ALJDEC decisions subject to certification as final

2014A-2399-ROC-RF · Registrar of Contractors · 2016-09-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Lowell Freeman Hancock and

Bonnie Sue Hancock

COMPLAINANT

-v-

License No. B.224034-R of

3 Star Homes and Remodeling Inc

dba Stealth Solar

RESPONDENT

No. 2014A-2399-ROC-RF

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: Thursday, September 14, 2016, at 8:00 AM

APPEARANCES: Lowell Freeman Hancock (“Complainant”); Bonnie Sue Hancock (“Complainant”); Dan Starwalt (“Respondent”); Thomas Raine (“Attorney for Registrar of Contractors”); and Doug Ulmer (“Recovery Fund Witness”)

ADMINISTRATIVE LAW JUDGE: Linda Mare Brown

_____________________________________________________________________

NOTE: CIVIL REMEDIES

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (“the Registrar”) issued License No. B-224034-R to Respondent.

On June 16, 2014, the Registrar received a workmanship Complaint against Respondent from Complainant regarding replacement of existing water heater and relocate shed with a contract date of February 15, 2013, for a contract amount of $13,410.00. See Exhibit 1.

As a result of the Complaint, the Registrar conducted a Jobsite Inspection on December 18, 2014, and made the following notes: Complaint Item 1: Water Heater Shed look like an out house, Investigator’s Observation: It was observed that the water heater enclosure was not built to any standards of building codes and is not acceptable to the HOA nor the written agreement. Complaint Item 2: Install solar water heater in existing storage shed per agreement. Investigator’s Observation: It was observed in the agreement dated February 15, 2013 that the water heater was to located in existing storage shed. Complaint Item 3: Damage to exterior of the mobile home during the installation of the solar water heater. Investigator’s Observation: It was observed that holes were cut in the exterior siding of the mobile home during the installation. See Exhibit 2.

The Registrar issued a Directive on January 16, 2015, directing Respondent to remedy the following violations: (1) Install solar water heater in existing storage shed per agreement. Correct by Appropriate Means; (2) Remove shed built for the new water heater not approved by the HOA. Correct by Appropriate Means; and (3) Repair damage to the exterior of the home that was damaged during the installation of the water heater and shed. Correct by Appropriate Means. See Exhibit 3.

A Citation against Respondent was issued on June 18, 2015, charging possible violations, Charge 1: A.R.S. § 32-1154(A)(2); Charge 2: A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and Charge 3: A.R.S. § 32-1154(A)(22). See Exhibit 4.

A Final Administrative Decision was issued on December 8, 2015, finding Respondent violated the provisions of A.R.S. §§ 32-1154(A)(2), (3), and (22), as charged in the Complaint, and ordered Respondent’s licenses be revoked effective the date of the Order. See Exhibit 5.

On or about December 15, 2015, Complainant filed a Recovery Fund Claim Form (“Recovery Fund”) with the Registrar attaching a copy of the initial contract and check no. 183 in the amount of $13,410.00 as paid to Stealth Solar on February 15, 2015. Complainant sought to recover the cost of replacing plumbing and tear shed down and haul away as follows: October 2, 2015, George Brazil, amount paid $325.49; and October 3, 2015, Jimmy Gozzela, amount paid $300.00 for a total of $625.49, as actual damages and total money spent to repair and/or complete the project. See Exhibit 6.

On January 25, 2016, the Registrar issued a Document Request Letter to Complainant requesting a copy of documentation from the contractor’s bonding company showing final disposition of their claim; and 3 itemized bids for the installation of the existing water heater in the original location of their shed. See Exhibit 7.

Complainant submitted additional documents to the Registrar on or about July 20, 2016. See Exhibit 8.

The Recovery Fund reviewed and assessed the documents submitted by the Complainant to arrive at the payout recommendation found on lines 66-67 for a total amount as listed on line 70 of $625.49. See Exhibit 9.

The Registrar issued a Notice of Claim for Administrative Payout finding that Complainant’s actual damages were $625.49. See Exhibit 10. Both parties appeal. Complainant contested the amount of the administrative payout. Respondent appeals on the belief the claim should be dismissed. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an evidentiary hearing.

A Notice of Recovery Fund Eligibility/Payout Hearing was held on September 14, 2016.

Hearing Evidence

The Recovery Fund Witness testified that he is a claims adjuster for the Fund. In his testimony, he stated he reviewed (1) the Directive that was issued by the Registrar regarding the workmanship issues surrounding the installment of Complainant’s water heater and constructing the shed; (2) the Administrative Decision regarding the underlying workmanship complaint; and (3) bids submitted by Complainants in calculating Complainants’ actual damages.

The Recovery Fund Witness testified that the award and payment is limited to the cost of repairs found in the Directive and is constrained by statute in regards to the award and payment from the Contractor’s Recovery Fund. He testified that because the underlying Directive addressed remedying the installation of the solar water heater in the existing shed and removal of the shed built, Complainant submitted bids for expenditures totaling $625.49 to repair and remedy same. This amount is reflected as the final payout recommendation, as listed on line item 70 of the Recovery Fund Spreadsheet and is the basis used to determine costs to remedy. Anything else is beyond the scope of the statute.

Attorney for Registrar of Contractors entered into evidence Exhibits 1 though 10, all of which he provided foundation upon admission. Each exhibit has been set forth in the Findings of Fact.

Complainant testified that Respondent should have to pay him for the full costs of $13,410.00. Complainant testified that he paid a large sum of money to have a solar water heater installed with the promise that it would save heating costs and that this was not the case. Now Complainant is left with a solar water heater that he is unable to make reasonable use.

Respondent testified that Stealth Solar, at the time of installation, he was a licensed contractor in Arizona. Respondent requested Complainant’s claim be dismissed. Respondent supported his assertion by referencing its response letter dated July 14, 2014, that was addressed to Registrar’s office, following Complainant’s initial Complaint, wherein Respondent replied alleging Client declined relocation of the water heater and signed the Certificate of Completion reflecting Client received products and services listed in the contract, as acceptable.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. .

A.R.S. § 32-1132(A) provides that “[a]n 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. . . .” Both parties, Complainant and Respondent, appealed the Notice of Claim for Administrative Payout, and both bear the burden of proof to establish that the proposed payout from the Fund is incorrect by a preponderance of the evidence.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

After review of all the evidence, the Tribunal concludes that the award provided by the Fund is an accurate reflection of Complainant actual damages. The Fund’s award takes into account the amounts that Complainant spent to replace the plumbing and tear down and remove the shed. The award thus appears to properly remedy the sole workmanship violation for which the Registrar cited Respondent. Complainant’s plea for recoupment of total installation costs of the solar water heater are not determined by the Registrar to be workmanship issues caused by Respondent in its Final Administrative Order dated December 8, 2015, and reach beyond the scope of this proceeding and not compensable. While the Tribunal is sympathetic to the frustration Complainant endured, the controlling statute does not permit recovery of damages beyond that which Respondent was ordered to remedy.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainant receive a payout from the Residential Contractors’ Recovery Fund in the amount of $625.49.

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, October 3, 2016.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors