ALJDEC decisions subject to certification as final

2018A-04993-RFA-ROC · Registrar of Contractors · 2020-05-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

John Caligiuri,

COMPLAINANT

Southwest Home Services Inc.,

License No. 204614,

RESPONDENT

No. 2018A-04993-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 5, 2020.

APPEARANCES: John Caligiuri, Complainant, appeared telephonically on his own behalf. John Tellier, Assistant Attorney General, appeared telephonically on behalf of the Registrar of Contractors.

ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera

_____________________________________________________________________

FINDINGS OF FACT

On April 3, 2020, the Registrar of Contractors (ROC) issued a Notice of Recovery Fund Hearing (Notice) setting the above captioned matter for hearing at the Office of Administrative Hearings (OAH) at 9:00 a.m. on May 5, 2020.

The issue is whether an award and payout from the ROC’s Recovery Fund (Fund) pursuant to Arizona Revised Statutes (A.R.S.) § 32-1131 is justified by the evidence.

No representative for Southwest Home Services Inc. (Respondent) appeared at the hearing and the matter was convened in its absence.

On July 29, 2017, Respondent entered into a construction agreement with Roger Berry to perform a roof underlayment replacement. Mr. Berry’s owned property located at 15215 East Golden Eagle Blvd, Fountain Hills, AZ 85268. Work commenced on August 2, 2017, and was completed on August 7, 2017. Mr. Berry paid Respondent $12,500.00. The underlayment used to replace the roof came with a 50-year manufacturer’s warranty.

On or about February 22, 2018, John Caligiuri (Complainant) bought 15215 East Golden Eagle Blvd, Fountain Hills, AZ 85268 from Mr. Berry. Soon after the purchase, Complainant observed leaks from the roof. Complainant requested Respondent to fix the leaks and honor the warranty. Respondent failed to honor the warranty.

On or October 22, 2018, Complainant filed a Complaint, with the ROC, alleging abandonment on Respondent’s part. The ROC issued a Citation to Respondent, which resulted in a hearing being conducted on May 20, 2019. As a result of that hearing, the ROC determined that Respondent violated A.R.S. §§ 32-1154(A)(3) and 32-1154(A)(22). The ROC revoked Respondent’s license effective August 12, 2019.

In its final administrative decision and order, the ROC included the following language, "[b]ecause the restitution award is not supported by sufficient evidence, the Registrar finds that the proposed award is inappropriate. This order, however, does not deprive Complainant of alternative remedies. Because Respondent’s license will be suspended as a result of the complaint, the Registrar may order payment from the Residential Contractors’ Recovery Fund. See A.R.S. § 32-1154(G). If Complainant is deemed to be eligible, the Registrar will determine Complainant’s damages, if any. This order also does not prevent Complainant from pursuing civil remedies against Respondent in a civil court.”

All errors in original.

On or about August 14, 2019, Complainant filed a Fund claim with the ROC and requested a payout of $10,716.00. Complainant submitted numerous documents to support the original contract between Mr. Berry and Respondent.

On or about February 12, 2020, ROC issued a Notice and Order of Recovery Fund Claim Denial (Order).

In the Order, the ROC denied Complainant’s claim because Complainant failed to establish that he sustained compensable actual damages when he did not enter into the original agreement with Respondent and did not pay Respondent.

At the hearing, the ROC introduced evidence that Complainant was not eligible to receive an award from the Fund pursuant to A.R.S. § 32-1132(A). Complainant failed to meet the criteria that he contracted with a licensed residential contractor when the work first commenced. Complainant also did not pay Respondent for any work performed on the original contract.

On or about July 8, 2019, Complainant filed a claim against Respondent’s bond. Complainant received $4,250.00 from Respondent’s surety bond.

The ROC presented evidence that the property classification laws changed effective August 27, 2019, and that the change eliminated any eligibility requirements related to property classification. However, the new law was not retroactive and, thus, did not apply to Complainant in this case.

At the hearing, Complainant argued that he should be eligible to receive an award from the Fund under the new statute. Complainant testified that the damages were established by the ALJ decision and that he qualified because he was the homeowner. Even after he received money from the surety bond, he was never told that he was ineligible to receive compensation from the Fund. Complainant opined that based on the ALJ decision that qualified him and the intent of the statute as modified, he was eligible to receive an award from the Fund.

CONCLUSIONS OF LAW

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. Arizona Administrative Code (A.A.C.) § R2-19-119.

Complainant filed a claim asserting that they meet the requirements to receive a payout from the Fund. As such, he bears the burden of proof in this matter. A.A.C. § R2-19-119; Magness v. Ariz. Registrar of Contractors 234 Ariz. 428 (App. 2014).

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).

Complainant bears the burden of proof to establish eligibility and compensable actual damages pursuant to A.R.S. § 32-1131, et seq and A.R.S. § 32-1132(A).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Indus. Comm’n 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.” See A.R.S. § 1-211(B).

The residential contractors' Fund is established, to be administered by the ROC, for the benefit of a claimant damaged by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter. An award from the Fund is limited to the actual damages suffered by the claimant as a direct result of the contractor’s violation. See A.R.S. § 32-1132(A).

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 Fund. But [t]he maximum individual award from the residential contractor’s Fund is $30,000.00.” A.R.S. § 32-1132.01(D).

The weight of the evidence established that Complainant did not directly contract with Respondent. The evidence showed that Complainant purchased the residential property from Mr. Berry after Respondent contracted with Mr. Berry. Additionally, Complainant did not pay Respondent for its services. Complainant failed to establish that he is eligible for a payout from the Fund and failed to establish that he met the elements of A.R.S. § 32-1132(A).

Furthermore, Complainant must meet the eligibility requirements of the laws that were applicable at the time of the contract and at the time the damages occurred. Even though the laws have changed and the eligibility requirements do not exist, the laws are not retroactive and Complainant is not eligible.

Considering the above, Complainant’s recovery fund claim should be denied.

RECOMMENDED ORDER

IT IS ORDERED that the Registrar of Contractor’s decision to deny Complainant’s recovery fund claim is affirmed and that Complainant’s 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, May 26, 2020.

/s/ Antara Nath Rivera

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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