ALJDEC decisions subject to certification as final

2009A-7090906-ROC · Registrar of Contractors · 2011-03-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 4, 2011, at 1:00 p.m. APPEARANCES: Complainant Ken Cruff appeared on his own behalf; Respondent Quality Roofing, L.L.C. did not appear; the Arizona Registrar of Contractors appeared through Seth T. Hargraves, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. In April 2005, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC205922, Class K-42 for dual roofing to Quality Roofing, L.L.C. (“Respondent”). Respondent’s address of record is P.O. Box 5623, Lake Montezuma, Arizona 86342-5623. 2. On April 9, 2008, the Registrar received a complaint against Respondent from Ken Cruff (“Complainant”) alleging that the new roof that Respondent had constructed on the patio at Complainant’s house at 4315 East Cayuga Lane, Lake Montezuma, Arizona (“the house”) blew off every year. According to the complaint, the date of the contract was September 9, 2005 and Respondent had last performed work on the roof on May 22, 2007. The Registrar designated the complaint as Case No. A08- 0459 and assigned it to Inspector John Prince for investigation. 3. Inspector Prince performed a jobsite inspection in Case No. A08-0459 and on June 9, 2008, issued a Corrective Work Order (“CWO”) to Respondent that required it within fifteen days to correct the rolled roofing that had blown off the back patio of the house. 4. Complainant subsequently requested a hearing in Case No. A08- 0459 and the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32- 1154(A)(7),[1] (18),[2] (23),[3] and (3) (namely A.A.C. R4-9- 108).[4] 5. After Respondent failed to file a timely written answer to the Citation and Complaint in Case No. A08-0459, on March 17, 2009, the Registrar issued a Decision and Order, finding that pursuant to A.R.S. § 32-1155(B) Respondent’s failure to timely answer the Citation and Complaint was deemed an admission of the charges contained therein. As a penalty for Respondent’s admitted statutory violations, the Registrar’s Decision and Order in Case No. A08-0459 required Respondent within forty days to accomplish the work described in the CWO, to pay a $500.00 civil penalty pursuant to A.R.S. § 32- 1154(D), and to pay a $1,000.00 civil penalty pursuant to A.R.S. § 32-1154(E). 6. On May 13, 2008, the Registrar revoked Respondent’s license as a result of its failure to comply with the Decision and Order in Case No. A08-0459. 7. On July 17, 2008, Complainant filed a claim in the amount of $1,030.75 to the Residential Contractors’ Recovery Fund (“the Fund”) to recover his cost to repair the roof on the back patio of the house. The Registrar designated Complainant’s claim as Case No. RF09-0906. 8. On April 13, 2010, Inspector Prince issued a Recovery Fund Inspection Report in Case No. RF09-0906. Inspector Prince reported that he scheduled an inspection for February 9, 2010, but that Complainant left a message that he would be out of state on that date. Inspector Prince reported that when he called Complainant to reschedule the inspection, Complainant stated that the house was not his home but, instead, a rental. Because Complainant was not the current occupant of the house, Inspector Prince did not perform a second inspection and recommended that the Fund not pay Complainant’s claim. 9. The Registrar subsequently redesignated Case No. RF09-0906 as Case No. 2009-7090906. On October 22, 2010, the Registrar issued a Notice to Claimant of Recovery Fund Ineligibility in Case No. 2009-7090906 because “Property was Not Class Three Residential Property Under A.R.S. § 42-12003 at the Time of Contract” and “Property was a Rental or Income Generating Property Classified as Class Four Property Under A.R.S. [§] 42-12004 at the Time of Contract.” 10. Complainant requested a hearing on the Registrar’s determination that his claim was ineligible. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. 11. On December 28, 2010, the Registrar issued a Notice of Recovery Fund Eligibility/Payout Hearing. The Registrar sent a copy of the Notice of Recovery Fund Eligibility/Payout Hearing to Respondent at its address of record. 12. A recovery fund payout hearing was held on March 4, 2011, at 1:00 p.m. 13. Respondent did not request to appear telephonically at the hearing and did not request that the hearing be continued. Although the hearing did not conclude until approximately 2:45 p.m., Respondent did not appear through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence. 14. Complainant testified that he intended to live in the house after he retired. Therefore, he argued that he met statutory requirements to be eligible to recover the cost of repairing Respondent’s poor work from the Fund. 15. The Registrar submitted documentary evidence from the Yavapai County Assessor that showed that from 2001 through February 25, 2011, the property where the house was located was classified as class 4, Rental Residential. Complainant did not contest the Registrar’s evidence. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[5] The Notice of Recovery Fund Eligibility/Payout Hearing that the Registrar mailed to Respondent at its address of record was reasonable. Respondent is deemed to have received the Notice of Recovery Fund Eligibility/Payout Hearing.[6] Complainant bears the burden of proof and must establish eligibility to recover from the Fund by a preponderance of the evidence.[7] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[8] 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.”[9] A.R.S. § 32-1131(3) defines a “person injured” who is eligible to recover from the Fund as “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 . . . .” The Arizona Court of Appeals has determined that the times when the owner of residential property must meet the requirements of A.R.S. § 32- 1131(3) to be eligible to recover a payout from the Fund are: (1) When the owner enters the contract with the contractor for the work to be performed, and (2) When the contractor performs the work and commits the statutory violation that injured the owner.[10] “In applying a statute, . . . its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”[11] A.R.S. § 32-1131(3) requires that property be classified as class three property under section 42-12003 for its owner to be eligible to recover damages from the Fund. Complainant did not present any evidence that the property on which the house is located was classified as class three property,[12] rather than class four property,[13] in September 2005, when he entered the contract with Respondent, or at any time between September 2005 and May 2007, when Respondent performed work on the house. Therefore, Complainant did not establish that he is eligible for an award from the Fund. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Case No. 2009-7090906 be dismissed. 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, March 23, 2011. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: William A. Mundell, Director Registrar of Contractors ----------------------- [1] This statutory subsection formerly included among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” [2] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[c]ontracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.” [3] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.” [4] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [5] See 32-1101 et seq. [6] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [7] 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). [8] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [9] Black’s Law Dictionary at page 1220 (8th ed. 1999). [10] See McMurren v. JMC Builders, Inc., 204 Ariz. 345, 350, 63 P.3d 1082, 1087 (App. 2003) (citing A.R.S. § 32-1132(A)). In that case, after the residence in which the homeowner had been living at least part-time was damaged by fire, the homeowner hired the contractor to perform repairs. Because the dwelling was uninhabitable after the fire, the homeowner lived temporarily in a motor home parked in the driveway. The residence subsequently was turned into a group home. The court held that the homeowner had established that he was eligible for a payout from the Fund because he had lived in the residence when he entered the contract for the contractor to repair the damages and while the contractor performed the repairs. See id. at 351, 63 P.3d at 1088. [11] Mid Kansas Federal Savings and Loan Ass’n of Wichita v. Dynamic Development Corp., 167 Ariz. 122, 128, 804 P.2d 1310, 1316 (1991). [12] A.R.S. § 42-12003(A) provides that “class three is established consisting of real and personal property and improvements to the property that are used for residential purposes, that are not otherwise included in class one, two, four, six, seven or eight and that are valued at full cash value. . . .” [13] A.R.S. § 42-12004(A)(1) provides that “class four is established consisting of . . . [r]eal and personal property and improvements to the property that are used solely as leased or rented property for residential purposes, that are not included in class one, two, three, six, seven or eight and that are valued at full cash value.”

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