ALJDEC decisions subject to certification as final

2017A-5994-ROC · Registrar of Contractors · 2018-12-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 14, 2018 APPEARANCES: Complainant Catherine Marie Jones appeared on behalf of herself. Assistant Attorney General Thomas Raine appeared on behalf of the Arizona Registrar of Contractors. Gerardo Parra appeared on behalf of Respondent P & P Tile of Az Co. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson _____________________________________________________________________ 1. In March of 2016, Respondent performed construction work on Complainant’s home. The work was paid for by Construction Details, LLC (“Construction Details” or “Construction Details, LLC”). 2. Complainant is the sole member of Construction Details. 3. On or about July 2, 2018, Complainant filed a claim with the Registrar’s Residential Recovery Fund (hereinafter “Recovery Fund”). 4. On or about July 24, 2018, the Registrar issued a notice denying the claim because Complainant had not suffered compensable actual damages. 5. Complainaint filed a timely appeal. 6. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing. 7. On or about October 24, 2018, the Registrar issued a Notice of Hearing setting the above-captioned matter for hearing on November 14, 2018. 8. A hearing was held on November 14, 2018. 9. The Registrar presented the testimony of Marlee McCormick, Recovery Fund reviewer, and submitted exhibits 1 through 5. Complainant testified on her own behalf, and submitted exhibit A. 10. Complainant testified that she has suffered actual damages because she is the sole owner of Construction Details, LLC. Complainant contended that she is the only individual involved with the company. Complainant also argued that she is eligible for a payout under Pinnamaneni v. Arizona Registrar of Contractors, 237 Ariz. 147 (2015) and Ramsey v. Arizona Registrar of Contractors, 241 Ariz. 102 (2016). 11. The Registrar contended that Complainant did not suffer actual damages because Construction Details, LLC paid for the construction work. Ms. McCormick testified that the Registrar would have determined that Complainaint suffered damages if Complainant had evidence that the payment was issued to the contractor pursuant to a loan that Complainant was required to pay back to Construction Details, LLC. CONCLUSIONS OF LAW 1. Complainant bears the burden of proof and the standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119. 2. A preponderance of the evidence is “[e]vidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990). 3. Ariz. Rev. Stat. section 32-1132(A) provides, in relevant part, as follows: 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.

4. In Ramsey v. Arizona Registrar of Contractors, the issue was not whether Plaintiff Ramsey had in fact suffered damages. The issue was the calculation of damages. In Ramsey v. Arizona Registrar of Contractors, the court adopted the Registrar’s interpretation of actual damages and held that damages pursuant to A.R.S. section 32-1132(A) are “limited to the reasonable cost of repairing the contractor’s defective work and completing the project, minus any portion of the contract price still unpaid to the original contractor.” See Ramsey v. Arizona Registrar of Contractors, 241 Ariz. 102, 104 (2016). 5. In Pinnamaneni v. Arizona Registrar of Contractors, the issue was whether Complainant was the owner or occupant of the property. In Pinnamaneni v. Arizona Registrar of Contractors, the court held that “an individual who occupies or intends to occupy the residence, and who is the trustor, trustee, and beneficiary of a revocable trust that owns the property, meets the statutory owner-occupant requirement of section 32-1131.” See Pinnamaneni v. Arizona Registrar of Contractors, 237 Ariz. 147, 148 (2015). 6. The Administrative Law Judge finds that Ramsey v. Arizona Registrar of Contractors and Pinnamaneni v. Arizona Registrar of Contractors do not apply to the current matter. It is undisputed that Complainant did not pay Respondent for the construction work. Because Complainant did not pay for the construction work, Complainant did not suffer actual damages. Consequently, the Registrar appropriately denied Complainant’s Recovery Fund claim. ORDER IT IS ORDERED that Complainant’s appeal 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 is forty days after the date of that certification. Done this day, November 14, 2018.

/s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826