ALJDEC decisions subject to certification as final

2012A-5768-ROC-rf · Registrar of Contractors · 2014-05-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

RECOVERY FUND ELIGIBILITY HEARING: April 9, 2014; the matter was held open until April 30, 2014, to allow time for parties to file legal memoranda. APPEARANCES: Complainant Natalie Marie Hayward appeared on behalf of herself and Complainant Mark Oldroyd; Complainants are now represented by Stockton Banfield, Esq., Mack, Watson & Stratman, P.L.C. Respondent Dreamscapes Lighting and Landscape LLC was represented by Fidelis V. Garcia, Esq.; Mr. Garcia withdrew as counsel for Dreamscapes Lighting and Landscape LLC on May 2, 2014. The Arizona Registrar of Contractors was represented by Seth T. Hargraves, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. The Arizona Registrar of Contractors (“the Registrar”) issued License Nos. B-5.262271-R and K-21.218384-D to Dreamscapes Lighting and Landscape LLC (hereinafter “Dreamscapes”). 2. Natalie Marie Hayward (hereinafter “Ms. Hayward”) and Mark Oldroyd (hereinafter “Mr. Oldroyd”) (collectively “Complainants”) submitted a claim to the Registrar’s Residential Contractors’ Recovery Fund (“the Fund”). On or about December 9, 2013, the Registrar issued a Notice and Order of Denial of Recovery Fund Claim that informed the parties that the Fund had determined that Complainants were not eligible to access the Fund.[1] 3. Complainants disagreed with the Fund’s determination and requested a hearing. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing.[2] 4. On February 11, 2014, the Registrar issued a Notice of Recovery Fund Eligibility/ Payout Hearing setting a hearing on April 9, 2014. The Registrar sent a copy of the Notice of Recovery Fund Eligibility/Payout Hearing to Dreamscapes at its address of record. 5. A Recovery Fund Eligibility Hearing was held on April 9, 2014. Complainants presented the testimony of Ms. Hayward and Mr. Oldroyd and submitted a black notebook, subdivided into five categories divided into marked exhibits. The Registrar submitted four exhibits and presented the testimony of James Barbour, a Claims Adjuster for the Fund. Dreamscapes’ attorney cross-examined witnesses but no evidence was presented by Dreamscapes. Hearing Evidence 6. On or about August 22, 2012, Mr. Oldroyd entered into a contract with Dreamscapes for the refurbishing of a swimming pool, landscape work, and the installation of a new covered patio area with a tile roof at the residence located at 39615 N. Spur Cross Rd., Maricopa County, Arizona (hereinafter “the property”). The property is owned solely by Ms. Hayward.[3] The original contract price was $69,547.68. Complainants paid Dreamscapes $62,592.41, leaving a balance of $6,955.27 under the terms of the parties’ contract.[4] 7. On or about November 29, 2012, Complainants filed a complaint against Dreamscapes with the Registrar. The complaint was assigned to Registrar Inspector Phil Coscia (hereinafter “Inspector Coscia”). On or about February 2, 2013, Inspector Coscia inspected Complainants’ property for alleged abandonment and poor workmanship. On or about February 26, 2013, a Corrective Work Order was issued. The Corrective Work Order provided, in relevant part, as follows: Contractor should correct the following items of complaint by the appropriate means:

No “back plug” on fountain feature and extremely [shoddy] “Pebble Tec” interior workmanship

Fountain feature remodeled by contractor is leaking and not holding water

Stucco work not complete

Crack appeared above lintel to newly installed double door entrance way to patio area within days of install.

Double doors installed for above mentioned new entrance way do not shut flush.

Damage to front exterior of property caused by contractor driving bobcat into front of building.

Pavers on patio installed by contractor only partially sealed. Did not begin work to patio roof. Demolition works complete and now have exposed areas at one side of the house requiring urgent repair.

Failure to complete building permit which was verbally agreed would be completed by general contractors’ sub-contractor; Queries remain outstanding from Town of Cave Creek. Did not install pool light. Pool must now be drained at additional cost to complete this work.

Did not begin work to single door entrance way which was to lead to front patio area (where new patio roof was to be installed).

8. Dreamscapes failed to comply with the Corrective Work Order and a Citation and Complaint was issued to Dreamscapes, ultimately resulting in the revocation of Dreamscapes’ License Nos. B-5.262271-R and K-21.218384-D on November 14, 2013. 9. On or about November 21, 2013, Ms. Hayward filed a claim with the Fund in the amount of $56,217.04, in which $24,312.00 was for money spent for repairs and a low bid of $31,905.04 from a licensed contractor to finish the repairs and/or complete the construction project. 10. On or about December 9, 2013, the Registrar issued a Notice and Order of Denial of Recovery Fund Claim. The Notice and Order of Denial of Recovery Fund Claim provided, in relevant part, as follows: In order to obtain an award from the Recovery Fund, an applicant must provide proof to establish by a preponderance of evidence that (s) he is eligible pursuant to ARS § 32-1131 et seq. Further, if eligible, an applicant must establish by a preponderance of evidence that damages sought are within the limitations of compensability as set forth in § 32-1132(A). This evidentiary showing requires documentation to support the original contract price, scope of work, payments made toward performance of the contract and documentation to substantiate costs to complete or repair any work required by the underlying disciplinary proceedings. These criteria are set forth below:

Eligibility:

In order to be eligible to access the Fund, an applicant must meet four eligibility criteria set forth at A.R.S. § 32-1131 et seq. See also McMurren v. J.M.C. Builder, Inc., 204 Ariz. 345 (App. 2003). An applicant must meet the definition of a “person injured” set forth at § 32-1131(3) which requires first that the applicant must own residential real property. Second, the property must have had a classification of three under § 42-12003. Third, the owner of the property must have occupied, or intended to occupy, the property as a residence that is damaged by a residential or dual licensed contractor. These criteria must be met at either the time the contract was executed or at the time the injury accrued. Fourth, as set forth in § 32-1132(A), an applicant must have contracted with a residential contractor whose license was in good standing at the time of contract execution. This fourth requirement is only applied at the time the contract was executed, not at the time of injury. McMurren v. J.M.C. Builder, Inc., 204 Ariz. 345, 350 (App. 2003).

Ms. Hayward’s Eligibility:

Complainant Ms. Hayward appears to meet three of the eligibility criteria. Complainant is not eligible however, due to her failure to meet the fourth eligibility criteria. Complainant did not have a contract with a residential contractor.

In enacting the Recovery Fund, the Legislature expressly stated in 1981 Ariz. Sess. Laws, Ch. 221, § 1, that:

It is the purpose and intent of the legislature to continue the registrar of contractors agency in order to protect the public health, safety, and welfare by providing for the continued licensing, bonding and regulation of contractors engaged in residential contracting. It is the further purpose of the legislature to provide improved protection for owners and lessees of property who contract for the construction or alteration of residential structures by establishing the contractors’ recovery fund and the contractors’ recovery fund board. (Emphasis added.)

Accordingly, the Fund’s purpose is limited to protecting those persons who enter into contracts with regulated licensees. Based upon all the foregoing and the records of the Registrar, Ms. Hayward’s claim must therefore be denied as ineligible, as she did not have a contract with Respondent.

Mr. Oldroyd’s Eligibility:

Complainant Oldroyd was not and is not, the property owner at either relevant time. This factor alone is a bar his accessing the Fund.

Actual Damages:

Pursuant to A.R.S. § 32-1134(A)(2)(3) and (5) the Registrar is required to subject all Recovery Fund claim files to examination by an accountant to ensure that all claims paid are appropriate. In order to fulfill this fiduciary responsibility and determine an amount payable (if any), the Registrar must request sufficient documentation to support all payments from the Fund. This includes having conclusive proof of the extent of all claimed damages. Anything less mandates that the Registrar deny the unsubstantiated portion of any claimed loss.

Pursuant to ARS § 32-1132(A) 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 the residential property lines. In order to determine actual damages the Fund must be able to verify, among other things, the actual contract price and all payments made on the contract and, if applicable, any unpaid balance due on the contract.

It is an applicant’s burden to prove, by a preponderance of the evidence, that they are eligible to access the Fund and that they have sustained actual damages within the limitations of § 32- 1132(A) that are compensable from the Fund. Ms. Hayward does not meet all the eligibility criteria and [has] not provided evidence that she as an individual Complainant suffered any “actual damages”. The information provided by . . . Ms. Hayward reflects that Mr. Oldroyd made all payments on this contract. Ms. Hayward is not out of pocket any monies on this project. Even if Ms. Hayward could overcome her eligibility barrier, Complainant Ms. Hayward did not enter directly into a residential construction contract with the Respondent. The name of the customer on the contract is Mark Oldroyd.[5] The signature on the contract is Mark Oldroyd.[6] Complainant Ms. Hayward was not a party to the contract. Complainant Ms. Hayward has not and cannot provide the burden of proof to reflect otherwise. Therefore the Complainant has not suffered any “actual damages” and this claim is denied with no payment from the fund.

Since Mr. Oldroyd cannot overcome his eligibility barrier, as he has never owned the subject property, he cannot access the Fund and get any award. [Footnotes in original]

Testimony Testimony of James Barbour 11. James Barbour (hereinafter “Mr. Barbour”) testified that he is a Claims Adjuster for the Fund. Mr. Barbour reviewed the provisions of A.R.S. § 32- 1132.[7] Mr. Barbour stated that the requirements for payment from the Fund are set forth by the above statute. 12. Mr. Barbour reviewed Complainants’ Recovery Fund Claim Form.[8] Mr. Barbour testified that on November 22, 2013, the Registrar acknowledged receipt of Complainants’ Recovery Fund claim.[9] 13. Mr. Barbour reviewed Complainants’ Recovery Fund Claim form and attachments.[10] Mr. Barbour testified that the warranty deed for the property located at 39615 N. Spur Cross Rd., Maricopa County, Arizona, was owned solely by Ms. Hayward and that on June 15, 2012, Ms. Hayward was an unmarried woman.[11] Mr. Barbour stated that Ms. Hayward is not mentioned in any manner in the contract between Mr. Oldroyd and Dreamscapes. Mr. Barbour testified that there was no reference to Ms. Hayward in any of the documents involved in the construction project. 14. Mr. Barbour testified that Mr. Oldroyd signed the construction contract. Mr. Barbour stated that there was no evidence that Mr. Oldroyd was involved in the purchase of the residence. Mr. Barbour reviewed the checks and testified that the checks were from Mr. Oldroyd to Dreamscapes with no reference to Ms. Hayward.[12] 15. Mr. Barbour testified that there was no documentation that Ms. Hayward had contracted with Dreamscapes. Mr. Barbour stated that there was no documentation that Mr. Oldroyd was operating on behalf of Ms. Hayward. Mr. Barbour testified that there was no documentation that Mr. Oldroyd had authority to act as Ms. Hayward’s agent. 16. Mr. Barbour testified that the Fund determined that Mr. Oldroyd was not the owner of the property and was not eligible to access the Fund. Mr. Barbour stated that no further analysis was performed regarding Mr. Oldroyd’s eligibility because he was not the owner of the property and was not eligible to access the Fund. 17. Mr. Barbour testified that Mr. Oldroyd made all of the payments on the construction contract. Mr. Barbour stated that Ms. Hayward did not enter directly into a residential construction contract with Dreamscapes. Mr. Barbour testified that Ms. Hayward was not a party to the contract. 18. Mr. Barbour testified that Ms. Hayward failed to provide any documentation that she had suffered any financial damages as all of the payments on the construction contract were made by Mr. Oldroyd. Mr. Barbour stated that Ms. Hayward was not eligible to access the Fund. 19. Mr. Barbour acknowledged that Ms. Hayward was the owner of the residential property at issue, that the property had a classification of three under A.R.S. § 42-12003, and that Ms. Hayward intended to occupy the residence at issue. Mr. Barbour testified that the only item at issue regarding Ms. Hayward’s eligibility was that an applicant to the Fund must have contracted with a residential contractor whose license was in good standing at the time of the contract execution. Mr. Barbour stated that there was no documentation that Ms. Hayward had contracted with Dreamscapes. 20. Mr. Barbour acknowledged that Ms. Hayward signed the Complaint Form against Dreamscapes.[13] 21. Mr. Barbour testified Ms. Hayward is shown as the sole owner of the property and that the Registrar has received no documentation to show that Mr. Oldroyd has any ownership interest in the property.[14] Testimony of Mark Oldroyd 22. Mr. Oldroyd testified that he is married to Ms. Hayward. Mr. Oldroyd stated that the property is the principal residence for Mr. Oldroyd and Ms. Hayward. Mr. Oldroyd testified that he and Ms. Hayward were married on December 12, 2012. 23. Mr. Oldroyd testified that he was acting as Ms. Hayward’s agent in the purchase of the property and when he entered into a construction contract with Dreamscapes. Mr. Oldroyd stated that property was run down and that the Complainants had planned to renovate the property and construct casitas on the property to enable them to operate the property as a guest ranch. 24. Mr. Oldroyd testified that the Complainants’ pre-nuptial agreement provided that any rental income from the property would be shared equally between the Complainants. Mr. Oldroyd stated that the Complainants intended the property to be their marital home. Mr. Oldroyd testified that he paid for all of the doors and numerous other items for the property. 25. Mr. Oldroyd reviewed Complainants’ emails with Dreamscapes.[15] Mr. Oldroyd testified that the property had been left vacant for two years and was in very poor condition. Mr. Oldroyd stated that Ms. Hayward provided all of the money for the purchase of the property. Mr. Oldroyd testified that Ms. Hayward would transfer money from her banking account in the United Kingdom to Mr. Oldroyd’s banking account in the United States. Mr. Oldroyd stated that he would then pay Dreamscapes. 26. Mr. Oldroyd testified that he informed Dreamscapes that “the wife controls the purse strings.” Mr. Oldroyd stated that Ms. Hayward was always involved in the construction process. Mr. Oldroyd testified that Complainants requested Dreamscapes to provide written proof that Ms. Hayward had paid various invoices. Mr. Oldroyd stated that Dreamscapes then sent Complainants invoices marked as “paid.” 27. Mr. Oldroyd testified that Dreamscapes requested payments in cash. Mr. Oldroyd stated that he felt uncomfortable paying in cash and issued checks to Dreamscapes instead. Mr. Oldroyd testified that he felt responsible for Ms. Hayward’s money that was being used for the construction project. Mr. Oldroyd stated that Ms. Hayward was the main point of contact for Dreamscapes after she arrived in the United States. 28. Mr. Oldroyd testified that the Complainants were not married when they entered into the contract with Dreamscapes. Mr. Oldroyd stated that he acted on Ms. Hayward’s behalf based on oral authority from Ms. Hayward. Mr. Oldroyd acknowledged there was no written authority from Ms. Hayward for him to act on her behalf. Mr. Oldroyd testified that he considered the property to be his home. Testimony of Natalie Marie Hayward 29. Ms. Hayward testified that her husband, Mark Oldroyd, signed a construction contract with Dreamscapes on September 26, 2012, for the renovation of Complainants’ property. Ms. Hayward stated that Dreamscapes’ contractor’s license was revoked and Dreamscapes filed for bankruptcy. 30. Ms. Hayward testified that she is an injured person as defined by statute. Ms. Hayward asserted that there is no specific statutory requirement that her name be on the construction contract. Ms. Hayward stated that Mr. Oldroyd acted as her agent in the United States. Ms. Hayward testified that she entered the United Stated on November 17, 2012, and that she married Mr. Oldroyd on December 12, 2012. 31. Ms. Hayward testified that Mr. Oldroyd informed Dreamscapes via email that “the wife controls the purse strings.” Ms. Hayward stated that while Complainants were not technically married when the email was sent, the email did inform Dreamscapes that Ms. Hayward was involved in the construction project. Ms. Hayward testified that she corresponded directly with Dreamscapes on numerous occasions.[16] 32. Ms. Hayward testified that she gave Mr. Oldroyd specific directions on what to include in the construction project. Ms. Hayward stated that her emails to Mr. Oldroyd clearly established that Mr. Oldroyd as acting as her agent for the construction work performed on the property. Ms. Hayward testified that the agent-principal relationship between Ms. Hayward and Mr. Oldroyd was apparent in the email correspondence between Ms. Hayward and Mr. Oldroyd. 33. Ms. Hayward testified that both she and Mr. Oldroyd contributed to the financial cost of the construction project. Ms. Hayward stated that she bore the majority of the costs for the construction project. Ms. Hayward testified that she believed that because she was living in the United Kingdom she could not deal directly with Dreamscapes. Ms. Hayward stated that she believed that she was required to utilize Mr. Oldroyd as her agent for the construction project. 34. Ms. Hayward testified that she funded the purchase of the property and the renovations thereon. Ms. Hayward stated that she would transfer funds from her account to Mr. Oldroyd’s account and that Mr. Oldroyd would then pay Dreamscapes. Ms. Hayward testified that Dreamscapes was aware of her involvement in the construction contract. 35. Ms. Hayward testified that Dreamscapes considered her to be a party to the contract. Ms. Hayward stated that Dreamscapes emailed her directly. [17] 36. Ms. Hayward testified that Dreamscapes would have been entitled to place liens against her property for the construction contract that Mr. Oldroyd signed. Ms. Hayward stated that because she was the homeowner, she should have access to the Fund to recover her damages. Ms. Hayward testified that she was the intended beneficiary of the construction agreement. Ms. Hayward stated that the property was to be Complainants’ marital domain. Ms. Hayward testified that she was in a joint venture with her husband, Mr. Oldroyd. 37. Ms. Hayward acknowledged that the title to the property was in her name. Ms. Hayward testified that no one asked if she wanted Mr. Oldroyd’s name on the deed. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[18] Complainants bear the burden of proof to establish they are eligible to access the Fund and that they have sustained actual damages within the limitations of A.R.S. § 32-1132(A) that are compensable from the Fund by a preponderance of the evidence.[19] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[20] 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.”[21] 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.

To be eligible to access the Fund, Complainants must meet the eligibility criteria set forth in A.R.S. § 32-1131(3). Complainants must meet the definition of a “person injured,” which requires first that the Complainants must own residential real property. Secondly, the property must have a classification of three under A.R.S. § 42-12003. Thirdly, the Complainants must have occupied, or intended to occupy, the property as a residence. These criteria must be met at either the time the contract was executed or at the time the injury occurred. Fourthly, as set forth in A.R.S. § 32-1132(A), Complainants must have contracted with a contractor whose license was in good standing at the time of the contract execution. The requirement that the Complainants must have contracted with a contractor whose license was in good standing at the time of the contract execution is only applied at the time the contract was executed, not at the time of injury. McMurren v. J.MC. Builder, Inc., 204 Ariz. 345, 350 (App. 2003). A.R.S. § 32-1132(A) provides as follows: 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. An award from the fund shall not be available to persons injured by an act, representation, transaction or conduct of a residential contractor who was not licensed pursuant to this chapter or whose license was in an inactive status, expired, cancelled, revoked, suspended or not issued at the time of the contract. No more than the maximum individual award from the fund shall be made on any individual residence or to any injured person. Notwithstanding any other provision of law, monies in the residential contractors' recovery fund shall not be directly awarded for attorney fees or costs except in contested cases appealed to the superior court.

The Registrar has a fiduciary duty to preserve the Fund’s assets and to ensure that no payouts are made except as authorized by statute.[22] The construction contract with Dreamscapes was entered into by Mr. Oldroyd and all payments to Dreamscapes under the contract were made by Mr. Oldroyd before Complainants were married. Mr. Oldroyd was not and is not currently the owner of the property. This Tribunal concludes that Mr. Oldroyd is not eligible for payment from the Fund. Ms. Hayward did not sign the contract with Dreamscapes. The contract does not indicate that Mr. Oldroyd was entering the contract on behalf of Ms. Hayward. Ms. Hayward’s name is not mentioned in the contract or in any of the payments that Mr. Oldroyd made to Dreamscapes. There is nothing in any of the contract documentation that would support a conclusion that Mr. Oldroyd was acting on behalf of Ms. Hayward. This Tribunal concludes that Ms. Hayward is not eligible for payment from the Fund because she did not have a contract with Dreamscapes. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Fund’s decision to deny a payout from the Fund to Mr. Oldroyd and Ms. Hayward be affirmed. 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 40 days from the date of that certification.

Done this day, May 15, 2014.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Registrar’s Exhibit #3. [2] See Registrar’s Exhibit #4. [3] See Registrar’s Exhibit #1. The Maricopa County Assessor valuation report and the warranty deed reflect that Ms. Hayward is the sole owner of the property. [4] See Registrar’s Exhibit # 1 and Black Notebook Banking Exhibits. All payments were paid by checks from Mr. Oldroyd. Mr. Oldroyd does not own the property even though he entered into the construction agreement. [5] No area of the contract states that Ms. Hayward is a party to the contract. [6] This was verified by signature match from the complaint form in which Ms. Hayward and Mr. Oldroyd signed in comparison with the signature on the contract. [7] See Registrar’s Appendix B. [8] See Registrar’s Exhibit #1. [9] See Registrar’s Exhibit #2. [10] See Registrar’s Exhibit # 1. [11] See Registrar’s Exhibit #1 (Warranty Deed). [12] See Registrar’s Exhibit #1. [13] See Complainant’s Black Book (Official Documentation Exhibit 7 (Marked as Complainant’s Exhibit 16). [14] See Registrar’s Exhibit No. 1 (Warranty Deed). [15] See Black Book Emails Exhibit 1 (Marked as Complainants’ Exhibit Nos. 17-25). [16] See Complainant’s Black Book (Email Correspondence Exhibit 6 )(Marked as Complainant’s Exhibit Nos. 17 through 25). [17] See Complainant’s Black Book (Email Correspondence Exhibit 6 )(Marked as Complainant’s Exhibit Nos. 17 through 25). [18] See A.R.S. §§ 32-1131 to 32-1140. [19] See A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [20] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [21] Black’s Law Dictionary at 1220 (8th ed. 1999). [22] A.R.S. § 32-1134(A) requires the Registrar to take the following actions to preserve the Fund and to ensure that payouts for damages that are authorized by law are made from the Fund: 1. Establish assessments and maintain the fund balance at a level sufficient to pay operating costs and anticipated claims using the cash basis of accounting. 2. Cause an examination of the fund to be made every three years by an independent certified public accountant. 3. File with the department of insurance an annual statement of the condition of the fund. 4. Employ accountants and attorneys from monies in the fund, but not to exceed ten thousand dollars in any fiscal year, that are necessary for the performance of the duties prescribed in this section. 5. Employ or contract with individuals and procure equipment and operational support, to be paid from or purchased with monies in the fund, but not to exceed in any fiscal year fourteen per cent of the total amount deposited in the fund in the prior fiscal year as may be necessary to monitor, process or oppose claims filed by injured persons which may result in collection from the recovery fund.

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