ALJDEC decisions subject to certification as final

2016A-2423-RFA-ROC · Registrar of Contractors · 2017-05-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Tammy F Morse-Ory,

COMPLAINANT,

v.

Fosdick Enterprises Inc. dba,

K F Builders,

License No: 093472

RESPONDENT.

No. 2016A-2423-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 26, 2017

APPEARANCES: Complainants appeared on behalf of themselves.

Karl Fosdick appeared on behalf of Respondent Fosdick Enterprises Inc. DBA: K F Builders. Assistant Attorney General Thomas Raine appeared on behalf of the Registrar of Contractors.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors, (hereinafter, “Registrar”), issued License No. 093472 to Respondent.

On or about July 8, 2016, the Registrar received a Complaint against Respondent from Complainant alleging poor workmanship in the construction of a new home. See Exhibit 1.

On August 30, 2016, the Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(2) and A.R.S. § 32-1154(A)(22).

Respondent filed a timely answer to the Citation.

On November 16, 2016, an administrative hearing was held.

In her November 17, 2016 Decision, Administrative Law Judge Suzanne Marwil concluded:

Respondent conceded that its subcontractor installed 3.5 and 4 ton air conditioning units in Complainant’s’ main house rather than the two 5 ton units the plans specified. Accordingly, Complainant met the burden to prove a violation of A.R.S. § 32-1154(A)(2).

Regarding a violation of A.R.S. § 32-1154(A)(22), Respondent steadfastly refused to accept responsibility for its subcontractor not following the plans even though as a general contractor Respondent plainly had the obligation to supervise its subcontractor and either prevent a deviation or have a change order executed. Nonetheless, because Respondent has already paid a civil penalty in the related cases of 2014-4777-ROC and 2015-2959-ROC involving the same project, imposition of another civil penalty is not necessary.

On December 8, 2016, the Registrar issued a Notice of Acceptance of Administrative Law Judge Decision.

On or about February 6, 2017, Complainant filed a claim with the Residential Contractors’ Recovery Fund, (hereinafter “the Fund”), to recover the installing a new air conditioning unit in Complainants’ main house. The claim form indicated that the lowest bid that Complainants had received to correct this item was $17,243.86 and that Complainants would not receive a payment from Respondent’s bond company. See Exhibit 12.

On February 21, 2017, the Registrar issued a Notice of Claim for Administrative Payout. The Registrar determined that Complainant would receive a payout of $17,213.86 from the recovery fund.

Respondent requested a hearing.

The Registrar referred the matter to the Office of Administrative Hearings, (hereinafter, “OAH”), for an evidentiary hearing.

A hearing was held on April 26, 2017.

Hearing Evidence

13. On August 8, 2016, Pennington sent Respondent a directive from

the Registrar. The Directive stated in pertinent part as follows:

After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). You must provide the Registrar with satisfactory proof of your compliance with this directive prior to 5:00 p.m. on August 25, 2016. You are hereby directed to remedy the following violations by the appropriate means:

A/C Main House Wrong size A/C units installed. Plans call for two 5 ton units to be installed, but a 4 ton and 3.5 ton was installed.

14. At hearing, Mr. Fosdick testified on behalf of Fosdick Enterprises. The Registrar presented the testimony of the Supervisor of the Recovery Fund, Doug Ulmer, (hereinafter “Mr. Ulmer”), and submitted four exhibits.

15. Mr. Ulmer testified that he is the Supervisor of the Recovery Fund. Mr. Ulmer stated that he had personally reviewed Complainants’ claim for payment from the Fund. Mr. Ulmer said that he determined that Complainants were eligible for payment from the Fund for their actual damages.

16. Mr. Ulmer testified that the Registrar must review all documentation that is necessary on a claim for a payout from the Fund before the Registrar makes a decision for a payout. Mr. Ulmer stated that he reviewed the entire file in this matter, including the 3 bids. Mr. Ulmer determined that a proper payout from the Fund for Complainants’ actual damages is the sum of $17,213.86.

17. Mr. Ulmer testified that he created a Recovery Fund Cost spread sheet in order to determine the final payout recommendation. Mr. Ulmer testified that chose the lowest bid to replace the air conditioning unit in Complainant’s main house in the amount of $17,213.86. The bid selected was from Christian Brothers. Mr. Ulmer determined that the total payout should be $17,213.86.

18. Mr. Ulmer’s testimony is found to be credible.

19. Respondent did not dispute the amount of the payout or how it was calculated. Respondent contended that he should not be liable for the payout because the substandard work was performed by its subcontractor and not Respondent.

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. . . .” Respondent 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 an accurate reflection of Complainant’s actual damages. The award appears to properly remedy the workmanship violations for which Respondent was responsible. Judge Marwil found that Respondent violated A.R.S. § 32-1154(A)(2) when its contractor installed an air conditioning unit other than the unit specified in the plans. Based upon the evidence provided, the Tribunal finds the scope of the bid from Christian Brothers is appropriate. Complainant is accordingly entitled to a payout from the Fund in the amount of $17,213.86.

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 $17,213.86.

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.

Done this day, May 12, 2017.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors