ALJDEC decisions subject to certification as final

2018A-04519-RFA-LS-ROC · Registrar of Contractors · 2021-03-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Patricia Isela Herrera,

COMPLAINANT

Acid Stain Designs, LLC

License No. ROC 257919,

RESPONDENT

No. 2018A-04519-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: March 23, 2021

APPEARANCES: Complainant Patricia Isela Herrera appeared on her own behalf. Vanessa and Christian Morales appeared on behalf of Respondent Acid Stain Designs, LLC. Assistant Attorney General John Tellier represented the Arizona Registrar of Contractors. Tedi White appeared as a witness for the Arizona Registrar of Contractors.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (“Registrar”) issued License No. 257919 to Acid Stain Designs, LLC (“Respondent”).

In September 2017, Patricia Isela Herrera (“Complainant”) contracted with Respondent for Respondent to install an epoxy coating on the concrete floors and install countertops in Complainant’s home.

On or about September 24, 2018, the Registrar received a Complaint against Respondent from Complainant alleging poor workmanship.

The Registrar assigned Investigator Lisa Melton to investigate the Complaint. Investigator Melton conducted a jobsite inspection and subsequently issued a Written Directive to Respondent ordering Respondent to correct by appropriate means Complaint item numbers 1, 2, 3, 6, 7, 8, and 9.

After the expiration of the Written Directive, Investigator Melton conducted a Compliance Inspection in which she observed that Respondent had failed to comply with the Written Directive.

Thereafter, the Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(22).

Respondent requested a hearing, and the matter was referred to the Office of Administrative Hearings to conduct the hearing.

On January 28, 2020, a hearing was held at which Complainant appeared. Respondent failed to appear for that hearing.

On February 17, 2020, the Administrative Law Judge issued a Decision concluding that Respondent had violated the charged provisions of this State’s contracting laws and recommended that Respondent’s license be revoked and a civil penalty be imposed.

On March 5, 2020, the Registrar issued a Final Administrative Decision and Order accepting the Administrative Law Judge Decision, revoking Respondent’s license and imposing a $500.00 civil penalty.

On or about September 17, 2020, Complainant filed a claim with the Residential Contractors’ Recovery Fund (the “Fund”) to recover the cost of repairing the flooring and countertops. As part of the claim process, Complainant filed a claim with Respondent’s bond company and submitted proof thereof, as well as a copy of the Deed of Trust to her home as proof that she owned the property at the time she contracted with Respondent, and submitted bids from three different contractors that Complainant had received to correct the project.

The Registrar thereafter requested Complainant submit additional bids to remove and replace the epoxy flooring due to the fact that the bids submitted with the Fund claim called for the installation of tile, which was not within the scope of the original contract.

The Registrar issued a Notice of Claim for Administrative Award, determining that Complainant should be awarded $22,623.50. Respondent requested a hearing, believing the award was too high. Complainant did not contest the amount of the administrative award. The Registrar referred the matter to the Office of Administrative Hearings for an evidentiary hearing which was held on March 23, 2021.

Hearing Evidence

The Written Directive from the Registrar specified that, “[a]fter investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). . . .” and directed Respondent to remedy the following violations by the appropriate means: i) Concrete floors have chips; ii) Concrete floors have become dull even with use of product; iii) Division from one room to the next visible (not seamless), iv) Clump of concrete left in computer room against built in bookcase; v) Edges against baseboard “chunky” not seamless/straight; vi) Areas missing statin or final epoxy coating – floor has areas that are not smooth; and vii) Edges of countertop not smooth.

Tedi White, Legal Assistant for the Registrar, testified that she reviewed the filed Complaint, the jobsite inspection notes, the Written Directive from the Registrar that had been issued, the compliance jobsite inspection notes, the Citation issued by the Registrar, the Final Order of the Registrar as well as the Decision issued by the Administrative Law Judge, Complainant’s claim to the Fund, and the bids submitted by Complainant in calculating Complainant’s actual damages. Ms. White testified that she disallowed the first three bids submitted by Complainant because they were not in line with the Written Directive because the floor was epoxy and not tile. Ms. White testified that she allowed the bid for the epoxy flooring. Ms. White further testified that she did not allow the bids for moving and storage of property, cleaning, or for costs associated with Complainant having to stay elsewhere while the repair work is being performed. Ms. White testified that she contacted Investigator Melton to ask her to review the bids to ensure that they corresponded with the scope of work. Investigator Melton responded that in her opinion, the scope and price of the repairs was commensurate with the amount of work it would take to repair Respondent’s work. Ms. White concluded that the bid for the repair of the flooring and countertops, totaling $22,623.50 was appropriate.

At hearing, Complainant questioned why her expenses for moving, storage, and staying elsewhere where not reimbursable and Ms. White explained that pursuant to statute, those expenses are not reimbursable. Complainant testified that she does not object to the amount of the award.

Respondent did not present any evidence to refute the amount of the award.

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); 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 Award states the following:

The administrative hearing will be limited in scope to determine the amount or propriety of the payment;

The party challenging the amount noticed is required to bear the burden of proof;

Respondent may not present evidence and testimony related to previously established contracting violations;

Respondent may be subject to liability for a maximum payout of $30,000.00, with accruing interest, per property per person. A.R.S. § 32-1132.01; and

If Respondent is the only party to request a hearing, Complainant may not seek payment in an amount greater than set forth in this Notice.

Emphasis added.

Because Respondent requested the hearing to challenge the amount of the award, Respondent bears the burden of proof to establish that the amount of the award is not appropriate.

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

According to A.R.S. § 32-1132.01(B), an award from the Fund “may not exceed the actual damages suffered by the claimant as a direct result of a contractor’s violation” and “[m]ay not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.”

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.

Respondent had an opportunity to correct the epoxy flooring and countertops following the Written Directive from the Registrar and failed to do so. Respondent did not present any evidence that the award of $22,623.50 is inappropriate or unwarranted.

After review of all the evidence, the Tribunal concludes that the award provided by the Fund accurately reflected Complainant’s actual damages. Accordingly, Complainant is entitled to a payout from the Fund in the amount of $22,623.50.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainant receive a payout from the Residential Contractors’ Recovery Fund in the amount of $22,623.50.

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 forty (40) days from the date of that certification.

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-137160-45720000Done this day, March 25, 2021.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000