ALJDEC decisions subject to certification as final

2009A-59389364-ROC · Registrar of Contractors · 2011-08-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

RECOVERY FUND ELIGIBILITY/PAYOUT HEARING: July 27, 2011, at 1:00 p.m. APPEARANCES: Complainants Robert Donnelly and Lisa Mendez appeared on their own behalf; Respondent Valiant Garage Doors, L.L.C. appeared through Darren Marley, its qualifying party and member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. In June 2007, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC233980, Class K-5 for dual garage doors and openers to Valiant Garage Doors, L.L.C. (“Respondent”). 2. On or about May 15, 2009, the Registrar received a complaint against Respondent from Robert Donnelly and Lisa Mendez (“Complainants”) regarding Respondent’s installation of a garage door at their home at 4450 East Alta Vista Road, Phoenix, Arizona 85042. The Registrar designated Complainants’ complaint as Case No. 09-5938. 3. The Registrar issued a Citation and Complaint in Case No. 09- 5938, charging Respondent with violating A.R.S. § 32- 1154(A)(2), former (7), (9), (23), and (3), namely A.A.C. R4- 9-108. 4. Respondent failed to file a timely written answer to the Registrar’s Citation and Complaint in Case No. 09-5938. 5. In December 2009, the Registrar issued a Decision and Order in Case No. 09-5938, finding that Respondent’s failure to timely answer the Citation and Complaint was deemed an admission of the charges contained therein under A.R.S. § 32- 1155. The Registrar suspended Respondent’s license until it rectified the deficiencies described in Complainants’ complaint and the Corrective Work Order. The Registrar also required Respondent to pay a $250.00 civil penalty under A.R.S. § 32-1154(D). 6. Respondent filed a petition for rehearing and in February 2010, paid the $250.00 civil penalty. In June 2010, the Registrar denied Respondent’s request for rehearing. On or about July 29, 2010, the Registrar suspended Respondent’s license for its failure to rectify the issues underlying the complaint in Case No. 09-5938. 7. On April 4, 2011, the Registrar received Complainants’ claim to the Residential Contractors’ Recovery Fund (“the Fund”). Complainants alleged on the claim to the Fund that the amount of their contract with Respondent was $1,285.00, that they had paid Respondent $1,285.00, and that the amount of the low bid to correct Respondent’s work was “$565.00 + tax.” The Registrar redesignated Complainants’ claim to the Fund as Case No. 2009-59389364. 8. On May 6, 2011, the Registrar issued a Notice to Contractor of Claim for Administrative Payout in Case No. 2009-59389364 in the amount of $565.00. 9. On or about May 12, 2011, Respondent requested a hearing on the amount and propriety of a payout from the Fund to Complainants in Case No. 2009-59389364. 10. The Registrar referred Case No. 2009-59389364 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 11. A hearing was held in Case No. 2009-59389364 on July 27, 2011. Complainants, Robert Donnelly and Lisa Mendez, testified on their own behalf, presented the testimony of their neighbor, Clayton Keys, and submitted five exhibits. Respondent’s qualifying party and member, Darren Marley, testified on its behalf. Hearing Evidence 12. Respondent’s contract is on a duplicate form. After a property owner accepts a proposal, Respondent gives the property owner the duplicate copy of the contract and keeps the original. The form contract has spaces for “check number” and “cash.” 13. Complainants submitted a copy of what they testified was the parties’ contract dated April 21, 2009. Complainants testified that Mr. Marley on Respondent’s behalf filled out the contract. 14. The total amount of the contract was $1,381.00. In the space for “check number,” were the notations, “1007” and “$858.00/523.” The space for “cash” was empty. 15. Complainants’ exhibit also included the notation, “Cash Price 1285.00,” beneath the “check #” notations. The notation, “Cash Price 1285.00,” was not on the duplicate and appeared to have been added after the duplicate was prepared. The notation, “Cash Price 1285.00,” also appeared to be in different handwriting than the writing on the duplicate; specifically, the letter “a” did not match either the upper case or lower case letters “a” on the duplicate portion of the proposal. 16. Mr. Marley denied having given a cash discount to Complainants, and testified that when he gives a cash discount, he writes it under the space for “cash” on the proposal form. Mr. Marley acknowledged that he had discussed a cash discount with Complainants. 17. The copy of the proposal that Respondent submitted to the Registrar after Complainants filed their complaint does not include the notation, “Cash Price 1285.00.” 18. Complainants also submitted a copy of their check no. 1007, dated April 21, 2009, made payable to Respondent, in the amount of $858.00. Both parties agreed that Complainants gave check no. 1007 to Respondent to begin the job. 19. The copy of check no. 1007 that Complainants submitted showed that it was returned on February 22, 2010, because the account on which it was drawn had been closed. 20. Ms. Mendez testified that although she gave check no. 1007 to Mr. Marley, she did not expect Respondent to cash the check because the parties agreed that Complainants would pay cash. Ms. Mendez testified that when Respondent failed to return the check, she stopped payment on it and then closed the account on which it was drawn. 21. Mr. Marley testified that when he tried to cash the check, he learned that Complainants had stopped payment and filed a complaint to the Registrar against Respondent. 22. Complainants testified that they paid Respondent’s employee, “Norm,” $1,285.00 in cash when he completed the job, because Mr. Marley was not around. Complainants submitted a copy of a cash withdrawal form dated April 22, 2009 from a different checking account than the account on which check no. 1007 was drawn. 23. Mr. Marley testified that he did not tell Complainants to pay “Norm,” and that Norm called him after the job was done and said that Complainants had not paid the remainder of the contract price because Ms. Mendez was sick. Mr. Marley testified that Complainants did not pay Respondent anything for the job. 24. Clayton Keyes is Complainant’s 15-year-old neighbor. Mr. Keyes testified that one day he was sitting on the couch, looking out the window, and saw Mr. Donnelly and “Norm” talking in Complainants’ driveway, and that Mr. Donnelly handed “Norm” “a large amount of cash.” CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] Complainants bear the burden of proof to establish that they are eligible to recover a payout from the Fund and if so, the amount that they should recover by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[4] The Registrar’s final Decision and Order in former Case No. 09-5938 established that Respondent violated A.R.S. § 32-1154(A)(2), former (7), (9), (23), and (3), namely A.A.C. R4-9-108. A.R.S. § 32-1132(A) limits a payout from the Fund to a claimant’s “actual damages”: 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. . . .

Complainants did not establish that they paid Respondent anything for its work. The proposal was altered after Mr. Marley wrote it, and Complainants’ down payment by check indicates that the parties did not agree to a cash discount. Mr. Keyes’ testimony sounded arranged, and was not credible. Complainants’ cash withdrawal on April 22, 2009, could have been for anything. Payments, especially if they are in cash, usually are made to the proprietor of a business who submitted the proposal, not to an employee who has not been authorized to receive payment, and receipts usually are expected and provided for cash payments. Complainants gave no reason for the parties’ purported gross deviations from usual business practices. Complainants did not establish that they paid Respondent anything under the contract, and the cost to repair Respondent’s work is less than the amount Complainants were to pay under the contract. Therefore, Complainants did not establish that Respondent’s proven statutory violations caused them any compensable monetary damages. RECOMMENDED ORDER In view of the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, the Registrar close Complainants Robert Donnelly and Lisa Mendez’s claim to the Residential Contractors’ Recovery Fund in Case No. 2009-59389364. 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 15, 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. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] Black’s Law Dictionary at page 1220 (8th ed. 1999).

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