ALJDEC decisions subject to certification as final

2017A-1762-RFA-REHRG-ROC · Registrar of Contractors · 2018-08-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Kay H Woods,

COMPLAINANT,

v.

AC in AZ LLC d/b/a, Ballard AC & Heating,

License No: 296644

RESPONDENT.

No. 2017A-1762-RFA-REHRG-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 9, 2018

APPEARANCES: Kay Woods, Complainant, Thomas Raine, Esq. Attorney for

the Registrar, Jessica Ortiz, Recovery Fund Claims Reviewer, Tim Pennington,

ROC Investigator

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

_____________________________________________________________________

FINDINGS OF FACT

This matter is referred to the Office of Administrative Hearings, an independent agency, on the appeal of Kay H. Woods of the December 4, 2018 Residential Contractor’ Recovery Fund [the “Fund”] Notice and Order of Denial of Recovery Fund Claim [hereinafter the “Claim”].

Hearing on this matter was conducted on August 9, 2018 for the purpose of determining whether the denial of the Claim in this case has merit.

The underlying Complaint of Kay Woods versus AC in AZ, in Registrar’s case number 2017-1762 resulted in the license of AC in AZ being revoked effective June 22, 2018 for poor workmanship in violation of A.R.S. §32- 1154(A)(3) and for failure to comply with the Registrar’s Directive and Corrective Work Order in violation of A.R.S. §32- 1154(A)(22).

Kay H. Woods is the owner and occupies the residence located at 10118 West Desert Rock Drive in Sun City, Arizona.

Prior to the presentation of evidence in this case Ms. Woods and Counsel for the Fund, Thomas Raine, Esq. stipulated on the record that there is only one issue presented for determination: Whether Kay H. Woods is ineligible for a payout from the Fund because she has received a prior payout from the Fund statutory of Thirty Thousand Dollars regarding 10118 West Desert Rock Drive in Sun City, Arizona.

Payout from the Fund for an “injured person” is limited by A.R.S. §32-1132:

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. [emphasis added].

And is further limited by the legislature’s additional limiting language of §32-1132(A) which, in part, states “No more than the maximum individual award from the fund shall be made on any individual residence or to any injured person.” [emphasis added].

The Fund does not dispute that Ms. Woods meets the defined requirements of a “person injured” as contemplated by legislature and acknowledges that, but for the Fund’s allegation that Kay H. Woods has received a prior payout of $30,000.00 from the Fund regarding the same property at 10118 West Desert Rock Drive in Sun City, Arizona, Kay H. Woods would otherwise be eligible for Fund payout.

The Fund asserts that Kay W. Woods, although otherwise meeting the definition of an “injured person” under §32-1132(A), she is, as a matter of law, ineligible under the “may be awarded... an amount of not more than thirty thousand dollars” clause of §32-1132(A).

At hearing, Ms. Woods testified first at the hearing. Ms. Woods stated that her Claim with the Fund was based on the instructions provided by the Fund’s Claim Form which did not ask any information about prior payouts or that payout from the fund is limited. Ms. Woods admitted that she had previously been the recipient of a separate Fund Claim from a contractor’s poor work on her home located at 10118 West Desert Rock Drive in Sun City, Arizona. She admits that the total amount awarded on the previous claim was Thirty Thousand Dollars ($30,000.00).

Testifying for the Fund, Jessica Ortiz stated that she was a Recovery Fund Claims Reviewer. She acknowledged that it was she that reviewed the Kay H. Woods Claim in this case. Ms. Ortiz stated that the Claim in this case, numbered 2017A-1762-RFA-REHRG-ROC, was filed on or about August 15, 2018. Ms. Ortiz testified that she was able to establish that Kay H. Woods did qualify as an “person injured” under A.R.S. §32-1132, but although qualified, Ms. Ortiz determined that Kay H. Woods was nonetheless not eligible for a payout. She testified that the Claim Form submitted by Ms. Kay H. Woods represented that there was no prior Fund payout to Ms. Woods. Ms. Ortiz testified that upon research of the Registrar’s records, she was able to establish, to the contrary, that in Registrar’s case number 2012-2889, Kay H. Woods was the Complainant versus Firebird Contracting, LLC. Kay H. Woods. Ms. Woods filed a Recovery Fund claim in 2012-2889. On the 2012-2889 claim, Kay H. Woods was found to be a “person injured” under §32-1132(A)(3) and is entitled to receive payment from [the Fund] ....in the amount of $30,000.00.”

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CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960).

The cardinal rule of statutory construction is to find and give effect to the Legislature’s intent. Mail Boxes, etc., U.S.A. v. Industrial Comm’n of Arizona, 181 Ariz. 119, 121, 888 P.2d 777, 779 (1995). For purposes of statutory interpretation, “each individual provision at issue must be considered in the context of the entire statute of which it is part.” Goddard v. Superior Court, 191 Ariz. 402, 404, 956 P.2d 529, 531 (App. 1998). Although courts generally follow the plain meaning of statutes, courts will avoid constructions that lead to impossible or absurd consequences. Miller v. City of Tucson, 153 Ariz. 380, 381, 736 P.2d 1192, 1193 (App. 1987).

To be qualified to access the Fund, an applicant must meet four qualification criteria set forth at A.R.S. § 32-1131, et seq. See also McMurren v. J.M.C. Builder, Inc., 204 Ariz. 345 (App. 2003). An applicant must meet the definition of a “person injured” set forth at A.R.S. § 32-1131(3):

The applicant must own residential real property;

The property must have had a classification of three under A.R.S. § 42-12003;

The owner of the property must have occupied, or intended to occupy, the property as a residence that is damaged by a residential or dual licensed contractor who has paid for financial protection from the Recovery Fund.

[The above criteria must be met at either the time the contract was executed or at the time the injury accrued; and,

As set forth in A.R.S. § 32-1132(A), an applicant must have contracted with a residential contractor whose license was in good standing at the time of contract execution. This fourth requirement is only applied at the time the contract was executed, not at the time of injury. McMurren v. J.M.C. Builders, Inc., supra.

By a preponderance of the evidence, Kay H. Woods is a “person injured” as set forth in A.R.S. § 32-1132(A).

The Arizona legislature has, since the creation of the Fund in 1981, limited the recovery an injured person may receive from the Fund for damages “sustained from . . . [any] act representation, transaction or conduct.” A.R.S. § 32-1132(A) 1981 Ariz. Sess. Laws ch. 221, § 18. Currently, the limit is $30,000. In 1987, the Legislature added the limitation that “no more than the maximum individual award from the Fund shall be made on any individual residence or to any injured person.” A.R.S. § 32-1132(A); 1987 Ariz. Sess. Laws ch. 297, § 3.

By a preponderance of the evidence, Kay H. Woods has previously received a payout from the fund on May 7, 2014 in case number 2012-2889, in the total amount of $30,000.00.

A.R.S §32-1132(A) limits those eligible for a Fund Payout in that “No more than the maximum individual award from the fund shall be made on any individual residence or to any injured person.”

By a preponderance of the evidence, on May 7, 2014, Kay H. Woods was paid an award by the Fund in the total amount of $30,000.00 for the same property as the property in this current claim located at 10118 West Desert Rock Drive in Sun City, Arizona.

The Notice and Order of Denial of Recovery Fund Claim is supported by a preponderance of the evidence in that although Kay H. Woods is otherwise qualified as an “injured person” to be considered for Fund payout, Kay H. Woods, is ineligible for a Fund Payout, as a matter of law, for the reason that Kay H. Woods has received a previous Fund payout on the same property for which her pending claim is made, the total of which payout was the maximum amount of payout allowed by law of $30,000.00. Kay H. Wood is no longer eligible for a Fund payout for contractor acts or omissions causing damage related to 10118 West Desert Rock Drive in Sun City, Arizona.

RECOMMEND ORDER

IT IS RECOMMENDED that this appeal of the December 4, 2018 Residential Contractor’ Recovery Fund Notice and Order of Denial of Recovery Fund Claim be denied.

FURTHER IT IS RECOMMENDED that December 4, 2018 Residential Contractor’ Recovery Fund Notice and Order of Denial of Recovery Fund Claim be upheld and confirmed.

Done this day, August 23, 2018.

/s/ Randolph D. Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors