ALJDEC decisions subject to certification as final

2017A-4471-RFA-ROC · Registrar of Contractors · 2020-05-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

William Michael Mitchell,

COMPLAINANT

Adams Construction and Consulting LLC,

ROC License: ROC 305387,

RESPONDENT

No. 2017A-4471-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 1, 2020.

APPEARANCES: William Michael Mitchell, Complainant, appeared telephonically on his own behalf. Sara Asta, Assistant Attorney General, appeared telephonically on behalf of the Registrar of Contractors (Registrar). Kenneth Welsh, attorney, appeared telephonically on behalf of Adams Construction and Consulting LLC, Respondent.

ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera

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Respondent challenged a proposed payout by the Residential Contractors’ Recovery Fund (the Fund). The Fund issued notice that it intended to make a payout to Complainant for the amount of $30,000.00. Complainant requested $30,000.00. Based upon the record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order for payout in the amount of $30,000.00.

FINDINGS OF FACT

Respondent was the holder of License No. 305387 issued by the Registrar.

On or about February 22, 2017, Complainant entered into a contract with Respondent to construct a back patio extension at his residence located at 8611 East Santa Catalina Drive, Scottsdale, AZ 85255. The total contract amount was $47,000.00. Complainant paid Respondent $31,020.00. Respondent began working on February 22, 2017, and never completed the job.

On or about August 30, 2017, Complainant filed a Complaint with the Registrar against Respondent alleging poor workmanship by Respondent.

On or about September 28, 2017, the Registrar issued a Directive From the Registrar (Directive) to Respondent notifying it that the Registrar substantiated workmanship issues and directed Respondent to remedy the issues by appropriate means. The Directive included the following items:

(1) Provide Engineer’s letter showing approval of trusses, hangers, and beams.

(2) Provide Engineer’s letter stating there is no structural damage to the pool.

(3) Complete project per approved plans, specifications, contract, and written change orders.

(4) Have all required building department inspection completed.

(5) Complete work in a professional and workmanlike manner.

On or about March 28, 2018, Respondent’s license was suspended for a period of five (5) days after a default finding of departure of plans or building codes without the consent of the owner in accordance with the plans, poor workmanship, failure to comply with the contract, and failure to comply with the Directive.

On or about December 28, 2018, Complainant made a claim to the Fund in which he indicated that the lowest bid he obtained to repair the project was $61,596.02. He anticipated receiving $30,000.00 from the Fund even though Complainant sustained damages and costs that totaled $83,347.87.

Complainant submitted the Proposal and Acceptance letter from Apollo Structural Engineers, LLC (Apollo). On or about November 2, 2017, Complainant hired Apollo to repair and modify some of Respondent’s incomplete work. Complainant paid Apollo $800.00.

Complainant obtained three bids to repair the remainder of Respondent’s incomplete work. The following were the bid amounts:

Reef Builders (Reef) quoted $57,075.65.

Builders Investment Group LLC quoted $97,990.00.

Estancia Development, Inc. quoted $90,989.64.

The Fund determined that Complainant was eligible for payout in the amount of $30,000.00.

HEARING EVIDENCE

At the hearing, the Registrar introduced the testimony of Shaquira Adebule, legal assistant and reviewer of recovery fund claims. Ms. Adebule conducted a thorough investigation and took into consideration Complainant’s original Complaint, the Jobsite Inspection Notes, the Directive, the Citation, copies of Complainant’s checks, the Administrative Law Judge’s Decision, the Fund Complaint, and all other documents that pertained to costs incurred by Complainant to repair Respondent’s incomplete work. Ms. Adebule verified that this was Complainant’s primary residence. Ms. Adebule also learned that Respondent’s bond company denied Complainant’s claim. Ms. Adebule determined that even though Complainant incurred more damages than the maximum allowable limit, Complainant was entitled to a payout amount of $30,000.00.

At the hearing, Complainant testified that he agreed with the $30,000.00 even though he incurred more damages than that amount. Complainant suffered multiple repercussions as a result of Respondent’s incomplete work.

At the hearing, Mr. Welsh introduced evidence on behalf of Respondent. The evidence presented showed that Respondent provided services and materials that were paid for by Respondent. Respondent paid a total of $20,854.66. Mr. Welsh requested that the amount Respondent paid out of pocket be deducted from the Fund’s proposed payout of $30,000.00. Respondent’s representative did not appear at the hearing.

CONCLUSIONS OF LAW

The burden of proof at an administrative hearing is generally upon the person who brings the action. Utah Construction Company v. Berg et al., 68 Ariz. 285, 205 P.2d 367 (1949); Arizona Administrative Code (A.A.C.) R2-19-119(B). Further, the standard of proof at hearing is by preponderance of the evidence. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A). The Notice of Claim for Administrative Payout states that Complainant bears the burden of proof to show entitlement to any amount other than that in the Notice.

Complainant is eligible for an award from the Fund pursuant to Arizona Revised Statutes (A.R.S.) § 32-1132(B)(1).

According to A.R.S. § 32-1132.01(B), an award from the Fund is limited to “actual damages suffered by the claimant as a direct result of a contractor’s violation . . .,” not to exceed the cost of repair or replacement. “Actual damages” are those that will put the injured party in the position in which he was before he was injured. United States Fidelity & Guaranty Co. v. Davis, 3 Ariz. App. 259, 263, 413 P.2d 590, 594 (1966).

Under the facts and circumstances of this case, the Fund is empowered to determine and award, based on actual damages, an appropriate payment to Complainant pursuant to A.R.S. § 32-1132.01.

The weight of the evidence established that Complainant was entitled to the maximum allowable amount of $30,000.00. The Registrar established that Complainant incurred damages that exceeded that amount and that Complainant was eligible to receive the maximum allowable amount. Complainant did not dispute the amount.

Respondent challenged the Fund payout amount. Respondent submitted exhibits that showed amounts paid by Respondent. There was insufficient evidence to show that the amounts paid were specific to Complainant’s home. Respondent’s representative did not appear at the hearing to testify about the validity of the exhibits. Thus, Respondent failed to establish by a preponderance of the evidence that any amount should be deducted from the $30,000.00.

The evidence of record supports an award to Complainant in the amount of $30,000.00, all of which shall be chargeable against Respondent and persons on the license as set forth in A.R.S. § 32-1139(B).

RECOMMENDED ORDER

In view of the foregoing,

IT IS RECOMMENDED that the Registrar of Contractors make payment from the Residential Contractors’ Recovery Fund to Complainant in the amount of $30,000.00.

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 Decision will be 40 days from the date of that certification.

Done this day, May 18, 2020.

/s/ Antara Nath Rivera

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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