ALJDEC decisions subject to certification as final

2015A-3660-RFA-ROC-RHG · Registrar of Contractors · 2018-07-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Virgil Stan,

COMPLAINANT,

v.

Lyle Lee Hemphill dba,

White Mountain Roofing,

License No: 151129

RESPONDENT.

No. 2015A-3660-RFA-ROC-RHG

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 20, 2018

APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine. Complainant Virgil Stan was represented by Eric Hawkins. Respondent Lyle Lee Hemphill doing business as White Mountain Roofing was represented by John Salskov.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

The Arizona Registrar of Contractors (Registrar) issued License No. 151129 to Respondent.

On or about August 25, 2015, the Registrar received a Complaint against Respondent from Complainant alleging, among other things, that Respondent’s work installing a metal roof at Complainant’s home did not comply with the Registrar’s workmanship standards (the workmanship complaint).

As a result of the workmanship complaint, the Registrar issued a Citation against Respondent charging possible violations of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3), and A.R.S. § 32-1154(A)(22).

Respondent did not file a timely answer to the Citation. Therefore, the Registrar issued a Final Administrative Decision and Order on December 13, 2016, in which the Registrar found that Respondent had violated the provisions of A.R.S. § 32-1154(A)(3) and (22) as charged in the complaint. Due to the violations, the Registrar suspended Respondent’s license for a period of one day.

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of fixing the roof. As part of the claim process, Complainant submitted bids from three different contractors that Complainant had received to correct the project.

During the review of Complainant’s claim, the Registrar determined that the property was not classified as a Class 3 property with the county assessor’s office at the time of the contract or at the time of the claim, but was a Class 4 property at all times prior to filing the claim.

After the Registrar notified Complainant regarding the classification issue, Complainant had the property reclassified as a Class 3 property.

After the property was reclassified as a Class 3 property, the Registrar issued a Notice of Claim for Administrative Payout, finding that Complainant’s actual damages were $15,600.00. Respondent requested a hearing, believing the payout was inappropriate. Complainant did not contest the amount of the administrative payout. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

Jessica Ortiz, Claims Reviewer for the Fund, testified that the Fund allows people to fix an error in the classification of their property to enable them to access the Fund. Ms. Ortiz stated that during her processing of the claim, she reviewed the bids submitted by Complainant and determined that the lowest bid, $19,350.00 was appropriate to use for her calculations. Ms. Ortiz then deducted the $3,750.00 still owing on the original contract with Respondent. Thus, Ms. Ortiz recommended a payout of $15,600.00 from the Fund.

John Riesgo, Complainant’s son-in-law, testified that Complainant spent more than six months of the year living in the home for the past 20 years and the classification was an error. Mr. Riesgo acknowledged that Complainant owned a property in Tucson that was recorded as a Class 3 property at the time of the contract, but asserted that the classifications of both properties was an error. Mr. Riesgo stated that the property had never been a rental property.

Respondent indicated that Complainant had filed a claim with its bond company, but the claim was denied because the property was not classified as a residential property at the time of the contract. Respondent asserted that, at a minimum, any payout to Complainant should be reduced by the amount of the $4250 bond that was not paid out because of the classification of the property.

Following the hearing, the Administrative Law Judge issued a recommended decision to the Registrar finding that the, because the property was not designated as a Class 3 property at the time of the contract or the work performed on the property, Complainant was not eligible for a payout from the Fund. The Registrar rejected that recommendation finding that the Class 3 designation after the filing of the claim was sufficient to render Complainant eligible for a payout from the Fund. The matter was remanded to the Office of Administrative Hearings for a rehearing to determine the actual damages payable to Complainant.

On rehearing, the parties stipulated that the Administrative Law Judge should take administrative notice of the record in the initial hearing in this matter.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

The burden of proof at an administrative hearing is generally upon the person who brings the action. Utah Construction Company v. Berg et al., 68 Ariz. 285, 205 P.2d 367 (1949); A.A.C. R2-19-119(B). Further, the standard of proof at hearing is by preponderance of the evidence. Smith v. Ariz. Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A). The Notice of Claim for Administrative Payout states that the party contesting bears the burden of proof to show entitlement to any amount other than that in the Notice. In this instance, Respondent bears the burden of showing, by a preponderance of the evidence, that the proposed payout amount is not reasonable and proper.

Complainant is an injured person within the definition in A.R.S. § 32-1131(3) and is, therefore, entitled to recovery from the Fund.

According to A.R.S. § 32-1132(A), an award from the Fund is limited to “actual damages suffered by the complainant as a direct result of the contractor’s violation,” but “[n]o more than the maximum individual award from the fund shall be made on any individual residence or to any injured person.”

Under the facts and circumstances of this case, the Fund is empowered to determine and award, based on actual damages, an appropriate payment to Complainant pursuant to A.R.S. § 32-1132 and A.R.S. § 32-1154(F).

The evidence established that Complainant is entitled to an award in the amount $15,600.00, which shall be chargeable against Respondent and persons on the license as set forth in A.R.S. § 32-1139(B).

RECOMMENDED ORDER

In view of the foregoing, it is recommended that the Registrar of Contractors make payment from the Residential Contractors’ Recovery Fund to Complainant in the amount of $15,600.00.

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, July 10, 2018

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors