ALJDEC decisions subject to certification as final

2017A-5527-RFA-LS-ROC · Registrar of Contractors · 2021-01-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Frederick William Merkle,

COMPLAINANT

R G B Construction Inc.,

License No. ROC 119983,

RESPONDENT

No. 2017A-5527-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: January 11, 2021

APPEARANCES: Frederick William Merkle on his own behalf; Robert Bowser for Respondent; Sarah A. Asta, Esq. for the Registrar of Contractors

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On December 2, 2020 the Registrar of Contractors (“ROC”) issued a Notice of Recovery Fund Hearing setting the above captioned matter for hearing at the Office of Administrative Hearings on January 11, 2021.

The issue is whether Frederick William Merkle is eligible for a payout from the residential contractors’ recovery fund. ROC determined that Mr. Merkle was not eligible because his property was not a class 6 or class 3 at the pertinent times.

Respondent R G B Construction Inc. holds license number 119983 issued by ROC.

On December 17, 2014, Mr. Merkle and Respondent entered a contract in which with Respondent was to construct a home for Mr. Merkle.

On or about November 2, 2017, Mr. Merkle filed with ROC a complaint against Respondent alleging poor workmanship and a failure to follow the plans and specifications.

ROC issued to Respondent a citation and an evidentiary hearing and rehearing were conducted. In an Administrative Law Judge (ALJ) Decision dated July 24, 2018, the ALJ concluded that Respondent had violated Ariz. Rev. Stat. sections 32-1154(A)(3), (A)(12) and (A)(22).

On August 24, 2018, ROC issued a Final Administrative Decision and Order through which it accepted the ALJ’s Decision and suspended Respondent’s license for four days.

Effective on August 27, 2019, many of ROC’s statutes, including those related to the recovery fund, were modified.

On September 9, 2020, Mr. Merkle submitted to ROC a Recovery Fund Claim requesting a payout of $30,000.00.

Mr. Merkle’s claim was submitted on the form ROC began using after the 2019 changes to the recovery fund statutes became effective. As such, that form did not include the section requiring the claimant to provide the county assessor’s property classification for his property in the years that the contract was in effect.

After ROC received Mr. Merkle’s claim, ROC’s Katelyn Rolling accessed the assessor’s website to obtain the property classification, but the parcel information went back only to 2017.

In 2017 and 2018, Mr. Merkle’s property was a class 2, and for the years of 2019, 2020 and 2021, it was a class 4.1.

On October 22, 2020, Mr. Merkle informed ROC that he had made a request to have the county assessor retroactively reclassify his property from class 2 to class 3 for the years 2014 to 2018.

Through a Notice and Order of Recovery Fund Ineligibility dated October 14, 2020, ROC informed Mr. Merkle that (1) he was not eligible for a payout from the recovery fund because his property was not either a class 3 real residential property pursuant to Ariz. Rev. Stat. section 42-12003 or a class 6 noncommercial historic property pursuant to section 42-12101, and (2) even if he was eligible, his claim would be denied for a lack of damages because he owed Respondent a balance greater than his cost to repair.

Mr. Merkle requested a hearing, which led to this matter being conducted.

At the hearing, ROC’s Ms. Rolling acknowledged that ROC’s Notice and Order of Recovery Fund Ineligibility had an error in that it provided an erroneous address for Mr. Merkle’s property. This error did not change her analysis of Mr. Merkle’s claim because that analysis was conducted based on accurate information, including information from the assessor’s website.

Mr. Merkle testified as to his opinion that ROC was being too rigid in requiring the property to be a class 3, considering that the house was under construction during the time at issue.

CONCLUSIONS OF LAW

Because Mr. Merkle filed a claim asserting that he is entitled to a payout from the recovery fund, he bears the burden of proof show that he meets the eligibility requirements for a payout. Ariz. Admin. Code § R2-19-119(B).

The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119(A).

A preponderance of the evidence is:

The 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 1373 (10th ed. 2014).

Effective on August 27, 2019, the ROC’s statutes, including those related to the recovery fund, were modified. In this matter, because Mr. Merkle’s injury occurred before that date, the statutes that were in effect prior to August 27, 2019 must be applied. See Aranda v. Industrial Com'n of Arizona, 198 Ariz. 467, 11 P.3d 1006 (Ariz. 2000); McMurren v. JMC Builders, Inc., 204 Ariz. 345; 63 P.3d 1082 (App. 2003).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

Prior to August 27, 2019, to be eligible for a payout from the recovery fund, a claimant had to be an owner of residential real property that was either a noncommercial historic property (class 6) as defined in Ariz. Rev. Stat. section 42-12101 or a class 3 property under section 42-12003 at the time his damages accrued. See Ariz. Rev. Stat. § 32-1131 (effective until August 27, 2019).

The preponderance of the evidence shows that Mr. Merkle’s property was not in class 6 or in class 3 at the time his damages accrued. Consequently, Mr. Merkle has not shown by a preponderance of the evidence that he is eligible for a payout from the recovery fund.

ROC’s Notice and Order of Recovery Fund Ineligibility should be affirmed and Mr. Merkle’s claim for a payout from the recovery fund should be denied.

RECOMMENDED ORDER

IT IS ORDERED that ROC’s Notice and Order of Recovery Fund Ineligibility is affirmed and Mr. Merkle’s claim for a payout from the recovery fund is 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 40 days from the date of that certification.

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-137160-45720000Done this day, January 27, 2021.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000