ALJDEC decisions subject to certification as final

2016A-1544-RFA-ROC · Registrar of Contractors · 2017-08-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Elizabeth M Powe,

COMPLAINANT

v.

Chad Jeramy Chouinard dba,

Backyard Decore ,

License No: 283855

RESPONDENT.

No. 2016A-1544-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 1, 2017 at 8:30 AM

APPEARANCES: Elizabeth M. Powe (“Complainant”); John Tellier (Attorney for Registrar of Contractors [“Registrar”]); Doug Ulmer (“Recovery Fund Witness” for Registrar); Bryan Lewis (“Witness1” for Complainant); Jessica Ortiz (Registrar Observer); and Hayley Schranfragel (for Complainant).

NON-APPEARANCE: Chad Jeramy Chouinard dba Backyard Decore (“Respondent”)

ADMINISTRATIVE LAW JUDGE: Linda Marie Brown

_____________________________________________________________________

A Hearing was held by the Office of Administrative Hearings to determine whether an award and payment from the Contractors’ Recovery Fund pursuant to A.R.S. § 32-1154(F) is justified by the evidence. The Administrative Law Judge basis its recommendation on the following Findings of Fact, Testimony and Evidence presented at the hearing, and Conclusions of Law.

FINDINGS OF FACT

Background: The Underlying Workmanship Complaint

On or about March 15, 2013, the Registrar issued License No. CR61.283855-D for carpentry, remodeling and repair to Respondent. Chad Jeramy Chouinard is Respondent’s qualifying party and member.

On or about May 9, 2016, Complainant filed a complaint with the Registrar alleging that around January 12, 2016, Respondent orally contracted with Backyard Décor to perform home remodeling to their residence at 6267 West Montebello Way, Florence, Arizona, and set forth in its complaint a list of poor workmanship items. According to the complaint, Complainants paid Respondent an entire contract price of $135,000.00.

Investigator Mike Crow of the Registrar’s office conducted a Jobsite Inspection on June 1, 2016. During the inspection, Complainant, Respondent and Respondent’s attorney, Emily Goldberg were present.

On June 29, 2016, Investigator Crow issued a Directive to Respondent setting forth 76 complained of items that were substantiated at the June 1, 2016 inspection. The Respondent was required to remedy the workmanship deficiencies no later than July 15, 2016, at 5:00 pm.

On July 15, 2016, Investigator Crow entered a Compliance Jobsite Inspection Notes document indicating Complainant informed him that Respondent had not completed the items on the written directive and had not even begun to attempt to complete them.

On July 19, 2016, the Registrar issued a Citation charging cause to discipline Respondent’s license under A.R.S. §32-1154(A)(1), A.R.S. §32-1154(A)(2), and A.R.S. § 32-1154(A)(22).

On or about October 28, 2016, Complainant filed a second Complaint with the Registrar setting forth ten (10) additional items to include water damage around the perimeter of the shower and failure to pull permits, among other items.

On or about December 7, 2016, Complainant and Respondent entered into a Stipulation to Final Order as prepared by Respondent’s Counsel, to include an admission to violations of A.R.S. §§32-1154(A)(1), (2), and (22), as charged; and agreeing that Complainant is a “person injured” as defined under A.R.S. §32-1131, and entitled to file a claim under the Arizona Residential Contractor’s Recovery Fund. Respondent also agreed to a thirty (30) day suspension of its license.

On December 8, 2016, the Administrative Law Judge entered its Order Vacating Hearing incorporating the parties Stipulation of December 7, 2016, as cause to vacate.

On December 15, 2016, the Registrar issued a Final Administrative Decision and Order setting forth acceptance of the parties Stipulation.

Complainants’ Claim to the Fund

On or about December 20, 2016, Complainant submitted a claim to the Registrar’s Residential Contractors’ Recovery Fund (“the Fund”) to recover damages for Respondent’s poor workmanship on their project. Complainant requested $141,938.31 to repair the items as listed on the Registrar’s Written Directive. Complainant included various bids, invoices and canceled checks that it had since paid to other contractors to perform repairs to remedy items to support her claim due to Respondent’s failure to timely correct items as set forth in the Registrar Written Directive of June 29, 2016.

The Registrar’s Recovery Fund Department prepared a Recovery Fund Spreadsheet based on the information Complainant submitted in its application, and determined that Complainant was eligible to receive a payout from the Fund up to the statutory maximum of $30,000.00 per property per person.

On January 3, 2017, the Registrar issued a Notice of Claim for Administrative Payout, informing the parties that “[a]fter a review of the claim and all supporting documentation, the Fund has determined that Complainants are to be awarded $30,000.00 in the form of a payment issued by the Fund.” Respondent contested the determination and requested a hearing.

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency for an evidentiary hearing.

The Registrar issued a Notice of Hearing setting a hearing at on March 1, 2017 at 1400 W. Washington St., Suite 101, Phoenix AZ 85007 at 1:00 PM before an Administrative Law Judge to determine if an award and payment from the Contractors’ Recovery Fund pursuant to A.R.S. § 32-1154(F) is justified by the evidence.

The Registrar mailed copies of the Notice of Hearing to Respondent at its address of record to include a copy to Respondent’s Counsel.

While a hearing on the amount that Complainants should recover from the Fund was initially scheduled on March 1, 2017, repeated motions to continue and other motions from various parties were filed which further delayed Complainant’s ability to recovery from the Fund.

A Minute Entry noticing the scheduled hearing of August 1, 2017, at 8:30 AM was mailed on July 5, 2017, to Respondent’s address of record with the Registrar, as well as a copy sent to his attorney of record, as follows: Chad Jeramy Chouinard, DBA: Backyard Decore, 476 E Christopher St, San Tan Valley, AZ 85140, and Michael W. Thal, Lang & Klain, P.C., 8767 E. Via De Commercio, Ste. 102, Scottsdale, AZ 85258.

Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the hearing was delayed 20 minutes, Respondent did not appear through an authorized member, employee, or attorney. Consequently, respondent did not present any evidence to contest Complainant’s claim to the Recovery Fund.

Complainant verified at the hearing the actual cost to correct and repair is $128,069.37. Complainant provided a Determination Letter dated July 29, 2016, from Respondent’s Bond Company denying claim citing it is premature at this time.

Mr. Tellier, Attorney for the Registrar stated for the record that Respondent was issued a CR61 license and was approved to contract up to $50,000.00. By contracting with Complainant for $135,000.00, the amount of the project exceeded its scope to contract, and Respondent was not qualified to perform a project of that value based on its license. Additionally, 76 of the 79 complained of items that Complainant alleged were substantiated by the Registrar’s Investigator.

Mr. Tellier stated Respondent failed to obtain the required permits. Complainant added that further discovery uncovered that Respondent was denied permitting by the Town of Florence.

Mr. Tellier stated the Registrar initiated discipline to which Respondent admitted to violations of A.R.S. 32-1154(A)(1), (2), and (22). At that time, Respondent had an opportunity to contest the charges but rather admitted as evidenced in the Stipulation.

Mr. Tellier stated that contractors are required to provide written contracts so the parties can reference the scope of the work to be performed, and in this instance, Respondent did not provide a written contract but rather entered into an oral contract with Complainant. He also indicated that Complainant obtained recovery of $18,000.00 from Respondent’s commercial insurance resulting from water damage of a shower install. The shower damage is unrelated to the items listed in the written directive.

Mr. Ulmer testified that even though bids submitted by the Complainant to repair and remedy are substantially much more than what the statute provides, the Recovery Fund maximum under A.R.S.§32-1132(A) is $30,000.00. Mr. Ulmer further stated that a determination for payout is made based on the outstanding repairs set forth in the Written Directive of the Registrar’s Investigator.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

After the Registrar has calculated the amount of the payout from the Fund to which Complainants are entitled, Respondent bears the burden of proof to establish that the Registrar’s calculations were erroneous or not supported 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.”

The Registrar issued a Final Administrative Decision and Order dated December 15, 2016, accepting the parties Stipulation of December 7, 2017. This final order stipulated that Complainants are entitled to recover from the Fund.

A.R.S. § 32-1132(A) describes the measure of damages that an eligible homeowner is entitled to recover from the Fund in relevant part as follows:

The residential contractors' recovery fund is established, to be administered by the registrar, from which any person injured by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter may be awarded in the county where the violation occurred an amount of not more than thirty thousand dollars for damages sustained by the act, representation, transaction or conduct. An 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. . . .

(Emphasis added.)

The Notice of Hearing the Registrar mailed to Respondent is found to be its address of record and copies were also sent to the address of its attorney as listed on various motions filed by counsel on Respondent’s behalf. The manner in which the Notice of Hearing was mailed is reasonable and Respondent is deemed to have received notice of the hearing. A.R.S. §§41-1092.04 and 41-1092.05(D).

Respondent’s failure to appear did not establish that Complainant is not eligible to recover the determined amount of $30,000.00 from the fund. Therefore, Respondent did not establish that the Registrar erred in proposing a payout in the amount of $30,000.00 from the Fund to compensate Complainant for the damages caused by Respondent’s violations.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that on the effective date of the final order in this matter, the Residential Contractors’ Recovery Fund shall pay $30,000.00 to Complainant Elizabeth Powe.

It is further recommended that under A.R.S. § 32-1139(B), the Registrar shall charge $30,000.00, plus interest at a rate of ten percent a year, to Respondent Backyard Decore License No. CR61-283855-D.

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 five days from the date of that certification.

Done this day, August 1, 2017.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors