ALJDEC decisions subject to certification as final

2020A-00095-RFA-LS-ROC · Registrar of Contractors · 2021-09-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ashley Nicole Johnson-Brown and Richard Williams,

COMPLAINANT

Top Onyx LLC,

License No. ROC 328003,

RESPONDENT

No. 2020A-00095-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 13, 2021

APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General Sarah A. Asta. Complainant Ashley Nicole Johnson-Brown appeared on her own behalf. Dewayne Lewis, Owner and Qualifying Party, appeared on behalf of Respondent Top Onyx LLC, which was represented by James Csontos.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (Registrar) issued License No. 328003to Respondent Top Onyx LLC.

On or about January 6, 2020, the Registrar received a complaint against Respondent from Complainant alleging that Respondent’s work on her project was poor (the workmanship complaint). The workmanship complaint noted that Complainant had paid $5,000.00 of the total agreed upon price of $10,112.82.

As a result of the workmanship complaint, the Registrar issued a written directive in which Respondent was ordered to correct poor work relating to the tile flooring installation. Specifically, the written directive provided as follows: “Correct locations of missing or irregular grout at the main floor tiles and the hall bathroom upstairs. Correct several main floor tiles that have lippage, a difference of height greater than 1/32 inch between individual tiles.”

After Respondent performed corrective work, the investigator conducted a compliance jobsite inspection at which time he noted that “[c]orrective work was performed at the lower level living room, family room and kitchen regarding lippage. Parties state approximately 35 tiles were replaced. Issues of lippage [are] still present at locations of the replaced tile and in couple of other locations. Observed more than a dozen tiles with lippage greater than 1/32”. . . . In the upstairs hallway bathroom parties state that work [regarding] cleaning the tile took place to correct a sheen issue. No work [regarding] missing or irregular grout was addressed in the bathroom.”

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); and A.R.S. § 32-1154(A)(22).

Respondent filed a timely answer to the Citation. After a hearing on the matter, the Registrar issued a Final Administrative Decision and Order finding the violations and imposing a two day suspension.

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of repairing the work. As part of the claim process, Complainant submitted invoices showing she had paid $921.28 for the installation of baseboards, which were not part of her contract with Respondent.

Complainant submitted bids from Wholesale Floors LLC and Grizzly’s Flooring, LLC including the removal and replacement of 1400 sq. ft. of tile, including the removal and installation of a toilet and hardy backer for the upstairs bathroom. Complainant also provided an estimate from Floor & Decor indicating the cost to purchase 1400 sq. ft. of tile.

On or about March 10, 2021, Investigator Jack Grimm returned to Complainant’s home to inspect the project. The Recovery Fund asked Investigator Grimm to determine the scope of the work necessary to repair the project. Investigator Grimm noted that only about four tiles still had unacceptable lippage, but some tiles were damaged when tiles were removed and replaced during the corrective work. Investigator Grimm did not inspect or make any observations regarding the upstairs bathroom.

Based on the observations of Investigator Grimm, the Recovery Fund requests that Complainant submit a new estimate limited to the replacement of 19 tiles without any work relating to baseboards, toilets, hardy backer, appliance, and furniture.

Complainant submitted a new estimate for 161.4 sq. ft. of tile costing $271.26 and a bid from Grizzly’s Flooring LLC for $3,540.00. Those bids still included work on the upstairs bathroom.

The Registrar issued a Notice and Order of Recovery Fund Claim Denial, finding that Complainant did not have any compensable actual damages. Complainant filed an appeal. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

Hearing was held on August 13, 2021.

Katelyn Rolling, Legal Assistant with the Fund, testified that she reviewed the agreement between the parties, the payments Complainant made on the contract, and bids submitted by Complainant in calculating Complainant’s actual damages. Ms. Rolling concluded that the underlying contract price was $10,740.00, of which, Complainant had paid $5,000.00, which left an unpaid balance due on the contract of $5,740.47. The lowest allowable bids for the repair work submitted by Complainant were $150.25 for the tile and $1,000.00 for installation. Ms. Rolling testified that because Complainant had a greater unpaid balance due on the contract than the cost to complete or repair the project, Complainant did not have any actual damages as defined by the statutes applicable to the Fund.

Complainant asserted that the Registrar had failed to consider the work necessary to repair the floor in the upstairs bathroom. Complainant stated that Investigator Grimm did not look at the flooring in that area during the March 10, 2021 inspection. Complainant admitted that she was unable to identify what her actual damages were and/or how much she was expecting to receive from the Recovery Fund.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

A.R.S. § 32-1132.01(B) provides that “[a]n 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.” Further, the actual damages “[m]ay not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines” and “[m]ust 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.” A.R.S. § 32-1132.01(B)(1) and (2).

Complainant bears the burden of proof to establish that the denial from the Fund is incorrect by a preponderance of the evidence. See A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B) (1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952).

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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.” Black’s Law Dictionary 1220 (8th ed. 1999).

The evidence presented established that the written directive issued by the Registrar required Respondent to address missing or irregular grout in the upstairs bathroom. The evidence also established that, during the compliance jobsite inspection, the Registrar observed that “[n]o work [regarding] missing or irregular grout was addressed in the bathroom.” Accordingly, Complainant proved that the work in the upstairs bathroom should have been included in the calculation of actual damages.

The evidence established that Complainant had an unpaid balance on the underlying contract with Respondent of $5,740.47. The estimates to repair the issues on Complainant’s project totaled $3,811,26. Accordingly, even allowing the larger scope of work to correct the work, Complainant’s unpaid balance on the underlying contract was in excess of the cost to repair the work. As such, Complainant did not have any compensable damages.

After review of all the evidence, the Tribunal concludes that the denial from the Fund accurately reflected Complainant’s lack of actual damages as defined by the statute. Accordingly, Complainant is not entitled to a payout from the Fund.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that Complainant’s appeal be 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.

-54864001

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-137160-45720000Done this day, September 2, 2021.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

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-137160-45720000