ALJDEC decisions subject to certification as final

2011A-1090-ROC-rf · Registrar of Contractors · 2013-12-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 9, 2013, at 8:00 a.m. APPEARANCES: Leslie D. Duckett and Jill Duckett (hereinafter “Complainants”) were represented by their attorney, Alexander E. Moorhead, Esq., Monahan Moorhead, P.L.C. Sun City Restoration LLC (hereinafter “Sun City” or “Respondent”) was represented by its qualifying party, Brent Allen Monroe. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Sun City challenged 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 in the sum of $4,459.85. Sun City challenged the proposed payout amount as being too high. Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law, and Recommended Order are made: BACKGROUND AND PROCEDURE Sun City is the holder of License No. License No. B-3.203111-R issued by the Registrar of Contractors. Following an administrative hearing, the Registrar issued a January 12, 2012 Order that gave Respondent until February 21, 2012, to perform corrective work or have its license suspended until Respondent showed that it was in compliance with the Registrar’s Order. The Registrar’s Order adopted the Administrative Law Judge’s Recommended Order that stated: IT IS RECOMMENDED that license B-3.203111-R, held by Sun City Restoration, LLC, be suspended beginning the effective date of the Registrar’s Order until the Registrar receives written proof that the items listed in Findings of Fact 4 and 5 have been corrected by appropriate means and the Registrar of Contractors accepts such written proof.

2. After a denial of a Motion for Rehearing, Sun City was given until July 29, 2012, to complete the work and to provide acceptable proof of compliance with the Registrar’s Order. On July 25, 2012, Sun City filed a written statement with the Registrar stating that Respondent had completed all work. Sun City requested a compliance inspection and alleged a scheduling dispute with Complainants. At the Compliance Hearing, Sun City clarified that the issue at compliance hearing was Complainants’ alleged refusal to provide reasonable access. 3. As a result of the compliance hearing, the Administrative Law Judge recommended that Sun City’s B-3.203111-R License be immediately suspended and remain suspended until the Registrar lifted the suspension. The Administrative Law Judge further recommended that the Registrar could lift the suspension after a recovery fund claim had been brought and proceeded to a final order pursuant to A.R.S. § 32-1154(F) and A.R.S. § 32-1139(B).

4. On January 4, 2013, the Registrar issued a Compliance Hearing Order that provided, in relevant part, as follows: The Registrar adopts the Administrative Law Judge’s attached Recommended Order with the following modifications: On page 6, line 11, “make” shall be replaced with “submit.” On page 6, line 12, after “Fund to” insert “attempt to.” On page 6, lines 16-19, “and remain suspended . . . and A.R.S. § 32-1139(B)” shall be replaced with “for a period of fourteen (14) days to be immediately followed by a ninety (90) day period of probation.”

5. On or about September 9, 2013, the Registrar of Contractors re-issued a Notice of Claim for Administrative Payout that provided, in relevant part, as follows: The Complainants named above filed a claim for payment with the Residential Contractors’ Recovery Fund pursuant to A.R.S. § 32- 1154(F). After a review of the claim and all supporting documentation, the Fund has determined that Complainants are to be awarded $4,459.85 in the form of a payment issued by the Fund.

In accordance with A.R.S. § 32-1154(F), both Complainants and Respondent have fifteen (15) days from the date of mailing of this Notice to file an administrative hearing request to contest the amount and/or propriety of the payment. Such request must be received by the Registrar no later than 5:00 p.m. on September 27, 2013. As provided in A.R.S. § 32-1154(F), the failure of Complainants and/or Respondent to file a timely written request for a hearing shall be deemed a waiver to contest the amount and/or propriety of the payment awarded.

On or about September 27, 2013, Sun City filed a request for an administrative hearing to contest the amount of the payout. FINDINGS OF FACT Testimony of Jill Duckett Jill Duckett (hereinafter “Ms. Duckett”) testified that Complainants obtained bids from three licensed contractors for the proper correction of the poor work performed by Sun City at their residence. Ms. Duckett stated that the lowest bid from a licensed contractor for the proper correction of Complainants’ residence was the total sum of $4,459.85. Ms. Duckett testified that the bids submitted by the three licensed contractors failed to include taxes that would have to be paid for the corrective work on Complainants’ residence. Ms. Duckett acknowledged that she had added the appropriate tax to the bids submitted by licensed contractors. Ms. Duckett testified that all three licensed contractors that submitted bids for the correction of Complainants’ residence informed her that it was cheaper and more cost-effective to replace the door casings that Sun City damaged rather than to attempt to correct the damaged door casings. Ms. Duckett testified that the sum of $4,459.85 included costs for material suppliers. Ms. Duckett stated that material suppliers were not required to be licensed contractors. Ms. Duckett’s testimony is found to be credible. Testimony of Brent Allen Monroe Sun City’s qualifying party, Brent Allen Monroe (hereinafter “Mr. Monroe”) testified that he opposed the proposed payout to Complainants in the sum of $4,459.85 because Ms. Duckett added taxes to the bids submitted by the three licensed contractors. Mr. Monroe acknowledged that appropriate taxes would have to be paid for the submitted corrective work. Mr. Monroe stated that the appropriate taxes should have been included in the bids submitted by three licensed contractors. Mr. Monroe asserted that Ms. Duckett improperly altered the submitted bids by adding the appropriate taxes to the bids. Mr. Monroe asserted that Complainants’ claim for damages should not be paid by the Fund because the Complainants’ claim for damages included costs from material suppliers that were not licensed contractors. Mr. Monroe acknowledged that material suppliers were not required to be licensed contractors. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. The Notice of Claim for Administrative Payout stated that Complainants bear the burden of showing, by a preponderance of the evidence, that the proposed payout amount of $4,459.85 is reasonable and proper. Complainants have met that burden. 4. Complainants are injured persons within the definition in A.R.S. § 32- 1131(3)[1] and are, therefore, entitled to recovery from the Fund. 5. Under the facts and circumstances of this case, the Registrar is empowered to determine an award, based on actual damages, and to make an appropriate payment to Complainants from the Fund pursuant to A.R.S. § 32- 1132[2] and A.R.S. § 32-1154(F).[3] 6. The credible evidence of record supports an award to Complainants in the sum of $4,459.85, all of which shall be chargeable against Sun City and the persons listed on License No. B-3.203111-R of Sun City. RECOMMENDed order In view of the foregoing, it is recommended that the Registrar authorize a payment from the Residential Contractors’ Recovery Fund to Complainants in the amount of $4,459.85. 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, December 9, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] A.R.S. § 32-1131(3) provides as follows:

"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.

[2] A.R.S. § 32-1132 provides, in relevant part, as follows:

A. The residential contractors' recovery fund is established, to be administered by the registrar, from which 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 may be awarded in the county where the violation occurred an amount of not more than thirty thousand dollars for damages sustained by the act, representation, transaction or conduct. An award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. Actual damages shall not be established by bids supplied by or the value of work performed by a person or entity that is not licensed pursuant to this chapter and that is required to be licensed pursuant to this chapter. If the claimant has paid a deposit or down payment and no actual work is performed or materials are delivered, the award of actual damages shall not exceed the exact dollar amount of the deposit or down payment plus interest at the rate of ten per cent a year from the date the deposit or down payment is made or not more than thirty thousand dollars, whichever is less. Interest shall not be paid from the fund on any other awards under this chapter unless ordered by a court of competent jurisdiction.

[3] A.R.S. § 32-1154(F) provides as follows:

Notwithstanding any other provisions in this chapter, 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, the registrar may order payment from the residential contractors' recovery fund to remedy the violation. The registrar shall serve the contractor with a notice setting forth the amount claimed or to be awarded. If the contractor contests the amount or propriety of the payment, the contractor shall respond within ten days of the date of service by requesting a hearing to determine the amount or propriety of the payment. Failure by the contractor to respond in writing within ten days of the date of service shall be deemed a waiver by the contractor of the right to contest the amount claimed or to be awarded. Service may be made by personal service to the contractor or by mailing a copy of the notice by registered mail with postage prepaid to the contractor's latest address of record on file in the registrar's office. If service is made by registered mail, it is effective five days after the notice is mailed. Except as provided in section 41-1092.08, subsection H, the contractor or injured person may seek judicial review of the registrar's final award pursuant to title 12, chapter 7, article 6. An applicant to the residential contractors' recovery fund pursuant to this subsection must show that the applicant has proceeded against any existing bond covering the residential contractor and has not collected on the bond in an amount of thirty thousand dollars or more.

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