ALJDEC decisions subject to certification as final

2021A-00455-RFA-LS-ROC-RS · Registrar of Contractors · 2022-06-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Matthew Charles Price,

COMPLAINANT,

M & M Diversified LLC,

License No. ROC 288011,

RESPONDENT.

No. 2021A-00455-RFA-LS-ROC-RS

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 6, 2022

APPEARANCES: Matthew Price, Complainant; Sean Mendoza, Respondent; Assistant Attorney General March Harris for the Registrar of Contractors

ADMINISTRATIVE LAW JUDGE: Kay Abramsohn

FINDINGS OF FACT

On April 20, 2022, 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 June 6, 2022.

The Notice of Hearing shows that the hearing was to determine whether an award and payment from the Residential Contractors’ Recovery Fund (“Fund”) pursuant to Arizona Revised Statutes (“A.R.S.”) § 32-1131 et seq. is justified by the evidence.

Complainant filed a claim with ROC’s Fund requesting a payout of $32,600.00 less the Bond amount that has been received.

After review and consideration of the available information, on April 6, 2022, ROC issued a Notice and Order of Administrative Award in the amount of $20,675.00.

Respondent requested an administrative hearing be scheduled, indicating his position that the determined amount had been calculated from the “wrong” information.

BACKGROUND

On or about July 13, 2018, Complainants entered a multi-item contract with Respondent that included construction of a patio balcony and deck using composite materials, the amount for which was stated to be $11,000.00; however, on January 14, 2019, Respondent executed a Change Order which called for the deck boards to be redwood and Respondent refunded $3,200.00 for the cost differential in that material.

On January 29, 2021, Complainant filed with ROC a complaint alleging that Respondent did not use the contracted-for materials, i.e., redwood.

Following the ROC jobsite inspection and issuance of a Directives and an Amended Directive, ROC issued to Respondent a Citation regarding the workmanship in that the deck board materials that had been used were, in fact, not redwood.

An administrative hearing was subsequently conducted to address the allegations.

In an Administrative Law Judge (“ALJ”) Decision dated August 13, 2021, the ALJ concluded: the parties’ contract had called for redwood; Respondent had been paid in full; Respondent did not initially use redwood materials; and, following the issuance of the Amended Directive, Respondent had not remediated the determined violations by the compliance deadline date. Further, the ALJ concluded that the evidence demonstrated that Respondent’s failure to have performed the work as contracted-for and failure to have corrected the work by the compliance deadline was in violation of ROC’s workmanship standards; therefore, the Respondent’s work was in violation of Arizona Administrative Code (“A.A.C.”) R4-9-108, which is also a violation of A.R.S. § 32-1154(A)(3). The ALJ also found that Respondent had violated A.R.S. § 32-1154(A)(22).

On September 8, 2021, ROC issued a Final Administrative Decision and Order through which it adopted the ALJ’s Decision, which included suspending Respondent’s license for one day.

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Complainant’s Recovery Fund Claim (“Claim”) indicated the parties’ contract was paid in full. Complainant indicated he had collected money from Respondent’s bonding company in the amount of $4,250.00. Complainant provided estimates for consideration.

When ROC considered the estimates, it found that, when comparing the parties’ contract, the Complaint, and the Amended Directive, a further/new bid was needed with regard to the materials for a determination of an amount that would wholly resolve the work required to complete/repair the project.

The March 29, 2022 bid from Remodeling and Repair Systems, estimated the required remediation work at $29,425.00. ROC reevaluated Complainant’s Claim and determined that the valid expenditures to complete/repair the project were $29,425.00 less the $4,250.00 recovery from the bonding company. Consequently, ROC calculated the Fund payout amount of $20,675.00.

While Complainant indicated at hearing that he would accept the Fund payout amount, Respondent essentially argued that the amount was too high because the original contract amount on that portion of the project was only $11,000.00.

Respondent noted that he had purchased redwood (only about a year ago) that could be used in the remediation and he argued that the $3,200.00 refund he had made (at the time of the Change Order) should also be taken into account. Finally, Respondent requested that, whatever award amount is made, that he be given time to repay the Fund so that he has time to continue to bring in receipts in order to be able to repay the Fund.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

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.

“Notwithstanding any other provision in this chapter, if a contractor license has been revoked or 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.” Ariz. Rev. Stat. § 32-1133.01(A).

Ariz. Rev. Stat. section 32-1132.01 provides in part:

An 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. Actual damages:

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[(B)(2)]. Must 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.

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F. If the claimant has recovered a portion of the claimant's loss from sources other than the fund, the registrar shall deduct the amount recovered from other sources from the amount of actual damages suffered pursuant to subsection B of this section and direct the difference, not to exceed $30,000, to be paid from the fund.

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H. For the purposes of this section, "actual damages" means the reasonable cost of completing the contract and repairing the contractor's defective performance, minus the part of the contract price still unpaid.

The preponderance of the evidence shows that Complainant has suffered damages within the meaning of the statute. In this case, the Administrative Law Judge concludes that ROC appropriately determined that $29,425.00 is a compensable cost-to-repair and Respondent has not demonstrated that this was an inaccurate or inappropriate amount. ROC was required to deduct from that cost-to-repair the $4,250.00 amount Complainant recovered from the Bond; therefore, the Fund Award is appropriately calculated to be $20,675.00 and should be approved. The Administrative Law Judge concludes that Notice and Order of Administrative Award of $20,675.00 payout should be affirmed, that a Fund payout of $20,675.00 should be awarded to Complainant, and that Respondent’s appeal should be denied.

RECOMMENDED ORDER

IT IS ORDERED that, on the effective date of the Registrar’s final order, Complainant receive a payout from the Residential Contractor’s Recovery Fund in the amount of $20,675.00.

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, June 26, 2022.

/s/ Kay A. Abramsohn

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

By Miranda Alvarez

Legal Secretary