ALJDEC decisions subject to certification as final
2017A-3514-RFA-ROC · Registrar of Contractors · 2018-03-08
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Robert Tevault
COMPLAINANT
-v-
Sundrop Solar LLC
License No(s). R-11.293661-R
RESPONDENT
No. 2017A-3514-RFA-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: February 20, 2018, 1:00 P.M.
APPEARANCES: Complainants Robert and Brenda Tevault appeared on their own behalf; Mike Bulatovich appeared on behalf of Respondent; Assistant Attorney General Thomas C. Raine appeared on behalf of the Arizona Registrar of Contractors
ADMINISTRATIVE LAW JUDGE: Roger A. Geddes
_____________________________________________________________________
FINDINGS OF FACT
1. Sundrop Solar, LLC (Respondent), is the holder of License Number R-11.293661-R issued by the Registrar of Contractors (Registrar).
2. On or about July 7, 2017, Complainants Robert Tevault filed a complaint with the Registrar against Respondent for abandonment with regard to the installation of solar panels at Complainant’s residence in Waddell, Arizona. (Registrar’s Exhibit 2). According to the complaint, Complainant had entered into a contract with Respondent on October 18, 2016, for the installation of the solar panels for the contract amount of $30,000.00 which Complainants had financed.
3. On August 3, 2017, the Registrar issued a Directive to Respondent to complete the solar panel project as per the agreement of the parties. (Registrar’s Exhibit 5).
4. When Respondent performed no further work, the Registrar issued a Citation and Complaint on August 25, 2017, charging Respondent with a violation of A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(3), and A.R.S. § 32-1154(A)(22). (Registrar’s Exhibit 6).
5. Due to Respondent’s failure to file a timely Answer, the Registrar issued a Final Administrative Decision and Order on September 20, 2017, finding that Respondent had violated A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(3), and A.R.S. § 32-1154(A)(22) as charged in the Complaint,. (Registrar’s Exhibit 7). Pursuant to the Order, the Registrar suspended Respondent’s license for a period of ten days and required that Respondent pay a civil penalty of $500.00.
6. On or about October 5, 2017 Complainants filed a claim to the Residential Contractors’ Recovery Fund (“Recovery Fund”) with the Registrar. (Registrar’s Exhibit 8). The claim form indicated that that they sought recovery from the fund in the amount of $30,000.00. Complainants also indicated they had not received any payment from Respondent’s bond company. 7. On November 24, 2017, the Registrar issued a Notice of Claim for Administrative Payout. The Registrar determined that Complainants would receive a payout of $30,000.00 from the Recovery Fund. (Registrar’s Exhibit 1).
8. Respondent filed a timely request for hearing on the Registrar’s Notice of Claim for Administrative Payout.
9. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing regarding the amount and/or propriety of the payment from the Recovery Fund. A hearing was held on February 20, 2018, at 1:00 P.M.
10. At hearing, the Registrar presented the testimony of the Claims Reviewer of the Recovery Fund, Marlee McCormick, and submitted 11 exhibits. Mike Bulatovich, General Manager of Respondent, appeared and testified on behalf of Respondent. Complainants appeared and testified on their own behalf.
11. Marlee McCormick testified on behalf of the Registrar that she had personally reviewed Complainant’s claim for payment from the Recovery Fund. Ms. McCormick said that she determined that Complainants were eligible for payment from the Fund for the amount they paid Respondent because no work was performed by Respondent at the job site.
12. Ms. McCormick further 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. Ms. McCormick stated that she reviewed the entire file in this matter, including documents reflecting ownership of the residence, correspondence from Respondent’s bonding company, and loan documents relating to payments to Respondent. Ms. McCormick determined that a proper payout from the Recovery Fund was the amount Complainants financed through Respondent in the total sum of $30,000.00, which Complainants became obligated to pay.
13. Mike Bulatovich on behalf of Respondent testified that Respondent experienced difficult economic times and fully intended to make Complainant whole when it could. He testified that although Respondent did no work at Complainant’s residence, Respondent did commence design work in-house of the solar system, work which he valued in excess of $10,000.00. He further testified that Respondent coordinated the financing for Complainant and that Respondent made the first four payments on Complainants’ loan on behalf of Complainants.
14. Documentation submitted by the Registrar substantiates that $413.66 was paid on one of Complainants’ loans, of which $350.35 was applied to the reduction of principal. (Registrar’s Exhibit 10). The documentation further reflects that the interest rate on Complainant’s loan is 16.47% and the loan start date was October 20, 2016.
15. Complainant Robert Tevault testified that no work had been performed or no materials delivered by Respondent at his residence. He further stated that he financed the amount of $30,000.00, and the funds went directly to Respondent.
16 Complainant Brenda Tevault testified that Respondent did in fact make four payments on behalf of Complainants on the loans for the project.
CONCLUSIONS OF LAW
1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.
2. After the Registrar has determined 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. See Arizona Administrative Code Rule 2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372 (1952).
3. “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). 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.” BLACK’S LAW DICTIONARY at p. 1220 (8th ed. 1999).
4. The Registrar’s final decision in the underlying abandonment and workmanship case established that Respondent abandoned the project and did not comply with the Registrar’s workmanship standards and that Complainants potentially were persons who had been injured by Respondent’s violation of A.R.S. § 32-1154(A)(1) and A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. The only issue in the hearing on Complainants’ claim to the Fund is the measure of their damages.
5. 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. . . . If the claimant has paid a deposit or down payment and no actual work is performed or materials are delivered, the award of actual damages shall not exceed the exact dollar amount of the deposit or down payment plus interest at the rate of ten per cent a year from the date the deposit or down payment is made or not more than thirty thousand dollars, whichever is less.
6. Respondent took responsibility for its actions and did not expressly contest the amount of the proposed payout. Respondent did indicate that Respondent performed design work in-house for the project and claimed a value for such work in excess of $10,000.00. However, Respondent did not argue that the proposed payout should be reduced by that amount or that it otherwise affected the calculation of Complainants’ actual damages. Regardless, it is undisputed that no work was performed at or materials delivered to Complainants’ residence. Further, Respondent failed to present sufficient evidence to establish the extent or value of the claimed in-house work. Thus, the amount Complainants paid and/or financed is the correct measure of their actual damages caused by Respondent’s violations.
7. Respondent further indicated that Respondent had made the first four payments on Complainants’ loans for the $30,000.00 project; the documentation submitted by the Registrar reflects that the principal balance on the loans had been reduced by $350.35 as a result. However, Respondent again did not contend that the proposed payout should be reduced by that amount or that it otherwise affected the calculation of Complainants’ actual damages. Regardless, in a case such as this when payment is made and no actual work is performed or materials delivered, the award of actual damages includes interest at the rate of ten per cent a year from the date of the payment. A.R.S. § 32-1132(A). With the loan inception date of October 20, 2016, interest at a rate of ten per cent accruing on the amount Complainants paid Respondent far exceeds the $350.35 reduction to principal resulting from Respondent’s payments on behalf of Complainants. Therefore, whatever credit Respondent might have received for its loan payments on behalf of Complainants is offset by the accruing interest on the amounts Complainants paid Respondent.
8. Accordingly, Respondent did not establish that the Registrar erred in proposing a payout in the amount of $30,000.00 from the Fund to compensate Complainants for the actual 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 Complainants Robert and Brenda Tevault.
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, March 8, 2018.
/s/ Roger Geddes
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
Registrar of Contractors