ALJDEC decisions subject to certification as final

2012A-1717-ROC · Registrar of Contractors · 2013-12-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 21, 2013

APPEARANCES: Complainant appeared on his own behalf; Respondent was represented by attorney Tyler Swenson, Esq. The Registrar of Contractors intervened in this matter and was represented by Assistant Attorney General Michael Raine.

WITNESSES: None

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

This matter involves an application to the Residential Contractors’ Recovery Fund (“the Fund”) by Complainant to recover actual damages caused by violations of the contracting statutes committed by Respondent. The Fund has declined to award any payout to Complainant. The Administrative Law Judge did not take testimony for this matter due to the fact that there are no relevant factual disputes and the only issue in dispute is a legal one--the meaning of the definition of “actual damages” in the controlling statute. At the hearing, all parties argued their respective positions and Complainant made an offer of proof. Based on the analysis described below, the Administrative Law Judge makes the following recommended order determining that Complainant has no damages that are recoverable through the Fund. Respondent installed a solar system at Complainant’s house. After Respondent defaulted on a complaint filed by Complainant about the sale of the solar system, the Registrar of Contractors (“Registrar” or “ROC”) issued a Default Decision and Order on April 24, 2013, that found Respondent in violation of A.R.S. § 32-1154(A)(7) (prohibiting fraud); A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1124(B) (requiring an ROC license number on all documentation used by a contractor); A.R.S. § 32- 1154(A)(13), namely A.R.S. § 32-1158 (requiring minimum elements in construction contracts); and A.R.S. § 32-1154(A)(16) (prohibiting use of false, misleading, or deceptive advertising). The Registrar revoked Respondent’s license due to those violations. Complainant has filed an application for recovery from the Fund. He seeks monetary damages in an amount to remove the solar system installed by Respondent and replace it, along with additional equipment, in order to achieve the efficiency rating he was promised by Respondent. He admits that the system installed by Respondent is in working condition and does what it is designed to do. His complaint about it has always been that it does not achieve the efficiency that Respondent promised. On August 19, 2013, the Recovery Fund Administrator denied Complainant’s application for the reason that, although Complainant is eligible for recovery, he does not have any allowable costs to repair the system, as the system works properly. The Fund found that Complainant’s complaint was based solely on a claim that Respondent misrepresented the efficiency of the system. Complainant requested a hearing. The Administrative Law Judge agrees with the Fund. By definition in A.R.S. § 32-1132(A), “[a]n 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.” This effectively caps Fund awards at an amount needed to complete or repair the job that is the subject of the violation. In this case, Complainant has no amount needed to complete or repair the solar system. By his own admission, it is complete and in working order. It needs no repairs. He submitted Exhibit A as an offer of proof of the damages he is seeking. Exhibit A shows that Complainant seeks to replace the system and add equipment in order to achieve a specific efficiency rating. Therefore, the amount needed to complete or repair Complainant’s job that is the subject of the violations is $0. RECOMMENDED ORDER IT IS RECOMMENDED that Complainant’s application for recovery from the Residential Contractors’ Recovery Fund be denied because Complainant has no recoverable damages as defined by A.R.S. § 32-1132(A).

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 will be the date of that certification.

Done this day, December 11, 2013.

/s/ Eric A. Bryant 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