ALJDEC decisions subject to certification as final
2014A-1546-RFA-ROC · Registrar of Contractors · 2018-06-13
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Senol Pekin,
PLAINTIFF,
v.
Randy Michael Perkins dba,
R and M Installations,
License No: 091199
DEFENDANTS.
No. 2014A-1546-RFA-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: May 23, 2018, 9:00 A.M.
APPEARANCES: The Arizona Registrar of Contractors (“Registrar”) appeared through Assistant Attorney General John Tellier, Esq.; Senol Pekin (“Complainant”) appeared on his own behalf. Randy M. Perkins, dba R and M Installations (“Respondent”), appeared through its counsel Mark Bainbridge, Esq.
ADMINISTRATIVE LAW JUDGE: Roger A. Geddes
_____________________________________________________________________
FINDINGS OF FACT
Background and Procedure
1. Randy Michael Perkins dba, R and M Installations (Respondent), is the holder of License Number 09199 issued by the Registrar of Contractors (Registrar).
2. On or about April 21, 2014, Complainant Senol Pekin filed a complaint with the Registrar against Respondent for poor work in connection with the installation of hardwood flooring at Complainant’s residence in Chandler, Arizona. (Registrar’s Exhibit 1). According to the complaint, Complainant had entered into a contract with Respondent on November 5, 2013, for the installation of the flooring for the contract amount of $2,895.00.
3. On September 22, 2014, the Registrar issued a Directive to Respondent to remedy workmanship issues as stated therein. (Registrar’s Exhibit 3).
4. When Respondent performed no further work, the Registrar issued a Citation and Complaint on June 3, 2015, charging Respondent with a violation of A.R.S. A.R.S. § 32-1154(A)(3). (Registrar’s Exhibit 4).
5. Respondent timely requested a hearing that was held on September 18, 2015. The Administrative Law Judge thereafter found that Respondent had violated A.R.S. § 32-1154(A)(3) and recommended suspension of Respondent’s license for one day. The Registrar issued a Final Administrative Decision and Order on December 13, 2015, finding that Respondent had violated A.R.S. § 32-1154(A)(3) as charged in the Complaint,. (Registrar’s Exhibit 7). Pursuant to the Order, the Registrar suspended Respondent’s license for one day. (Registrar’s Exhibit 6).
6. On or about January 5, 2018 Complainant filed a claim to the Residential Contractors’ Recovery Fund (“Fund”) with the Registrar. (Registrar’s Exhibit 7). The claim form indicated that that he sought recovery from the Fund in the amount of $17,740.02. Complainant also indicated he had not received any payment from Respondent’s bond company.
7. Complainant submitted three separate bids from AAA Hardwood Flooring, Flooring America, and Legend Flooring for replacement of the entire flooring installed by Respondent for the amounts of $19,491.53, $16,722.38, and $17,740.02, respectively. (Registrar Exhibit 10). The bids reflect bids for floor areas of 957 square feet, 840 square feet, and 1,000 square feet, respectively. 8. On November 24, 2017, the Registrar issued a Notice of Claim for Administrative Payout. The Registrar determined that Complainant would receive a payout of $15,754.02 from the Fund. (Registrar’s Exhibit 15).
9. Respondent and Complainant filed a timely request for hearing on the Registrar’s Notice of Claim for Administrative Payout.
10. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing regarding the amount and/or propriety of the payment from the Fund. A hearing was held on May 23, 2018, at 9:00 A.M.
11. At hearing, the Registrar presented the testimony of the Legal Assistant in the Legal Department of the Recovery Fund, Marlee McCormick, and submitted 15 exhibits. Respondent Randy Perkins appeared and testified on his own behalf and submitted three exhibits. Complainant Senol Pekin appeared and testified on his own behalf and submitted two exhibits.
12. Marlee McCormick testified on behalf of the Registrar that she had personally reviewed Complainant’s claim for payment from the Fund. Ms. McCormick said that she determined that Complainant was eligible for payment from the Fund based on her review of the entire file in this matter, including documents reflecting ownership of the residence, correspondence from Respondent’s bonding company, and bid documents. Ms. McCormick further testified that she determined that a proper payout was $15,754.02, based on the bid from Legend Flooring presented by Complainant which she adjusted. (Registrar Exhibit 10). She explained that she disallowed $1,986.00 from the Legend Flooring bid due to the adjustment in the size of the flooring from 1,000 square feet in the bid to the actual 850 square feet to arrive at the recovery amount $15,574.02
13. Ms. McCormick further testified that contractors informed her that the existing flooring installed by Respondent could not be salvaged and reused. She stated she did not inquire whether the flooring could be repaired as opposed to completely replaced.
14. Respondent Randy Perkins testified that he only did the installation of wood flooring purchased by Complainant for about $2,700.00 and the entire project only cost about $10,000.00. He further stated that he had purchased three boxes of boards (with 17.5 square feet per box) for $400.00 in total in response to the Directive and put other boxes on hold but had been deprived of the opportunity to correct the flooring. Concerning the three boxes of flooring he purchased, he stated he was unsure of the condition of the boards that he indicated have been sitting in a warehouse in heat for several years.
15. Mr. Perkins also testified that he believed he could have repaired the areas in question, the foyer and the family room, for $2,000.00 (labor only), rather than replace the entire floor. He further testified that he received a bid from Taylor Flooring Installations which estimated the removal and replacement of 30 boards of the flooring for $1,550.00 (labor only). He stated he received another bid from T Bar Flooring for $1,750.00 (labor only). He acknowledged that neither bidder visited the residence nor were they presented with photographs of the flooring. He further estimated that the areas in question that need to be replaced, the foyer and areas of the family room, were approximately 150 square feet in total.
16. Complainant Senol Pekin testified that the color of the originally installed flooring has since been discontinued and is no longer available, and therefore Complainant must accept a new color. He testified that he had originally purchased 945 square feet of flooring for the 850 square foot area, slightly 10% over the actual floor area. (Registrar Exhibit 8). He testified that that the National Wood Flooring Association recommended that 10% extra material be ordered due to the cutting of the boards. Complainant submitted another bid for $16,705 from Baker Brothers Company, although he indicated the company did not visit the residence.
CONCLUSIONS OF LAW
1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.
2. After the Registrar has determined the amount of the payout from the Fund to which Complainants are entitled, Respondent bears the burden of proof to establish that the Registrar’s calculations were erroneous or not supported by a preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372 (1952).
3. “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). 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.” BLACK’S LAW DICTIONARY at p. 1220 (8th ed. 1999).
4. The Registrar’s final decision in the underlying workmanship case established that Respondent did not comply with the Registrar’s workmanship standards and that Complainant potentially was a person who had been injured by Respondent’s violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. The only issue in the hearing on Complainant’s claim to the Fund is the measure of their damages.
5. A.R.S. § 32-1132(A) describes the measure of damages that an eligible homeowner is entitled to recover from the Fund in relevant part 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. . . .
6. Actual damages means the reasonable cost of completing the contract or repairing the contractor’s defective performance less the contract price unpaid. Ramsey v. Ariz. Registrar Contractors, 241 Ariz. 102, 106 (2016). This construction is consistent with the principle of expectation damages which are intended to put the injured party in as good a position as he would have been had the contract been performed. Id. at 107 (citing Restatement (Second) of Contracts § 347, cmt. (a)).
7. Respondent has failed to satisfy its burden to show that the Registrar erred with regard to the proposed payout amount or that it was not supported by the evidence. Respondent attempted to re-litigate the issue concerning whether it was afforded an opportunity to perform corrective work. However, a hearing on a proposed administrative payout is not the appropriate time for a determination as to whether there was a valid justification not to perform corrective action. The matter was litigated at the hearing with respect to the underlying workmanship issue and it is evident that Respondent offered evidence at that time in that regard. Respondent was to have performed corrective work by October 6, 2014, which Respondent evidently failed to do. There was no specific finding that Respondent had a valid justification for its failure to correct the defective work presumably because the Citation did not contain the alleged violation of A.R.S. § 32-1154(A)(22). However, in finding a violation of A.R.S. § 32-1154(A)(3) in the underlying proceeding, the Tribunal implicitly found that there was no valid justification for the failure to perform corrective action. A finding of a valid justification for failure to perform corrective action would have negated a finding of a violation of A.R.S. § 32-1154(A)(3).
8. Respondent’s alternative argument that the flooring areas in question should have been repaired as opposed to replacing the entire floor was also unpersuasive. There was no direct or independent evidence presented, other than the opinion of Respondent, that repair was a viable option. Respondent’s bids came from contractors that did not examine the flooring. Further, even if repair was an option, there was no evidence presented to refute Complainant’s testimony that the original flooring was no longer available. The evidence reflects that 150 square feet of flooring was required for repair and Respondent testified that he had only three boxes of boards which, even if in installable condition, would not be enough to cover the problem areas. Thus, Respondent failed to show that repair as opposed to replacement was a legitimate alternative.
9. Complainant has also failed to satisfy its burden to show that the Registrar erred with regard to the proposed payout amount or that it was not supported by the evidence. Complainant’s argument that the Registrar should not have adjusted the Legend Flooring bid to account for square footage difference is unpersuasive. Complainant maintained that the National Wood Flooring Association recommended ordering 10% extra flooring than the size of the floor to be covered. However, it is noted that this is only a “recommendation” and Complainant provided no persuasive evidence that this extra 10% was a requirement or an accepted industry standard. Further, it is noted that the Flooring America bid included installation of only 840 square feet of flooring. (Registrar Exhibit 10). Thus, either Flooring America apparently did not believe the additional 10% of material was required, as Complainant maintains, or their measurements of the area of the floor to be installed was less than 840 square feet. In either case, the Tribunal is unconvinced that more than 850 square feet of flooring material was required.
10. Complainant also argued that Registrar should not have made adjustments to the bids for molding. However, the Legend Flooring bid used by Registrar includes molding and the Registrar made no adjustments in that regard to that bid. (Registrar Exhibit 10). Complainant presented no evidence that more molding was required than specified in the Legend Flooring bid.
11. Accordingly, neither Complainant nor Respondent established that the Registrar erred in proposing a payout in the amount of $15,754.02 from the Fund to compensate Complainant for the actual damages caused by Respondent’s violation or that the amount was not supported by the evidence.
RECOMMENDED ORDER
In view of the foregoing, it is recommended that on the effective date of the final order in this matter, the Residential Contractors’ Recovery Fund shall pay $15.754.02 to Complainant Senol Pekin.
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 five days from the date of that certification.
Done this day, June 12, 2018.
/s/ Roger Geddes
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
Registrar of Contractors