ALJDEC decisions subject to certification as final

2010A-529719-ROC · Registrar of Contractors · 2012-01-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 16, 2011

APPEARANCES: Robert Kapp appeared on behalf of Complainants; no one appeared on behalf of Respondent; the Residential Contractors’ Recovery Fund intervened in this matter and was represented by Assistant Attorney General Elizabeth Campbell and Recovery Fund Supervisor Glenn Hawkins.

WITNESSES: None (no factual dispute)

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant Robert Kapp[1] requested a hearing to appeal a proposed payout by the Residential Contractors’ Recovery Fund (“the Fund”). The Fund has issued notice that it intends to make a payout to Complainants of $2,341.94. Complainant asserts that this amount is too low and request $4,491.49. The difference in the amounts is equal to the unpaid portion of the contract price. Thus, the Fund claims that Complainant’s damages should be reduced by the unpaid portion of the contract price and Complainant disagrees. As noted, Respondent did not appear and has not participated in the process. This tribunal entered the Fund claim file received from the Registrar of Contractors into the record. The claim file includes the underlying complaint file, ROC Complaint Number 2010-529719 (formerly T10-0052), which is the basis for the payout. As noted, no testimony was taken because the issue in dispute is a purely legal issue. Thus, the hearing became a discussion about why the Fund determined Complainant’s actual damages by discounting the amount Complainant paid for the corrective work by the unpaid portion of the contract. Based upon the record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order for payout in the amount of $2,341.94. FINDINGS OF FACT 1. Respondent was the holder of license C-30.232832-R. The license was revoked in June 2010 as a result of the underlying complaint. That complaint concerned a kitchen-remodeling job that encompassed replacing cabinets and countertops, and installing a kitchen island. The allegations included abandonment with regard to the kitchen island that Respondent failed to install. An administrative hearing was held and the resulting ROC Decision and Order, issued on April 23, 2010, adopted an Administrative Law Judge Decision that ordered Respondent to pay Complainant restitution in the amount of $4,491.49 or face revocation of its license. The restitution was due to the failure to install the kitchen island and the amount was based on the cost Complainant incurred to buy the materials for the island and have someone else install the island. No discount was applied for the unpaid portion of the contract. The Decision and Order became final. 2. Complainant filed a claim with the Fund in August 2011, seeking payout for damages caused by Respondent. The Fund accepted the amount of $4,491.49, which was the cost for the island plus its installation as found in the Administrative Law Judge Decision. However, the Fund determined that Complainant’s actual damages is a lesser amount because Complainant had not paid the final $2,149.55 of the contract price. Therefore, the Fund discounted the $4,491.49 award by the unpaid portion of the contract ($2,149.55) and determined that Complainant’s actual damages are $2,341.94. 3. At hearing, Complainant expressed that he did not understand why the Fund applied the discount to the $4,491.49. Discussion ensued wherein the Assistant Attorney General made legal arguments as to why it was necessary to discount the $4,491.49 amount by the unpaid portion of the contract. Complainant argued that the unpaid portion should not discount the award of $4,491.49 in the Administrative Law Judge Decision because Respondent had abandoned the job. After hearing from both parties, the matter was taken under advisement. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action.[2] Further, the standard of proof at hearing is by preponderance of the evidence.[3] The Notice of Claim for Administrative Payout states that Complainant bears the burden of proof to show entitlement to the amount requested. Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that the amount he claims is reasonable and proper. Complainant has not met that burden. 2. Complainant is an injured person within the definition in A.R.S. § 32-1131(3) and is, therefore, entitled to recovery from the Fund. 3. Under the facts and circumstances of this case, the Registrar of Contractors is empowered to determine and award, based on actual damages, an appropriate payment to Complainant from the Fund pursuant to A.R.S. §§ 32-1132 and 32-1154(F). 4. This tribunal is persuaded that the unpaid portion of the contract price should be taken off the award of $4,491.49 made in the original Decision and Order.[4] The amount paid by Complainant to have the island completed minus the unpaid portion of the contract price represents Complainant’s actual damages.[5] Thus, this tribunal recommends an award to Complainant in the amount of $2,341.94, all of which shall be chargeable against Respondent and persons on the license as set forth in A.R.S. § 32- 1139(B). RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors make payment from the Residential Contractors’ Recovery Fund to Complainant in the amount of $2,341.94.

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, January 5, 2012.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Although the caption for this matter includes Lois Kapp, both the underlying complaint and the Recovery Fund claim have been prosecuted by Robert Kapp, who was the sole complainant on the underlying complaint. Therefore, this Administrative Law Judge Decision will hereinafter refer only to Robert Kapp and designates him as the “Complainant.” [2] 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). [3] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A). [4] This should have been done in the original Decision and Order, but was overlooked. For this claim, the Fund has an independent duty to award only the amount of actual damages (see A.R.S. § 32-1132(A)). Therefore, the Fund is empowered to make its own determination of such damages. [5] To the extent that there is an unpaid portion of the contract price, Complainant has not been damaged by that amount because he has not paid it.

-----------------------

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