ALJDEC decisions subject to certification as final

2019A-02754-RFA-ROC · Registrar of Contractors · 2020-12-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ivory McFadden,

COMPLAINANT

3 Step Construction LLC,

License No. ROC 320548,

RESPONDENT

No. 2019A-02754-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 11, 2020

APPEARANCES: Complainant Ivory McFadden appeared on his own behalf. Respondent 3 Step Construction LLC did not appear. The Arizona Registrar of Contractors was represented by Assistant Attorney General John R. Tellier.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (Registrar) issued License No. 320548 to Respondent. Stephen P. Amarillas Jr. and Maria Monica Lopez were identified as members on the license.

On or about May 28, 2019, the Registrar received a Complaint against Respondent from Complainant alleging, among other things, that Respondent’s on his project was poor, including the tile and window installation (the workmanship complaint).

With the workmanship complaint, Complainant submitted a document entitled “Estimate for Remodeling – 3 Step Construction – Daniel Lopez” with a total contract price of $43,100. The heading on the document read as follows:

Daniel Lopez

(520) 220-3277

[email redacted]

Contractor’s License no. 320548

Upon receipt of the workmanship complaint, Investigator Gregory Johndrow performed a jobsite inspection. Mr. Amarillas attended the jobsite inspection on behalf of Respondent. Nothing in Mr. Johndrow’s inspection notes indicated that Mr. Amarillas denied Respondent was responsible for the work performed on the project.

After the jobsite inspection, Investigator Johndrow issued a written directive to Respondent requiring it to address the seven items identified in the workmanship complaint.

Respondent did not address any of the items. As a result the matter was referred to the Legal Department for issuance of a citation.

The Registrar issued a citation against Respondent alleging violations of A.R.S. § 32-1154(A)(2), (3), and (22). Respondent did not file a timely answer to the citation as required by A.R.S. § 32-1155(A).

On August 26, 2019, the Registrar issued a Final Administrative Decision and Order in which Respondent’s failure to answer within ten days from the issuance of the citation was deemed an admission by Respondent of Respondent’s commission of the acts charged in the complaint. Accordingly, Respondent’s license was suspended for a period of one day.

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover $29,000.00 as the cost of fixing the project. As part of the claim process, Complainant submitted bids from three different contractors that Complainant had received to correct the project.

On or about September 14, 2020, the Registrar issued a Notice of Order of Recovery Fund Claim Denial, finding that Complainant was not entitled to a payout from the Fund because Complainant submitted proof of payments totaling $17,000.00 paid to Daniel Lopez, but Mr. Lopez was not a person named on Respondent’s license. The Registrar did not accept the payments to Mr. Lopez as payments on the original contract. Therefore, the Registrar concluded that Complainant had an unpaid balance due on the contract of $43,100.00. As that amount was more than the bid the Registrar found appropriate to address the work to be repaired or completed, $31,989.73, Complainant was not eligible for a payout from the Fund.

Complainant appealed the denial of a payout from the Fund. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

Hearing Evidence

Eric Ullinger testified that the he reviewed the documents relating to the workmanship complaint, including the proof of payments Complainant submitted. Because the payments were all made to Daniel Lopez, and not to Respondent, Mr. Ullinger concluded that Complainant still had an unpaid balance due of the contract of $43,100.00. Mr. Ullinger testified that he spoke to Investigator Johndrow regarding the workmanship complaint. Investigator Johndrow did not document in his notes that Respondent admitted or denied it was responsible for the work performed by Mr. Lopez.

Mr. McFadden testified that he initially met with Monica Lopez, a member on Respondent’s license, and her husband Mr. Lopez regarding the project. Mr. McFadden stated he was told Mr. Lopez was Respondent’s employee and payments should be made out to him personally. Mr. McFadden testified that during the jobsite inspection, Mr. Amarillas acknowledged Respondent was responsible for the work performed on the project.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

A.R.S. § 32-1132(A) provides that “[a]n award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. . . .” Respondent bears the burden of proof to establish that the proposed payout from the Fund is incorrect 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.”

The Registrar’s position that Respondent was not responsible for the work performed because Complainant paid Mr. Lopez was disingenuous in that Investigator Johndrow issued a written directive to Respondent after Mr. Amarillas attended the jobsite inspection, the Registrar issued a citation to Respondent, and the Registrar disciplined Respondent’s license after Respondent failed to respond to the citation.

While Respondent would have reasonably appeared at the jobsite inspection upon notice of such from the Registrar, one would presume that if Respondent had nothing to do with the contract, Mr. Amarillas would have notified Investigator Johndrow of such and/or would have filed a response to the citation denying the alleged violations.

Further, Complainant was the only individual to testify as to the statements of Mr. Amarillas, Mr. Lopez, and Ms. Lopez as it related to the contract and the directions he received as to payments. Complainant’s testimony was credible as to his conversations with the relevant individuals.

Reviewing the claim to the Fund, the following calculations were correct:

Contract Amount $43,100.00

Amount Paid $17,000.00

Unpaid Balance (contract amount less amount paid) $26,100.00

Accepted Bid to Repair $31,989.73

Actual Damages (cost to repair less unpaid balance) $5,889.73

After review of all the evidence, the Tribunal concludes that the Registrar inappropriately denied Complainant a payout from the Fund. Complainant is entitled to a payout from the Fund in the amount of $5,889.73.

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 $5,889.73.

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.

-54864001

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-137160-45720000Done this day, December 31, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

001

-137160-45720000