ALJDEC decisions subject to certification as final

2013A-1047-ROC · Registrar of Contractors · 2014-06-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 22, 2014

APPEARANCES: Complainant Melvin Brody appeared on behalf of Complainants; Respondent was represented by LLC Member Rod Hutchings; the Residential Contractors’ Recovery Fund intervened in this matter and was represented by Assistant Attorney General John R. Tellier.

WITNESSES: James L. Barbour, Fund Claims Reviewer Rod Hutchings Melvin Brody

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainants seek payout from the Residential Contractors’ Recovery Fund (“Fund”) for damages from Respondent. The Fund appeared through Assistant Attorney General John Tellier, challenging Complainants’ eligibility for payout from the Fund, as did Respondent. The only issue for which the parties were given notice and for which the hearing was held is Complainants’ eligibility for recovery from the Fund. This tribunal entered into the record Exhibits 1 through 7 submitted by the Fund, and Exhibits A and B submitted by Complainants. Testimony from the three witnesses listed above was also taken. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding that Complainants are not eligible for recovery from the Fund. FINDINGS OF FACT 1. Respondent was the holder of License No. C-8.250945-R.[1] The license was issued in November 2008, and was suspended for non-renewal starting December 1, 2012, through November 30, 2013. The license expired on December 1, 2013. 2. According to an ROC Complaint filed by Complainants in February 2013, Complainants entered into a remodeling contract with Respondent on December 18, 2012. After a hearing on the Complaint, brought by the ROC, Respondent was found to have entered into the contract while its license was suspended, along with other violations that eventually ended with revocation of the license in February 2014.[2] 3. Complainants filed a claim with the Fund in October 2013.[3] On that form, Complainants stated that the date of contract with Respondent was November 1, 2012.[4] The Fund denied the claim, finding that Complainants are not eligible for recovery from the Fund because Respondent’s license was suspended on the date of contract, which the Fund found was December 18, 2012. 4. At hearing, Mr. Brody confirmed that the contract with Respondent was verbal and not written. Evidence shows that Complainants made an initial payment of $25,000.00 to Respondent on December 18, 2012, for the work.[5] Mr. Brody testified that Complainants and Respondent entered into the contract earlier than that date, but had no independent evidence to corroborate that testimony. 5. The Administrative Law Judge finds that the evidence shows that Complainants and Respondent did not have an enforceable contract until December 18, 2012. That is the date upon which consideration was given by Complainants. Prior to that date, there was no contract between the parties. 6. The evidence shows that Complainants entered into the contract at issue while Respondent’s license was suspended for non-renewal. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action.[6] Further, the standard of proof at hearing is by preponderance of the evidence.[7] Therefore, Complainants bear the burden of showing, by a preponderance of the evidence, that they are eligible for recovery from the Fund.[8] Complainants have not met that burden. 2. A.R.S. § 32-1132(A) provides, in part, that “[a]n 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.”[9] Thus, persons injured by a contractor with a suspended license are not eligible for recovery from the Fund. 3. Because Respondent’s license was suspended at the time of the contract, Complainants are not eligible for recovery from the Fund. RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors maintain the conclusion that Complainants Melvin I. and Maxine T. Brody are not eligible for recovery 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 Decision will be 40 days from the date of that certification.

Done this day, June 11, 2014.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit 5. [2] Administrative notice is taken of Respondent’s license record as reflected on the ROC’s public website on June 10, 2014. [3] Exhibit 6. [4] The date actually states “2013” but is clearly a typographical error and means 2012. [5] Id. [6] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949); Arizona Administrative Code (A.A.C.), OAH Rule R2-19-119(B). [7] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A). [8] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [9] Sixth sentence.

-----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826