ALJDEC decisions subject to certification as final

2019A-06359-RFA-LS-ROC · Registrar of Contractors · 2022-08-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Scott R Allen,

COMPLAINANT

Dahl Luxury Homes LLC

License No. ROC 276021,

RESPONDENT

No. 2019A-06359-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 23, 2022, and July 20, 2022

APPEARANCES: Complainant Scott R. Allen appeared on his own behalf. Respondent Dahl Luxury Homes LLC was represented by Francis J. Slavin. The Arizona Registrar of Contractors was represented by Assistant Attorney General Sarah Asta.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

The Arizona Registrar of Contractors (Registrar) issued License No. 276021 to Respondent.

On or about December 27, 2019, the Registrar received a Complaint against Respondent from Complainant alleging, among other things, that the flooring installed in the home was not level (the workmanship complaint).

After a jobsite inspection regarding the Complaint, Investigator Steve Nelsen issued a Written Directive to Respondent. The March 24, 2020 Written Directive from the Registrar provided, in pertinent part, as follows:

After investigation, the Registrar has verified that your work fails to meet minimum workmanship standards. A.R.S. § 32-1154(A)(3); A.A.C. R4-9-108. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on April 20, 2020.

. . . .

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

. . . .

Compliance Item: 5 - Nook/Kitchen floor- Un level more than a 1/4" in 12 feet.

Investigator’s Observation: The area in question, behind the dining table was out of standards and should be corrected.

. . . .

Compliance Item: 10 - Office Right Floor- Un level more than a 1/4" in 12 feet.

Investigator’s Observation: The area behind the desk exceeded the standard and should be corrected.

. . . .

Compliance Item: 11 - Office Left Floor- Un level more than a 1/4" in 12 feet.

Investigator’s Observation: The area behind the desk exceeded the standard and should be corrected.

. . . .

Compliance Item: 12 - Living Room Floor- Un level more than a 1/4" in 12 feet.

Investigator’s Observation: Near the left entrance to the living room, there was a peak in the floor that exceeded the standard and should be corrected.

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

Respondent filed a timely answer to the Citation. An administrative hearing was held. In her July 27, 2020 Decision, Administrative Law Judge Tammy L. Eigenheer considered Respondent’s arguments and concluded, among other things, that “Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.”

On August 10, 2020, the Registrar issued a Final Administrative Decision and Order finding violations and imposing a one day suspension.

On October 8, 2021, Complainant filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of fixing the flooring. As part of the claim process, Complainant submitted bids from two different contractors to correct the project.

After a review of the underlying complaint and the submitted bids, the Registrar calculated Complainant’s actual damages. The Registrar concluded that the only acceptable bid of $43,057.04 for the repair was appropriate. The price broke down to approximately $51.50 per square foot.

The Registrar issued a Notice of Administrative Award, finding that Complainant’s compensable actual damages were $30,000.00. Respondent requested a hearing, believing the payout was too high. Complainant 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.

A hearing was held on June 23, 2022, and July 20, 2022.

At the first hearing session, Respondent argued that the square footage represented in the bids submitted by Complainant was excessive as the Written Directive identified specific areas of the three rooms that had issues with the flooring rather than the entire room. Respondent argued that the areas needing to be replaced was closer to 180 total square feet rather than the 836 total square feet detailed in the bid used to calculate Complainant’s damages.

After the first hearing session, Respondent provided the Registrar with a March 25, 2020 bid from DDL Flooring LLC indicating a total bid of $2,065.00 to repair the workmanship issues. The bid did not include materials, but was just the labor necessary to perform the work.

Prior to the second hearing session, the Registrar submitted a supplemental exhibit consisting of a revised cost spreadsheet which indicated a possible payout of $2,065.00.

The Registrar denied that it was quashing the Notice of Administrative Award, but was merely providing the revised cost spreadsheet as information for the Administrative Law Judge to consider when rendering her decision.

At the second hearing session, Tedi Quezada, Legal Assistant II, testified that she reviewed the bid Respondent submitted and showed it to Investigator Steve Nelsen who stated that the bid was more in line with the scope of the work needed to be done to repair the flooring.

Derek Dahl, Respondent’s Owner and Qualifying Party, testified that the bid submitted from DDL Flooring LLC was obtained during the time Respondent was attempting to complete the corrective work after the Written Directive was issued and before the deadline expired. Because Respondent was attempting to schedule the work during the beginning stages of the COVID-19 pandemic, he was unable to get the work completed before the deadline expired. Mr. Dahl stated that he had purchased the materials needed to perform the corrective work and those materials were delivered to Complainant’s home, thus the bid only included the labor costs associated with installing the flooring.

Complainant testified that he did not give instructions to either bidding company on the scope of the work needed to be performed. Rather, Complainant stated that he provided the companies with the written directive and each one independently provided a bid. As both bids were in excess of $43,000.00, Complainant believed each accurately reflected the cost to complete the corrective work.

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. . . .” Respondent bears the burden of proof to establish that the proposed 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.”

After review of all the evidence, the Tribunal concludes that the award noticed by the Fund failed to accurately reflect Complainant’s actual damages. The bids submitted by Complainant were excessive in scope to correct the issues identified in the Written Directive.

However, Respondent did not provide sufficient evidence to establish the amount of a correct award from the Fund. The bid provided by Respondent was crafted more than two years prior to the hearing and could not reliably reflect the current labor costs to correct the work. Further, it was not clear from the evidence submitted if the materials Respondent delivered to the jobsite in early 2020 were still available and usable to complete the repair work.

Therefore, the Administrative Law Judge finds that the recommended payout from the Fund be disallowed. As to the correct amount that should be awarded, the Registrar may require additional information from Complainant with updated bids reflecting the reduced square footage. Alternatively, the Registrar may award Complainant $9,270.00, that is, the 180 square feet from Respondent’s bid at $51.50 per square foot from Complainant’s bid.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the Registrar quash the Notice of Administrative Award and either request additional information from Complainant or issue a payout of $9,270.00 to Complainant.

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, August 9, 2022.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

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-137160-45720000