ALJDEC decisions subject to certification as final

2016-3101-RFA-ROC · Registrar of Contractors · 2017-04-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Josue Raul Valenzuela-Morales

and Noelia Leon Martinez

COMPLAINANTS,

v.

Nogales Builders LLC ,

License No: 285909

RESPONDENT.

No. 2016-3101-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 27, 2017

APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine. Complainants Josue Raul Valenzuela-Morales and Noelia Leon Martinez appeared on their own behalf.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

Complainant challenges a proposed payout by the Residential Contractors’ Recovery Fund (Fund). The Fund has issued notice that it intends to make a payout to Complainant for the amount of $1,874.00. Complainant requested a hearing, challenging the proposed payout amount as too low. Based upon the record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order for payout in the amount of $1,874.00.

FINDINGS OF FACT

Respondent was the holder of License No. 285909 issued by the Registrar of Contractors (Registrar).

In 2014, Complainants entered into a contract with Respondent to build a new home. Respondent stopped work on the home on or about December 18, 2015.

At some point after the Respondent stopped working on the home, Complainants filed a complaint with the Registrar regarding Respondent’s work on the project. The complaint resulted in discipline against Respondent’s license. Complainants’ made a claim to the Fund to complete the project. On September 21, 2016, the Registrar issued a Default Decision, Order and Award in which Complainants were awarded $28,126.00 from the Fund. That payment was made to Complainants on October 4, 2016.

On or about August 18, 2016, Complainants filed a complaint alleging poor workmanship by Respondent. Upon investigation, the Registrar issued a written directive, on or about September 8, 2016, in which the following items were noted:

Correct roof leak at front porch entry and repair drywall and texturing, repaint.

Correct shower leak at threshold.

Replace cracked tiles near entryway.

Correct paint on kitchen cabinets.

Correct paint on front door.

Correct leaks at windows in living room and kitchen area, repair drywall and texturing, repaint.

Respondent did not complete the work required in the written directive, and the Registrar issued a Citation.

On or about November 14, 2016, Respondent’s license was revoked after a default finding of poor workmanship and failure to comply with a directive from the Registrar by Respondent in relation to Complainants’ complaint.

Complainants made a claim to the Fund on January 6, 2017. With the claim, Complainants submitted three bids from licensed contractors to correct the issues identified in the written directive. The bids ranged from $16,950.00 to $18,750.00.

On or about January 9, 2017, the Registrar issued a Notice of Claim for Administrative Payout. The Registrar determined that Complainants were eligible for payout from the Fund in the amount of $1,874.00.

Complainants objected to the proposed payout.

At hearing, Douglas Ulmer, Claims Reviewer, testified that Complainants’ payout in this matter was limited by the statutory limit of $30,000.00 per property per person set forth in A.R.S. § 32-1132(A). Mr. Ulmer indicated that because Complainants received $28,126.00 from the Fund on October 4, 2016, the maximum payout for any future claims by Complainants for actual harm at this residence was $1,874.00.

At hearing, Complainants indicated that they did not have the funds necessary to fix the roof and they had no idea that the roof needed to be fixed when they filed the initial complaint.

CONCLUSIONS OF LAW

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. Arizona 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 Complainants bear the burden of proof to show entitlement to any amount other than that in the Notice. Therefore, Complainants bear the burden of showing, by a preponderance of the evidence, that the proposed payout amount is not reasonable and proper.

Complainants are injured persons 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.” “Actual damages” are those that will put the injured party in the position in which he was before he was injured. United States Fidelity & Guaranty Co. v. Davis, 3 Ariz. App. 259, 263, 413 P.2d 590, 594 (1966).

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

Because payouts from the Fund are limited to $30,000.00 per residence and per injured person, the Fund cannot pay Complainants more than $30,000.00 in total for actual damages suffered as a result of Respondent’s acts or ommissions.

The evidence established that Complainants received a payout of $28,126.00 from the Fund on October 4, 2016. Thus, any payout from the Fund in this matter is limited by the $30,000.00 statutory limit.

The evidence of record supports an award to Complainant in the amount $1,874.00, 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 $1,874.00.

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 Decision will be 40 days from the date of that certification.

Done this day, April 12, 2017.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors