ALJDEC decisions subject to certification as final

2022A-09947-RFA-LS-ROC · Registrar of Contractors · 2023-05-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Micah Ensor,

COMPLAINANT

Outdoor Luxury Living Inc.,

License Nos. ROC 325258, 325501,

RESPONDENT

No. 2022A-09947-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 18, 2023

APPEARANCES: Complainant Micah Ensor appeared on his own behalf. Respondent Outdoor Luxury Living Inc. did not appear. The Arizona Registrar of Contractors was represented by Assistant Attorney General Seth T. Hargraves.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (Registrar) issued License Nos. 325258 and 325501 to Respondent.

The Registrar previously received a Complaint against Respondent from Complainant alleging abandonment (the workmanship complaint).

As a result of the workmanship complaint, the Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(1) and A.R.S. § 32-1154(A)(3), namely of A.A.C. R4-9-108(A).

Respondent failed to file a timely answer to the Citation.

On or about December 1, 2022, the Registrar issued a Final Administrative Decision and Order (Default) finding the violations and revoking Respondent’s license 325501.

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of completing or repairing the project. The claim form included a “Required Documentation Checklist” that advised claimants of the documents needed to be submitted with claims to the Fund. With respect to the cost to repair and/or complete the project, the required documents were listed as follows:

A. Submit copies of TWO itemized bids for each item requiring repairs or completion.

The bids must be from licensed residential contractors that are in good standing with the Registrar

NOTE: The bids you supply must match up with any written directive or findings from your underlying disciplinary case

B. IF REPAIRS ARE IN PROGRESS OR PROJECT IS COMPLETE: copies of new contract(s) with licensed residential contractor(s) that are in good standing, invoices, receipts and proof of payment as specified in Box 5. NOTE: Only those costs incurred to complete or repair the corrective work ordered by the Registrar are compensable as ‘actual damages.’ A.R.S. § 32-1132.01.

As part of the claim process, Complainant indicated that he had paid Respondent a total of $39,629.52 of the total contract price of $44,039.34. Complainant also listed that he had already spent $6,580.00 to “Parker Pool Remodel” to work on the project. Complainant also submitted a bid from Soto & Sons, Inc. to install a pebble finish for a total price of $6742.90.

On or about December 6, 2022, the Registrar notified Complainant that additional information was needed. Complainant was instructed to submit, by December 13, 2022, proof of payment to Respondent and proof of payment to Parker Pool Remodel.

On or about December 14, 2022, the Registrar notified Complainant that he needed to submit, by January 13, 2023, bank statements for two credit card payments made to Respondent and cancelled checks or bank statements for two checks paid to Respondent.

On or about December 21, 2022, the Registrar again notified Complainant that some additional information was needed. The notice provided, in pertinent part, as follows:

The Registrar reviewed your Recovery Fund claim and found that some required documentation is missing. As noted in the instructions for the Recovery Fund administrative claim form, state law establishes specific eligibility requirements that must be met for a person to receive an award from the Recovery Fund. The Registrar is unable to determine whether you meet these requirements without additional documentation. Please provide the following documentation:

1. Written statement answering the following questions:

I. How much was actually paid to Outdoor Luxury Living Inc? Was it $39,629.52 according to your bank statements and affidavit, $39,635.42 according to your math in your affidavit, or $40,524.03 according to your four payment confirmation emails

II. Did you have Outdoor Luxury Living Inc execute a change order? Your Recovery Fund claim form says “0” in box 4. Under section C, but you provided a $14,989.03 estimate for paver decking that is dated 08/24/2022.

2. Parker Pool Remodeling & Electrical, LLC’s license number

3. Proof of payments made to Parker Pool Remodeling & Electrical, LLC

4. Second bid

On or about January 3, 2023, Complainant submitted an email in response to the notice that provided, in pertinent part, as follows:

I will answer your questions as clearly and as thoroughly as possible, in order.

1. How much was actually paid to Outdoor Luxury Living Inc?

a. I apologize for the discrepancy. The correct amount paid is reflected in the bank statements which is: $39,629.52. No other funds were drawn or paid from any another source.

2. Did Outdoor Luxury Living institute a change order?

a. Yes there was a change order issued on 8/24/2022 for $14,989.03, of which I paid a 50% deposit ($7,494.51) The reason I did not include this on the recovery claim form is because I found that this change order complicates the situation, however I will explain it here. This change order only states "Pavers Decking Install". The reality is that it is the price of the coping & decking material as well as the install of the decking. The price of the coping material and install was actually part of the original contract but due to our unique design of the pool, our coping and decking are one in the same. (do you see where this starts to get messy? The costs are not itemized on the original contract) After Jack let me know he was filing for bankruptcy and was unable to finish my project I was able to connect with his subcontractor that installed the coping. I was able to pay him directly to complete the install of all decking for less than the balance I owed Jack on the change order. I called National Pool Tile to get the cost of the pavers. They quoted me, over the phone, a retail cost of $5.50 per square foot (contractors price would be lower but they would not tell me that cost). At 800 square feet the cost was $4,400 Which means I overpaid about $3,094.51 This does not factor in the amount I double paid for the coping in the original contract so I lost over $4,000. Without exact numbers I elected to leave this out of the original claim however I have attached the change order and the proof of payment as reference as I would love to recoup this loss if at all possible.

3. I cannot locate the License number for Parker Pool Remodeling on the documentation. Parker Pool and Remodeling is the sub contractor that Jack from Outdoor Luxury Living used to "rough in" the plumbing and electrical. I was given his name and number by Jack, after his departure, to help me finish the pool. I attempted to get quotes from other electrical and plumbing companies. Two that I spoke to did not work on pools, one would not complete work they did not start, and a fourth would not have an opening for months to even come look at the job and said that "nothing was guaranteed."

4. I have attached proof of payments to Parker Pool Remodeling & Electrical LLC for:

a. $3,290 deposit paid on 11/7/2022 for electrical and plumbing

b. $3,290 balance paid on 11/15/2022 for electrical and plumbing

c. $7,400 total paid on 12/20/2022 for the mini pebble installation (I have also attached the invoice)

5. Second Bid: as stated above, I could not even obtain a second bid for the plumbing/electrical work. I did get a second bid from Soto and Sons for plaster (attached) but I did not like the product they were going to use. They also did not quote the additional Abalone.

I believe this addresses everything in your letter. Please let me know what additional documentation or clarification I can provide.

On January 4, 2023, the Registrar responded, in pertinent part, as follows:

With regards to the change order, I will have to consider it in my review. You are welcome to provide proof of your cost to complete the decking for my review and consideration. All I would need is a contract and proof of payments.

With regards to Parker Pool and Remodeling & Electric LLC, they are an unlicensed contractor. And because they are unlicensed, the $6,580.00 you paid them will be disallowed. A warning letter to cease and desist unlicensed activity has been issued to them.

With regards to a second bid, A.R.S. § 32-1132.01(B)(2) requires bids from properly licensed contractors be provided. This is required of everyone that comes to the Recovery Fund. I would suggest using our advanced contractor search tool on our website (https://azroc.my.site.com/AZRoc/s/contractor-search) to find more contractors in your area that are licensed to do the work.

On or about January 12, 2023, Complainant replied to the Registrar, in pertinent part, as follows:

Can I get a little more time to get this second quote together? This has been a lot to navigate.

I feel like Ollie Pools put me in a REALLY tough spot here because Jack, from Ollie Pools, used Parker Pool and Remodeling for the initial electrical work and gave me his name and number to call to allow me to finish. I didn't realize they were unlicensed. I'm just a homeowner that got put in an impossible situation and have been trying to finish this pool using the referrals I was given. I am now out over $15K or so because Jack, a licensed contractor, abandoned my project. Isn't there anything that can be done to still consider these funds that I paid to Parker Pool Remodeling?

On or about January 12, 2023, the Registrar responded as follows:

Why thank you! I absolutely can. Given how many claims have yet to have been filed, it is going to be at least another couple of months.

Unfortunately, given the parameters outlined under A.R.S. § 32-1132.01(B)(2), I cannot reconsider your payments made to Parker Pool and Remodeling. Doing so would be deviating from the statutes that I am legally bound by in my review.

On or about February 9, 2023, Complainant submitted an estimate from Arizona Backyard Synergy for a total contract price of $7,900.00. The bid from Arizona Backyard Synergy included the same scope of work already performed by Parker Pool Remodel, but with different pricing. Complainant never submitted a bid for the paver work included in the change order.

On or about February 13, 2023, the Registrar issued a Notice and Order of Recovery Fund Claim Denial, finding that Complainant did not have any actual damages as defined by statute. Because Complainant’s total contract price was $59,028.37, of which Complainant paid a total of $47,124.03, Complainant had an unpaid balance of $11,904.34 on the contract. The valid expenditures to complete or repair the project, as demonstrated by the bid from Soto & Sons, Inc. were $6,209.28, which was less than the amount still owing on the contract. Complainant requested a hearing, believing that the denial was improper. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

A hearing was held on April 18, 2023.

Hearing Evidence

Katelyn Rolling, Legal Assistant II for the Fund, testified that she had been assigned to review all claims for payouts from the Fund related to Respondent. Ms. Rolling indicated that, as of the time of the hearing, she had reviewed 30 claims, 25 of which were determined to be eligible. Ms. Rolling stated that, pursuant to statute, payouts from the Fund were limited to $200,000.00 per license issued by the Registrar and had to be dispersed on a pro rata basis for all claimants. Because Respondent had two licenses, a total of $400,000.00 was available from the Fund for all claimants that established actual damages based on Respondent’s actions.

Ms. Rolling stated that she reviewed the Directive from the Registrar that had been issued, the claim, and the documentation and bids submitted by Complainant in calculating Complainant’s actual damages. Ms. Rolling concluded that Complainant failed to establish that he had actual damages that were compensable from the Fund. While Complainant had been give opportunities to submit additional documentation related to the pavers, Complainant failed to do so.

Complainant testified that there was no question he was left with an unfinished pool and, therefore, was harmed. Complainant stated that he unknowingly entered into a contract with an unlicensed contractor who was recommended by Respondent to complete the pool after Respondent was no longer able to perform the work. Complainant maintained that he misunderstood the instructions related to his claim. Complainant asserted that the denial was arbitrary and capricious because the Registrar failed to give him specific instructions as to what information he needed to submit and he was unaware he could submit more information. Complainant requested that he be allowed an additional 60 days to submit a bid for the paver work.

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.

Complainant bears the burden of proof to establish that the denial of a payout from the Fund was incorrect 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.”

Complainant hired an unlicensed contractor to complete the work on the project prior to filing a claim with the Fund. Under the applicable statute, the monies paid to that contractor cannot be considered compensable actual damages.

Further, Complainant had ample opportunity to submit bids related to the pavers and failed to do so.

After review of all the evidence, the Tribunal concludes that the denial of a payout from the Fund was appropriate. Accordingly, Complainant was not entitled to a payout from the Fund.

RECOMMENDED ORDER

Based on the foregoing, it is recommended affirming the Registrar’s denial of a payout from the Residential Contractors’ Recovery 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.

-54864001

001

-137160-45720000Done this day, May 8, 2023.

/s/ Tammy L. Eigenheer

Administrative Law Judge

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

Martín Quezada, Director

Registrar of Contractors

Micah Ensor

[email redacted]

Outdoor Luxury Living Inc.

[email redacted]

Seth T. Hargraves

Office of the Attorney General

[email redacted]

By: OAH Staff