ALJDEC decisions subject to certification as final

2019A-04441-RFA-LS-ROC-RS · Registrar of Contractors · 2022-09-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jason and Rita Stiller,

COMPLAINANT

BCLD LLC

License No. ROC 296383,

RESPONDENT

No. 2019A-04441-RFA-LS-ROC-RS

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING:

APPEARANCES:

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

Jason and Rita Stiller,

COMPLAINANTS

BCLD LLC

License No. ROC 296383,

RESPONDENT

No. 2019A-04441-RFA-LS-ROC-RS

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 17, 2022

APPEARANCES: Complainant Rita Stiller appeared on behalf of Complainants. Respondent BCLD LLC did not appear. The Arizona Registrar of Contractors was represented by Assistant Attorney General Justin Larson.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

The Arizona Registrar of Contractors (Registrar) issued License No. 296383 to Respondent BCLD LLC.

On or about August 31, 2019, the Registrar received a Complaint against Respondent from Complainants. On or about September 17, 2019, the Registrar received an Addendum to the Complaint.

As a result of the workmanship complaint, the Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108; A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158; A.R.S. § 32-1154(A)(16); and A.R.S. § 32-1154(A)(22).

Respondent filed a timely answer to the Citation, and an administrative hearing was held. In her January 20, 2020 Decision, Administrative Law Judge Jenna Clark considered Respondent’s arguments and concluded, among other things, that “Respondent did not meet minimum workmanship standards” and “failed to take appropriate corrective action” after the written directive was issued. Judge Clark further noted that Respondent “admitted to working outside the scope of its license on the underlying project.”

On or about February 14, 2020, the Registrar issued a Final Administrative Decision and Order finding violations and imposing a three day suspension.

On or about April 24, 2020, Complainants received a $9,000.00 payout from Respondent’s bond company.

On or about June 28, 2020, Complainants filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of repairing the project. As part of the claim process, Complainants submitted invoices and receipts from contractors who had performed work to correct the project and a bid from a licensed contractor to perform additional corrective work on the project.

On or about March 28, 2022, the Registrar issued a Notice of Claim for Administrative Award, finding that Complainants’ actual damages were $23,914.10. Complainants requested a hearing, believing the payout was not high enough as they were still seeking bids to correct other issues on the project. 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.

Before the administrative hearing, the assistant attorney general assigned to the matter discovered the existence of Complainants’ civil case and resulting judgment against Respondent in Maricopa County Superior Court. Based on the information gathered, the Registrar quashed the Notice of Claim for Administrative Award.

Complainants had filed a civil suit in Maricopa County Superior Court against Respondent regarding the project. The matter went through arbitration, and a Final Award was entered on April 29, 2021.

On or about June 1, 2021, the Maricopa County Superior Court entered a Judgment in favor of Complainants which awarded Complainants damages in the amount of $82,255.62, plus pre- and post-judgment interest, costs, and attorney’s fees incurred.

While Complainants’ counsel notified the Registrar of the civil suit within 30 days of filing the suit, Complainants’ counsel failed, within 20 days’ written notice to the Registrar, to apply to the court for an order directing payment out of the fund of the amount unpaid on the judgment as required by A.R.S. § 32-1133(C).

On or about June 8, 2022, the Registrar issued a Notice and Order of Recovery Fund Claim Denial, finding that Complainants did not have any compensable actual damages. Complainants requested a hearing, believing they were eligible for a payout from the Fund. The Registrar again referred the matter to the OAH for an evidentiary hearing.

At the hearing, the Registrar argued that, because Complainants could collect on the civil court judgment at any time, the Registrar was required to consider the judgment as an offset to Complainants’ alleged damages. The Registrar noted that it had not been ordered by Maricopa County Superior Court to issue a payout from the Fund with respect to the judgment entered by the court.

At the hearing, Ms. Stiller stated that Complainants had substantial damages, as evidenced by the arbitration award, and that Complainants had not collected anything on the judgment. Therefore, Ms. Stiller believed a payout from the Fund was appropriate. Ms. Stiller testified she was not aware that her counsel was required to file an application to Maricopa County Superior Court to seek a payout from the Fund after the judgment was entered. Ms. Stiller maintained that Complainants were not seeking a windfall and, if they were to ever collect on the judgment, they would ensure the Fund was reimbursed. Ms. Stiller also questioned if the Fund could seek an order from the court to the effect that, if payment was made on the judgment, the Fund would be repaid.

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. . . .” Complainant bears the burden of proof to establish that the denial of a payout from the Fund was 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 provides, in pertinent part, as follows:

B. 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.

2. Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.

. . . .

F. If the claimant has recovered a portion of the claimant’s loss from sources other than the fund, the registrar shall deduct the amount recovered from other sources from the amount of actual damages suffered pursuant to subsection B of this section and direct the difference, not to exceed $30,000, to be paid from the fund.

A.R.S. § 32-1133 provides, in pertinent part, as follows:

B. When a claimant commences an action for a judgment that may result in collection from the fund, the claimant must notify the registrar in writing to this effect within thirty calendar days after the commencement of the action. The registrar at any time may intervene in and defend the action.

C. When any claimant recovers a valid judgment against any residential contractor for an act, representation, transaction or conduct that is in violation of this chapter or the rules adopted pursuant to this chapter, the claimant, on twenty days’ written notice to the registrar, may apply to the court for an order directing payment out of the fund, of the amount unpaid on the judgment, subject to the limits stated in this article. . . .

D. The court may proceed on an application in a summary manner and, on the hearing, the claimant is required to show that the claimant has done all of the following:

1. Given notice as required by subsections B and C of this section.

2. Obtained a judgment that has become final, as provided in subsection C of this section, stating the amount and the amount owing at the date of the application.

3. Proceeded against any existing bond covering the residential contractor.

E. The court may make an order directed to the registrar requiring payment from the fund of whatever sum it finds to be payable on the claim, in accordance with this section, if the court is satisfied on the hearing of the truth of all matters required to be shown by the claimant by subsection D of this section. The recovery limits established under this article apply to all judgments awarded beginning September 1, 2002. If the claimant has recovered a portion of the claimant’s loss from sources other than the fund, the court shall deduct the amount recovered from other sources from the amount of actual damages suffered pursuant to section 32-1132.01, subsection A and direct the difference, not to exceed $30,000, to be paid from the fund.

F. On receipt of a certified copy of the order specified in subsection E of this section, the registrar may authorize payment from the residential contractors’ recovery fund even if an appeal has been instituted but not completed.

The evidence presented established that Complainants obtained a judgment against Respondent in the Maricopa County Superior Court in excess of $82,000.00.

The evidence presented at hearing established that Complainants’ counsel provided notice to the Registrar within 30 days of the civil suit against Respondent being filed in Maricopa County Superior Court. However, the evidence failed to demonstrate that Complainants’ counsel notified the Registrar of the final judgment and/or filed an application to the Maricopa County Superior Court for an order directing a payment from the Fund within 20 days of such notice.

Because Complainants could recover on the judgment at any time, the Registrar was required to consider the judgment as an offset of Complainants’ damages in calculating Complainants’ actual compensable damages.

After review of all the evidence, the Tribunal concludes that the denial of an award from the Fund was appropriate.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, the Complainants’ appeal be denied.

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 30 days from the date of that certification.

-54864001

001

-137160-45720000Done this day, September 6, 2022.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

By Miranda Alvarez

L-54864001

001

-137160-45720000egal Secretary