ALJDEC decisions subject to certification as final

2017A-4429-RFA-ROC · Registrar of Contractors · 2018-08-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jay Gold,

PLAINTIFF,

v.

R Isaac Real Estate and Development LLC

License No: 297138

DEFENDANT.

No. 2017A-4429-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 22, 2018.

APPEARANCES: Jay Gold, Plaintiff; Jessica Ortiz, Registrar’s Fund Reviewer,

Asst. ROC Atty., Thomas Raine, Esq., counsel for the Registrar

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

_____________________________________________________________________

FINDINGS OF FACT

On April 21, 2015, the Arizona Registrar of Contractors (the “Registrar”) issued R Isaac Real Estate and Development LLC, License Number 297138, a Class KB-2 dual license for general contracting to construct, alter, and repair small commercial and residential structures (“Isaac”). Isaac’s license was suspended for lack of bond from May 1, 2017 through and including May 25, 2017

THE WORKMANSHIP COMPLAINT (CASE NO. 2017 A-4429-CHC-ROC)

On or about May 23, 2017, Plaintiff [Complainant below] Jay Gold (“Gold”) signed a contract with Isaac for a renovation project. The total cost of the project was $28,957.81 and Mr. Gold paid a total of $17,000.00 toward the project.

On or about August 28, 2017, the Registrar received a Complaint against Isaac from Mr. Gold alleging abandonment with respect to the project. The Registrar assigned the complaint to Investigator Steve Klein.

After a jobsite inspection, Investigator Klein issued a written directive to Isaac that provided as follows:

After investigation, the Registrar has substantiated that your· work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a Citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. Failure to comply with this Directive may also be treated as an aggravating factor should the Registrar pursue discipline of your license. You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on 10/13/17.

You are hereby directed to remedy the following violations appropriate means:

Respondent shall complete project per original contract agreement, properly executed change orders, verbal agreements, and local building codes and manufacturers installation instructions.

Following the issuance of the Written Directive, Isaac made no attempt to contact Mr. Gold regarding the work to be done. After the deadline in the directive expired, Investigator Klein was notified no corrective work had been performed.

The Registrar issued a citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(1 ); A.A.C. R4-9-1, and thereby of A.R.S. § 32- 1154(A)(3); and A.R.S. § 32-11 54(A)(22). The Registrar referred the matter to the Office of Administrative Hearings (OAH), an independent state agency, for an evidentiary hearing.

The hearing was held on December 29, 2017. Isaac did not appear and therefore did not present any evidence to defend its license.

Investigator Klein testified that as of December 27, 2017, no additional work had been completed on the project.

Mr. Gold reported that after paying Isaac $14,000.00 to begin work on the project, Isaac sent him information indicating the project was progressing. Mr. Gold stated that he paid Isaac an additional $3,000.00 when Isaac indicated the windows were ready to be ordered.

The presiding Administrative Law Judge, Hon. Tammy L. Eigenheer, found the evidence established that Respondent abandoned the contract without legal excuse for the abandonment in violation of A.R.S. § 32-1154(A)(1 ). Judge Eigenheer, also found that the evidence established that Isaac did not attempt to compete the project following the written directive from the Registrar being issued. Therefore, Mr. Gold established that Isaac had failed to take appropriate corrective action following a written directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).

Judge Eigenheer recommended the Registrar revoke Isaac’s License Number 297138 and recommended Isaac be required to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(E).

The Registrar accepted the Recommendations of Judge Eigenheer. On February 9, 2018 which, by the Registrar’s Order, became effective on March 21, 2018. With the lapse of time, the Order has become final.

THE CLAIM TO THE RESIDENTIAL CONTRACTORS’ RECOVERY FUND

On or about March 19, 2018, the Registrar received Mr. Gold’s Claim in the amount of $30,000.00 to the Residential Contractors’ Recovery Fund (“the Fund”).

The Registrar’s Fund Claims Reviewer, Registrar’s attorney assistant Jessica Ortiz, analyzed the Gold Claim to the Fund. Ms. Ortiz determined that on the date of the Gold contract with Isaac, the Isaac License Number 297138 was under administrative suspension for lack of bond and also determined that Mr. Gold was not the owner of the property involved in the claim nor did the “owner” of the property actually reside in or intended to reside in the subject property. On April 5, 2018, the Registrar issued a Notice and Order of Recovery Fund Ineligibility.

HEARING EVIDENCE

Mr. Gold timely requested a hearing on the Notice and Order of Recovery Fund Ineligibility. The Registrar referred the matter to the OAH for an evidentiary hearing.

A Recovery Fund Payout Hearing was held on August 22, 2018.

At the hearing, the Registrar presented the testimony of Claims Reviewer Jessica Ortiz. Ms. Ortiz testified that a search of the Registrar’s records reviled that Isaac’s license 297138 was suspended for lack of bond from May 1, 2017 through and including May 25, 2017. Per review of the documents submitted by Mr. Gold along with his claim for fund recovery, she determined that the contract between Mr. Gold and Isaac was executed on May 23, 2017. Ms. Ortiz concluded that the Isaac license was suspended at the time of the contract thereby excluding Mr. Gold from eligibility for payout from the Fund Ms. Ortiz also testified that her search of the chain of title to the property listed in the Fund Claim Form as 1101 West Northern Avenue in Phoenix, Arizona indicated that Mr. Gold has never owned this property. To the contrary, Fund Exhibit 3 admitted into evidence at hearing demonstrated that since December 31, 2017, the subject realty was owned by “The Arlene Gold Irrevocable Living Trust, dated December 12, 2007.” Ms. Ortiz thus concluded that Mr. Gold was not a “person injured” and was therefore not eligible for recovery from the Fund.

Mr. Gold testified that on the date of the signing of the contract with Isaac, he believed Isaac was licensed. Mr. Gold did not produce evidence or argument to dispute the Registrar’s showing that Mr. Gold did not own the realty from which the Claim arose. Mr. Gold stated that the Warranty Deed reflected in Fund Exhibit 3 was executed while his late mother was still living and that the intention was for his late mother to live in the home for the remainder of her life. He testified that he was and has always been the Trustee of his mother’s irrevocable trust. He said he had intended at some time to occupy the subject realty, but has never done so. Mr. Gold admitted that the Arlene Gold Irrevocable Living Trust owned the realty from which the claim arose. But, he thought that since he had power as Trustee to alienate the trust property, that he was for all intents and purposes the actual owner of the trust property.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Mr. Gold bears the burden of proof to establish the amount that he is entitled to recover from the Fund by a preponderance of the evidence.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

A.R.S. § 32-1132 provides the method of calculating the amount that a homeowner is entitled to recover from the Fund for a contractor’s statutory violations. This statute limits recovery from the Fund:

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.

“A cardinal rule of statutory interpretation is to give full effect to each statutory word or phrase so that no part is rendered void, superfluous, contradictory or insignificant.”

By a preponderance of the evidence, the Registrar has proven that Mr. Gold is not eligible to recover any sum from the Residential Contractors Recovery Fund because at the time of the contract between Gold and Isaac, the license 297138 held by Isaac was suspended.

By a preponderance of the evidence, the owner of 1101 West Northern Avenue in Phoenix, Arizona is “The Arlene Gold Irrevocable Living Trust, dated December 12, 2007”. Thus, the Registrar has proven by a preponderance of the evidence that Mr. Gold is not eligible to recover any sum from the Residential Contractors Recovery Fund because he is not a “person injured” as defined by A.R.S.§32-1131.

RECOMMENDED ORDER

In view of the foregoing,

IT IS RECOMMENDED that the Registrar’s April 5, 2018, Notice and Order of Recovery Fund Ineligibility should be upheld.

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 40 days from the date of that certification.

/s/Randolph D. Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors