ALJDEC decisions subject to certification as final

2012A-2863-ROC · Registrar of Contractors · 2013-12-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 3, 2013, at 8:00 a.m. APPEARANCES: Robert K. Cao-Ba and Pama M. Peckham-Cao-Ba (hereinafter “Complainants”) appeared on their own behalf. S and B Mechanical LLC (hereinafter “S and B” or “Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

S and B 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 $1,320.49. S and B 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 S and B is the holder of License No. C-39R.171993-R issued by the Registrar of Contractors. On or about August 28, 2011, S and B contracted with Complainants to replace Complainants’ heat pump in their residence for the total sum of $7,089.12. Complainants filed the underlying complaint against S and B alleging numerous workmanship issues. Pursuant to the filing of the formal complaint, the Registrar of Contractors issued a Citation and Complaint charging S and B with possible violations of A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154(A)(3), namely, A.A.C. R4-9-108, A.R.S. § 32-1154(A)(9), A.R.S. § 32-1154(A)(16), and A.R.S. § 32-1154(A)(23). On January 8, 2013, the Registrar issued a Default Decision and Order that provided, in relevant part, as follows: IT IS ORDERED suspending Respondent’s license on the effective date of this Order (40 days after the mailing date, shown below), until the Registrar receives proof that Respondent has appropriately rectified the corrective work involved and detailed in the Complaint and the agency’s written directive. If Respondent properly corrects these specified items on or before the effective date of this Order, then Respondent’s license shall not be suspended. Instead, the Registrar shall place Respondent’s license on disciplinary probation for 60 days.

Pursuant to A.R.S. § 32-1154(D), IT IS FURTHER ORDERED that Respondent pay $500.00 as a civil penalty to the Registrar. If Respondent fails to pay this civil penalty on or before 30 days after this Order’s effective date, the Registrar shall automatically revoke Respondent’s license on that date. The Registrar shall not issue any future or additional contractor’s licenses to any entity comprised of persons associated with Respondent, as defined in A.R.S. § 32-1101(A) (5), unless Respondent or any of the parties defined in A.R.S. § 32-1101(A) (5) pays any and all outstanding civil penalties.

S and B failed to comply with the terms of the Registrar’s January 8, 2013 Default Decision and Order. On March 29, 2013, License No. C-39R.171993-R of S and B was revoked for failure to pay a civil penalty. On July 22, 2013, the Registrar of Contractors 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 $1,320.49 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 August 9, 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 August 8, 2013, S and B filed a request for an administrative hearing to contest the amount of the payment. FINDINGS OF FACT Testimony of Pama M. Peckham-Cao-Ba Pama M. Peckham-Cao-Ba (hereinafter “Ms. Peckham-Cao-Ba”) testified that Complainants obtained bids from licensed contractors for the proper correction of the heat pump system installed by S and B. Ms. Peckham-Cao- Ba stated that the lowest bid from a licensed contractor for the proper correction of Complainants’ new heat pump system was the sum of $1,320.49. Ms. Peckham-Cao-Ba testified that the low bid had been submitted by Comfort World Air Conditioning & Heating.[1] Ms. Peckham-Cao-Ba’s testimony is found to be credible. Testimony of Robert K. Cao-Ba Robert K. Cao-Ba (hereinafter “Mr. Cao-Ba”) testified that he agreed with his wife’s testimony. Mr. Cao-Ba stated that the construction process had been very difficult for Complainants. Mr. Cao-Ba testified that he was very unhappy with the HVAC work that was performed by S and B. Administrative notice is taken of S and B’s prior license record as reflected on the Registrar of Contractors’ public website on December 3, 2013. Such prior license record reflects that License No. C-39R.171993-R of S and B was revoked on March 29, 2013, for failure to pay a civil penalty, suspended until compliance on March 20, 2013, suspended for lack of bond on August 25, 2012, and suspended for non-renewal from February 1, 2012, through January 31, 2013. 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 $1,320.49 is reasonable and proper. Complainants have met that burden. 4. Complainants are injured persons within the definition in A.R.S. § 32- 1131(3)[2] and are, therefore, entitled to recovery from the Fund. 5. Under the facts and circumstances of this case, the Registrar is empowered to determine and award, based on actual damages, an appropriate payment to Complainants from the Fund pursuant to A.R.S. § 32-1132[3] and A.R.S. § 32-1154(F).[4] 6. The credible evidence of record supports an award to Complainants in the sum of $1,320.49, all of which shall be chargeable against S and B and the persons on License No. C-39R.171993-R of S and B. 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 $1,320.49. 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 4, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] License No. 096279. [2] 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.

[3] 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.

[4] 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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