ALJDEC decisions subject to certification as final

2009A-7100368-ROC · Registrar of Contractors · 2011-08-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 12, 2011, at 8:00 a.m. The matter was held open until August 2, 2011, to allow the parties sufficient time to submit legal memorandums in support of their positions in this matter. APPEARANCES: The Complainant appeared through his attorney, Jay Powell. The Registrar of Contractors appeared through Assistant Attorney General, Montgomery Lee. The Respondent failed to appear. 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. On February 25th, 2011, the Registrar of Contractors issued a Notice to Claimant of Recovery Fund Ineligibility which provides, in pertinent part, as follows: At the time the Claimant entered into the contract with Pathway Developments in August 2005, the property was owned by Santa Rita Townhomes LLC. The scope of the work was for the construction of a new home. However, before the construction of the home was completed the contractor abandoned the project and the Claimant never took ownership of the subject property. As § 32-1131.3 requires a “person injured” to be, as a threshold criteria, an “owner of residential real property,” Claimant cannot therefore access the Fund.

2. The Complainant disagreed with the determination of ineligibility and on March 7, 2011, requested an administrative hearing. 3. There was no dispute that on August 5, 2005, the Complainant entered into a construction agreement with the Respondent for the construction of a new residence to be constructed on lot 46 of the Crown of Tucson Townhouses. 4. There was no dispute that the Complainant paid the sum of $17,000.00 as a down payment for the construction of the new townhouse. 5. There was no dispute that the real property at issue was owned by Santa Rita Townhomes LLC when the Complainant entered into the construction agreement, 6. There was no dispute that the Respondent abandoned the construction project before the construction of the new residence was completed, 7. There was no dispute that the Complainant never took ownership of the residential real property at issue. 8. Credible testimony and evidence established that the Complainant is not a person injured as defined by applicable statute. 9. Credible testimony and evidence supports a finding that the Complainant is not eligible to access the Contractors’ Recovery Fund. CONCLUSIONS OF LAW 1. The Complainant has the burden of demonstrating by a preponderance of the evidence that the Complainant is eligible to access the Contractors’ Recovery Fund. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 Pd 367 (1949, A.A.C. R2-19-119 (A) and (B). 2. 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). 3. 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). 4. A.R.S. § 32-1131.3 provides, in pertinent part, as follows: 3. "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. Included in this definition are lessees of residential real property who contract directly with a residential contractor or indirectly with a subcontractor of that contractor and homeowners' or unit owners' associations after transfer of control from the builder or developer for damages to the common elements within the complex. 5. The Complainant failed to sustain his burden of proof to establish that the Complainant is eligible to access the Contractors’ Recovery Fund. RECOMMENDed order In view of the foregoing, it is recommended that the determination of Recovery Fund Ineligibility be affirmed and that this matter be closed as the Complainant being deemed ineligible to receive a payout from the Contractors’ Recovery Fund. 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, August 17, 2011.

/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