ALJDEC decisions subject to certification as final

2022A-06302-RFA-LS-ROC · Registrar of Contractors · 2023-08-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Dennis and Debra Tucker,

COMPLAINANT

The 9 Design Group LLC

License No. ROC 326280,

RESPONDENT

No. 2022A-06302-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 17, 2023

APPEARANCES: Complainant Dennis Tucker appeared on his own behalf. The Arizona Registrar of Contractors was represented by Assistant Attorney General Mona Baskin.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (Registrar) issued License No. 326280 to Respondent.

On or about July 28, 2022, the Registrar received a Complaint against Respondent from Complainant alleging, among other things, poor work (the workmanship complaint).

As a result of the workmanship complaint, the Registrar issued a Citation against Respondent charging a possible violation of A.R.S. § 32-1154(A)(1).

Respondent filed a timely answer to the Citation. An administrative hearing was held. In her December 14, 2022 Decision, Administrative Law Judge Jenna Clark considered Respondent’s arguments and concluded, among other things, that

It is clear that the parties had a pool remodeling and landscaping contract that Complainant substantially paid on, and that Respondent failed to complete due to insolvency. The record reflects that the parties’ settlement agreement, for Respondent to reimburse Complainant for completing the project, was not honored by Respondent though Complainant fulfilled his obligations under the negotiated deal.

On or about January 6, 2023, the Registrar issued a Final Administrative Decision and Order finding the violations and imposing a fourteen (14) day suspension.

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of completing or repairing the project. As part of the claim process, Complainant submitted proof of payments made to a number of companies and individuals that Complainant hired to complete the project.

The Registrar issued a Notice of Administrative Award, finding that Complainant’s actual damages were $1,457.46. Complainant requested a hearing, believing the payout was not enough. Respondent 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.

Hearing was held on July 17, 2023.

Hearing Evidence

At the time of the initial jobsite inspection, Complainant had already hired others and the project was complete.

Shaquira Adebule, Legal Assistant for the Fund, testified that she reviewed the file from the Registrar, the contract, Judge Clark’s December 14, 2022 Decision regarding the underlying complaint, and the invoices and payments submitted by Complainant in calculating Complainant’s actual damages.

Ms. Adebule determined that the original contract price was $115,035.44 and that Complainant had paid $87,000.00 on the contract. Accordingly, Complainant had an unpaid balance of $28,035.44.

Upon review of Complainant’s documents, Ms. Adebule noted that several of the individuals or companies paid by Complainant to complete the work were not licensed contractors and/or he did not provide contracts for the work performed. Therefore, Complainant’s payments to them were not considered as part of his actual damages.

After reviewing all of the materials, Ms. Adebule concluded Complainant’s actual damages totaled $1,457.46. Ms. Adebule’s calculations were as follows:

Original Contract $106,035.44

Change Orders $9,000.00

Total Contract $115,035.44

Payments Made $87,000.00

Unpaid Balance $28,035.44

Allowed Costs

Monterrey Tile Co. $2,172.59

Monterrey Tile Co. $344.12

Monterrey Tile Co. $61.70

Monterrey Tile Co. $796.84

Monterrey Tile Co. $106.62

City of Mesa $138.00

SCP $1,523.14

SCP $2,610.09

American Pool Finisher $4,707.80

Jeremy Weldon $2,500.00

West Valley Desert $3,000.00

Oasis Patio $5,766.00

Total Allowed Costs $29,492.90

Less Unpaid Balance $28,035.44

Actual Damages $1,457.46

Disallowed Costs

Aaron Lee $2,850.00

Jonathon Torres $750.00

Mike Lundy $650.00

Carlos Perez $3,000.00

Carlos Perez $4,000.00

Complainant argued that the unlicensed contractors were subcontractors Respondent had used on the project and he merely paid them to complete their work. Complainant asserted that he had no reason to believe they were not licensed.

Notably, Complainant testified that at some point in the project, he decided to go in a different direction than the original contract with Respondent contemplated, and therefore, Complainant did not provide the invoices or contracts for work he had done that varied from the work Respondent was supposed to have completed. Complainant maintained that he did not include any of the work that was done after the hardscape because the whole design was completely different. Complainant acknowledged that he did not mention that change to the Registrar during the processing of his claim to the Fund.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

A.R.S. § 32-1132.01(B) provides, in pertinent part, as follows:

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:

1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.

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.

The Registrar bears the burden of proof to establish that the proposed payout from the Fund is correct 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.”

This matter was complicated by the fact that Complainant had the project completed by other contractors before the investigator completed the jobsite inspection in the underlying complaint. Accordingly, the Registrar had no way of knowing what work Respondent performed on the project and what work remained to be done under the contract.

Based on the information provided to the Registrar from Complainant, the Registrar properly determined Complainant’s actual damages. The Fund cannot reimburse Complainant for payments made to unlicensed contractors or those without documentation supporting the work performed. Further, Complainant’s failure to provide bids for the work Respondent was contracted to perform, but that Complainant decided to alter after Respondent stopped work on the project, prevented the Registrar from calculating the full cost to complete the project.

After review of all the evidence, the Tribunal concludes that the award provided by the Fund accurately reflected Complainant’s actual damages. Accordingly, Complainant is accordingly entitled to a payout from the Fund in the amount of $1,457.46.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainant receive a payout from the Residential Contractors’ Recovery Fund in the amount of $1,457.46.

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.

-54864001

001

-137160-45720000Done this day, August 14, 2023.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Martín Quezada, Director

Registrar of Contractors

Dennis and Debra Tucker

[email redacted]

The 9 Design Group LLC

[email redacted]

Registrar of Contractors

[email redacted]

By: OAH Staff