ALJDEC decisions subject to certification as final

2017A-3790-RFA-ROC · Registrar of Contractors · 2018-04-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Holly Latham,

COMPLAINANT,

v.

dba,

Modern Closets,

License No: 194884

RESPONDENT

No. 2017A-3790-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 28, 2018, 8:30 A.M.

APPEARANCES: Complainant Holly Latham appeared on her own behalf; the Arizona Registrar of Contractors was represented by Assistant Attorney General Thomas Raine; no appearance was made on behalf of Respondent

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

1. Erik Lee Marshall, dba, Modern Closets (Respondent), is the holder of License Number 194884 issued by the Registrar of Contractors (Registrar).

2. On or about February 27, 2017, Holly Latham (Complainant) entered into contract with Respondent for cabinet work to be performed at her residence in Chandler, Arizona.

3. On or about July 24, 2017. Complainant filed a Complaint against Respondent alleging poor workmanship. (Registrar Exhibit 1). Thereafter, a Directive, dated September 6, 2017, was issued by the Registrar requiring corrective work to be undertaken by Respondent by September 25, 2017. (Registrar Exhibit 3). When all Directive items were not timely corrected, a Citation was issued to Respondent, dated October 13, 2017, for the alleged violations of A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(3), A.R.S. § 32-1154(A)(8), A.R.S. § 32-1154(A)(12), and A.R.S. § 32-1154(A)(22). (Registrar Exhibit 4).

4. Due to Respondent’s failure to file a timely Answer, the Registrar issued a Final Administrative Decision and Order on November 7, 2017, finding that Respondent had violated A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(3), A.R.S. § 32-1154(A)(8), A.R.S. § 32-1154(A)(12), and A.R.S. § 32-1154(A)(22) as charged in the Complaint. (Registrar’s Exhibit 5). Pursuant to the Order, Respondent’s License Number 194884 was revoked.

5. On or about August 17, 2017, Complainant filed claim 2017-3790 against license number 194884 with the Residential Contractors’ Recovery Fund (“Recovery Fund”) seeking the amount of $19,110.58.00 (Registrar’s Exhibit 6).

6. Claims Reviewer of the Recovery Fund Jessica Ortiz reviewed all documentation in claim 2017-3790. In Ms. Ortiz’s review, she noted that at the time Complainant entered into the subject contract with Respondent, Respondent’s License Number 194884 had been suspended as of June 7, 2015, due to the lack of posting of a bond. (Registrar’s Exhibit 7).

7. On January 25, 2018, the Registrar issued a Notice and Order of Recovery Fund Ineligibility. (Registrar’s Exhibit 8).

8. Complainant filed a timely request for hearing on the Registrar’s Notice of Claim for Administrative Payout. (Registrar’s Exhibit 9).

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 March 28, 2018, at 8:30 A.M.

10. At hearing, Complainant testified on her own behalf. The Registrar presented the testimony of Jessica Ortiz. The Tribunal received and admitted the Respondent’s exhibit letters A - B and the Registrar’s exhibit numbers 1 - 9.

11. Jessica Ortiz testified on behalf of the Registrar that she had personally reviewed Complainant’s claim for payment from the Recovery Fund. Ms. Ortiz said that she determined that Complainant was not eligible because Respondent’s license was suspended at the time Complainant entered into the subject contract with Respondent, February 27, 2017.

12. Complainant testified that Respondent had represented to her that his license was in good standing at the time she entered into a contract with him and that she had contacted the Register who confirmed the status of his license. She further testified that the Registrar’s web site did not reflect Respondent’s suspension status when she checked the site in February 2017.

CONCLUSIONS OF LAW

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

2. In order to obtain an award from the Recovery Fund, an applicant must provide proof to establish by a preponderance of evidence that they are eligible pursuant to A.R.S. § 32-1131, et seq. Further, if eligible, an applicant must establish by a preponderance of evidence that damages sought are within the limitations of compensability as set forth in A.R.S. § 32-1132(A). 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 did not comply with the Registrar’s Directive and that Complainant potentially was a person who had been injured by Respondent’s violation of A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(3), A.R.S. § 32-1154(A)(8), A.R.S. § 32-1154(A)(12), and A.R.S. § 32-1154(A)(22). As Complainant has potentially established that she is a person injured by Respondent’s violations, the issue remains whether Complainant has complied with the other criteria to be eligible to access the Recovery Fund.

5. A.R.S. § 32-1132(A) describes the measure of damages that an eligible homeowner is entitled to recover from the Recovery 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. . . . An award from the fund shall not be available to persons injured by an act, representation, transaction or conduct of a residential contractor who was not licensed pursuant to this chapter or whose license was in an inactive status, expired, cancelled, revoked, suspended or not issued at the time of the contract. No more than the maximum individual award from the fund shall be made on any individual residence or to any injured person....

(emphasis added).

6. An award from the Recovery Fund is subject to the limitation that an award is not available to persons if the contractor’s license was suspended at the time of the contract. The Registrar established that Respondent’s contractor’s license had been suspended since June 7, 2015, due to the lack of posting of a bond. Therefore, an award from the Recovery Fund is not available to Complainant due to Respondent’s license status on February 27, 2017, the date on which Complainant entered into the subject contract with Respondent.

7. The Tribunal can certainly sympathize with Complainant’s plight, particularly in light of the fact that Complainant may have been diligent in confirming Respondent’s license status before entering into a contract with him. However, even if Respondent’s license status may have been incorrectly confirmed or incorrectly reflected, such does not overcome the statutory criteria for eligibility for an award from the Recovery Fund.

8. Accordingly, the Registrar did not err in denying a payout to Complainant from the Recovery Fund.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that on the effective date of the final order in this matter, that Complainant’s claim to the Residential Contractors’ Recovery Fund be denied with no payment to Complainant from the Recovery Fund.

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, April 17, 2018.

/s/ Roger Geddes

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors