ALJDEC decisions subject to certification as final

2014A-2732-ROC-RF · Registrar of Contractors · 2016-05-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 23, 2016 held open until April 20, 2016 APPEARANCES: Sander Zandbergen, Complainant; Tom Taine, Attorney for the Registrar of Contractors; James Barbour, witness; Joseph Citelli, observer ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________

FINDINGS OF FACT 1. Respondent’s Registrar of Contractors license was disciplined as a result of Complainant’s complaint against it for removing popcorn ceiling texturing without testing for asbestos. Complainant then filed a Residential Contractors Recovery Fund claim. 2. The Registrar of Contractors reviewed the claim and issued a Notice of Claim for Administrative Payout[1] on January 4, 2016. The notice informed Complainant that Residential Contractors Recovery Fund had determined that Complainant would be awarded $5,627.13 on his claim. 3. Complainant appealed the award amount and the matter was set for hearing at the Arizona Office of Administrative Hearings, an independent agency authorized to conduct hearings in contested matters arising out of State regulation. 4. At the hearing, James Barbour, Recovery Fund Claims Reviewer, testified that he reviewed the items that Complainant submitted for consideration, which he summarized in a Costs Spreadsheet.[2] Mr. Barbour found that, of the items that Complainant had already paid for, the $3,608.25 that Complainant paid to Steamy Concepts Restoration and the $838.88 that Complainant paid to American Technologies, Inc., were compensable. He also found the bid by G.P. Pro Painting for $1,180.00 was compensable. This totaled $5,627.13, which was the proposed pay-out amount. 5. Mr. Barbour found the remaining items requested in Complainant’s Residential Contractor’s Recovery Fund claim not to be compensable. Complainant submitted a Costs Sheet[3] summarizing the additional $2,531.66 in costs that he disputed. Complainant waived the remaining denied items that were not in his Costs Sheet. The first 6 items that Complainant disputed corresponded to items 68 to 73 of Exhibit 13. Complainant’s item 7 corresponds to item 74 of Exhibit 13. They all relate to the cost of installing hard floors where Complainant previously had carpeting. 6. Mr. Barbour testified that he had originally thought that the costs of abatement were not compensable but that, after consulting with Registrar of Contractors legal counsel and others, he came to see that, although the Respondent was not hired to do any work with asbestos, Respondent was still responsible for the damage because a licensed contractor, knowing that asbestos could exist, had a duty to check for it prior to removing Complainant’s popcorn ceiling.[4] Mr. Barbour had also questioned covering work that took place outside of the area where the original contract work was completed, but this too was found to be part of the affected area because asbestos in the carpet in the living room could be tracked to other parts of the house. When it came to reimbursing Complainant’s hard flooring, however, it was not allowed. Regardless of whether, as Complainant argued, the replacement flooring cost less than carpet, the fund would only agree to reimburse Complainant for the same materials that were in the home to begin with in an effort to place the Complainant in the position he would have been in had the violation not taken place.[5] Because the claim did not contain any estimates for carpet, no pay out was offered for flooring. 7. Complainant asked Mr. Barbour whether the Registrar of Contractors would consider that he would not be safe with carpeting because of the asbestos that continues to fall through the air and land on the flooring. He noted that he can simply wipe up a hard floor whereas vacuuming a carpet would throw the asbestos back into the air. Mr. Barbour responded that the Registrar of Contractors focuses on the construction issue and even approving the remediation was further than he had originally understood to be its purpose. He agreed that the law does not require the same materials be used in calculating actual damages.[6] 8. The record was left open to allow Complainant the opportunity to submit verification of the cost of replacement carpet. However, no additional information was provided. CONCLUSIONS OF LAW 1. This hearing was conducted in accordance with Arizona Revised Statutes (“A.R.S.”) § 41-1092.01 et seq. Complainant has the burden of proof and the standard of proof on all issues is by a preponderance of the evidence. See Arizona Administrative Code (“A.A.C.”) R2-19-119. 2. Arizona Revised Statute § 32-1132(A) provides 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. 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. An 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. No more than the maximum individual award from the fund shall be made on any individual residence or to any injured person. Notwithstanding any other provision of law, monies in the residential contractors' recovery fund shall not be directly awarded for attorney fees or costs except in contested cases appealed to the superior court. [Emphasis added.]

3. A.R.S. § 32-1154(G) provides, in relevant part, 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. . . .

4. In this case, Respondent offered reasonable legal arguments for the position that it has adopted. Complainant’s arguments were also reasonable. However, Complainant had the burden of proof. Therefore, there being no clear legal authority for the question of whether the cost of hard floors are reimbursable where carpeting had previously existed, and there being no harm to Complainant because he can make another claim to the Recovery Fund, it is recommended that the appeal be denied. RECOMMENDED DECISION Based on the foregoing considerations, the undersigned Administrative Law Judge hereby recommends that Complainant’s appeal be denied. Done this day, May 6, 2016.

/s/ Dorinda M. Lang Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Exhibit 14. [2] Exhibit 13. [3] Exhibit A. [4] See Hearing Record at approximately 29:00 to 31:00. [5] See Hearing Record from approximately 34:00 to 37:00. [6] See Hearing Record from approximately 1:02:00 to 1:06:00.

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