ALJDEC decisions subject to certification as final

2009A-7091051-ROC · Registrar of Contractors · 2011-06-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 23, 2011, at 8:00 a.m. APPEARANCES: Complainant Michael A. Covington appeared on his own behalf; Respondent Tracy Lee Young dba Scottsdale Builders Group General Contractors and Design did not appear; the Arizona Registrar of Contractors appeared through Keely Verstegen, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On October 4, 2005, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC212072, Class KB-2, to Tracy Lee Young doing business as (“dba”) Scottsdale Builders Group General Contractors and Design (“Respondent”). Respondent’s address of record is 5036 North Scottsdale Road, Scottsdale, Arizona 85253-7002. According to the Registrar’s electronic record, on July 22, 2007, Respondent’s license was suspended by operation of law for lack of bond. On September 7, 2007, Michael A. Covington (“Complainant”) filed a complaint to the Registrar against Respondent concerning remodeling work at Complainant’s residence at 7050 E. Pasadena Ave., Scottsdale, Arizona. According to Complainant’s complaint, the date of the parties’ contract was April 21, 2005, Respondent last performed work on the project on October 1, 2005, and Complainant paid the full $93,000.00 contract price to Respondent. On September 24, 2007, the Registrar’s inspector, Randy Cason, called Complainant and left a message for Complainant to confirm the last date that Respondent worked on the project to allow Inspector Cason to determine whether Complainant filed the complaint within two years of Respondent’s performance of work, as A.R.S. § 32-1155(A) requires. On September 27, 2007, Complainant returned Inspector Cason’s call, and verbally confirmed Respondent’s last day on the project as October 1, 2005. Inspector Cason asked Complainant to send in a written statement regarding the last day that Respondent worked on the project and any documentation that he had to back up the statement. Complainant never provided this information. Because Respondent appeared to have been unlicensed when he entered the contract and performed work at Complainant’s residence, the Registrar designated Complainant’s complaint as Case No. U08-0110, an unlicensed contracting case. On September 27, 2007, Inspector Cason sent a 10-day action letter to the parties in Case No. U08-0110. On October 2, 2007, the United States Postal Service returned as undeliverable the 10-day action letter that Inspector Cason had sent to Respondent’s address of record in Case No. U08-0110. Inspector Cason advised Complainant that he needed to request a hearing to pursue his complaint against Respondent. On October 11, 2007, Complainant requested a hearing on his complaint against Respondent. On or about October 16, 2007, the Registrar revoked Respondent’s license as a disciplinary penalty in Case No. 07-1212, a case that was unrelated to Case No. U08-0110. The Registrar subsequently imposed additional revocations in three other unrelated cases. The Registrar did not find that Respondent violated any statute in Case No. U08-0110 and did not discipline Respondent’s license in that matter.[1] On June 10, 2009, the Registrar received Complainant’s claim to the Residential Contractors’ Recovery Fund (“the Fund”), requesting a payout in the amount of $40,000.00 to repair and complete Respondent’s work at Complainant’s residence. The Registrar designated Complainant’s claim as Case No. RF09-1051. The Registrar’s Recovery Fund supervisor, Glenn Hawkins, reviewed Complainant’s claim to the Fund in Case No. RF09-1051. Mr. Hawkins asked Complainant to provide documentation of payments to Respondent or work performed by Respondent on or after October 4, 2005. Complainant did not provide such documentation. The Registrar redesignated Case No. RF09-1051 as Case No. 2009-7091051. On November 24, 2010, the Registrar issued a Notice to Claimant of Recovery Fund Ineligibility in Case No. 2009-7091051 for the following reasons: Contractor’s License is Not Disciplined as Required by A.R.S. § 32-1154(F)

Respondent’s License was in an Inactive Status, Expired, Cancelled, Revoked, Suspended or Not Issued at the Time of the Contract as Prohibited by A.R.S. § 32-1132

Complainant requested a hearing on the Registrar’s Notice to Claimant of Recovery Fund Ineligibility in Case No. 2009-7091051. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. On February 23, 2011, the Registrar issued a Notice of Recovery Fund Eligibility/Payout Hearing in Case No. 2009-7091051. The Registrar sent a copy of the notice to Respondent at his address of record. A hearing was held on May 23, 2011, in Case No. 2009-7091051. Complainant submitted four exhibits and testified on his own behalf. The Registrar submitted five exhibits and presented the testimony of two witnesses: (1) Mr. Hawkins; and (2) Inspector Cason. Respondent did not request to appear telephonically at the hearing in Case No. 2009-7091051 and did not request that the hearing be continued. Although the hearing did not conclude for 45 minutes, Respondent did not appear, personally or through an attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Respondent did not present any evidence at the hearing. Complainant testified at the hearing in Case No. 2009-7091051 that someone else filled out the complaint form in Case No. U08-0110, and the dates on the form were erroneous. Complainant testified that he hired Respondent in May 2005, Complainant moved out of his residence into a rental in September 2005, Respondent started work on October 1, 2005, and Respondent did not complete his work until after February 2006. Complainant submitted the following exhibits at the hearing in Case No. 2009-7091051 to support his testimony: (1) A receipt dated September 22, 2005, from Elm Enterprises to Complainant for rent on a one-bedroom apartment between September 22, 2005, and February 22, 2006; and (2) A receipt from Central Supply & Metal Co. dated April 10, 2006, that Complainant testified came from Respondent’s subcontractor or supplier and was left by Respondent at Complainant’s residence. Complainant did not submit proof of any payments to Respondent at any time. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[2] Complainant bears the burden of proof and must establish that he is eligible to receive a 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] A.R.S. § 32-1132(A) provides that “[a]n award from the [F]und shall not be available to persons injured by an act, representation, transaction or conduct of a residential contractor who was not licensed pursuant to this chapter or whose license was in an inactive status, expired, cancelled, revoked, suspended or not issued at the time of the contract.” Complainant did not establish that Respondent contracted or performed work pursuant to the contract after the Registrar issued Respondent’s license on October 4, 2005. Even if Respondent were licensed at the time of the contract, A.R.S. § 32- 1154(F) allows the Registrar to order a payout from the Fund “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.”[5] Complainant presented no evidence that the Registrar ever found Respondent to have violated a contracting statute in his performance of his contract with Complainant, or disciplined Respondent’s license as a result of such violation. RECOMMENDED ORDER In view of the foregoing, it is recommended that on the effective date of the Registrar’s final order, the Registrar affirm its denial of Complainant Michael A. Covington’s claim to the Residential Contractors’ Recovery Fund and close Case No. 2009-7091051 (former Case No. RF09-1051). 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, June 7, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The record in this matter does not show whether the Registrar closed its investigation into Respondent’s unlicensed activity in Case No. U08- 0110 after Respondent’s license was revoked in the three other matters. [2] See 32-1101 et seq. [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). [5] A.R.S. § 32-1154(A) also allows “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” to receive a payout from the Fund “for damages sustained by the act, representation, transaction or conduct . . . .”

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