay $2,642.85 to Complainants Perry and Turee Toro. It is further recommended that the Registrar under A.R.S. § 32- 1139(B) charge this amount in Case No. 2009-56680559 to License No. ROC209829 previously issued to Respondent Theodore C. Wagner, L.L.C. dba Canyon Creek Custom Interiors. In the event of certification of the 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 that certification. Done this day, August 1, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See 32-1101 et seq. [2] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [3] See A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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