ALJDEC decisions subject to certification as final

2017A-6081-ROC · Registrar of Contractors · 2019-03-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 28, 2019 APPEARANCES: Ryan and Jessica Cox on their own behalf; no one appeared for Respondent; John Tellier, Esq. for the Registrar of Contractors ADMINISTRATIVE LAW JUDGE: Thomas Shedden FINDINGS OF FACT 1. On January 9, 2019, 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 at 9:00 a.m. on February 28, 2019. 2. The issue is whether an award and payout from the Contractors’ Recovery Fund pursuant to Ariz. Rev. Stat. section 32-1154([G]) is justified by the evidence. 3. No representative for Respondent Golden Developing Solutions LLC appeared and the matter was convened in its absence at about 9:15 a.m. 4. Respondent holds license number 308901. ROC’s website shows that Respondent’s license has been revoked. 5. Respondent owns Lato Glass. Lato Glass is not licensed by ROC. 6. Complainants are Ryan and Jessica Cox. 7. Ryan Cox owns Cox Cactus Farm LLC. 8. Cox Cactus Farm paid to Lato Glass $22,000 to have work completed at a house located at 1110 West Creek Canyon Road in Phoenix. 9. Mr. Cox owns the West Canyon Creek property as his “sole and separate property.” 10. At all times pertinent to this matter, the West Canyon Creek property was a “class 4 non-primary” property. As of the hearing date, Mr. Cox had begun the process to have the property reclassified as a “class 3” residential property. 11. On December 7, 2017, Ms. Cox filed with ROC a complaint alleging poor work on Lato Glass’s part. ROC issued a Citation to Respondent, which resulted in a hearing being conducted on May 7, 2018. As a result of that hearing, ROC determine that Respondent had violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22) and it suspended Respondent’s license. 12. On October 18, 2018, the Coxes filed with ROC a Recovery Fund Claim requesting a payout of $6638.77.[1] 13. On December 17, 2018, ROC issued a Notice and Order of Recovery Fund Ineligibility. 14. ROC denied the Coxes’ claim because the property was not a class 3 property and because Cox Cactus Farm LLC, not the Coxes, made the payments to Lato Glass. 15. At the hearing, ROC also argued that the Coxes do not qualify for a payout from the fund because Lato Glass is not a licensed contractor. CONCLUSIONS OF LAW 1. Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. 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. The Coxs have filed a claim asserting that they meet the requirements to receive a payout from the recovery fund. As such, they bear the burden of proof in this matter. Ariz. Admin. Code § R2-19-119; Magness v. Ariz. Registrar of Contractors 234 Ariz. 428 (App. 2014). 3. 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). 4. 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."). 5. “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B). 6. The purpose of the recovery fund is to provide improved protection for owners and lessees of property who contract for the construction or alteration of residential structures. McMurren v. JMC Builders, 204 Ariz. 345 (App. 2003). 7. “The assessments received by the registrar for deposit in the fund shall be held in trust for carrying out the purposes of the fund.” Ariz. Rev. Stat. § 32-1135. 8. “Person injured” means “any owner of residential real property which is classified as class three property … and which is actually occupied or intended to be occupied by the owner as a residence . . . who [is] damaged by the failure of a residential contractor . . . to adequately build or improve a residential structure or appurtenance on that real property.” McMurren at ¶ 8; see also Ariz. Rev. Stat. § 32-1131(3). 9. Any “person injured” by a licensed residential contractor’s violation of ROC’s statutes or rules may be awarded up to $30,000 from the residential recovery fund. But an “award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation ….” Ariz. Rev. Stat. § 32-1132(A). 10. The Coxes have not shown that they are eligible for a payout from the recovery fund because the property is not a class 3 residential property as required. In addition, because it was Cox Cactus Farm LLC that made payments to Lato Glass, not the Coxes, the Coxes have not shown that they suffered any injury. 11. Because Lato Glass is not a licensed contractor, any conduct by Lato Glass cannot form the basis for a payout from the fund. See Ariz. Rev. Stat. § 32-1132(A). 12. Considering the above, the Coxes’ recovery fund claim should be denied. RECOMMENDED ORDER IT IS ORDERED that on the Registrar of Contractor’s decision to deny Ryan and Jessica Coxes’ recovery fund claim is affirmed and that the Coxes’ appeal is dismissed. 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.

Done this day, March 11, 2019.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] Although only Ms. Cox’s name appears as the “person injured,” both Mr. and Ms. Cox signed the claim form.

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