ALJDEC decisions subject to certification as final

2021A-04017-RFA-LS-ROC · Registrar of Contractors · 2023-02-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Barbara Jean DeWitt,

COMPLAINANT,

Walker's Enterprises, Inc.

DBA: Sun Valley Stucco,

License No. ROC 283688,

RESPONDENT

No. 2021A-04017-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: January 24, 2023

APPEARANCES: Complainant Barbara DeWitt appeared on her own behalf. Douglas Dwayne Walker appeared on behalf of Respondent Walker’s Enterprises, Inc., doing business as Sun Valley Stucco. Assistant Attorney General Seth Hargraves represented the Arizona Registrar of Contractors.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Background and Procedure

According to the Arizona Registrar of Contractors’ (“Registrar”) public website, on March 1, 2013, the Registrar issued License No. 283688, General Dual KB-1 Dual Building Contractor contracting license to Walker’s Enterprises, Inc., doing business as Sun Valley Stucco (“Respondent”). Douglas Dwayne Walker is listed on the license as the Qualifying Party and an Officer of Respondent.

On or about August 17, 2021, the Registrar received a Complaint filed by Barbara DeWitt (“Complainant”) against Respondent alleging poor work with respect to the stucco project performed by Respondent. The Registrar assigned John Smith (“Investigator Smith”) to investigate the Complaint.

Investigator Smith conducted a jobsite inspection at the project site on September 22, 2021. During that inspection, Investigator Smith took photographs of Respondent’s work. After the inspection, Investigator Smith drafted Jobsite Inspection Notes.

On September 24, 2021, Investigator Smith issued a Written Directive from the Registrar to Respondent due to having substantiated Complainant’s allegations that some of the work Respondent had performed failed to meet minimum workmanship standards. Respondent was put on notice that it had until 5:00 p.m. on October 15, 2021, to notify the Registrar of its compliance with the Written Directive or face discipline pursuant to Ariz. Rev. Stat. § 32-1154(A)(22) and Ariz. Rev. Stat. § 32-1154(E).

Respondent failed to perform all of the required corrective work. Consequently, Investigator Smith referred the Complaint to the Registrar’s legal department.

On October 22, 2021, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22).

After receiving Respondent’s Written Answer to the Citation, the Registrar referred the matter to the Office of Administrative Hearings, an independent State agency, for an evidentiary hearing to determine whether the Registrar had cause to discipline Respondent’s license based upon Respondent’s alleged violations of this State’s contracting laws.

On December 21, 2021, an administrative hearing was held before the Office of Administrative Hearings.

On or about January 10, 2022, the Office of Administrative Hearings transmitted the Administrative Law Judge Decision to the Registrar which recommended that discipline be imposed against Respondent’s contracting license as the Administrative Law Judge concluded that Respondent had violated the charged provisions of this State’s contracting laws. The Order also recommended that Respondent’s license be suspended for five (5) days and that Respondent pay a civil penalty in the amount of $500.00.

On January 24, 2022, the Administrative Law Judge Decision was accepted by the Registrar.

On March 5, 2022, the Final Administrative Decision and Order became effective.

On or about July 1, 2022, the Registrar received Complainant’s claim for payment from the Residential Contractors’ Recovery Fund (“Fund”) in the amount of $30,000.00.

On August 8, 2022, the Registrar issued a Notice and Order of Recovery Fund Ineligibility.

Complainant appealed the Registrar’s Recovery Fund claim denial and the matter was referred to the Office of Administrative Hearings for an independent evidentiary hearing.

Hearing Evidence

At the hearing, the Registrar called Shaquira Adebule as a witness. Complainant testified on her own behalf. Mr. Walker appeared on behalf of Respondent and deferred to the Registrar’s presentation. All of the Registrar’s exhibits were admitted. Complainant’s two exhibits were admitted. Respondent did not submit any exhibits. Administrative notice was taken of the agency record.

Ms. Adebule is a Legal Assistant II for the Registrar and she reviewed Complainant’s claim to the Fund. Ms. Adebule testified that she reviewed Respondent’s scope of work, the Complaint, the payments made to Respondent, the Jobsite Inspection Notes, photographs, Written Directive, Citation, the Administrative Law Judge Decision, the final agency action, and the Fund claim form with the attached invoices, as well as other relevant documentation.

Ms. Adebule testified that upon review, she discovered that Complainant filed the Complaint against Respondent and listed DreamBuild, LLC as the licensed contractor filing the Complaint. Ms. Adebule also discovered that Respondent’s contract for the property located on Summer Ranch Place was with DreamBuild, LLC, and the contract for Adobe Ranch Place, the property for which this claim was filed, was also with DreamBuild, LLC. Ms. Adebule testified that the checks written to Respondent were issued on DreamBuild, LLC checks, signed by Complainant.

Ms. Adebule testified that the Claim to the Fund named DreamBuild, LLC as the Claimant, listed its contracting license number, and in Section A of the Fund claim form, Complainant indicated that she does not currently occupy nor does she intend to occupy the property as her primary residence.

Ms. Adebule referenced the February 7, 2022 letter from Respondent’s bonding company that denied Complainant’s claim due to the fact that a general contractor is not eligible to make a claim against a subcontractor’s bond.

Ms. Adebule testified that the repair contract entered into by Complainant with Old Pueblo Stucco & Lath, LLC identifies Tylko Ja Real Estate, LLC as the owner of the property and DreamBuild, LLC as the Builder. The payments made to Old Pueblo Stucco & Lath, LLC were on checks containing both the names of Complainant and DreamBuild, LLC.

The Quit Claim Deed for the property lists the owner of the property as Tylko Ja Real Estate, LLC.

Ms. Adebule testified that the Corporation Commission records for Tylko Ja Real Estate, LLC show Complainant as the sole member.

Ms. Adebule testified that on August 5, 2022, she searched Complainant’s realty site, Tierra Antigua Realty, and discovered that the property for which the claim to the Fund was filed, was for sale and that such was consistent with the information contained on the Fund claim filed on July 1, 2022, that Complainant did not intend to occupy the property.

The records for Pima County identify the owner of the property as Tylko Ja Real Estate, LLC. The records for Pima County also identify the mailing address for Complainant as 5465 W. Sunset Rd., and that the 5465 W. Sunset Rd. address is Complainant’s primary residence.

Ms. Adebule testified that the Registrar issued a Notice of Ineligibility to Complainant based upon the fact that Complainant does not occupy or intend to occupy the property. Ms. Adebule explained the Registrar’s analysis set forth in the Notice pursuant to Ariz. Rev. Stat. § 32-1132.01:

In order for a limited liability company to be eligible for an award from the Fund:

The LLC must contract with a licensed residential contractor who was appropriately licensed when the underlying contract was signed, when the first payment was made, or when the underlying work first commenced. A.R.S. §§ 32-1132(C) & (D);

The LLC must own the residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance. A.R.S. § 32-1132(B)(2)(a); and

All of the LLC’s members must actually occupy or intend to occupy the residential real property as their primary residence. A.R.S. § 32-1132(B)(2)(b).

No member of the LLC may have received monies from the Fund in the last two years. A.R.S. § 32-1132(B)(2)(c).

If any of the conditions listed above are not met, the claimant is statutorily ineligible for an award from the recovery fund.

Ms. Adebule further explained that notwithstanding a recent change in the statute, the Registrar’s determination would remain unchanged because although the statute no longer requires all of the LLC’s members to occupy or intend to occupy the property as their primary residence, because Complainant is the sole member of the LLC, the outcome is the same.

Ms. Adebule testified that she did not conduct a damages analysis due to Complainant’s ineligibility.

Complainant testified that she changed her address the day before the hearing and that she is being “forced to move into a house that she doesn’t want to live in.” Complainant asserted that Respondent’s work was faulty and Respondent was provided an opportunity to correct its work and did not do so.

Complainant testified that she lost the opportunity to sell the property in question and has therefore suffered harm. Complainant testified that she indicated on the Fund claim form that she did not intend to occupy the home because at that time she intended to sell the home, however, she has been unable to do so, and consequently, has been compelled to move into the home. Complainant further testified that she has “always intended to be flexible as to where she lives,” asserting that “every house she builds is a possibility to move into.” However, Complainant has only constructed two homes.

Complainant asserted that the purpose of the Fund is to make people whole and she wants access to the Fund because she now intends to occupy the residence. Complainant testified that the day before the hearing, on January 23, 2023, she decided to move into the home, took the home off the market, and obtained a new driver license containing the property’s address. Complainant testified that she was going to move into the home the evening of January 24, 2023, the day of the hearing in this matter. Complainant testified that she decided to move the day before the hearing “so [she] could be honest in this hearing” and she “should not be penalized for morality.”

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before the Office of Administrative Hearings.

Complainant bears the burden of establishing by a preponderance of the evidence that the Fund improperly denied her claim.

“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.”

Ariz. Rev. Stat. § 32-1133.01(A) provides that “if a contractor 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.”

Pursuant to Ariz. Rev. Stat. § 32-1132(B):

Only the following claimants are eligible for an award from the residential contractors' recovery fund:

1. An individual who both:

(a) Owns residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance.

(b) Actually occupies or intends to occupy the residential real property described in subdivision (a) of this paragraph as the individual's primary residence.

2. A limited liability company to which both of the following apply:

(a) The limited liability company owns the residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance.

(b) At least one of the limited liability company's members actually occupy or will occupy the residential real property as described in subdivision (a) of this paragraph as their primary residence.

Regardless of which version of the statute is utilized, in this case, the credible, probative, and substantial evidence of record established that Complainant is the sole member of her limited liability company and Complainant does not occupy or intend to occupy the residence. While there is ample evidence that Complainant sustained damages as a result of Respondent’s poor workmanship, the evidence before the tribunal does not establish that Complainant is eligible to receive an award from the Fund.

Therefore, the undersigned Administrative Law Judge concludes that the Registrar properly denied Complainant’s claim to the Fund. However, nothing in this order would prevent Complainant from seeking a monetary award against Respondent from a civil court of competent jurisdiction.

RECOMMENDED ORDER

Based on the foregoing,

it is recommended that Complainant’s appeal be denied.

IT IS FURTHER RECOMMENDED that the Registrar affirm the denial of Complainant’s claim to the Fund.

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.

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-137160-45720000Done this day, February 10, 2023.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically or by mail to:

Martín Quezada, Director

Registrar of Contractors

By: OAH Staff

-54864001

001

-137160-45720000