ALJDEC decisions subject to certification as final

2009A-7100197-ROC · Registrar of Contractors · 2010-12-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 6, 2010

APPEARANCES: Complainant appeared on his own behalf; Respondent did not appear; the Residential Contractors’ Recovery Fund intervened in this matter and was represented by Assistant Attorney General Keely Verstegen.

WITNESSES: Dolly Lucero, Specialist with the ROC Recovery Fund Michael Smith

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant Michael Smith seeks a payout from the Residential Contractors’ Recovery Fund (“Fund”) for damages caused by defective workmanship of Respondent Perfect Temperature, Inc. Respondent did not appear. The Fund appeared through Assistant Attorney General Keely Verstegen and challenged Complainant’s eligibility for payout from the Fund. The only issue for which the parties were given notice is Complainant’s eligibility. That is the only issue addressed herein. This tribunal entered the claim file received from the Registrar of Contractors into the record, along with Complainant’s Exhibit A and the Fund’s Exhibits 1, 2, and 3. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding Complainant ineligible for recovery from the Fund.

FINDINGS OF FACT 1. Respondent Perfect Temperature, Inc. was the holder of license K- 39.169379-D issued by the Registrar of Contractors (“ROC”). Respondent performed contracting work on Complainant’s property in 2007 and 2008. The license has since been revoked. 2. Complainant made a claim to the Fund in September 2009 for recovery of damages cause by Respondent.[1] The ROC conducted a preliminary check and determined that Complainant’s property was not classified as class three (residential owner-occupied) property at the time of the contract from which the claim arose. Class three classification of the subject property is required by the statutes governing the Fund, so the ROC notified Complainant that he was ineligible for recovery.[2] Complainant then requested a hearing. 3. At hearing, Complainant testified and submitted evidence showing that when he bought the property in 2005, he was unaware that it was not classified as class three property. The property was classified as property that was not owner-occupied. He testified he lived on the property in a mobile home while he built a house on the property, which he then moved into. He testified that he has never rented out the property. He did not learn of the classification issue until his denial of Fund eligibility by the ROC in July 2010. He immediately had the property re- classified to class three property.[3] 4. The Fund does not contest Complainant’s testimony or evidence. 5. Complainant testified that he paid his property tax assessment bills on the property each year and that when he changed the property classification in 2010 he learned that he was overpaying those taxes due to the classification of the property as non-owner-occupied. Based on that testimony, this tribunal finds that it is likely that Complainant was informed of the property’s classification each time he received a tax assessment bill. Thus, he should have been aware of the misclassification early in his ownership of the property. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action.[4] Further, the standard of proof at hearing is by preponderance of the evidence.[5] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that he is eligible for recovery from the Fund.[6] Complainant has not met that burden. 2. Only owners of “residential real property . . . classified as class three property under section 42-12003 and . . . actually occupied or intended to be occupied by the owner as a residence . . .” are eligible for recovery from the Fund.[7] That statutory requirement invokes two necessities: (1) classification as class three property, and (2) actual occupancy (or intent to occupy) by the owner. Those provisions are mandatory and not ambiguous. 3. Complainant essentially argues that he because he met the second necessity, he met the spirit, if not the letter, of the law. However, the classification necessity is a clear and unambiguous requirement for eligibility for payout from the Fund. This tribunal cannot overlook that statutory provision, no matter how sympathetic Complainant’s situation might be. 4. Complainant is not eligible for recovery from the Fund because he does not meet the statutory requirement that he be the owner of property that was classified as class three property at the time of the contract from which his damages arose. RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors find that the claim filed by Michael Smith is not eligible for recovery from the Fund.

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 Decision will be 40 days from the date of that certification.

Done this day, December 22, 2010.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit 1. [2] Exhibit 2. [3] Exhibit A. [4] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949); Arizona Administrative Code (A.A.C.), OAH Rule R2-19-119(B). [5] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A). [6] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [7] Arizona Revised Statutes (A.R.S.) § 32-1131(3).

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