ALJDEC decisions subject to certification as final

2019A-04453-RFA-ROC · Registrar of Contractors · 2020-08-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Soha Abdelrahman,

COMPLAINANT

RGV Renovations LLC,

License No. ROC 272298, 289042,

RESPONDENT

No. 2019A-04453-RFA-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: August 12, 2020

APPEARANCES: Soha Abdelrahman on her own behalf; Robert Vela for Respondent; John Tellier, Esq. for the Registrar of Contractors

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On July 13, 2020, the Registrar of Contractors (“ROC”) issued a Notice of Recovery Fund Hearing setting the above captioned matter for hearing August 12, 2020 at the Office of Administrative Hearings.

The issue for hearing is whether an award and payout from the Contractors’ Recovery Fund pursuant to Ariz. Rev. Stat. section 32-1131 et seq. is justified by the evidence.

Complainant Soha Abdelrahman appeared and testified on her own behalf.

Robert Vela appeared for Respondent RGV Renovations LLC but provided no evidence.

ROC presented the testimony of Legal Assistant Shaquira Adebule.

Ms. Adebule testified that Ms. Abdelrahman was found to be ineligible for a payout from the recovery fund because Ms. Abdelrahman never occupied or intended to occupy as a primary residence the property at issue.

Ms. Abdelrahman is the sole member of Real Property Investing LLC.

Throughout all times pertinent to this matter Ms. Abdelrahman’s and the LLC’s mailing address and address of record has been 563 East Krista Way in Tempe.

The property at issue is located at 3150 W. Frankfort Drive in Chandler. Real Property Investing purchased that house on or about November 16, 2018.

On or about December 12, 2018, Ms. Abdelrahman entered a contract for remodeling work with James Aodisho, who she understood to be a representative of Respondent and or JD Renovation.

On September 3, 2019, Ms. Abdelrahman filed with ROC a complaint against Mr. Aodisho, JD Renovation and Respondent alleging poor work. Ms. Abdelrahman gave her mailing address as 563 East Krista Way.

In her complaint, Ms. Abdelrahman wrote that Mr. Aodisho finished the work and was paid in full; the house was put on the market and “we got buyers,” but the work completed by Mr. Aodisho failed the home inspection and the “[b]uyers walked away from the house”.

On October 16, 2019, ROC’s Dennis Bierma inspected Ms. Abdelrahman’s property.

Mr. Bierma found that some of the work at issue did not meet the workmanship standards. Mr. Bierma concluded that the home was not Ms. Abdelrahman’s primary residence.

On December 11, 2019, ROC issued to Respondent a Citation alleging that it may have violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22).

Respondent failed to file a timely answer to the Citation and through an Order dated January 7, 2020, ROC found that Respondent had violated sections 32-1154(A)(3) and (A)(22) and it revoked Respondent’s licenses.

On February 2, 2020, Ms. Abdelrahman filed with ROC a Recovery Fund Claim requesting a payout of $34,000. Ms. Abdelrahman gave her mailing address as 563 East Krista Way.

ROC’s Ms. Adebule evaluated the claim.

On May 26, 2020, ROC issued a Notice and Order of Recovery Fund Ineligibility.

The Notice of Ineligibility shows that Ms. Abdelrahman did not meet the eligibility requirements because the members of the LLC did not occupy or intend to occupy the Frankfort property as a primary residence.

Ms. Abdelrahman acknowledged that when the LLC bought the Frankfort property, the intention was to “flip” the house, but she and her husband were separating and or divorcing, so she moved into the Frankfort property. In support of her testimony, she had provided ROC with utility bills for electric service, internet service, and water service for the Frankfort property. With the exception of the internet bill, these bills were mailed to 563 East Krista Way.

According to Ms. Abdelrahman, the bills at issue continued to go to 563 East Krista Way because she has no income and her husband was paying her bills.

Maricopa County Assessor’s information from June 12, 2020 shows that Fei Li and Jie Zhang own the Frankfort property and that it was last sold on January 1, 2020, with the last deed dated February 21, 2020.

Real Property Investing transferred the property to Fei Li and Jie Zhang through a deed dated January 30, 2020 that was signed by Ms. Abdelrahman on February 19, 2020.

At the hearing, Ms. Adebule testified to her opinion that during the pertinent time periods, Ms. Abdelrahman never occupied or intended to occupy the Frankfort property.

Among the reasons that Ms. Adebule concluded that Ms. Abdelrahman did not occupy the Frankfort property are: Ms. Abdelrahman gave 563 East Krista Way as her address on her complaint and her recovery fund claim; Ms. Abdelrahman owns 563 East Krista Way as a class 3.1 primary residence; Arizona Corporation Commission information from June 15, 2020, shows that Real Property Investing’s statutory agent and sole member is Ms. Abdelrahman, with the Krista Way address being the mailing address for both; the LLC’s Articles of Incorporation, dated December 17, 2015, show Ms. Abdelrahman as both agent and member at the East Krista Way address; the County assessor’s records show that the Frankfort house was a class 4.2 residential rental property in 2019 and a class 3.1 primary residence in 2020; and a January 9, 2019 check from Ms. Abdelrahman and her husband making a payment for the Frankfort remodel, bears the memo: Flip repairs Frankfort.

Consistent with the Notice of Ineligibility, Ms. Adebule testified that she did not find that Ms. Abdelrahman occupied or intended to occupy the Frankfort property.

Ms. Abdelrahman acknowledged that she had never changed the LLC’s or her address with the Corporation Commission, nor had she changed her driver license address.

CONCLUSIONS OF LAW

Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

Ms. Abdelrahman has filed a claim asserting that he meets the requirements to receive a payout from the recovery fund. As such, he bears the burden of proof in this matter. Ariz. Admin. Code § R2-19-119(B).

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

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.

A claimant who is damaged by an act, representation, transaction or conduct of a residential contractor licensed by ROC that is in violation of ROC’s statutes or rules, may be eligible for a payout from the recovery fund. An LLC is not eligible unless, among other things, all members actually occupy or intend to occupy the residential real property as their primary residence. Ariz. Rev. Stat. § 32-1132.

Ms. Abdelrahman has not proven by a preponderance of the evidence that she actually occupied or intended to occupy the Frankfort property, and to the contrary, the evidence shows that the house was purchased and used as an investment property.

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

RECOMMENDED ORDER

IT IS ORDERED that the Registrar of Contractor’s decision to deny Soha Abdelrahman’s recovery fund claim is affirmed and that Ms. Abdelrahman’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.

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

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000