ALJDEC decisions subject to certification as final

2009A-7090982-ROC · Registrar of Contractors · 2010-07-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 26, 2010 at 8:00 a.m. APPEARANCES: The Complainants appeared through Elizabeth Gingg. The Respondent failed to appear. The Registrar of Contractors appeared through Assistant Attorney General, Montgomery Lee. 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. There was no dispute that on November 30, 2007, the Complainants entered into a contractual agreement with the Respondent for the fabrication and installation of custom cabinets in the kitchen, halls, and two bathrooms for the property located at 4646 E. Calle Redonda, Phoenix, Arizona 85018. 2. There was no dispute that the total contract price was $33,359.45 and that the Complainants paid the Respondent the sum of $30,029.73. 3. There was no dispute that the Respondent failed to fabricate and install the agreed upon custom cabinets and that the Complainants received no value for the $30,029.73 that they paid the Respondent. 4. When the Respondent failed to perform the agreed upon construction work the Complainants filed a complaint (08-2946) against the Respondent with the Registrar of Contractors. Pursuant to the filing of the complaint a Citation and Compliant was issued and on January 28, 2009 the Respondent’s contractor’s license was suspended by Order of the Registrar based upon the Complainants’ complaint against the Respondent. 5. On May 12, 2009 the Complainants filed the claim at issue with the Contractors’ Recovery Fund claiming losses of $36,656.31 based upon their actual cost of having an alternative contractor complete the fabrication and installation of the custom cabinets. 6. The Respondent’s contracting license has been previously revoked by Order of the Registrar of Contractors. Such revocation is determined to render this Respondent unable to remedy the violations of the State’s contracting laws which gave rise to the instant claim for damages. 7. There was no dispute that the Respondent abandoned the construction project and failed to fabricate or install the new custom cabinets and that the Complainants received no value for the money that they paid the Respondent. 8. Pursuant to the filing of the Complainant’s claim for damages an assigned Agency Inspector then conducted an onsite Recovery Fund Inspection. The Inspector found that the residence had been completed and that it was for sale. 9. The assigned Agency Inspector spoke to Crystal L. Mahoney (the Complainant’s adult daughter) during the onsite inspection. Ms. Mahoney informed the inspector that the property at 4646 Calle Redonda, Phoenix, Arizona 85018 was originally purchased to fix up and sell and that neither Ms. Mahoney nor the Complainants lived at the property. 10. The Inspector then recommended that the Complainants’ claim for damages be denied pursuant to the applicable provisions of A.R.S. § 32-1131. 11. On April 19, 2010 a Notice of Recovery Fund Ineligibility was mailed to the Complainants and the Complainants then requested an administrative hearing. 12. There was no dispute that the Complainants have suffered actual damages in excess of the maximum amount of money ($30,000.00) that can be paid by the Contractors’ Recovery Fund. 13. Complainant Elizabeth Gingg testified that her daughter, Crystal Moroney, is also an owner of the residence and that she had intended the residence at issue to be for her daughter and son-in-law and that it was only after her son-in-law’s income dropped off and would have been unable to make the payments on the residence that the house was listed for sell.

14. Complainant Elizabeth Gingg testified that her daughter may not have known that the residence was originally intended for the daughter’s personal residence when her daughter spoke with the Inspector. 15. Complainant Elizabeth Gingg admitted that none of the owners of the residence located at 4646 E. Calle Redonda, Phoenix, Arizona 85018 live in the residence and that the residence is for sell. 16. Credible testimony and evidence established that the residence at 4646 Calle Redonda, Phoenix, Arizona 85018 was placed on the market as soon as the extensive remodeling of the residence was completed. 17. The credible testimony and evidence of record is inadequate and fails to support a finding that the Complainants were occupying or intending to occupy the residence at 4646 Calle Redonda, Phoenix, Arizona 85018 when they entered into their agreement with the Respondent. 18. The credible testimony and evidence of record is inadequate and fails to support a finding that the Complainants were occupying or intending to occupy the residence at 4646 Calle Redonda, Phoenix, Arizona 85018 when their claim against the Respondent accrued. 19. The credible testimony and evidence of record is inadequate and fails to support a finding that the Complainants are an “injured person” as defined by statute.

CONCLUSIONS OF LAW

1. 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. 2. A.R.S. § 32-1131-3 provides, in relevant 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. 3. The Complainants have the burden of demonstrating by a preponderance of the evidence their eligibility pursuant to A.R.S. § 32-1131 and their actual damages pursuant to A.R.S. § 1132 (A). 4. 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). 5. Proof by preponderance of the evidence “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 (rev. 6th ed. 1990). 6. The Plaintiffs failed to sustain their burden of proof to establish that they are an “injured person” as defined by A.R.S. § 32-1131. 7. The credible testimony and evidence of record fails to sufficiently sustain a finding that the Complainants are eligible for payment from the Contractors’ Recovery Fund.

RECOMMENDed order

In view of the foregoing, it is recommended that the Complainants’ claim for damages from the Contractor’s 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, July 28, 2010.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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