ALJDEC decisions subject to certification as final

2015A-459-ROC-RF · Registrar of Contractors · 2017-01-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Melissa Giordano

COMPLAINANT

-v-

License No. CR21.241426-D of

Desert Sun Installations Inc

RESPONDENT

No. 2015A-459-ROC-RF

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: Monday, December 19, 2016, at 1:00 PM

APPEARANCES: Melissa Giordano (“Complainant”); James McCune for Desert Sun Installations Inc. (“Respondent”); Tom Raine (“Attorney”) for the Registrar of Contractors (“ROC” or “Registrar”); and Doug Ulmer (“Witness” for Registrar of Contractors Recovery Fund).

ADMINISTRATIVE LAW JUDGE: Linda Marie Brown

_____________________________________________________________________

Desert Sun Installations, Inc. (“Respondent”) contest the Notice of Claim of Administrative Payout made by the Registrar of Contractors that Mellissa Giordano (“Complainant”) be awarded $1,836.00 in the form of payment issued by the Fund. At hearing, this tribunal admitted Exhibits 1 through 9 offered by the Registrar and received evidence and testimony. Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order to affirm the Registrar’s payout determination.

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (“the Registrar”) issued License No. CR21.241426-D to Respondent.

Complainant contracted with Respondent for the installation of a combination water feature and gas fire pit. On or about February 2, 2015, the Registrar received a Complaint from Ms. Gordano alleging workmanship issues with the installation.

The Registrar conducted a Jobsite Inspection on April 1, 2015, and made the following notes: Complaint Item 1: Water feature fire pit was built without any way to drain resulted in submersion of gas pipe which caused it to rust and clog. On 12/10 they came to fix. They haphazardly drilled holes and pierced water pipe, then cut large hole in back of feature. The crew left and SI) would be back the following day to fix. Have not heard from anyone despite multiple attempts to contact.

Investigator’s Observation:

Burner port exposed to rain or moisture shall be non-corrosive.

Where passing through an outside wall, the piping shall also be protected against corrosion by coating and wrapping with an inert material.

Over flow drain should be installed.

Masonry repair at rear of water feature.

Out of scope contracting, gas and electric.

No permit for electric.

See photos 1 through 6.

On April 22, 2015, a Directive from the Registrar was issued to Respondent directing it to remedy jobsite observations with the exception of “out of scope contracting for electric” and “no permit for electric.”

A Citation was issued on July 14, 2015, charging possible violations as: Charge 1: A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108; Charge 2: A.R.S. § 32-1154(A)(16); and Charge 3: A.R.S. § 32-1154(A)(22).

A Final Administrative Decision was issued on February 8, 2016, finding Respondent violated the provisions of A.R.S. §§ 32-1154(A)(3), (16), and (22) when it constructed the unit with poor design, worked outside the scope of its license and failed to complete the corrective work.

On or about September 12, 2016, Complainant filed a Recovery Fund Claim Form (“Recovery Fund”) with the Registrar attaching a copy of the initial contract and payment schedule in the amount of $7,200.00 paid on November 25, 2013; $3,000.00 paid on January 21, 2014; and $2,868.00 paid on February 11, 2014 to Desert Sun Installations, Inc. Complainant sought to “recover the cost to remove existing steel 1⁄2” custom steel burner in fire-water feature and install new brass custom burner. Also install a new ball valve on water-line inlet on north side of water feature. Clean up bottom of water feature and reseal interior. Also install a new float. Also drill a hole through the back of the water feature in the basin area so if the water lever gets too high it won’t fill in the new burner.”

Complainant provided three (3) bids from the following contractors: (1) Lone Star Landscaping Inc. in the amount of $1,954.00; (2) Masterscapes LLC in the amount of $1,836.00; and (3) Aquatec Fountains in the amount of $2,083.37.

The Recovery Fund reviewed and assessed the documents submitted by the Complainant to arrive at the payout recommendation found on lines 160-162 in the total amount of $1,836.00.

The Registrar issued a Notice of Claim for Administrative Payout finding that Complainant’s actual damages were $1,836.00. Respondent contested the amount of the administrative payout. 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 December 19, 2016.

Hearing Evidence

Attorney for Registrar of Contractors admitted into evidence Exhibits 1 through 9, all of which he provided foundation upon admission. Each exhibit has been set forth in the Findings of Fact, including photographs admitted as Exhibit 9 to include photographs 1 through 10.

Witness for the Recovery Fund testified that in making his recommendation, he reviewed (1) the underlying Complaint; (2) workmanship issues; (3) the scope of the work; (4) the Directive issued by the Registrar regarding the workmanship issues surrounding the installment of water – fire pit feature; (5) the Administrative Decision regarding the underlying workmanship complaint; and (6) 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 he compares bids with the underlying Directive and conclusions of the decision that are appropriate in scope to address remedying the issue. In this instance, the issue is water submerging the burner as noted in the Inspector’s Observations. Complainant submitted three (3) bids to repair and remedy same. These amount are reflected on line items 72-74 and the final payout recommendation is found as line item 162 of the Recovery Fund Spreadsheet and is the basis used to determine costs to remedy. Anything else is beyond the scope of the statute.

Respondent testified that he is a licensed contractor in Arizona, and the company was responsive to Complainant’s concerns. Respondent requested Complainant’s claim be dismissed because nothing is wrong with the ball check valves. Respondent was asked when remedying other workmanship issues, if it is industry standard to have to replace all components, to which he replied yes.

When asked, Respondent agreed that the amount of the claim seems to be fair and reasonable.

Complainant testified that she has been without a working water feature – gas fire pit feature and that she is seeking to only remedied this issue. When asked about any recovery from the contractor’s bond, she stated that when she filed the claim, it was rejected as being one (1) day late to qualify for claims, and thus she sought recovery from the Recovery Fund.

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. . . .” Complainant bears the burden of proof with regard to its entitlement to the amount noticed. Respondent, contest the Notice of Claim for Administrative Payout, and bears 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 fair and reasonable as an accurate reflection of Complainant’s actual damages. The Fund’s award takes into account the amount Complainant will need to spend in order to remedy the workmanship issues that Respondent was disciplined for in the underlying complaint. The award thus appears to properly remedy the sole workmanship violation for which the Registrar cited Respondent.

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 $1,825.00.

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 is forty days after the date of that certification.

Done this day, January 5, 2017.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors