ALJDEC decisions subject to certification as final

2017A-989-RFA-ROC · Registrar of Contractors · 2020-06-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ivy Lynn Mitchell,

COMPLAINANT

Universal Homes Construction LLC,

License No. ROC 159590,

RESPONDENT

No. 2017A-989-RFA-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: May 27, 2020

APPEARANCES: Ivy Lynn Mitchel on her own behalf; Joe Contadino for Respondent; John Telleir, Esq. for the Registrar of Contractors

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On April 24, 2020 the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above captioned matter for hearing at the Office of Administrative Hearings on May 27, 2020. The issue is whether an award and payout from the residential contractors’ recovery fund is justified by the evidence.

Respondent Universal Homes Construction LLC holds license number 159590 issued by ROC.

Ivy Lynn Mitchell purchased a home from Respondent and she subsequently filed with ROC a complaint against Respondent alleging poor workmanship.

After receiving Ms. Mitchell’s complaint, ROC investigator Jim Dimond inspected her home and determined that thirty-five floor tiles had lippage in excess of the allowable limit, that one tile was hollow, and that several tiles were cracked. ROC ordered Respondent to correct these deficiencies.

Respondent made repairs, but at a compliance jobsite inspection, Mr. Dimond determined that four tiles had not been properly repaired in that these tiles still had excessive lippage.

Respondent was willing to conduct additional work to correct those four tiles, but Ms. Mitchell was unwilling to allow Respondent access to do so.

ROC issued to Respondent a citation and an evidentiary hearing was conducted.

At that hearing, Ms. Mitchell took the position that in order to repair her floor would be to retile the entire house. Ms. Mitchell also affirmed that she would not be willing to allow Respondent access to repair the four tiles that ROC determined still had excess lippage.

In an Administrative Law Judge (ALJ) Decision dated August 31, 2017, the ALJ concluded that Ms. Mitchell had not proven that it was necessary to retile the entire floor. The ALJ also concluded that Respondent had violated Ariz. Rev. Stat. section 32-1154(A)(3), but recommended that ROC’s citation be dismissed because Ms. Mitchell was unwilling to allow Respondent access to make repairs.

On September 28, 2017, ROC issued a Final Administrative Decision and Order through which it adopted the ALJ’s determination that Respondent had violated section 32-1154(A)(3), but also modified the Decision. The modifications included suspending for one day Respondent’s license, rather than dismissing the citation.

On September 25, 2019, Ms. Mitchell submitted to ROC a Recovery Fund Claim requesting a payout of $19,770.00.

Through a letter dated December 11, 2019, ROC informed Ms. Mitchell that the bids she had provided in support of her claim were excessive because those bids for the cost to replace the entire floor, whereas ROC had determined that it was not necessary to replace the entire floor. ROC requested that Ms. Mitchell provide bids to replace only the four tiles that ROC had found to be deficient.

Ms. Mitchell did not provide ROC with bids for the replacement of those four tiles.

On March 19, 2020, ROC issued a Notice and Order of Recovery Fund Claim Denial showing that Ms. Mitchell’s claim was being denied because the bids in support of her claim exceeded the actual damages she had suffered.

Ms. Mitchell requested a hearing, which led to this matter being conducted.

At the hearing, Ms. Mitchell testified to the effect that Mr. Dimond’s compliance jobsite inspection had not been thorough and that he told her that it did not matter whether four tiles or 400 were deficient because either way, Respondent was not in compliance with ROC’s Directive ordering Respondent to repair the deficient work.

Mr. Dimond’s compliance jobsite investigation notes show that he did not inspect tiles that were under furniture because he had already determined that Respondent was non-compliant with ROC’s Directive.

Ms. Mitchell testified to the effect that ROC’s director’s office had informed her not to worry about the number of tiles because the recovery fund would pay to replace the floor.

Ms. Mitchell testified to the effect that contractors were not willing to guarantee their work if that work was limited to replacing only four tiles.

CONCLUSIONS OF LAW

Unless otherwise provided by law, the party asserting a claim, right, or entitlement has the burden of proof. Ariz. Admin. Code § R2-19-119(B).

Ms. Mitchell filed a claim asserting that she is entitled to a payout from the Recovery Fund pursuant to Ariz. Rev. Stat. section 32-1132. Consequently, Ms. Mitchell bears the burden of proof show that she is an injured person who meets the requirements for a payout from the recovery fund. Ariz. Admin. Code § R2-19-119(B); see also Harvest v. Craig, 195 Ariz. 521, 524, ¶¶ 14-15 (App. 1999) (the party seeking a right granted by statute generally has the "burden of proving that [she] comes within the ambit of the statute").

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).

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).

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).

“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.

“‘Person injured’ means “any owner of residential real property which is classified as class three property under [a section of the tax code] 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).

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).

“‘Actual damages’ ... mean[s] the reasonable cost of completing the contract and repairing the contractor's defective performance ‘less the part of the contract price still unpaid.’” Ramsey v. Ariz. Registrar of Contractors, 241 Ariz. 102, ¶ 8 (App. 2016)(adopting ROC’s definition of actual damages).

The preponderance of the evidence shows that Ms. Mitchell’s actual damages are limited to the cost of replacing four tiles. Ms. Mitchell presented no evidence on which those damages can be monetarily calculated. Consequently, Ms. Mitchell has not meet the burden to show that her recovery fund claim should be approved.

ROC’s Order of Recovery Fund Claim Denial should be affirmed and Ms. Mitchell’s claim for a payout from the recovery fund should be denied.

RECOMMENDED ORDER

IT IS ORDERED that ROC’s Order of Recovery Fund Claim Denial is affirmed and Ms. Mitchell’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, June 18, 2020.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000