ALJDEC decisions subject to certification as final

2013A-134-ROC · Registrar of Contractors · 2014-07-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 8, 2014

APPEARANCES: Complainant appeared on his own behalf; the Residential Contractors’ Recovery Fund intervened in this matter and was represented by Assistant Attorney General Seth Hargraves; Respondent did not appear.

WITNESSES: James L. Barbour, Fund Claims Reviewer Martin Gamboa

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant seeks payout from the Residential Contractors’ Recovery Fund (“Fund”). The Fund appeared through Assistant Attorney General Seth Hargraves, challenging Complainant’s eligibility for payout from the Fund. The only issue for which the parties were given notice and for which the hearing was held is Complainant’s eligibility for recovery from the Fund. As noted above, Respondent did not appear or participate. This tribunal entered Exhibits 1 through 3, submitted by the Fund, into evidence. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding that Complainant is not eligible for recovery from the Fund. FINDINGS OF FACT 1. Respondent was the holder of License No. B-3.275037-R.[1] On January 27, 2014, the ROC issued a Default Decision and Order revoking Respondent’s license based on a complaint that had been filed by Complainant.[2] 2. The evidence shows that the residential property at issue was being rented to tenants by Complainant through late 2010. The home was badly damaged by a fire in the last months of 2010 and Complainant hired Respondent to perform repairs in March 2011. Respondent abandoned the project in October 2012.[3] As noted, Respondent’s license was revoked in January 2014, after Complainant’s formal complaint. 3. In March 2014, Complainant made a claim to the Fund for damages incurred due to Respondent’s abandonment of the project.[4] The Fund denied the claim, finding that Complainant did not meet the statutory definition of “person injured.”[5] The Fund found that the property was classified as rental property by the county assessor at the time the contract was entered into and at the time of injury by Respondent, which is a disqualification for eligibility to access the Fund. The Fund also found that Complainant had not occupied or intended to occupy the home at the time of the contract with Respondent or at the time the injury by Respondent occurred, which is another disqualification for eligibility to access the Fund. 4. The evidence submitted by the Fund supports the Fund’s conclusions. 5. Complainant did not present any evidence to contradict the Fund’s evidence. When asked at hearing what he had intended to do with the property had Respondent completed the job, he forthrightly answered, “Sell it.” 6. The evidence shows that, at the relevant times, the property was classified as class four rental property and that Complainant did not occupy or intend to occupy the home. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person asserting a claim.[6] Further, the standard of proof at hearing is by preponderance of the evidence.[7] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that he is eligible for recovery from the Fund.[8] Complainant has not met that burden. 2. Only a “person injured by an act, representation, transaction, or conduct of a residential contractor” is eligible for recovery from the Fund. “Person injured” is defined in A.R.S. § 32-1131(3) as: 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.

This provision requires that the person seeking recovery from the Fund be (1) an owner (2) who has been damaged by the contractor’s failure to adequately build or improve a structure that is (3) on real property classified as class three property by the tax assessor and (4) who actually occupies or intends to occupy the residence. 3. The relevant times for determining whether a person is a person injured as defined by statute and is, therefore, eligible for recovery from the Fund are (1) the time the contract is entered into or (2) the time the claim accrues.[9] 4. Complainant does not meet two of the four statutory requirements listed above that are necessary to be considered a “person injured” under the statute. Complainant was the owner and was damaged at the relevant times, but does not meet the other two criteria. 5. First, the property was not classified as class three property since at least 2010; nor should it have been as it was rental property. 6. Second, at the time of the contract and injury by Respondent, Complainant did not occupy or intend to occupy the home. 7. Complainant has not shown that he is eligible for recovery from the Fund. RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors find that Martin David Gamboa is not eligible for recovery from the Fund in this matter.

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, July 28, 2014.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit 2. [2] Id.. [3] Finding of Fact 2 is derived from Exhibit 2. [4] Exhibit 1. [5] Exhibit 3. [6] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949); A.A.C. 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] McMurren v. JMC Builders, Inc., 204 Ariz. 345, 351, 63 P.3d 1082, 1089 (App. 2003).

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

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