ALJDEC decisions subject to certification as final

2017A-4013-RFA-ROC · Registrar of Contractors · 2018-02-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Christopher Wayne Allen,

COMPLAINANT,

v.

Trinity Turf & Landscapes, LLC,

License No: 264310

RESPONDENT.

No. 2017A-4013-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 24, 2018, at 8:30 a.m.

APPEARANCES: Christopher Wayne Allen (“Complainant”); Michel Raine (Attorney for Registrar of Contractors “Registrar” or “ROC”); and Marlee McCormick (“Ms. McCormick” witness for the Registrar).

ADMINISTRATIVE LAW JUDGE: Linda Marie Brown

_____________________________________________________________________

FINDINGS OF FACT

On or about May 22, 2017, Christopher Wayne Allen (“Mr. Allen” or “Complainant”) entered into a residential construction contract with Trinity Turf & Landscapes, LLC (“Respondent”) to perform landscaping work at its residence located at 4134 East Gable Avenue, Mesa, Arizona.

On August 4, 2017, Complainant filed a complaint with the Registrar against Respondent alleging abandonment. Complainant stated the contract price was $15,831.61, and he paid Respondent $11,873.71, as follows: Check No. 105, dated 05/24/2017, payable to Mike Browning, in the amount of $7,915.81; and Check No. 108, dated 06/21/2017, payable to Trinity Turf & Landscapes, LLC, in the amount of $3,957.90.

The complaint was assigned to Investigator Russell Reed. Investigator Reed conducted a Jobsite Inspection on August 16, 2017, and substantiated eleven (11) complained of issues. Investigator Reed issued a Directive to Respondent on this same day setting forth the following: “complete project as per contract and any written change orders.” The completion date was August 31, 2017, by 5:00 p.m.

On or about September 9, 2017, a citation was issued and sent certified mail to the Respondent’s address of record charging it with abandonment, poor workmanship, and failing to take corrective action after a written directive was issued by the Registrar. Respondent failed to timely respond to the citation or defend its license which resulted in a revocation of Respondent’s license No. 264310 for violations of A.R.S. 31-1154(A)(1); A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108; and A.R.S. § 32-1154(A)(22).

On or about November 14, 2017, Complainant filed a claim with the Residential Contractors’ Recovery Fund seeking an award of the costs to complete the landscaping at Complainant’s residence.

Upon review of the documents in the file by the Recovery Fund reviewer, the Registrar issued a Notice and Order of Denial of Recovery Fund Claim, as follows:

The fourth requirement, as set forth in A.R.S. § 32-1132(A) states, an applicant must have contracted with a residential contractor whose license was in good standing at the time of execution. In this case, the Applicant failed to meet the fourth requirement for eligibility to the Recovery Fund.

Complainant filed a timely request for hearing upon receipt of the Registrar’s Notice and Order of Denial of Recovery Fund Claim.

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing regarding the ineligibility for payment from the Recovery Fund.

At hearing, Mr. Allen testified that he reasonably relied on the Arizona Registrar of Contractor’s public website that reflected a finite suspension from 05/16/2017 to 05/21/2017, as highlighted in his Exhibit C-1. The Registrar presented testimony of the Recovery Fund reviewer, Marlee McCormick (“Ms. McCormick”), and admitted five (5) exhibits into evidence.

Ms. McCormick 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 and the Fund had reviewed the entire file in this matter and determined that Complainant was ineligible because the Respondent’s license was suspended during the time of contract execution and the time work was performed.

Ms. McCormick’s testimony is found to be credible.

Mr. Allen testified he should be eligible to access the Recovery Fund. Complainant provided screen shots of the Registrar’s public website in his assertion that he reasonably relied on the viewable contents that the Respondent’s license was in good standing at the time of contracting.

Mr. Allen testified that he telephoned the Registrar prior to contracting and was told the Respondent’s license was in good standing. No evidence was presented to show any phone records, or parties called as witnesses to affirm that Mr. Allen received assurances from the Registrar that the Respondent’s license was in good standing prior to or at the time of contracting.

At hearing, it was agreed to by the parties, and at the request of the Administrative Law Judge, to submit (3) additional exhibits. The State’s post-hearing documents labeled Exhibit S-6 included (1) Respondent licensee’s administrative suspension effective February 21, 2017, due to lack of bond; (2) a copy of the Final Administrative Decision and Order (2017-564); and (3) information learned as to various acronyms displayed on the Registrar’s public website.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Mr. Allen bears the burden of establishing, by a preponderance of the evidence, both (1) eligibility and (2) compensable damages pursuant to A.R.S. § 32-1131, et seq.

Under A.R.S. § 32-1132(A), residential property owners may not recover damages caused by contractors “whose license was in an inactive status, expired, canceled, revoked or suspended at the time of the contract.”

This Tribunal finds that Respondent’s license was suspended for lack of bond when it entered into the contract and performed work for Mr. Allen as evidenced by the State’s Post-Hearing Submittal of a Notice of Cancellation from the bond company, RLI, dated February 17, 2017, and directly addressed to the Registrar of Contractors. This letter was stamped received by the Registrar on February 21, 2017.

This Tribunal also finds Respondent’s license suspension is further supported by Complainant’s Exhibit C-1, in which the comments section noted, [Suspended lack of bond 02/21/2017], immediately followed by [suspend til compliance 04/03/2017].

Mr. Allen argued that the Registrar should be estopped from denying his claim because the Registrar’s staff did not tell him that Respondent’s license was suspended for lack of bond when Mr. Allen called to inquire about the license status. “To assert equitable estoppel against the State, a party first must show that the State performed an affirmative act, inconsistent with a claim later relied upon, with ‘some considerable degree of formalism under the circumstances. . . . It is rare that satisfactory evidence of an absolute, unequivocal, and formal state action will be found unless it is in writing.’”

The Registrar owes a fiduciary duty to preserve the assets of the Fund and to ensure that payouts are not made to claimants who do not meet all statutory requirements for eligibility, even if they otherwise meet the definition of an injured person under A.R.S. § 32-1131(3). Under well-established case law, the Registrar’s unnamed or unsubstantiated staff member’s oral statement to Mr. Allen that Respondent had a valid license does not estop the Registrar from finding that Mr. Allen is ineligible for a Fund payout nor does it overcome the plain language of A.R.S. § 32-1132(A) that requires the contractor’s license to have been in good standing at the times it entered and performed the contract.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the Registrar affirm the Order of Denial of Recovery Fund and that Complainant’s claim for payment for damages from the Fund be denied.

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 forty (40) days from the date of that certification.

Done this day, February 13, 2018.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors