ALJDEC decisions subject to certification as final

2011A-1018-ROC · Registrar of Contractors · 2014-02-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 16, 2014

APPEARANCES: Complainants appeared on their own behalf; Respondent was represented by sole Member Ryan Donnelly and former Superintendent Chris Adams. The Registrar of Contractors did not intervene in this matter.

WITNESSES: Warren Partridge Laurey Partridge Ryan Donnelly Chris Adams

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Respondent challenges a proposed payout by the Residential Contractors’ Recovery Fund (“the Fund”). The Fund has issued notice that it intends to make a payout to Complainant for the amount of $4,025.00. Respondent requested a hearing, challenging the proposed payout amount as too high. This tribunal entered the Fund claim file received from the Registrar of Contractors (“ROC”) into the record. The parties presented evidence, including testimony from the witnesses listed above. 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 $3,125.00. FINDINGS OF FACT 1. Respondent was the holder of License No. B.179042-R issued by the ROC. On June 21, 2012, the license was revoked after a default finding of abandonment by Respondent on a project for Complainants.[1] The project consisted of demolition of a residential structure and the building of a new home on the same site. Respondent abandoned the project when the demolition was nearly complete and before any work was done on the new construction phase of the contract. 2. For reasons described in the Recovery Fund Claim Report and not necessary to recount here, the Fund determined that the best way to calculate Complainants’ actual damages was to assess the value of the demolition work performed and compare it to the amount paid by Complainants. The Administrative Law Judge agrees with this analysis, and so do Complainants and Respondent. 3. The parties agree that Complainants paid a total of $22,500.00 to Respondent. 4. To determine the value of the demolition work performed, the Fund received two estimates from licensed contractors, provided by Respondent,[2] and also used a software program—Power Claim—to do its own estimation. Out of those three estimates, the Fund took the lowest, which came from a licensed contractor and was for the amount of $18,475.00. 5. The Fund calculated the difference between the value of the work performed (as estimated by the lowest contractor estimation) and what Complainants paid, which came to $4,025.00, and determined that amount as Complainants’ actual damages. Complainants accepted that amount and do not challenge it. 6. Respondent objects to that amount. Respondent argued at hearing that the Power Claim estimate (the middle amount, neither lowest nor highest) should be used, but offered no compelling argument for it. Respondent also pointed out at hearing that the low bid missed two items of the demolition that Respondent performed: 1) labor for removal and stacking of pavers to be used by Complainants on the new project; and 2) demolition of a tree and a decorative wall. Respondents estimated that work performed at values of 1) $400.00 and 2) $500.00, for a total of $900.00. Respondent offered no documentation to support those amounts, but Complainants did not voice much of an objection to the estimated amounts for those two items. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action.[3] Further, the standard of proof at hearing is by preponderance of the evidence.[4] The Notice of Claim for Administrative Payout states that Complainants bear the burden of proof to show entitlement to the amount in the Notice. Therefore, Complainants bear the burden of showing, by a preponderance of the evidence, that the proposed payout amount is reasonable and proper. Complainants have not met that burden with respect to the $900.00 difference. 2. Complainants are injured persons within the definition in A.R.S. § 32-1131(3) and are, therefore, entitled to recovery from the Fund. 3. According to A.R.S. § 32-1132(A), the statutory maximum amount of payout from the Fund is $30,000.00. 4. Under the facts and circumstances of this case, the Fund is empowered to determine and award, based on actual damages, an appropriate payment to Complainants pursuant to A.R.S. § 32-1132 and A.R.S. § 32- 1154(F). 5. Here, the Administrative Law Judge concludes that the Fund appropriately used the low estimate. However, that estimate did not include $900.00 worth of work that Respondent performed. Thus, that amount should be added to the low estimate, making the value of the work done by Respondent equal $19,375.00. This changes the conclusion as follows: Actual amount paid to Respondent $22,500.00 Less the value of the work performed $19,375.00 Total actual damages $3,125.00

6. The evidence of record supports an award to Complainants in the amount of $3,125.00, 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 Complainants in the amount of $3,125.00.

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, February 4, 2014.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] This information was verified by taking administrative notice of the information on the ROC website on February 4, 2014. [2] Complainants were given an opportunity to provide bids but failed to do so. [3] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949); A.A.C. R2-19-119(B). [4] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A).

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