ALJDEC decisions subject to certification as final

2019A-04955-RFA-ROC · Registrar of Contractors · 2021-08-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Barbara Jeana Darlington,

COMPLAINANT

Sun Property Services LLC

License Number ROC 291627,

RESPONDENT

No. 2019A-04955-RFA-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: February 22, April 7 and June 16, 2021

APPEARANCES: Barbara Jeana Darlington on her own behalf; Richard G. Luker for Respondent; Sarah Asta, Esq. for the Registrar of Contractors

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On December 11, 2020 the Registrar of Contractors (“ROC”) issued a Notice of Recovery Fund Hearing setting the above captioned matter for hearing at the Office of Administrative Hearings on January 14, 2021. The matter was continued and evidence was taken on February 22, April 7 and June 16, 2021.

ROC’s Notice of Hearing shows that the hearing is “to determine if an award and payment from the Contractors’ Recovery Fund pursuant to [Ariz. Rev. Stat. section] 32-1131 et sec. is justified by the evidence.”

Complainant is Barbara Jeana Darlington who appeared and testified on her own behalf.

Respondent Sun Property Services LLC holds license number 291627 issued by ROC. Richard G. Luker, Respondent’s owner appeared and testified for Respondent.

Although ROC appeared through counsel and presented the testimony of Tedi White, a legal assistant II, in its closing argument it asserts that it is not a party to the matter.

In November 2017, Ms. Darlington and Respondent entered a contract that called for Respondent to oversee construction of a home for Ms. Darlington.

Respondent was receiving a fixed fee for its work, but was also paying subcontractors with funds received from Ms. Darlington.

According to Ms. Darlington Respondent last worked on the project on June 27, 2019.

On September 30, 2019, Ms. Darlington filed with ROC a complaint against Respondent alleging abandonment.

On November 5, 2019, ROC issued a Directive ordering Respondent to remedy by the appropriate means complaint items 12, 18, 19, 20 a, and 21. ROC subsequently received proof that complaint items 12 and 20a were corrected.

Complaint item 18 involved the placement of a water line; complaint item 19 was to the effect that there was a gap between the stucco and soffit; and complaint item 21 involved cosmetic items in kitchen.

Alvarado Roofing Inc. was subcontracted to do the roof, the soffits and fascia. Alvarado was the contractor that actually performed the deficient work at issue in complaint item 19. Respondent paid Alvarado $12,950 for its installation of the roof, but withheld $6800 because Alvarado’s work on the fascia and soffits was deficient and because Mr. Luker was of the opinion that Ms. Darlington had a balance due to Respondent.

On December 9, 2019, ROC issued to Respondent a Citation alleging that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(1), (A)(2)(a), (A)(3) and (A)(22).

Though a Final Administrative Decision and Order dated March 23, 2020, ROC adopted an Administrative Law Judge Decision finding that Respondent had not abandoned the project but had violated Ariz. Rev. Stat. sections 32-1154(A)(2)(a), (A)(3) and (A)(22). Based on these proven violations ROC suspended Respondent’s license for one day and assessed against it a civil penalty of $250.

On or about June 18, 2020, Ms. Darlington submitted to ROC a Recovery Fund Claim showing that the original contract price was $208,908, she had paid to Respondent $205,807, that she had a balance due on the contract of $3877, that she had already spent $9565 to repair or complete the project, and that the lowest bid to complete the project was $1500.

Through her Recovery Fund Claim Ms. Darlington requested a payout of $7188.

ROC’s Ms. White evaluated Ms. Darlington’s Recovery Fund Claim using the statutes that went into effect on August 29, 2019.

While Ms. White was evaluating Ms. Darlington’s claim, Mr. Luker contacted her and provided her with information that he believed would be pertinent to her evaluation. Ms. White did not give much consideration, if any, to Mr. Luker’s information, because she was of the opinion that that information would be appropriate for consideration only if there was a hearing on Ms. Darlington’s claim.

Ms. White found that Ms. Darlington had compensable expenses of $8064 ($6800 she paid to Alvarado Roofing plus $1264 she paid to Taz Plumbing to repair the waterline) and that it would cost $2900 to repair the interface between the stucco and soffit. Consequently, Ms. White determined that Ms. Darlington’s loss was $10,964.

From the $10,964, Ms. White deducted $3101, which she concluded was the unpaid balance on the contract, resulting in $7863, which Ms. White recommended that Ms. Darlington receive as a payout from the fund.

As of the hearing date, no award or payout had been made to Ms. Darlington.

Alvarado did not perform any work for the $6800 that Ms. Darlington paid it and there was no plan for Alvarado to do any work. Ms. Darlington paid the $6800 to Alvarado because Respondent had not fully paid it for the work it completed and Ms. Darlington wanted to hire Alvarado to do other unrelated work.

Mr. Lucker testified to the effect that Ms. Darlington had a balance of $7618, which included extra charges that were not necessarily memorialized.

Ms. Darlington did not agree that all of these extra charges were actually charges that she agreed to. Through an email dated June 20, 2019, however Ms. Darlington appeared to acknowledge that there was an outstanding balance of $5000, but she was of the opinion that this was not yet due because it was the final draw that was due only when the project was complete.

On October 13, 2020, ROC issued a Notice of Claim for Administrative Payout showing that Ms. Darlington would be awarded $7863 in the form of a payout from the Recovery Fund unless either Ms. Darlington or Respondent requested a hearing contesting the amount or propriety of the payment.

Respondent requested a hearing, which led to this matter being scheduled.

CONCLUSIONS OF LAW

“Contested case means any proceeding ... in which the legal rights, duties or privileges of a party are required or permitted by law, other than [Title 41, Chapter 6], to be determined by an agency after an opportunity for an administrative hearing.” Ariz. Rev. Stat. § 41-1001(5).

Respondent has a right to a hearing “to determine the amount or propriety of the payment” before ROC may actually make a payment from the Fund and no payment will be issued unless and until ROC issues an Order directing the Fund to make such a payment. See Ariz. Rev. Stat. § 32-1133.01(C). Respondent’s license will be suspended if ROC does issue a payout from the Fund. Ariz. Rev. Stat. § 32-1139. Consequently, this matter is a contested case.

Unless otherwise provided by law: the party asserting a claim, right, or entitlement has the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense; and the proponent of a motion shall establish the grounds to support the motion. Ariz. Admin. Code § R2-19-119(B).

Ms. Darlington filed a claim asserting that she is entitled to a payout from the Recovery Fund pursuant to Ariz. Rev. Stat. section 32-1132.Consequently, Ms. Darlington bears the burden of proof show that she meets the requirements for a payout from the Fund. Ariz. Admin. Code § R2-19-119(B).

The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119(A).

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 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.

Payouts from the recovery fund are limited to the actual damages suffered by a Claimant. Actual damages “may not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.” Ariz. Rev. Stat. § 32-1132.01(B)(1).

The preponderance of the evidence shows that the $6800 Ms. Darlington paid to Alvarado was not money that was necessary to complete or repair a residential structure or appurtenance within residential property lines. Moreover, the preponderance of the evidence shows that Alvarado was actually responsible for the deficient work at issue in compliance item 19.

The preponderance of the evidence shows that Ms. Darlington paid to Taz Plumbing $1294 to repair the waterline and that she received a bid of $2900 to repair Alvarado’s deficient work at the interface between the stucco and soffit.

The preponderance of the evidence shows that Ms. Darlington had a balance due of $3877 on the contract as she verified in her recovery fund claim.

The preponderance of the evidence shows that Ms. Darlington suffered a loss of $4194 ($1294 plus $2900) and actual damages of $317 ($4194 less the balance of $3877) as a result of Respondent’s violation of ROC’s workmanship standards.

Consequently, Ms. Darlington should receive a $317 payout from the Fund.

RECOMMENDED ORDER

IT IS RECOMMENDED that the Registrar of Contractors issue an Order authorizing a recovery fund payout of $317 to Barbara Jeana Darlington.

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 17, 2021.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000