FINACT2014A-4449-RFA-ROC.pdf

2014A-4449-RFA-ROC · Registrar of Contractors · 2018-06-06

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Dana Rae Schimek, Case No. 2014-4449 COMPLAINANT,

J DiGuiseppe Investments LLC, License No. 219115, Docket No. 2014A-4449-RFA-ROC RESPONDENT. FINAL ADMINISTRATIVE DECISION AND ORDER

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an

administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the

Registrar must provide written justification setting forth the reasons for the modification or rejection.

In this case, a hearing was held, and the administrative law judge issued a written decision. See

Administrative Law Judge Decision, attached. The Registrar modifies that decision.

MODIFICATION AND WRITTEN JUSTIFICATION

Here, the administrative law judge found that Complainant, Ms. Schimek, sold the home in 2015

and filed her application for the Recovery Fund on or about June 15, 2017. ALJ Dec. 3:15-17. The

administrative law judge also found that, “For the years of 2013, 2014, and 2015, Ms. Schimek’s home

was listed as a Class 4 property by the Maricopa County Assessor.” ALJ Dec. 4:1-2. As noted by the administrative law judge, “During those years, the home was described as “NON-PRIMARY/NOT IN OTHER CLASSES RESID.” ALJ Dec. 4:2-3. Despite finding that Ms. Schimek’s home was not a noncommercial historic property, nor classified as a class three property, the administrative law judge concluded that Ms. Schimek qualified as a “Person injured,” who is eligible to recover from the Recovery Fund under A.R.S. § 32-1131(3)(a), because Ms. Schimek’s home would have qualified for a class 3

1 of 4 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 designation. See ALJ Dec. 8:1-3. The administrative law judge found, without citing to any evidentiary support, that Ms. Schimek’s home could only have been classified as a class 4 property due to a “clerical error.” ALJ Dec. 8:6-7. Here, the administrative law judge ignored the actual classification of Ms. Schimek’s property and found that the property “met the class 3 classification” at the time the contract was executed, and that “there was no other explanation for the home being classified as class 4 other than clerical error.” ALJ Dec. 8:1-7. By finding Ms. Schimek eligible for the Residential Contractors’ Recovery Fund (the “Fund”), the administrative law judge disregarded the plain and simple language of A.R.S. § 32-1131(3)

(a). The Registrar modifies the Administrative Law Judge Decision to correct this error.

The Fund was established to be administered by the Registrar, from which any “person injured” by

an act, representation, transaction, or conduct of a licensed residential contractor may be awarded up to

thirty thousand dollars for damages caused by the contractor. See A.R.S. § 32-1132(A). “Person injured”

is a statutorily-defined term and means an owner of residential real property that is either: (1)

noncommercial historic property as defined in section 41-12101 or (2) classified as class three property

under section 42-12003. See A.R.S. § 32-1131(3)(a). Additionally, the property must be actually occupied

or intended to be occupied by the owner as a residence. Id. Furthermore, the owner must be damaged by

the failure of a licensed residential contractor to adequately build or improve a residential structure or

appurtenance on that real property. Id. The plain language of the statute explicitly notes that the property must be “either noncommercial historic property as defined in section 41-12101, or classified as class three property under section 42- 12003.” A.R.S. § 32-1131(3)(a) (emphasis added). The administrative law judge’s finding that Ms. Schimek’s “home qualified for classification of class 3 at the time that the construction contract was executed,” despite not being classified as such, is irrelevant and cannot serve to override the plain language of A.R.S. § 32-1131 (requiring a property to be classified as a class three property). See ALJ Dec. 8:11-13 (emphasis added). Ms. Schimek does not meet the definition of “person injured” under

A.R.S. § 32-1131.1 CONCLUSION AND ORDER The Registrar therefore modifies the Administrative Law Judge Decision as follows: • The Registrar removes paragraphs 12 and 13 on page 8. • The Registrar replaces paragraph 14 on page 8 with “Ms. Schimek did not establish by a preponderance of the evidence that her home was classified as a class 3 property at the time that the construction contract was executed or at the time the claim accrued.” • The Registrar replaces paragraph 15 on page 8 with “Ms. Schimek did not establish by a

preponderance of the evidence that she is a person injured pursuant to Ariz. Rev. Stat. 32-

1131(3).”

• The Registrar modifies the Recommended Order on page 8 to state: “Because Ms.

Schimek’s property was not designated as a noncommercial historic property as defined in

section 41-12101, nor classified as a class three property under section 42-12003, Ms.

Schimek is ineligible to receive an award from the Residential Contractors’ Recovery

Fund.”

The effective date of this Order is July 16, 2018.

Dated this 6th day of June 2018.

Registrar of Contractors

/s/ Nicole Sornsin ----------------------------------------------------------- Nicole Sornsin Assistant Director, Legal and Recovery Fund Copy mailed via USPS First Class mail and via electronic mail this 6th day of June 2018 to:

1 Although the administrative law judge notes that the property was reclassified as a class 3 property at the time the recovery fund claim was filed, at that time Ms. Schimek no longer owned, occupied, or intended to occupy the home, and thus, could not meet the additional requirements under A.R.S. § 32- 1131(3)(a) that the property must be actually occupied or intended to be occupied by the owner as a residence.

3 of 4 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Respondent J DiGuiseppe Investments, LLC. 16060 N. Boulder Dr. Fountain Hills, AZ 85268-1819 Respondent’s Attorney Matthew J. Pierce, Esq. Warner Angle Hallam Jackson & Foremanek, PLC. 2555 E. Camelback Rd., Ste. 800 Phoenix, AZ 85016-9237 Complainant Dana Rae Schimek 3540 E. Crocus Dr. Phoenix, AZ 85032-5347 Case No. 2014-4449/jo