ALJDEC decisions subject to certification as final

2019A-02020-RFA-ROC · Registrar of Contractors · 2020-02-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Courtney N Collins,

COMPLAINANT

Integrity Pools and Spas Inc.,

ROC License: ROC 135859,

RESPONDENT

No. 2019A-02020-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 21, 2020.

APPEARANCES: Complainant appeared on her own behalf. Respondent did not appear. The Registrar of Contractors was represented by Assistant Attorney General John Tellier.

ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera.

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FINDINGS OF FACT

On September 11, 2019, 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 at 9:00 a.m. on October 15, 2019. Prior to that date, Complainant requested a continuance. The hearing was continued to 9:00 a.m. on January 21, 2020.

The issue is whether an award and payout from the ROC’s Recovery Fund pursuant to Ariz. Rev. Stat. section 32-1154(G) is justified by the evidence.

No representative for Integrity Pools and Spas Inc. appeared and the matter was convened in its absence at about 9:15 a.m.

On or about August 1, 2018, Complainant hired Respondent to build a swimming pool at her residence. The total contract amount was for $50,690.00. Complainant paid Respondent $47,000.00. Respondent did not complete the swimming pool.

On or about April 18, 2019, Complainant filed a Complaint with the ROC alleging abandonment on Respondent’s part.

On or about June 10, 2019, the ROC issued a Citation to Respondent. Respondent failed to file a timely written answer to the Citation.

On or about July 5, 2019, the ROC issued a Final Administrative Decision and Order revoking Respondent’s license because Respondent’s failure to answer the Citation was deemed an admission by Respondent of the acts charged in the Complaint.

On or about July 18, 2019, Complainant filed with the ROC a Recovery Fund Claim (Claim) requesting a payout of $47,000.00.

On or about August 14, 2019, the ROC issued a Notice and Order of Recovery Fund Ineligibility (Order).

The ROC denied Complainant’s claim because Complainant entered into a contract with Respondent when its license was suspended.

At the hearing, the ROC introduced testimony of Doug Ulmer, legal assistant at the ROC. Mr. Ulmer testified that Complainant entered into a contract with Respondent, on or about August 1, 2018, whereby Respondent was to build a swimming pool. Complainant filed a Complaint with the ROC. The ROC issued a Directive From The Registrar (Directive) and a Citation.

The ROC presented evidence that Respondent’s license status was “[s]uspend til [c]ompliance” effective June 21, 2018. The ROC records show that this suspension was “cleared” on August 24, 2018.

On or about July 1, 2018, Respondent was suspended for lack of renewal. The ROC records show that this suspension was “cleared” on September 13, 2018.

On or about July 2, 2018, Respondent was suspended for nonpayment of a recovery fund. The ROC records show that this suspension was “cleared” on August 16, 2018.

On or about July 11, 2018, Respondent’s license was suspended for lack of bond. The ROC records show that this suspension was “cleared” on September 11, 2018.

Mr. Ulmer opined that Respondent’s suspended license status should have appeared on the ROC website within a day of each suspension. Also on the website was evidence that Respondent had been disciplined 15 times. However, Mr. Ulmer was not sure if that information was on the website on or about August 2018.

On or about September 13, 2018, Respondent paid for his renewal fee. However, despite that, Respondent’s license was ultimately revoked for other reasons.

At the hearing, Complainant testified that the date of the contract was August 5, 2018. Three days before she signed the contract, she conducted a search of Respondent’s license on the ROC website. Complainant observed only one complaint against Respondent and no suspensions or revocations.

Complainant was not notified by the ROC that Respondent was suspended even after she filed the Complaint. The ROC investigator who handled her case never informed her of Respondent’s suspension before, during, or after his investigation.

After Complainant filed her Claim, she spoke with representatives from the ROC regarding the recovery fund. Complainant was given instructions as to how to apply for funds. The representatives acknowledged receipt of Complainant’s application. None of the messages or correspondence received from the ROC mentioned that Respondent was suspended or that she was ineligible to recover funds. Complainant finished the swimming pool with another contractor based on her belief that she was eligible to recover the funds.

Complainant opined that the public was not protected because the ROC website did not fully disclose Respondent’s license status.

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); Ariz. Admin. Code 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); Ariz. Admin. Code R2-19-119(A). The Notice of Claim for Administrative Payout states that Complainant bears the burden of proof to show entitlement to any amount other than that in the Notice.

According to Ariz. Rev. Stat. § 32-1132.01(B), an award from the Fund is limited to “actual damages suffered by the claimant as a direct result of a contractor’s violation . . .,” not to exceed the cost of repair or replacement. “Actual damages” are those that will put the injured party in the position in which he was before he was injured. United States Fidelity & Guaranty Co. v. Davis, 3 Ariz. App. 259, 263, 413 P.2d 590, 594 (1966).

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.

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 “[t]he maximum individual award from the residential contractor’s recovery fun is $30,000.00.” Ariz. Rev. Stat. § 32-1132.01(D).

According to Ariz. Rev. Stat. § 32-1132(A), “[a]n 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 in an inactive status, expired, cancelled, revoked, suspended or not issued at the time of the contract.”

The weight of the evidence established that Respondent was suspended on four different bases on or about the date of the contract and/or the date Complainant reportedly checked Respondent’s license on the ROC’s website. While it is unfortunate that Complainant was unaware of the status of Respondent’s license, Complainant did not show that she was eligible for a payout from the recovery fund because Respondent was not in good standing the date the contract was signed.

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

RECOMMENDED ORDER

In view of the foregoing,

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, February 5, 2020.

/s/ Antara Nath Rivera

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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