ALJDEC decisions subject to certification as final

2013A-3078-ROC · Registrar of Contractors · 2015-02-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 20, 2015 APPEARANCES: Robert Wrathall appeared on his own behalf. The Arizona Registrar of Contractors was represented by Assistant Attorney General Michael Raine. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ Respondent Robert Louis Wrathall, doing business as Degree Air Conditioning and Heating (“Respondent”) 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 Complainant in the sum of $6,985.72. Respondent 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: FINDINGS OF FACT Respondent is the holder of License No. License No. R39R.057841-R issued by the Registrar of Contractors (“the Registrar”). On June 25, 2013, Complaint filed a Complaint against Respondent alleging poor workmanship. Following an investigation, the Registrar issued a Corrective Work Order on July 18, 2013, requiring Respondent to correct a number of issues. On September 19, 2013, a second jobsite inspection was conducted in which it was determined Respondent had failed to correct six items identified in the Corrective Work Order. On December 24, 2013, the Registrar issued a Citation and Notice of Hearing in which it alleged that Respondent had failed to comply with the Corrective Work Order. On February 24, 2014, Respondent and the Registrar entered into a Consent Order on February 24, 2014. The Consent Order provided as follows: IT IS ORDERED that License No. C39R.057841-R held by Respondent be suspended commencing on March 28, 2014 at 5:00 p.m. and ending on March 31, 2014 at 8:00 a.m. Pursuant to A.R.S. § 32-1154(D), IT IS FURTHER ORDERED that Respondent pay $500.00 as a civil penalty to the Registrar.

On October 20, 2014, the Registrar issued a Notice of Claim for Administrative Payout that provided, in relevant part, as follows: The Complainant named above filed a claim for payment with the Residential Contractors’ Recovery Fund pursuant to A.R.S. § 32- 1154(G). After a review of the claim and all supporting documentation, the Fund has determined that Complainant is to be awarded $6,985.72 in the form of a payment issued by the Fund.

In accordance with A.R.S. § 32-1154(G), both Complainant 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 November 7, 2014. As provided in A.R.S. § 32-1154(G), the failure of Complainant 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 November 7, 2014, Respondent filed a request for an administrative hearing to contest the amount of the payout. Respondent did not raise any objection to the eligibility of Complainant to access a payout from the Fund. Hearing Evidence Testimony of James Barbour James Barbour testified that Complainant obtained a total of seven bid from licensed contractors for the proper correction of the poor work performed by Respondent at her residence. Because the corrective work fell under three different trades, Complainant obtained two bids per trade and one bid that included all three trades. With the multiple trades and bids, Mr. Barbour stated that the lowest bids from the licensed contractors for the proper correction of Complainants’ residence totaled $6,985.72. Mr. Barbour’s testimony is found to be credible. Testimony of Robert Louis Wrathall Respondent’s qualifying party, Robert Louis Wrathall testified that he opposed the proposed payout to Complainants in the sum of $6,985.72 because on August 29, 2014, he had been ordered to pay Complainant a sum of $3,474.85 as a result of a small claims civil case in Maricopa County Justice Courts. Mr. Wrathall provided a copy of the judgment, which provided as follows: Per ROC Case 2013-5394 & Office of Administrative Hearing Case 2013- 5394 ordered to pay:

Published/advertised cash discounts of 30% = $2,774.85 Refund for equipment not installed or necessary = $200.00 Refund for Protective Maintenance Agreement fraudulent/incomplete contract = $500.00

Mr. Wrathall submitted a copy of a cashier’s check showing that Respondent had paid Complainant $3,526.85 on January 14, 2015. Mr. Barbour testified that the judgment in the civil case was entered after the determination that Complainant was to be awarded a payout from the Fund. Mr. Barbour also indicated that the information included in the judgment did not change the finding because it was unclear from the document what items from the Corrective Work Order and submitted bids were included in the judgment. Without that information, it was not possible for Mr. Barbour to conclude the judgment duplicated any part of the award from the Fund. Mr. Wrathall also submitted copies of bids he had obtained from different contractors to show that the bids obtained by Complainant were excessive. The bid from Lowe’s was difficult to read as it was extremely blurry. The bid from Nieves Drywall does not include a license number from the Registrar, and therefore it is unclear if that bid came from a licensed contractor. The “bid” from Dun Rite is simply a price list and does not indicate what services would be provided to Complainant and any related charges. 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 Complainant bears the burden of showing, by a preponderance of the evidence, that the proposed payout amount of $6,985.72 is reasonable and proper. Complainant has met that burden. 4. Complainant is an injured person within the definition in A.R.S. § 32- 1131(3)[1] and is, therefore, entitled to recovery from the Fund. 5. Under the facts and circumstances of this case, the Registrar is empowered to determine an award, based on actual damages, and to make an appropriate payment to Complainant from the Fund pursuant to A.R.S. § 32- 1132[2] and A.R.S. § 32-1154(G).[3] 6. The credible evidence of record supports an award to Complainant in the sum of $6,985.72, all of which shall be chargeable against Respondent and the persons listed on License No. R39R.057841-R of Respondent. RECOMMENDed order In view of the foregoing, it is recommended that the Registrar authorize a payment from the Residential Contractors’ Recovery Fund to Complainant in the amount of $6,985.72. 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, February 9, 2015.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] 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.

[2] 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.

[3] A.R.S. § 32-1154(G) 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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