ALJDEC decisions subject to certification as final

2019A-04333-RFA-ROC · Registrar of Contractors · 2020-07-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Patricia A. Price,

COMPLAINANT

Arizona Restoration Builders LLC,

License No. ROC 272988,

RESPONDENT

No. 2019A-04333-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 17, 2020

APPEARANCES: Complainant Patricia A. Price appeared on her own behalf. Respondent 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. 272988 to Respondent.

On or about August 23, 2019, the Registrar received a Complaint against Respondent from Complainant alleging abandonment.

As a result of the workmanship complaint, the Registrar issued a Citation against Respondent charging possible violations of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(1); A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108; A.R.S. § 32-1154(A)(9); and A.R.S. § 32-1154(A)(22).

Respondent filed a timely answer to the Citation. An administrative hearing was held. In a December 16, 2019 Decision, Administrative Law Tammy L. Eigenheer considered Respondent’s arguments and concluded, among other things, that “Complainant established that Respondent abandoned the contract and failed to complete the project in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(1) and A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108” and that “[t]he evidence established that ‘Rudy’ was not a licensed contractor but Respondent was employing ‘Rudy’ as a subcontractor. Therefore, Complainant established that Respondent aided and abet[ed] an unlicensed person in violation of A.R.S. § 32-1154(A)(9).”

On January 3, 2020, the Registrar issued a Final Administrative Decision and Order finding violations and imposing a five day suspension.

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of completing the project. As part of the claim process, Complainant submitted a bid from Phaneuf Construction Inc. that Complainant had received to correct the project.

The Registrar issued a Notice of Claim for Administrative Payout, finding that Complainant’s actual damages were $2620.15.00. Complainant requested a hearing, believing the payout was too low. Respondent did not contest the amount of the administrative payout. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

Hearing was held on June 17, 2020.

Hearing Evidence

The underlying case in this matter set forth the timeline of events and the relevant facts for consideration. Of particular note to the analysis of the claim to the Fund was the relationship between Respondent and “Rudy” and the finding that Respondent aided and abetted “Rudy”, in engaging in unlicensed contracting.

Respondent’s owner, Kevin Kane, presented “Rudy” to Complainant as its project manager and regularly referred Complainant to “Rudy” for various issues. Complainant was told “Rudy” would arrange to take payments from Complainant, including facilitating Complainant making a direct payment to the cabinet manufacturer as a down payment.

When Complainant was unable to get Mr. Kane to respond to her questions regarding the project not being completed, “Rudy” provided Complainant with a tentative quote of what it would cost if he finished the project for Complainant. “Rudy” did not perform any work on the project after providing Complainant with the tentative quote.

After Complainant filed the complaint with the Registrar, the Registrar assigned the complaint to Investigator Phil Jaegge. After a jobsite inspection, Investigator Jaegge issued a written directive to Respondent providing that Respondent had until September 28, 2019, to complete the project.

Katelyn Rolling, Legal Assistant with the Registrar, testified that she reviewed the Directive from the Registrar that had been issued, Judge Eigenheer’s December 16, 2019 Decision regarding the underlying complaint, and the bid submitted by Complainant in calculating Complainant’s actual damages. Ms. Rolling testified that because Respondent was found to have aided and abetted “Rudy”, the Registrar was required to consider the tentative quote he provided to Complainant as part of the overall contract with Respondent. As a result, Ms. Rolling concluded that the total contract price was $25,641.04, consisting of $11,500.00 as the original contract with Respondent, $750.00 as a change order with Respondent, and $13,391.04 as a change order/new contract with “Rudy”. Ms. Rolling stated that Complainant provided proof that she had made payments on the project totaling $5,733.00, leaving an unpaid balance on the project of $19,908.04. The accepted bid submitted with the claim to the Fund included work including an allowable total of $22,528.19. The bid, less the amount still owing on the contract resulted in the recommended payout of $2,620.15.

Complainant asserted that the tentative quote from “Rudy” was not an amendment to the original contract or a new contract and that “Rudy” was just letting her know what the cost would be if he completed the work Respondent had been contracted to perform. Complainant argued that the $13,391.04 quote from “Rudy” should not have been included in the total contract price in determining her actual damages.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant 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.”

A.R.S. § 32-1132.01(B) provides, in pertinent part, as follows:

An award from the residential contractors' recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor's violation. Actual damages:

1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.

While the Registrar argued that because Respondent was found to have violated A.R.S. § 32-1154(A)(9), it was required to consider the amount of the tentative quote from “Rudy” in calculating the amount of the original contract, the Administrative Law Judge concludes so such requirement exists. As was indicated in the underlying matter, the basis of the violation was Mr. Kane’s representations that “Rudy” was Respondent’s project manager when “Rudy” was not Respondent’s employee at all. Assuming arguendo that the quote from “Rudy” had to be considered, it should not be considered in addition to the original contract with Respondent, but as a replacement as it covers the same scope of work as the original contract.

After review of all the evidence, the Tribunal concludes that the award provided by the Fund does not accurately reflect Complainant’s actual damages. Rather, Complainant is entitled to a payout from the Fund in the amount of $16,011.19. That is, the payout is equal to the total contract amount of $12,250.00 ($11,500.00 plus $750.00), less the amount paid on the contract of $5733.00, leaving a balance due of $6517.00, which was deducted from the bid of $22,528.19, resulting in actual damages of $16,011.19.

/ / / / /

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 $16,011.19.

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, July 7, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

001

-137160-45720000