ALJDEC - Licensing

2022A-09090-RFA-LS-ROC · Registrar of Contractors · 2024-09-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Julie Kay Riley ,

COMPLAINANT,

v.

Native Interiors LLC,

License No. ROC 313434,

RESPONDENT.

No. 2022A-09090-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 16, 2024

APPEARANCES: Julie Kay Riley represented herself. No person appeared on behalf of Native Interiors.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: ROC Exhibits 1 through 8.

_____________________________________________________________________

FINDINGS OF FACT

Background

The Arizona Registrar of Contractors (“Registrar)” issued License Number 313434 to Native Interiors LLC (“Respondent”).

In or about November 2022, the Registrar received a Complaint against Respondent from Julie Kay Riley (“Complainant”) alleging multiple workmanship issues and abandonment with respect to Respondent’s contracted scope of work. Respondent’s scope of work in the instant matter included “luxury vinyl flooring” installation in the home.

As a result of the Complaint and the ensuing investigation process, the Registrar subsequently 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).

Following an administrative hearing, an Administrative Law Judge concluded that Respondent had violated the charged provisions of this State’s contracting laws.

On June 5, 2023, the Registrar issued a Final Administrative Decision and Order accepting the Administrative Law Judge’s May 12, 2023 Decision and imposing a seven-day suspension, as well as a $500.00 civil penalty. The effective date of that Order was July 15, 2023.

On April 4, 2024, Complainant filed a claim with the Residential Contractors’ Recovery Fund (“the Fund”) to recover the cost of having a licensed contractor perform the uncompleted corrective work. As part of the Fund claim process, Complainant submitted bids from two licensed contractors that Complainant had received to perform the repairs to the project.

Registrar issued a Notice of Administrative Award, finding that Complainant’s actual damages were $5,909.00.

Complainant requested a hearing, noting that they had requested monies from the Footprints Flooring bid of $7,815.00 to make the corrective work.

The Registrar referred the matter to the Office of Administrative Hearings for an evidentiary hearing.

Hearing

In the underlying workmanship Complaint, the December 19, 2022 Written Directive from the Registrar specified that, as to several of the Complaint items, Respondent would be directed to remedy certain violations, as follows:

Compliance Item: - 1) Flooring throughout main floor hall is lifting/ buckling due to improper install as determined by materials manufacturer.;

Investigator’s Observation: I was shown several planks on the hallway Kitchen area that were marked with blue tape. I noted raise edges were present on the end joints and longitudinal joints on random planks in the area.

Compliance Item: - 2) Flooring on main floor dining room is lifting/buckling at seams due to improper install as determined by materials manufacturer.

Investigator’s Observation: I was shown several planks on the dining room area that were marked with blue tape. I noted raise edges were present on the end joints and longitudinal joints on random planks in the area.

Compliance Item: -3) flooring in kitchen is lifting/buckling at seams due to improper install as determined by materials manufacturer.

Investigator’s Observation: I was shown several planks on kitchen area that were marked with blue / green tape. I noted separations gaps exceeding 3/16” in width at the end joins on random planks in the area. Respondent closed the gap by stepping on the planks and moving his foot forward. Expansion and contraction (movement) is expected on this types of floors, however, the gaps observed in this area were excessive. It was also shown to me a piece of flooring against / under the kitchen island that had a separation gap on the longitudinal joint.

Compliance Item: - 4) Flooring on main floor in front of Arcadia doors are lifting/buckling at seams due to improper install as determined by materials manufacturer.

Investigator’s Observation: I was shown several planks on the hallway/arcadia door area that were marked with blue tape. I noted raise edges were present on the end joints and longitudinal joints on random planks in the area.

Compliance Item: - 11) Caulking on stairs does not meet workmanship standards and looks uneven and is in one place separating from stair leaving a 1/2 inch gap between caulking and stairs.

Investigator’s Observation: I noted caulking residue on the stairs landing. Caulking residue shall be removed from form the surface of the stairs landing.

Compliance Item: - 12) General lifting / buckling throughout residence as trim work was installed directly on top of flooring against manufacturers printed instruction.

Investigator’s Observation: I noted that various areas throughout the residence floor where the base board did not have a space of about 1/16” between the SPC floor and the base board as illustrated and instructed in the SPC Flooring Installation Instructions. Respondent shall identify these areas and complete project per manufacturer’s installation instructions.

Meredith Bell, Claims Reviewer for the Fund, had reviewed the Complaint, jobsite notes, jobsite photographs, Written Directive, Citation, and the two bids submitted by Complainant, in determining that Complainant was eligible to make a claim with the Fund and in calculating Complainant’s actual damages.

Ms. Bell determined that, as required, Complainant had made a claim with a Respondent’s bonding company as a prerequisite to obtaining a payout from the Fund. Ms. Bell reviewed evidence that there was no payout from Respondent’s bonding company.

Complainant submitted two estimates to the Fund for completion of the project. The bid from Footprint Flooring was in the amount of $7,815.00 and the bid from Eagle Flooring was in the amount of $5,909.00. Ms. Bell initially concluded that the lowest bid of $5,909.00 for completion of the project was appropriate. Ms. Bell also discussed the bids with her supervisor and the assigned investigator, Albert Bernal, to verify that the Eagle Flooring bid was the bid most in line with the scope of work contained in the Written Directive. The difference noted was that the Footprint Flooring bid was not cost-itemized and also contained charges for removal of the home’s furniture from the downstairs of the home, while Complainant’s contract with Respondent had contained a provision that the homeowners would move all furniture and appliances. As a result of her review, Ms. Bell recommended a payout from the Fund to Complainant in the amount of $5,909.00.

At hearing, Complainant argued that there was only $1,900.00 difference in the two bids and that, overall, she believed that Footprint Flooring was likely the better of the two contractors to perform the work. Additionally, Complainant argued that it was their preference to be able to choose Footprint Flooring to do the work.

At hearing, the ROC argued that the Fund, as a Fiduciary, is required to award a bid that repairs the actual damages as had been found in the Directive that needed to have been repaired, and cannot award additional monies. ROC argued that the Eagle Flooring bid is sufficient in covering the actual damages that needed repairs as had been found in the Directive.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

A.R.S. § 32-1132(A) provides that “[t]he residential contractors' recovery fund is established, to be administered by the registrar, for the benefit of a claimant damaged by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter.” The Registrar’s final decision in the underlying workmanship case giving rise to the instant matter establishes that Respondent’s work violated the sections of A.R.S. § 32-1154(A) that were charged in the Citation.

For the purposes of an award under A.R.S. § 32-1132(A), A.R.S. § 32-1133.01(B) provides 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:

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

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.

When the Registrar has calculated the amount of a complainant’s compensable damages and proposed a payout from the Fund to which s/he is entitled, the calculation is a prima facie showing of the amount that a complainant is entitled to recover as a payout from the Fund. In this case, Complainant requested a hearing challenging the Recovery Fund payout.

“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 Complainant is eligible for an award from the Fund and that the $5,909.00 award proposed by the Fund accurately reflects Complainant’s actual damages. Accordingly, the Tribunal concludes that Complainant is entitled to a payout from the Fund in the amount of $5,909.00.

RECOMMENDED ORDER

In view of the foregoing,

IT IS ORDERED that on the effective date of the final Order in this matter, the Residential Contractors’ Recovery Fund shall pay $5,909.00 to Complainant Julie Kay Riley.

IT IS FURTHER ORDERED that under A.R.S. § 32-1139(B), the Registrar shall charge $5,909.00, plus interest at a rate of ten percent a year, to Respondent Native Interiors, LLC’s License Number 313434.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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.

Done this day, September 5, 2024.

/s/ Kay A. Abramsohn

Administrative Law Judge

Transmitted electronically to:

Tom Cole

Registrar of Contractors

Legal Department

[email redacted]

Julie Riley

[email redacted]

Native Interiors LLC

[email redacted]

Mona Baskin

Assistant Attorney General

[email redacted]

By: OAH Staff