ALJDEC decisions subject to certification as final

2016A-1138-RFA-ROC · Registrar of Contractors · 2017-10-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

John George Evans,

COMPLAINANT,

v.

Creative Finishing Services Inc.,

License No. 280445

RESPONDENT.

No. 2016A-1138-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 12, 2017, at 1:00 PM

APPEARANCES: David and Paula Landis (“Respondents” for Creative Finishing Services Inc.); John and Darlene Evans (“Complainants”); Jonathan Evans (“Mr. Evans” witness for Complainants); John Tellier (“Mr. Tellier” attorney for the Registrar of Contractors (Registrar or ROC); Jessica Ortiz (“Ms. Ortiz” witness for the Registrar’s Recovery Fund); and Doug Ulmer (“Mr. Ulmer” Registrar Recovery Fund Observer).

ADMINISTRATIVE LAW JUDGE: Linda Marie Brown _____________________________________________________________________

In accordance with A.R.S. § 32-1154(G) Respondent timely files his Notice to request an administrative hearing to contest an administrative payout to Complainant. The Recovery Fund issued Notice of Claim for Administrative Payout that in review of the claim, the Fund determined Complainants awarded $5,660.00. Based upon testimony and evidence, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order.

FINDINGS OF FACT

Respondent is the holder of License No. 280445 issued by the Arizona Registrar of Contractors.

On or about April 7, 2016, Complainant filed a Complaint with the Registrar alleging poor workmanship issues against Respondent from an underlying contract executed on or about March 21, 2016, for Respondent’s to paint the interior of their residence located at 1300 South Table Mountain Road, Chino Valley, Arizona. The project was $2,500.00. Complainants paid $1,750.00

The Complaint was assigned to Investigator Jim Dimond. Investigator Dimond performed a jobsite inspection and substantiated minimum workmanship, and issued a Directive on June 8, 2016 for corrective action to be complete no later than June 24, 2016.

On July 26, 2016, the Registrar issued Citation against Respondent citing violations of Charge 1: A.A.C. R9-9-108 minimum construction standards, and thereby of A.R.S. § 32-1154(A)(3); Charge 2: A.R.S. § 32-1154(A)(12) Failure in any material respect to comply with this chapter, and Charge 3: A.R.S. § 32-1154(A)(22) failure to take appropriate correction action.

An evidentiary hearing was held on October 7, 2016. Both Respondent and Complainant were present. Upon testimony and evidence, the Administrative Law Judge (ALJ) issued its findings and recommended the Respondent be disciplined and license suspended for five (5) business days and pay a $250.00 civil penalty. The Registrar accepted the ALJ’s recommendation.

On March 10, 2017, Complainant submitted a claim to the Registrar’s Recovery Fund for damages in the amount of $6,410.00. Complainant homeowner provided proof of payment, and three contractor bids.

The contractor bids were provided as follows: 03/07/2017 -- Pinion Painting proposed $6,410.00; 02/28/2017 -- Douglas E. Nobel Painting proposed $7,500.00; and 02/24/2017 – Century Painting, LLC proposed $7,700.00.

Upon review of Complainant’s claim, the Registrar Recovery Fund issued its Notice of Claim for Administrative Payout in the amount of $5,660.00. The Notice provided a 15-day window for either party to contest the determination.

On June 19, 2017, Respondent timely filed its notice to request an administrative hearing.

At hearing, Jessica Ortiz, Claims Reviewer, testified that Complainants’ payout in this matter is determined upon a full evaluation of the jobsite inspection, the underlying Directive issued and findings from the Administrative hearing.

Ms. Ortiz further testified that upon an information analysis and review of the scope of work, she then compares the underlying directive with the bids submitted by the Complainant. In comparison, the lowest bid of the three for actual harm to Complainant’s residence was selected as set forth in the Recovery Fund cost calculation spreadsheet.

Ms. Ortiz stated that $750.00 was deducted from the accepted bid of $6,700.00 to arrive at the $5,660.00 amount. This adjustment took into account that Complainant only paid $1,750.00 of the $2,500.00 contract amount.

Respondent testified he was not properly heard at the evidentiary hearing and that his request to appeal the Final Administrative Order was denied. Respondent was reminded the underlying matter has already been decided and today’s hearing is limited to determine the amount or propriety of the payment.

Respondents became hostile during the hearing process and were politely reminded that security would escort them out of the hearing room should the behavior persist.

Respondent did not provide any additional evidence and argued that the work was blended and no touch up was noted on the Directive. Respondent asked that the payout determination be dismissed.

In closing, Mr. Tellier argued that the amount determined in the Notice of Administrative Payout should issue.

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 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.

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 omissions.

The evidence established that Complainant is entitled to an award. Respondent failed to meet its burden of proof in challenging the payout. The evidence of record supports an award to Complainant in the amount $5,660.00, 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 $5,660.00.

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, October 2, 2017.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors