ALJDEC decisions subject to certification as final
2017A-3993-RFA-ROC · Registrar of Contractors · 2018-09-17
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Richard Allen Winters,
COMPLAINANT,
v.
Happy Cooling & Heating LLC,
License No: 300073
RESPONDENT.
No. 2017A-3993-RFA-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: August 28, 2018, 1:00 P.M.
APPEARANCES: Jesse Vigil appeared on behalf of Respondent; Assistant Attorney General Thomas C. Raine appeared on behalf of the Arizona Registrar of Contractors. No appearance was made on behalf of Complainant.
ADMINISTRATIVE LAW JUDGE: Roger A. Geddes
_____________________________________________________________________
FINDINGS OF FACT
Background and Procedure
1. Happy Cooling & Heating, LLC (Respondent), is the holder of License Number 300073 issued by the Registrar of Contractors (Registrar).
2. On or about August 3, 2017, Complainants Richard Allen Winters and Terri Lynn Baggin filed a complaint with the Registrar against Respondent for poor work in connection with the installation of an air conditioning unit at Complainants’ residence in Tucson, Arizona. (Registrar’s Exhibit 2).
3. On August 30, 2017, the Registrar issued a Directive to Respondent to remedy deficiencies as described therein on or before September 15, 2017. (Registrar’s Exhibit 4).
4. When the Registrar determined that Respondent had not complied with the Directive, the Registrar issued a Citation and Complaint on September 22, 2017, charging Respondent with a violation of 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 October 19, 2017, finding that Respondent had violated 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 two days and required that Respondent pay a civil penalty of $250.00.
6. On or about April 10, 2018 Complainant Terri Baggin filed a claim to the Residential Contractors’ Recovery Fund (“Recovery Fund”) with the Registrar. (Registrar’s Exhibit 8). The claim indicated that that she sought recovery from the Recovery Fund in the amount of $3,078.00.
7. The claim was supported by three bids to correct Respondent’s work from Goettl Air Conditioning., dated March 21, 2018, Hamstra Heating and Cooling, Inc., dated March 29, 2018, and D & H Air Conditioning & Heating Co., Inc., dated July 17, 2017. (Registrar Ex. 9). The bid amounts were $1,246.00, $1,755.00, and $1,800.00, respectively. The claim was also supported by repair bills paid by Complainants in the amount of $1,323.00. (Registrar’s Exhibit 10). 8. On May 9, 2018, the Registrar issued a Notice of Claim for Administrative Payout. The Registrar determined that Complainant would receive a payout of $2,391.00 from the Recovery Fund. (Registrar’s Exhibit 1).
9. Respondent filed a timely request for hearing on the Registrar’s Notice of Claim for Administrative Payout.
10. 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 August 28, 2018, at 1:00 P.M.
11. At hearing, the Registrar presented the testimony of the Claims Reviewer of the Recovery Fund, Jessica Ortiz. Jesse Vigil appeared and testified on behalf of Respondent. No appearance was made on behalf of Complainant. The Tribunal received and admitted Registrar’s exhibit numbers 1 – 11.
12. 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 eligible for payment from the Recovery Fund. She also stated that she determined that Complainant had paid the full amount of the contract with Respondent.
13. Ms. Ortiz further testified that in order to determine the proper amount from the Recovery Fund, she selected the lowest bid in the amount of $1,246.00 from Goettl Air Conditioning which she stated she determined to be consistent with the scope of work in the Directive. She stated to that amount she added repair costs incurred by Complainant in the amount of $1,145.00 comprised of a $95.00 payment of an invoice on March 15, 2017, another $95.00 payment on an invoice on July 13, 2017, and a $955.00 payment on an invoice on July 14, 2017. (Registrar’s Exhibit 10). She further stated that she disallowed other costs incurred by Complainant in the amount of $99.00 and $79.00 which she determined were for diagnostics and not repairs. (Registrar’s Exhibit 10).
13. Jesse Vigil testified on behalf of Respondent that he closed the business in April 2017 and that apparently as a result, he had not received service of the papers in the underlying case that had likely been sent to Respondent’s old address. He stated that he had only became aware of this subject matter from his bonding company. He stated further that a subcontractor, Mission Heating, did the actual work on this job and that they should be the contractor held responsible to Complainants.
14. Mr. Vigil further testified that the bids obtained by Complainant were not competitive and that Complainant had submitted bids from the three most expensive HVAC companies in Tucson. He also questioned the repair costs incurred by Complainant and argued that those companies doing the repairs should be held accountable by warrantying their repairs.
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 Recovery Fund to which Complainant is 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 workmanship case established that Respondent 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)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(22). The only issue in the hearing on Complainant’s claim to the Recovery Fund is the measure of her damages.
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. . . .
6. None of Respondent’s contentions would support a finding that the Registrar’s calculations of the Recovery Fund award were erroneous or not supported by the evidence. First, this is not the proceeding for Respondent to contest proper service in the underlying case. Moreover, Respondent did not contest service in the instant proceeding.
7. Further, that Respondent used a subcontractor on this particular project does not absolve Respondent from ultimate responsibility to Complainants for the work Respondent contracted to perform. Similarly, the fact that other contractors attempted to repair the system does not absolve Respondent for work that did not meet workmanship standards.
8. Lastly, while Respondent argued that Complainant’s bids were the most expensive possible, it did not contend that they were excessive or improper nor did Respondent present alternative bids.
9. Accordingly, Respondent did not establish that the Registrar erred in proposing a payout in the amount of $2,391.00 from the Recovery Fund to compensate Complainant for her 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 Recovery Fund shall pay $2,391.00 to Complainant Terri Baggin.
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, September 17, 2018.
/s/ Roger Geddes
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
Registrar of Contractors