ALJDEC decisions subject to certification as final

2018A-2528-ROC · Registrar of Contractors · 2019-03-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 26, 2019 APPEARANCES: Luke and Diana Abell 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 4, 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 1:00 p.m. on February 26, 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. Respondent Omega Construction Services LLC did not appear at the scheduled hearing time, and the matter was convened in its absence at about 1:15 p.m. 4. Complainants Luke and Diana Abell entered a contract with Respondent in which Respondent was to perform roofing work at Complainants’ house. 5. On June 5, 2018, Mr. Abell filed with ROC a complaint against Respondent alleging abandonment. In his complaint, Mr. Abell stated that the date of the contract with Respondent was December 30, 2017. 6. On July 24, 2018, ROC issued to Respondent a Citation alleging violations of Ariz. Rev. Stat. sections 32- 1154(A)(1), (A)(3), and (A)(22). 7. On August 22, 2018, ROC suspended Respondent’s license as a direct result of Mr. Abell’s complaint. 8. On September 13, 2018, the Abells filed with ROC a Recovery Fund Claim requesting a payout of $27,945.26. In their Claim, the Abells stated that the date of their contract with Respondent was December 30, 2017, and that contract was written, not verbal. 9. Based on a matter unrelated to this one, Respondent’s license was suspended from December 20, 2017 through March 30, 2018. 10. On December 13, 2018, ROC issued a Notice and Order of Recovery Fund Ineligibility. 11. ROC denied the Abells’ Claim because it determined that Respondent’s license was suspended on December 30, 2017, which as a matter of law precludes any payout from the fund for damages resulting from contracts entered into on that date. 12. At the hearing, Mr. Abell testified to the effect that the parties actually had a verbal contract that was effective on December 18, 2017. 13. In support of this position, the Abells had admitted into evidence an undated and unsigned proposal showing that Respondent would complete certain work for $15,341.40. Mr. Abell referred to this as the initial contract, and he testified to the effect that the parties had a meeting of the minds as of December 18, 2017, and that there was offer, acceptance and consideration for the formation of the contract. Complainant Exhibit A. 14. Complainant Exhibit A shows “Deposit of 50% down at time of signing of contract and scheduling”. 15. ROC’s Exhibit 7 at Bates page 28 includes a second proposal or contract that was signed by Mr. Abell and by a representative for Respondent, and a copy of a check from Mr. Abell to Respondent for $10,000. The contract/proposal is not dated and the check is dated December 30, 2017. 16. The contract/proposal in ROC Exhibit 7 is for a total of $13,149.77 and shows “Deposit of $10,000 down at time of signing contract and scheduling”. 17. Mr. Abell testified that the second proposal/contract was signed by the parties on December 19, 2017. He testified that the check was not signed until December 30, 2017 because there was a delay in getting the funding required. 18. Mr. Abell testified to the effect that the parties had an oral contract as of December 18, 2017, which was modified by the signed proposal on December 19, 2017. 19. According to Mr. Abell, the reason his original complaint and the Abells’ Recovery Fund Claim show a contract date of December 30, 2017 was because he used the date the first check was written to Respondent. 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 Abells 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, 63 P.3d 1082 (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 shall not be available to persons injured by an act, representation, transaction or conduct of a residential contractor who was not licensed pursuant to this chapter or whose license was … suspended … at the time of the contract.” Ariz. Rev. Stat. § 32-1132(A)(underscore added). 10. The Abells’ recovery fund claim-form and Mr. Abell’s original complaint both show that the Abells entered a contract with Respondent on December 30, 2017. Contrary to Mr. Abell’s testimony, the Abells’ recovery fund claim form shows that the parties had a written contract. The signed contract shows that $10,000 was due on signing, and that sum was paid to Respondent by a check dated December 30, 2017. 11. The preponderance of the evidence shows that the Abells entered a contract with Respondent on December 30, 2017. Respondent’s license was suspended on December 30, 2017, and the Abells are not eligible to receive a payout from the recovery fund. RECOMMENDED ORDER IT IS ORDERED that the Registrar of Contractor’s decision to deny Luke and Diana Abell’s recovery fund claim is affirmed and that the Abells’ 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 12, 2019.

/s/ Thomas Shedden Thomas Shedden 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