ALJDEC decisions subject to certification as final

2011A-1230-ROC · Registrar of Contractors · 2011-11-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 3, 2011 APPEARANCES: Aaron Brown, Complainant; Elizabeth Campbell, Assistant Attorney General representing the Registrar of Contractors; Doug Ulmer, witness; Melissa Brown, observer ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________ On appeal from a notice of ineligibility from the Registrar of Contractors regarding his Recovery Fund Claim, Complainant did not establish that the notice was incorrect. However, a review of the applicable laws reveals that the class of Complainant’s property can be retroactively changed. If that should happen, Complainant should be allowed to initiate a Recovery Fund Claim, which, if it is timely filed, should be reviewed for eligibility in accordance with the appropriate property classification at that time. FINDINGS OF FACT 1. Complainant filed a Recovery Fund Claim with the Registrar of Contractors on or about August 3, 2011. The Registrar of Contractors reviewed the application and found that Complainant’s property was listed as class four by the county assessor. 2. On or about July 15, 2011, the Registrar of Contractors issued Complainant a notice informing him that he was not eligible to receive a pay-out from the recovery fund because his property was listed under class four. Complainant appealed that determination. 3. Complainant appeared at the hearing and testified that he and his wife have lived in the home since it was purchased in 2009. When his Recovery Fund Claim was denied, Complainant called the county assessor’s office where he was told that the previous owner had changed the classification to class four. Complainant said he did not know until his claim was denied that he was supposed to have his property class changed when he moved in because it was his first home and no one told him about legal classifications. He said that when he found out about it, he wrote a letter asking the county assessor to change the property to class three, but he has not received an answer yet. 4. For the purpose of showing that he lived there, Complainant offered into evidence Exhibits B, C, and D (A was withdrawn) showing that his paycheck, taxes and bills are all sent to the same address. Complainant argued that a technicality should not be allowed to prevent him from recovering when the purpose of the Registrar of Contractors Recovery Fund is to protect people like him. 5. The Registrar of Contractors argued that the law limits recovery fund pay-outs to class three properties and the most relevant time is at the time of the contract, so the Registrar of Contractors was prevented from issuing a pay-out in this case. CONCLUSIONS OF LAW 1. Arizona Revised Statute § 32-1132(A) provides for a residential contractor’s recovery fund “from which any person injured by an act, representation, transaction or conduct of a residential contractor . . .” may be awarded a pay-out from the fund. 2. A “person injured” is defined at A.R.S. § 32-1131(3) as the owner of residential real property classified as class three property under A.R.S. § 42-12003. 3. A.R.S. § 42-12003(A) states that class three property includes property that is used for residential purposes that is not otherwise included in class one, two, four, six, seven or eight. Rental property is included in class four pursuant to A.R.S. § 42-12004(A)(1). In this case, it was not disputed that the county assessor’s website lists Complainant’s property as class four. Since the county assessor does the classifications, it must be concluded that Complainant’s property was a class four at the time of the hearing. However, A.R.S. § 42-12054(A) provides that if a person converts a property listed as class four and occupies it, he or she may have the classification reviewed by the county assessor, who may change it to a class three from the date of conversion. Therefore, if Complainant proves to the county assessor that the property should be a class three dating back to the time of the contract, he might rightfully be able to show that he meets the definition of a person injured under A.R.S. § 32-1131(3). Unfortunately, at the time of the hearing, Complainant’s property was still listed as a class four dating back to the time of the contract in question and the jurisdiction for determining whether that classification was correct is in the hands of the county assessor according to A.R.S. § 42-12054(A). The Administrative Law Judge in this matter has no jurisdiction to change the classification even if the evidence at hearing established that the property should be a class three. Therefore, Complainant was not able to establish that he meets the criteria for a pay-out from the Registrar of Contractors recovery fund at this time, and the appeal should be denied. 4. Since Complainant’s property can be changed to a class three dating back to the relevant time of the contract, Complainant should be allowed to file a timely Recovery Fund Claim if the county assessor agrees to make the requested change. RECOMMENDED DECISION Based upon the foregoing considerations, the undersigned Administrative Law Judge hereby recommends that this appeal be denied.

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 Order is the date of the certification by the Director of the Office of Administrative Hearings.

Done this day, November 17, 2011.

/s/ Dorinda M. Lang 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