ALJDEC decisions subject to certification as final

2016A-2070-RFA-ROC · Registrar of Contractors · 2020-01-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Flora Pennington James,

COMPLAINANT

All Right Builders Inc.,

DBA: Allen & Kyla,

ROC License: ROC 207665,

RESPONDENT

No. 2016A-2070-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 16, 2019

APPEARANCES: Complainant Flora Pennington James appeared on her own behalf. Lee Price, Owner and Qualifying Party, appeared on behalf of Respondent All Right Builders Inc., doing business as, Allen & Kyla. The Arizona Registrar of Contractors was represented by Assistant Attorney General John Tellier.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (Registrar) issued License No. 207665 to Respondent.

On or about June 15, 2016, the Registrar received a Complaint against Respondent from Complainant alleging poor work and abandonment by Respondent (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 filed a timely answer to the Citation. An administrative hearing was held. In her November 14, 2016 Decision, Administrative Law Tammy L. Eigenheer considered Respondent’s arguments and concluded, among other things, that “Complainant established that Respondent not complete the project in a workmanship manner in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3)” and “that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).”

On December 9, 2016, the Registrar issued a Final Administrative Decision and Order finding violations and imposing a three day suspension.

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of repairing the work done by Respondent. As part of the claim process, Complainant submitted bids from three different contractors that Complainant had received to correct the project. Complainant indicated on the claim that the lowest bid to complete or repair the work was $17,945.84, but Complainant expected to receive $25,000.00 from the Fund.

The Registrar issued a Notice of Claim for Administrative Payout, finding that Complainant’s actual damages were $3999.81. Respondent requested a hearing, believing the payout was too high. Complainant requested a hearing, believing the payout was too low. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

Hearing was held on December 16, 2019.

Hearing Evidence

Doug Ulmer, Legal Assistant for the Registrar, testified that he reviewed the Directive from the Registrar that had been issued, Judge Eigenheer’s November 14, 2016 Decision regarding the underlying complaint, and bids submitted by Complainant in calculating Complainant’s actual damages. Mr. Ulmer concluded that the bids included items in excess of those necessary to complete or repair the work identified in the directive issued by the Registrar. Based on his review, Mr. Ulmer determined that the lowest bid to address the work required was $6999.81. Mr. Ulmer noted that $3000.00 was still owing on the underlying contract. Accordingly, Mr. Ulmer testified that appropriate payout was $3999.81.

Complainant testified that additional items beyond those included in the directive needed to be addressed, and that the award recommended by the Registrar was not enough to correct all the issues.

Mr. Price argued the underlying matter of whether Respondent had complied with the directive.

At the hearing, the Registrar conceded that additional items relating to the kitchen floor were appropriate to be included in the payout from the Fund.

Those items included Line 41 through Line 44 of the bid, including sales tax, overhead, and profit. Lines 41 through 44 totaled $712.51; materials sales tax totaled $30.53; overhead totaled $74.30; and overhead totaled $74.30. This resulted in an increased payout of $891.64, for a total of $4891.45.

CONCLUSIONS OF LAW

This matter lies within the jurisdiction of the Registrar.

Complainant and Respondent filed appeals of the Registrar’s recommended payout from the Fund. As such, Complainant bears the burden to establish by a preponderance of the evidence that the recommended payout was inappropriately low and Respondent bears the burden to establish by a preponderance of the evidence that the recommended payout was inappropriately high. See A.A.C. R2-19-119; Magness v. Ariz. Registrar of Contractors 234 Ariz. 428 (App. 2014).

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

The purpose of the recovery fund is to provide improved protection for owners and lessees of property who contract for the construction or alteration of residential structures. McMurren v. JMC Builders, 204 Ariz. 345 (App. 2003).

A.R.S. § 32-1132.01(B) provides that “[a]n award from the residential contractors’ recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor’s violation.” Actual damages “[m]ay not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines” and “[m]ust be established by bids supplied by or the value of work performed by a person that is licensed.”

Any person injured by a licensed residential contractor’s violation of ROC’s statutes or rules may be awarded up to $30,000 from the residential recovery fund. But “[t]he maximum individual award from the residential contractor’s recovery fund is $30,000.” A.R.S. § 32-1132.01(D).

Respondent failed to identify why the proposed payout was inappropriately high. Rather, Respondent attempted to relitigate the underlying workmanship complaint.

Complainant established by a preponderance of the evidence that the recommended payout was inappropriately low. As conceded by the Registrar during the hearing, the proposed payout should have been $891.64 more to account for the kitchen flooring.

After review of all the evidence, the Tribunal concludes that the award provided by the Fund failed to accurately reflect Complainant’s actual damages. The evidence of record supports an award to Complainant in the amount of $4891.45, all of which shall be chargeable against Respondent and persons on the license as set forth in A.R.S. § 32-1139(B).

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 $4891.45.

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.

-54864001

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-137160-45720000Done this day, January 6, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

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-137160-45720000