ALJDEC decisions subject to certification as final

2019A-05016-RFA-ROC · Registrar of Contractors · 2020-06-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Manuel A and Arlene Garcia,

COMPLAINANTS,

v.

Bill Roger Acker,

dba B A Associated,

License No. ROC 316689,

RESPONDENT.

No. 2019A-05016-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 04, 2020 at 9:00 AM.

APPEARANCES: Assistant Attorney General John Tellier, Esq., appeared telephonically on behalf of the Arizona Registrar of Contractors (“Registrar”) with Tedi White and Gregory Johndrow as witnesses. Ryan O’Neal, Esq. appeared telephonically on behalf of Manual Garcia and Arlene Garcia (“Complainants”). Brenda Lee, Esq., appeared telephonically on behalf of Bill Roger Acker (“Respondent”). Respondent observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT

Background and Procedure

According to the Registrar’s public website, on or about November 28, 2017, the Registrar issued License No. 316689, specialty dual CR-69 asphalt paving contracting license, to Respondent. Bill Roger Acker is the Qualifying Party and Owner on this license. Respondent’s address of record on the license is 223 Georgianna St. Sunset, LA 70584-5515.

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. On October 10, 2019, License No. 316689 was revoked by the Registrar. The license has been disciplined by the Registrar on four prior occasions, and there is one open complaint against the license. There are also two resolved or otherwise settled cases on Respondent’s license. The license had a $6,750.00 surety bond issued by RLI Insurance Company (“RLI”), however, the bond was canceled effective January 05, 2020.

On September 29, 2019, Complainants filed a complaint against Respondent with the Registrar alleging poor workmanship. In the complaint, Complainants asserted that on or about June 13, 2019, Complainants and Respondent entered into a contract whereby Respondent agreed to repave Complainants’ driveway for the sum total of $26,000.00, and Respondent’s work failed approximately three months after the work was completed. The Registrar received the complaint on October 03, 2019, whereby it was designated Complaint No. 2019-05016 and assigned to Gregory Johndrow (“Investigator Johndrow”) for investigation.

On November 01, 2019, Investigator Johndrow completed his inspection of Complainants’ project. Respondent was not in attendance. Ultimately, Investigator Johndrow substantiated 7 of 9 workmanship complaint items, and determined that the work Respondent performed fell below the Registrar’s minimum workmanship standards.

On November 05, 2019, a Directive From The Registrar (“Directive”) was issued by the Registrar which instructed Respondent to remedy the outlined violations by appropriate means and provide written proof of completion to the Registrar no later than 5:00pm on November 21, 2019. Respondent was put on notice that if its license had been revoked it was only permitted to remedy the listed violation(s) by paying a licensed contractor as hired by Complainants or by entering into a financial settlement agreement with Complainants. Respondent was also informed that it was not permitted to hire contractors outside the scope of its license to perform remediations on the project.

Respondent did not adhere to the Registrar’s Directive. Specifically, Respondent did not perform the remediations for the violation’s identified in the Directive, nor did Respondent subcontract restorative work. Moreover, Complainants and Respondent did not execute a financial agreement on or by November 21, 2019, to resolve Complaint No. 2019-05016.

On November 27, 2019, a Citation was issued and sent certified and first class mail to Respondent’s address of record charging Respondent with failure to meet minimum construction standards in violation of Ariz. Rev. Stat. § 32-1154(A)(3) and Ariz. Admin. Code R4-9-108, and for failing to take corrective action after a written directive was issued by the Registrar in violation of Ariz. Rev. Stat. § 32-1154(A)(22). Respondent was advised to submit a written Answer to the Registrar by December 12, 2019, and that failing to do so would constitute an admission pursuant to Ariz. Rev. Stat. § 32-1155(B).

Respondent did not submit an Answer to the Registrar.

On December 23, 2019, the Registrar issued a Final Administrative Decision and Order (Default) to the parties whereby Respondent was held to be in violation of Ariz. Rev. Stat. §§ 32-1154(A)(3) and (A)(22). As such, the Registrar revoked Respondent’s licenses under Ariz. Rev. Stat. §§ 32-1154 and 32-1155.

On or about December 30, 2019, the Registrar received a claim for payment with the Recovery Fund from Complainants. Complainants indicated a $26,000.00 deposit to be refunded, and specifically requested a $26,000.00 payment from the Recovery Fund.

On April 02, 2020, the Registrar issued a Notice and Order of Recovery Fund Claim Denial which held that Complainants were legally eligible for an administrative awarded from the Fund, and had received a payout award for the sum total of $21,000.00. Specifically, the Registrar determined that the entire project would have to be redone, and the lowest bid Complainants obtained was for $21,000.00.

On or about April 13, 2020, the Registrar received a timely appeal request from Respondent, whereby Respondent contested Complainants’ eligibility to access the fund and also contested Complainants’ payout award amount.

On or about April 15, 2020, the Registrar received a timely appeal request from Complainants, whereby Complainants contested their payout award amount.

On April 20, 2020, the Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an independent evidentiary hearing on June 04, 2020. The issue at hearing was to determine if an award and payment from the Recovery Fund pursuant to Ariz. Rev. Stat. § 32-1131 et seq. was justified by the evidence.

Hearing Evidence

At the hearing, the Registrar presented the testimony of Tedi White and submitted Exhibits 1-17. Complainants called Gregory Johndrow as a witness and submitted Exhibit 4. The Notice of Hearing was also admitted into the record as an exhibit. Respondent did not call any witnesses or admit any exhibits. The substantive facts are as follows:

Complainants own residential property located at 2600 E Stallion Lane, Catalina, AZ 85739, which is the site of the underlying project at issue.

Ms. White is a Legal Assistant II for the Registrar. Ms. White made the determination that Complainants were eligible for a payout from the Fund, and also calculated the payout amount at issue.

The parties’ contract, which is a total of one page, details that Respondent set a “flat price” of $26,000.00 to pave Complainants’ extended driveway on June 13, 2019. Complainants paid the contract in full.

Complainants did not have remediations performed on the project, but did obtain two (2) bids for such work. The first bid Complainants’ obtained was from Tucson Asphalt Contractors (“TAC”). On or about November 15, 2019, TAC provided Complainants with a bid to remove and replace Complainants’ asphalt for $23,122.06. The second bid Complainants’ obtained was from Adobe Asphalt & Seal Coating LLC (“Adobe”). On or about November 18, 2019, Adobe provided Complainants with a bid to remove and replace Complainants’ asphalt for $21,000.00.

On January 13, 2020, Complainants’ filed a claim against Respondent’s surety bond. On February 05, 2020, RLI issued a denial letter to Complainants which states, in pertinent part:

“RLI elects to exercise its right under ARS § 32-1152(E) and require that a civil lawsuit be filed, and judgment obtained, against [Respondent] ... before payment is issued under the bond (not to exceed the $4,250.00 Bond amount.) Therefore, when and if suit is filed, RLI will respond accordingly. In the meantime, RLI must deny your claim against the Bond.”

Closing Arguments

In closing, Complainants argued that the Registrar erred in issuing an administrative award on the lowest bid they provided, and should have instead issued an award on the higher bid. Complainants further argued, essentially, that just because it is the Registrar’s practice to make an applicant whole by the least expensive means, it is not mandatory to do so. Thus, the Registrar should award Complainants $2,000.00 more dollars on their Recovery Fund claim because they may.

In closing, Respondent argued that Complainants only means of lawfully receiving an administrative payout from the Recovery Fund were if they had obtained a civil judgment pursuant to Ariz. Rev. Stat. § 32-1133.01, and because they currently have a suit pending they are unable to proceed as their claim is unripe. Respondent further argued that the Registrar ran the risk of having to recoup any award issued should Complainants’ suit be unsuccessful.

In closing, the Registrar argued that its administrative payout determination was legally sound, and neither party provided sufficient evidence to reverse or modify it.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

Complainants and Respondent bear the burden of establishing by a preponderance of the evidence that the Fund’s payout amount was incorrect and/or improperly issued. The Registrar bears the burden to establish factors in mitigation by the same evidentiary standard.

“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.”

Pursuant to Ariz. Rev. Stat. § 32-1131 et seq., in order to be eligible to access the Recovery Fund an applicant must meet four eligibility criteria. See McMurren v. J.M.C. Builder, Inc., 204 Ariz. 345 (App. 2003). First, an applicant must meet the definition of a “person injured” set forth at Ariz. Rev. Stat. § 32-1131(3) which requires that the applicant be the owner of the residential real property at issue. Second, the property must have had a classification of three under Ariz. Rev. Stat. § 42-12003. Third, the owner of the property must have occupied, or intended to occupy, the property as a resident that is damaged by a [residential or dual licensed] contractor who has paid for financial protection from the Recovery Fund. These criterion must be met at either the time the contract was executed or at the time the injury accrued. Fourth, as set forth in Ariz. Rev. Stat. § 32-1132(A), the applicant must have contracted with a residential contractor whose license was in good standing at the time of contract execution.

Ariz. Rev. Stat. § 32-1154(F) provides that “if a contractor’s license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter the registrar may order payment from the residential contractors’ recovery fund to remedy the violation.”

Statutes shall be liberally construed to affect their objects and to promote justice. In interpreting a statute, “[w]e first consider the language of the statute and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter, historical background, effects, consequences, spirit, and purpose.”

Statutes should be interpreted to provide a fair and sensible result. “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”

The Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.

In the case at bar, however, a detailed factual analysis is not necessary. Neither Complainants nor Respondent provided binding authority or statute under which the Tribunal or Registrar would be bound to accept and modify Complainant’s administrative payout amount. As such, both Complainants and Respondent failed to sustain their respective burdens of proof in this matter.

Here, the evidence is clear regarding to whom and how much Complainants would have to pay to remediate their contract with Respondent. The record reflects that the Registrar soundly established Complainant’s eligibility and how Complainant’s payout award amount was properly calculated at $21,000.00.

Ms. White credibly testified that she diligently reviewed Complainants’ underlying contract with Respondent, the bids Complainants provided with their Recover Fund claim, and sought advice and counsel from Investigator Johndrow regarding; which is how she determined that Complainants were eligible for a $21,000.00 payout award from the Recovery Fund.

Neither Complainants nor Respondent offered any credible evidence to rebut or overcome Ms. White’s testimony.

Therefore, the undersigned Administrative Law Judge concludes that Complainants were properly awarded a $21,000.00 payout from the Recovery Fund. Both Complainants’ and Respondent’s appeals are denied.

RECOMMENDED ORDER

Based on the foregoing,

it is recommended that Respondent’s appeal be denied.

IT IS FURTHER RECOMMENDED that Complainants’ appeal be denied

IT IS FURTHER RECOMMENDED that the Registrar affirm the $21,000.00 payout from the Recovery Fund as outlined in the Notice of Claim for Administrative Award, as issued on April 02, 2020.

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 forty (40) days from the date of that certification.

Done this day, June 23, 2020.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors