ALJDEC decisions subject to certification as final

2019A-01473-RFA-ROC · Registrar of Contractors · 2020-05-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Timothy Werner Tompkins,

COMPLAINANT,

v.

Bay Pools and Spas LLC,

License No. ROC 310484,

RESPONDENT.

No. 2019A-01473-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 24, 2020, at 1:00 p.m.

APPEARANCES: Timothy Werner Tompkins (“Complainant”) appeared on his own behalf; Bay Pools and Spas LLC (“Respondent”) failed to appear; the Arizona Registrar of Contractors (“the Registrar”) was represented by Sarah A. Asta, Esq., Assistant Attorney General.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

_____________________________________________________________________

FINDINGS OF FACT

Procedural Background

The Registrar referred to the Office of Administrative Hearings (“OAH”), an independent state agency, Complainant’s appeal of the Registrar’s determination that Complainant was not eligible to receive a payout from the Residential Contractors’ Recovery Fund (“the Fund”) for an evidentiary hearing.

On February 24, 2020, the Registrar issued a Notice of Hearing, setting a hearing on March 26, 2020. The Registrar sent the Notice of Hearing to Respondent at its address of record.

On March 20, 2020, the Registrar’s attorney moved to continue the hearing. On March 22, 2020, the Administrative Law Judge (“ALJ”) issued an order continuing the hearing to April 24, 2020. OAH staff sent the order continuing the hearing to Respondent’s email address of record.

On March 18 and 31, 2020, the ALJ issued orders informing the parties that the hearing would be held telephonically to reduce the risk of spreading the COVID-19 virus and requiring the parties to provide to OAH telephone numbers at which they could be contacted for the hearing.

A hearing was held on April 24, 2020. Complainant testified on his own behalf. The Registrar submitted four exhibits and presented the testimony of Shaquira Adebule, a Legal Assistant employed by the Registrar who had analyzed Complainant’s claim to the Fund.

Respondent did not provide a telephone number at which its representative could be contacted and did not request that the hearing be continued a second time. Consequently, Respondent did not present any evidence to defend against Complainant’s claim to the Fund.

Additional Hearing Evidence

According to the Registrar’s public website, on December 27, 2016, the Registrar issued License No. ROC 310484 for General Residential B-5 General Swimming Pool Contracting to Respondent.

Complainant filed a complaint against Respondent for poor workmanship on a project that it contracted to construct for Complainant.

On June 11, 2019, after Respondent failed to file a timely written answer to the Citation that the Registrar issued in Complainant’s case, the Registrar issued a Final Administrative Decision and Order. The Registrar found that, under A.R.S. § 32-1155(B), Respondent was deemed to have admitted violating A.R.S. § 32-1154(A)(1), (3), (16), and (22), as charged in the Citation. As a result, the Registrar revoked Respondent’s contractor’s License No. 310484.

On July 12, 2019, Complainant filed a claim to the Fund in the amount of $7,691.12 to recover the damages that Respondent’s proven violations of contracting statutes caused him to incur.

Ms. Adebule testified that she reviews claims that homeowners make to the Fund to determine whether the claimant is eligible for a payout. In Complainant’s case, she determined that the Mohave County Assessor classifies Complainant’s property as Class 4, or a non-primary residence.

Ms. Adebule testified that Complainant’s claim to the Fund accrued on June 11, 2019, when the Registrar issued the final decision and order on Complainant’s workmanship complaint. At that time, A.R.S. § 32-1131(3) required that a homeowner’s property must be classified as a class three property under A.R.S. § 42-12003. Although the Registrar’s statutes were later amended to remove the requirement that the property must be classified as class three if the owner used the property as his primary residence, effective August 2019, the amendment was not retroactive.

On January 6, 2020, the Registrar issued a Notice and Order of Denial of Recovery Fund Claim from the Fund, notifying the parties that “[a]fter a review of the claim and all supporting documentation, the Fund has determined, based upon A.R.S. § 32-1131, et seq., that the Complainant(s) is/are ineligible for a payment from the Fund.” Specifically, “[b]ecause the property is not a . . . class three property, the Complainants cannot meet the statutory definition of a ‘person injured.’ Therefore, pursuant to § 32-1131.3, the claim must be denied as ineligible.”

Complainant testified that the house where Respondent performed the work is the only residence that he and his wife own. They reside in the house full-time and use it as their primary residence. When they bought the house, they intended it to be their primary residence in their retirement.

Complainant testified that, when he and his wife purchased the house in 2017, they did not know that wrong box on the affidavit of property value had been checked. Complainant testified that to correct the mistake, he and his wife would have to sell the property to themselves and resubmit an affidavit of property value, which would cause the property to be reassessed.

Complainant argued that what should govern is his and his wife’s intent to reside in the house as their primary residence, not the mistaken classification of the property, since the statute has been changed to omit the requirement that a property must be classified as class 3 to make an owner eligible for a payout from the Fund.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainants bear the burden to establish that they are eligible to receive a payout from the Fund by a preponderance of the evidence.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he 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.”

Former A.R.S. § 32-1131(3)(a) defines an “injured person” who is entitled to a payout from the Fund as follows:

“Person injured":

(a) Means any owner of residential real property that is either noncommercial historic property as defined in section 42-12101 or classified as class three property under section 42-12003. The property must also be actually occupied or intended to be occupied by the owner as a residence including community property, tenants in common or joint tenants who are damaged by the failure of a residential contractor or a dual licensed contractor to adequately build or improve a residential structure or appurtenance on that real property.

(Emphasis added.) Under this statute, to be eligible for a Fund payout, at the time the contract was made or the injury accrued, the claimant must have owned as his primary residence and the residential property must have been classified a class 3 property. The statute does not make any exception for an alleged mistake made at the time the sale was recorded.

The amendment to the Registrar’s statutes eliminated the requirement in A.R.S. § 32-1131(3)(a) that the property be class 3 and enacted A.R.S. § 32-1132(B), which requires only that the claimant occupy or intend to occupy the property as his primary residence. The effective date of the amendments to A.R.S. §§ 32-1131 and 32-1132 was in August 2019. The Arizona Legislature did not expressly provide that the amendments were retroactive. In Arizona, “[n]o statute is retroactive unless expressly declared therein.”

The Registrar owes a fiduciary duty to manage the Fund for the benefit of all eligible homeowners who have suffered actual damages caused by a licensed contractor’s statutory violations as defined by the statutes in effect when the injury accrued. Before authorizing a payout, the Registrar must determine whether a claimant is eligible under the statutes that govern his claim. Complainant does not dispute that at all relevant times his property was classified as class 3. Complainant did not establish that applicable statute required the Registrar to find him eligible to receive a payout from the Fund.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that on the effective date of the final order in this matter, the Registrar’s denial of Complainant Timothy Werner Tompkins’ claim to the Fund shall be affirmed and Complainant’s appeal of the Registrar’s denial shall be 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 five days from the date of that certification.

Done this day, May 8, 2020.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors