FINACT2012A-5364-RFA-ROC.pdf

2012A-5364-RFA-ROC · Registrar of Contractors · 2019-04-16

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Victor and Carmen Castro, Case No. 2012-5364 COMPLAINANTS, Docket No. 2012A-5364-RFA-ROC v. Frank Mendoza Carrillo Jr., FINAL ADMINISTRATIVE DECISION DBA: Carrillo Builder's and Home Development AND ORDER Co., License No. ROC 078891, RESPONDENT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an

administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the

Registrar must provide written justification setting forth the reasons for the modification or rejection.

REGISTRAR’S ACCEPTANCE

In this case, a hearing was held, and the administrative law judge issued a written decision. See

Administrative Law Judge Decision, attached. The Registrar reviewed that decision and hereby accepts

it.

CONCLUSION

Because the Registrar has accepted the administrative law judge’s decision, that decision is the

final administrative decision in this case and becomes effective on May 22, 2019.

FINAL NOTE

On page 2, line 17 replace “12:30 p.m.” with “8:00 a.m.” and “November 6, 2013” with

“November 21, 2012”.

On page 4, line 4 replace “November 7, 2013” with “March 3, 2015”.

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 On page 4, lines 5-6 replace “32-1154(A)(2)” with “32-1154(3)”, “32-1154(A)(2)(3)” with “32-

1154(A)(12)” and “32-1154(A)(23)” with “32-1154(A)(20)”.

On page 4, line 21 replace “32-1154(A)” with “32-1154(A)(3)”.

On page 5, line 9 replace “June 1, 2018” with “July 19, 2018”.

On page 5, line 9 replace “July 9, 2018” with “July 24, 2018”.

On page 6, lines 18-19 replace “a Final Order issued by an Administrative Law Judge” with

“when the ROC receives an Administrative Law Judge Decision and then issues a Final Administrative

Decision and Order”.

On page 8, line 3 replace “was the only itemized bid” with “was the only bid itemized in a way

that compensable “actual damages” could be calculated”.

On page 12, after line 15 add “It is further recommended that under A.R.S. § 32-1139(B), the

Registrar charge $20,933.84, plus interest at a rate of ten percent a year, to Respondent, Frank Mendoza

Carrillo Jr., DBA: Carrillo Builder's and Home Development Co., License Number 078891.

Dated April 12, 2019.

Registrar of Contractors /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Copy mailed via USPS First Class mail April 12, 2019 to: Respondent Frank Mendoza Carrillo JrFrank Mendoza Carrillo Jr DBA: Carrillo Builder's and Home Development Co Camino Pesqueira Rio Rico, AZ 85648 Respondent’s Attorney Fidelis V. Garcia, Esq. PO Box 2230 Chandler, AZ 85244

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Complainants Victor and Maria Castro HC 2 Box 317 Nogales, AZ 85621 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Respondent’s Attorney at email address of record with Registrar Complainant at email address on record with the Registrar Office of Administrative Hearings Jenna Clark, Administrative Law Judge

Office of the Attorney General Thomas Raine, Assistant Attorney General Case No. 2012-5364 / mm

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 3.27.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Victor Castro and Carmen Castro, No. 2012A-5364-RFA-ROC Complainants, ADMINISTRATIVE LAW JUDGE -vs- DECISION Frank Mendoza Carrillo Jr. dba Carrillo Builder's and Home Development Co. License No. B.078891-R, Respondent.

HEARING: March 13, 2019 at 9:00 AM. APPEARANCES: Assistant Attorney General Thomas Raine, Esq. appeared on behalf of Victor Castro and Carmen Castro (“Complainants”) with Marlee McCormick as a witness. Fidelis Garcia, Esq. appeared on behalf of Carrillo Builder’s and Home Development Co. (“Respondent”) with Frank Carrillo Jr. as a witness. Pamela Reconde and Shaquira Adebule observed. ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this RECOMMENDED ORDER to the Director of the Arizona Registrar of Contractors (“ROC”). FINDINGS OF FACT BACKGROUND AND PROCEDURE 1. According to the ROC’s public website, on or about June 23, 1988, the ROC issued License No. 078891, B general residential contracting license, to Respondent.1 Frank Mendoza Carrillo is the Qualifying Party on this license.2

1 See https://roc.az.gov/contractor-search?Id=a0Yt000000ACYrEEAX. Id. Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 3.27.2019 ROC LEGAL

Respondent’s address of record on the license is 32 Camino Pesqueira, Rio Rico, AZ 85648-2403.3 2. Pursuant to ARIZ. ADMIN. CODE R4-9-117, Administrative Notice is taken of

Respondent’s prior License record as reflected on the Registrar’s public website on

March 13, 2019. License No. 078891 is current and renewed through May 31, 2019.

There are no open complaints against the license, but there is one record of prior

discipline that has been taken against the license. The license has a $5,000.00 surety

bond through American Contractors Indemnity Company effective June 16, 2010.4

1. On or about October 22, 2012, Complainant filed a complaint against

Respondent with the ROC alleging poor workmanship.5 The ROC received the

complaint on October 29, 2012, whereby it was designated Complaint No. 2012-5364

and assigned to Mike Nieves for investigation.

3. On November 05, 2012, the ROC notified Respondent of the filed

complaint via postal mail.6

4. On November 05, 2012, the ROC issued the parties a JOBSITE INSPECTION

NOTIFICATION LETTER to inform them that an inspection of the project would take place at

12:30 p.m. on November 06, 2013.7 On November 19, 2012, the ROC issued another JOBSITE INSPECTION NOTIFICATION LETTER to inform the parties that the inspection had been rescheduled for November 27, 2012, at 8:00 a.m.8 5. Investigator Nieves completed his inspection of the project on November 27, 2012.9 Both parties were present. Investigator Nieves completed jobsite inspection notes. 6. On November 28, 2012, Investigator Nieves issued a CORRECTIVE W ORK ORDER to Respondent because he substantiated thirty-two of Complainant’s complaint Id. 4 Id. The license had a $9,000.00 surety bond through American Contractors Indemnity Company, but was cancelled as of September 12, 2018. The license also had another $9,000.00 surety bond through American Contractors Indemnity Company, but that one was cancelled on August 18, 2016. See the ROC’s electronic file at Insp Formal Complaint Miscellaneous1.pdf. See the ROC’s electronic file at Rcc012 Formal Inspection Jobsite2.rtf. See the ROC’s electronic file at Rcc012 Formal Inspection Jobsite1.rtf. See the ROC’s electronic file at Rcc063 Reschedule Formal Jobsite Inspection1.rtf. 9 Id.; see also ROC Exhibit 6. RECEIVED 3.27.2019 ROC LEGAL

items regarding the allegation that Respondent’s work on the project failed to ROC meet minimum workmanship standards.10 Respondent was put on notice that he had until December 18, 2012, to notify the ROC of its compliance with the CORRECTIVE

W ORK ORDER or face discipline pursuant to ARIZ. REV. STAT. §§ 32-1154(A)(23) and 32-

1154(D).11

7. On January 15, 2013, Investigator Nieves closed the complaint, as no

request for hearing regarding issuing a Citation to Respondent had been received by

the ROC from Complainant.12

8. On October 24, 2013, Investigator Nieves received a request from

Complainant to reopen the complaint against Respondent.13 Included was a copy of the

parties’ contract.14

9. Investigator Nieves determined that because Respondent’s license was

current as of the date of the contract, that it was appropriate to reopen the complaint.15

10. On October 24, 2013, Investigator Nieves sent a COMPLIANCE INSPECTION

NOTIFICATION LETTER to the parties to inform them that another inspection of the project

would take place on November 06, 2013, at 12:30 p.m.16

11. On November 06, 2013, Investigator Nieves completed a compliance inspection of the project.17 Both parties were present. Investigator Nieves took twenty photographs and completed compliance inspection notes.18

See the ROC’s electronic file at Rcc014 Corrective Work Order1.rtf. Id. ARIZ. REV. STAT. § 32-1154(A)(23) stated "Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the Registrar..." A RIZ. REV. STAT. § 32-1154(D) stated "The Registrar may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of subsection A, paragraph 23, of this section ..." 12 See ROC’s electronic file at Rcc032 Odr1rtf. Id. Id. Id. See the ROC’s electronic file at Rcc012 Formal Inspection Jobsite1.rtf. See the ROC’s electronic file at Rcc032 Odr1rtf. See the ROC’s electronic file at Rcc100 Jobsite Inspection Notes1.rtf; see also Insp Complaint Submittal3.docx. RECEIVED 3.27.2019 ROC LEGAL

12. Ultimately, Investigator Nieves determined that Respondent had not fully complied with the CORRECTIVE W ORK ORDER that had been issued on November 28, 2012.19

13. On November 07, 2013, the ROC issued Respondent a CITATION FOR

ALLEGED VIOLATIONS OF ARIZ. REV. STAT. §§ 32-1154(A)(2), 32-1154(A)(2)(3), 32-

1154(A)(23), and ARIZ. ADMIN. CODE R4-9-108.20 The written complaint charged

Respondent with failing to take corrective action after the CORRECTIVE W ORK ORDER

was issued, and for the commission of an act or acts that would, if proved, be cause for

the suspension or revocation of Respondent’s license.21

14. On August 19, 2014, Investigator Nieves issued a Subpoena Duces

Tecum to Respondent pursuant to ARIZ. REV. STAT. § 32-1106 for all invoices,

sub/contracts, bids, estimates and/or proposals, executed, accepted, or performed by

Respondent or any of its agents at Complainant’s jobsite.22 The deadline for

Respondent to comply was September 30, 2014.23 Respondent timely complied.24

15. On September 29, 2014, Investigator Nieves reviewed the documents

received and determined that the contract between the parties was signed on April 05,

2010, and that June 15, 2010, was when the contract was assigned to the bank.25 16. The ROC referred the matter to the Office of Administrative Hearings (“OAH”), an independent State agency, for an evidentiary hearing.26 However, because Respondent entered into a CONSENT ORDER with the ROC on or about September 09, 2015, for substantiated violations of ARIZ. REV. STAT. § 32-1154(A),27 Respondent’s license was suspended for one day, on September 10, 201528, and the hearing was vacated.

19 Id. See the ROC’s electronic file at Rcc032 Odr1rtf; see also ROC Exhibit 7. 21 Id. See the ROC’s electronic file at Rcc102 Bank Subpoena Duces Tecum1.rtf. Id. See the ROC’s electronic file at Rcc032 Odr1rtf. Id. See OAH Docket No. 2014A-4819-ROC. See ROC Exhibits 8 and 14. 28 Id. RECEIVED 3.27.2019 ROC LEGAL

17. On November 28, 2017, Complainants filed a claim for payment with the Residential Contractors’ Recovery Fund (“the Fund”), in the amount of $30,000.00, pursuant to ARIZ. REV. STAT. §§ 32-1132(A) and 32-1154(G).29 The ROC received

Complainant’s filing on December 18, 2017.30

18. On January 18, 2018, the ROC issued a RECOVERY FUND NOTIFICATION

LETTER to the parties.31

19. On June 01, 2018, the ROC issued a NOTICE OF CLAIM FOR ADMINISTRATIVE

PAYOUT which held Complainants were awarded $20,933.84 from the Fund.32

20. On July 09, 2018, the ROC received an electronic mail appeal letter from

Respondent contesting Complainants’ award amount from the Fund.33

21. On August 20, 2018, the ROC again referred the matter to the Office of

Administrative Hearings for an independent evidentiary hearing.34 Per the NOTICE OF

HEARING issued to the parties on August 28, 2018, the issue for hearing was to

determine if Complainant’s award from the Fund was properly calculated and

appropriately issued pursuant to ARIZ. REV. STAT. § 32-1154(F), as justified by the

evidence.35

22. The hearing took place on March 13, 2019.36 HEARING EVIDENCE 23. At the hearing, the ROC submitted eighteen exhibits and presented the testimonies of Marlee McCormick and Victor Castro. Respondent presented the

See the ROC’s electronic file at Rf Claim Filed1.pdf. Id. 31 See the ROC’s electronic file at Rcrf27 Rf Administrative Acknowledgement Letter1.rtf. See the ROC’s electronic file at Rcrf11 Notice To Contractor2.rtf. A second NOTICE OF CLAIM FOR ADMINISTRATIVE PAYOUT was issued to the parties on July 19, 2018, which extended Respondent’s deadline to request an Administrative Hearing until August 03, 2018. See the ROC’s electronic file at Rcrf11 Notice To Contractor1.rtf. This was due to the ROC’s issuance of an ORDER QUASHING PRIOR NOTICE OF CLAIM FOR ADMINISTRATIVE PAYOUT on June 25, 2018. See the ROC’s electronic file at Rcrf46 Order To Quash1.rtf. See the ROC’s electronic file at Rf Correspondence1.pdf. See the ROC’s electronic file at _hearing_request.pdf. See NOTICE OF HEARING. The hearing was originally supposed to be held on October 11, 2018, but due to multiple continuance requests the matter was reset and eventually heard on March 13, 2019. RECEIVED 3.27.2019 ROC LEGAL

testimony of Frank Carrillo Jr. The NOTICE OF HEARING, NOTICE OF CONTINUED HEARING, and the ROC’s electronic hearing file were also admitted into the evidentiary record. Marlee McCormick’s testimony 24. Ms. McCormick testified that for the last two years she has been employed by the ROC as a legal assistant. Per Ms. McCormick, she investigated Case 2012-5364 and calculated Complainants’ administrative payout. Ms. McCormick noted that Investigator Nieves is no longer employed by the ROC and was not contacted during the course of her investigation, nor was he requested to testify as a witness in this matter, because doing so would have violated ROC employee policy. 25. At the onset of her testimony Ms. McCormick clarified that there is no statute of limitations on recovery fund claims. 26. Ms. McCormick testified that in order to be eligible for an administrative payout applicant(s) must meet several requirements. First, the underlying contractor’s

license must have been in good standing at the time the contract between the parties

was executed. Second, the applicant(s) must own the property at issue as their primary

residence, and occupy it. Third, the legal classification of the property must be a three

or a six. Fourth, the contractor must have been disciplined by either the ROC, a FINAL ORDER issued by an Administrative Law Judge, or pursuant to a duly entered CONSENT ORDER between the contractor and the ROC. 27. Ms. McCormick testified that Respondent’s license was in good standing at the time the contract with Complainants’ was executed. Referring to the ROC’s website and internal documents, Ms. McCormick testified that the only dates of suspension reflected for Respondent were June 01, 2017, through June 17, 2017, for non-renewal, September 10, 2015, per CONSENT ORDER, June 01, 2013, through June 09, 2013, for non-renewal, and April 14, 2010, through June 16, 2010, for lack of bond.37

37 See ROC Exhibit 14. RECEIVED 3.27.2019 ROC LEGAL

28. Ms. McCormick testified that she determined the contract execution date between the parties to be April 05, 2010. Per Ms. McCormick, she relied on the second paragraph of the parties’ contract agreement, under the Assignment of Contracts section, which reads as follows: Assignor hereby grants, transfers, and assigns to Lender all of Assignor’s present and future rights, title, and interest in and to the following Construction Contract, including without limitation, all subcontracts, rights, and amendments relating thereto, and all related substitute or replacement contracts: the contract between Assignor and Carrillo Builders and Home Development Company (the “Contractor”) dated April 5, 2010 (“Construction Contract”).38 (Emphasis added). 29. Ms. McCormick testified that the date of assignment was June 15, 2010, in the amount of $155,000.00. Per Ms. McCormick, she relied on documents received from Complainants including a Settlement Statement, and Indemnity Agreement,

escrow instructions and a loan request from the Bank of Tucson, a Disbursement

Request and Authorization, a Disclosure Statement, a Deed of Trust, and the

Construction Loan Agreement.39 30. Ms. McCormick also testified that, per her review of the records, Complainants obtained a New Home Construction Loan from the Bank of Tucson to pay Respondent. The bank paid $155,000.00 directly to Respondent on behalf of Complainants.40 31. Regarding the classification of Complainants’ property, Ms. McCormick testified that the ROC assessed the land at the time of filing, not at the time of the underlying alleged incident. Thus, Complainants’ property was classified as a three because it was real property Complainants owned that they used as their primary residence. 32. Next, Ms. McCormick testified that in order to calculate Complainants’ damages, Complainants were required to obtain three bids from other contractors so

See ROC Exhibit 12. See ROC Exhibit 9. 40 See ROC Exhibit 13. RECEIVED 3.27.2019 ROC LEGAL

that the lowest one could be chosen by the ROC, and then permissible remediation costs could be tallied to calculate Complainants’ award. Per Ms. McCormick, she chose the Jacobson Custom Homes (“Jacobson”) bid because it was the only itemized bid that she received from Complainants. Ms. McCormick calculated Complainants’ damages by going line by line between the Jacobson bid, the parties’ original contract, and Investigator Nieves’ compliance inspection notes. Ultimately, Ms. McCormick disallowed eight items as being corrected or over-inclusive, adjusted the allowable overhead percentage, and recalculated the sales tax applicable to the Jacobson bid’s new subtotal. At the conclusion of Ms. McCormick’s recalculations the Jacobson bid was reduced from $65,123.25 to $20,933.84. 33. Ms. McCormick testified that of six bonds listed on Respondent’s license, Complainants only filed against bond #[number redacted] for $5,000.00 on October 19, 2017.41 Ms. McCormick noted that on November 03, 2017, Complainant’s claim was

denied pursuant to the two-year statute of limitations as outlined in ARIZ. REV. STAT. §

32-1152(E).42

Frank Carrillo Jr.’s testimony

34. Mr. Carrillo testified that he is the Qualifying Party on ROC License No. 078891. 35. Regarding the Complainants new home build project, Mr. Carrillo agreed that he had a contract with Complainants but testified that it was executed on June 15, 2010, because that is the day Respondent signed an agreement with the bank and received payment for the project. Mr. Carrillo argued that the April 05, 2010, document was an estimate. 36. Mr. Carrillo denied receiving a notice of filing from any bond on Respondent’s license.

See ROC Exhibits 9 and 14. 42 See ROC Exhibit 9. RECEIVED 3.27.2019 ROC LEGAL

37. Mr. Carrillo opined that most, if not all, of the Jacobson bid was too high. Specifically, Mr. Carrillo argued that the line item costs were too expensive and that he could have obtained the materials, or performed the work at issue, for a cheaper price. 38. Lastly, Mr. Carrillo testified that he was unable to comply with the

CORRECTIVE W ORK ORDER because Complainants restricted his work hours and would ask him to leave the project site. CLOSING ARGUMENTS 39. In closing, Respondent argued that the underlying contract between the parties is invalid because there was no consideration tendered. Respondent further argues that the April 05, 2010, document is an estimate, and the June 15, 2010, document is the parties’ contract. Respondent alleges that its license was suspended at that time, so its agreement with Complainants is also invalid. Respondent argues that Complainants’ property was neither a three nor a six between April and June of 2010, and should thusly be held ineligible to access the Fund. Respondent additionally argues that Complainants should be barred from accessing the Fund because it did not attempt to file against all of Respondent’s available bonds. 40. In closing, Complainants argued that they entered into a contractual agreement with Respondent on April 05, 2010, which was accepted by the bank on June 15, 2010. Complainants argue that the fact that Respondent was paid by the bank is immaterial and irrelevant. Complainants argue that at the time their contract with Complainant was executed that Respondent’s license was in good standing. Complainants argue that they were not required to file against all of Respondent’s bonds in order to be eligible to access the Fund, and that they filed once construction was complete which was two-years after their contract with Respondent was signed. Complainants argue that the Jacobson bid was appropriately chosen since it was the only available line-item bid, and that Respondent’s arguments about the bid being “too high” are also immaterial and irrelevant. CONCLUSIONS OF LAW

RECEIVED 3.27.2019 ROC LEGAL

1. This matter lies within the Registrar’s jurisdiction.43 2. Respondent bears the burden of establishing by a preponderance of the evidence that the Fund’s payout amount was incorrect or improperly issued. 44

3. “A preponderance of the evidence is such proof as convinces the trier of

fact that the contention is more probably true than not.”45 A preponderance of the

evidence is “[t]he greater weight of the evidence, not necessarily established by the

greater number of witnesses testifying to a fact but by evidence that has the most

convincing force; superior evidentiary weight that, though not sufficient to free the mind

wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to

one side of the issue rather than the other.”46

4. Pursuant to ARIZ. REV. STAT. § 32-1131 et seq., in order to be eligible to

access the Recovery Fund an applicant must meet four eligibility criteria. See

McMurren v. J.M.C. Builder, Inc., 204 Ariz. 345 (App. 2003). First, an applicant must

meet the definition of a “person injured” set forth at ARIZ. REV. STAT. § 32-1131(3) which

requires that the applicant be the owner of the residential real property at issue.

Second, the property must have had a classification of three under ARIZ. REV. STAT. §

42-12003. Third, the owner of the property must have occupied, or intended to occupy, the property as a resident that is damaged by a [residential or dual licensed] contractor who has paid for financial protection from the Recovery Fund. These criterion must be met at either the time the contract was executed or at the time the injury accrued. Fourth, as set forth in ARIZ. REV. STAT. § 32-1132(A), the applicant must have contracted with a residential contractor whose license was in good standing at the time of contract execution.47 5. ARIZ. REV. STAT. § 32-1154(F) provides that “if a contractor’s license has been revoked or has been suspended as a result of an order to remedy a violation of See ARIZ. REV. STAT. §§ 32-1131 to 32-1140. See ARIZ. REV. STAT. § 41-1092.07(G)(2); ARIZ. REV. CODE R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). BLACK’S LAW DICTIONARY, pg. 1220 (8th ed. 1999). This fourth requirement is only applied at the time the contract was executed, not at the time of injury. See McMurren v. J.M.C. Builders, Inc., 204 Ariz. 345 (App. 2003). RECEIVED 3.27.2019 ROC LEGAL

this chapter the registrar may order payment from the residential contractors’ recovery fund to remedy the violation.” 6. In interpreting a statute, “[w]e first consider the language of the statute

and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter,

historical background, effects, consequences, spirit, and purpose.”48 “In applying a

statute its words are to be given their ordinary meaning unless the legislature has

offered its own definition of the words or it appears from the context that a special

meaning was intended.”49

7. Here, the ROC soundly established Complainant’s eligibility and how

Complainant’s payout award amount was properly calculated at $20,933.84. Ms.

McCormick credibly testified that she diligently made calculations to allow and disallow

line items from the bid chosen by the ROC, which is how she reached her final figure.

8. Furthermore, the ROC established that Respondent’s license was not

suspended at the time the parties’ entered into their contract, the property at issue was

classified as a three at all relevant times, Complainants clearly intended to occupy the

property as their primary residence, and Complainants were certainly persons injured

as they owned the property at issue and paid for the project. 9. The ROC was not required, as Respondent repeatedly argued, to determine whether the price Complainants paid for remediation of their contract with Respondent was “reasonable” and/or hold that Complainants are ineligible to receive a payout from the Fund because it would cost “too much” to complete their project. Respondent did not provide any evidence to support its argument that Complainants’ payout award amount should be decreased or nullified, per operation of law, because of its belief that Complainants could have completed their project in a less expensive manner.

McMurren v. JMC Builders, Inc., 204 Ariz. 345, 350 ¶ 12, 63 P.3d 1082, 1087 (App. 2003) (citing Norgord v. State ex rel. Berning, 201 Ariz. 228, P7, 33 P.3d 1166, ¶ 7 (App. 2001), quoting Hobson v. Mid-Century Ins. Co., 199 Ariz. 525, P8, 19 P.3d 1241, ¶ 8 (App. 2001)). Mid Kansas Federal Savings and Loan Ass’n of Wichita v. Dynamic Development Corp., 167 Ariz. 122, 128, 804 P.2d 1310, 1316 (1991). RECEIVED 3.27.2019 ROC LEGAL

10. The Tribunal is required to apply equitable principles when rendering decisions.50 The application of equity entails offering a remedy to avoid an unconscionable or unjust result.51 Here, the evidence is clear regarding to whom and

how much Complainants would have to pay to remediate their contract with

Respondent. Moreover, the evidence is also clear regarding why and by how much the

ROC’s reduced Complainants’ award from the Fund.

11. Based on the credible and available evidence in the record, Respondent

has not sustained its burden of proof in this matter. Complainants were properly

awarded their $20,933.84 payout from the Fund. As such, Respondent’s appeal should

be denied.

RECOMMENDED ORDER

Based on the foregoing facts and conclusions of law,

IT IS RECOMMENDED that the ROC affirm the NOTICE OF CLAIM FOR

ADMINISTRATIVE PAYOUT dated July 19, 2018, and deny Respondent’s request to amend, nullify, or otherwise quash Complainant’s $20,933.84 payout amount from the Fund. 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 forty (40) days from the date of that certification. Done this day, March 26, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors

Seitz v. Industrial Commission of Arizona, 184 Ariz. 599, 603 (Ariz. Ct. App., Div. 1, 1995). Sanders v. Folsom, 104 Ariz. 283, 289, 451 P.2d 612 (Ariz. 1969), quoting Merrick v. Stephens, 337 S.W.2d 713, 719 (Mo. App. 1960).