ALJDEC decisions subject to certification as final

2023A-00706-RFA-LS-ROC · Registrar of Contractors · 2023-11-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Abhinav Puri,

COMPLAINANT

Royal HVAC, LLC

License No. ROC 316223,

RESPONDENT

No. 2023A-00706-RFA-LS-ROC

No. 2022A-10845-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 29, 2023, with the record held open until October 23, 2023

APPEARANCES: Complainant Abhinav Puri appeared on his own behalf. The Arizona Registrar of Contractors was represented by Assistant Attorney General Wesley M. Cox. Respondent Royal HVAC, LLC did not appear.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

The Arizona Registrar of Contractors (Registrar) issued License No. 316223 to Respondent Royal HVAC, LLC.

On or about November 28, 2022, and January 19, 2023, the Registrar received complaints against Respondent from Complainant Abhinav Puri alleging abandonment with respect to the installation of air conditioning units at two different properties owned by Complainant.

In the complaints, Complainant asserted that he paid $3300.00 towards the total contract price of $5600.00 on the Dunbar Drive property and $2600.00 towards the total contract price of $4600.00 on the Desert Lane property. Complainant stated no work was performed and the units were never installed by Respondent.

As a result of the complaints, the Registrar issued citations against Respondent charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(1).

Respondent failed to file timely answers to the citations.

On or about February 10, 2023, and March 7, 2023, the Registrar issued Final Administrative Decisions and Orders (Default) finding the violations and revoking Respondent’s license.

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the money paid toward the projects at the two different properties. On the claim form, Complainant answered “Yes” to the question, “Do you currently occupy or intend to occupy the subject property as your primary residence?” Complainant indicated that he paid a total of $5900.00 on both projects and Respondent did not perform any work on the projects.

During its review of Complainant’s claim, the Registrar determined that Complainant owned the two properties, but they were both rental properties and therefore, Complainant was not susceptible for an award from the Fund.

On or about July 24, 2023, the Registrar issued a Notice and Order of Recovery Fund Ineligibility in which the Registrar notified Complainant that he was not eligible for a payout from the Fund because the properties were both rental properties.

Complainant requested a hearing, believing he was eligible for a payout from the Fund. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

A hearing was held on September 29, 2023.

Tedi Quezada, Legal Assistant, testified that she reviewed the claim and the underlying complaints in determining whether Complainant was eligible for a payout. Ms. Quezada concluded that both properties were rental properties and therefore, Complainant was not eligible for a payout. Ms. Quezada acknowledged that she did not ask Complainant about the indication on the claim form that he occupied or intended to occupy the property as his primary residence. Ms. Quezada testified that the Registrar did not have a policy as to when an individual is required to occupy or intent to occupy a property as their primary residence to be eligible for a payout from the Fund.

Complainant testified that he previously lived in the Desert Lane house and intended to occupy the house as his primary residence again in the early part of 2024 when his tenants’ lease was up. Complainant stated that his mother-in-law helped care for his children and she was having surgery in March 2024. Following the surgery, she would be unable to navigate stairs for some time and therefore, he would need to reside in a one-story house. Complainant testified that, of the three properties he owned, the Desert Lane house was the only one-story home. Complainant acknowledged he would not be eligible for a payout from the Fund that would reimburse him for the entire amount paid to Respondent, but asserted he should be eligible for a portion.

At the conclusion of the hearing, the Administrative Law Judge asked the Registrar to submit additional written argument distinguishing the present matter from the situation in 2019A-00572-RFA-LS-ROC in which the Registrar authorized a payout from the Fund to a homeowner who admittedly did not intend to occupy the property as his primary residence for approximately five years after the date of the hearing and close to ten years after the date of the contract. In that matter, counsel for the Registrar argued that the statutes governing administration of the Fund did not provide a timeframe by which a person must intend to occupy the residence as their primary residence, and as such, it would be improper for the Registrar to set such a timeframe.

In its written arguments, the Registrar asserted that “[i]t was not until after the Registrar denied his recovery from the Fund that he first asserted that he intended to occupy one of the two properties as a primary residence.” The Registrar also noted that the complainant in the prior matter submitted a signed declaration to the Registrar of his intent to make the property his primary residence upon retirement and no such declaration was submitted by Complainant in this matter.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Ariz. Rev. Stat. § 32-1132 provides, in pertinent part, as follows:

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.

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.”

The Registrar’s assertion that Complainant only raised his intention to reside in one of the properties as his primary residence after he received a denial from the Fund was inaccurate. Rather, Complainant notified the Registrar that he intended to occupy one of the properties as his primary residence when he submitted the claim to the Fund in which he answered “yes” to the relevant question on the claim form. Complainant did not submit a signed declaration to that effect because he was not asked to do so. Ms. Quezada admitted that she did not ask Complainant for any clarifying information with respect to his answer.

In light of the Registrar’s previous position that the applicable statutes do not establish a timeframe for an owner’s intention to occupy a property as their primary residence and Complainant’s credible testimony that he intended to occupy the Desert Lane house as his primary residence in early 2024, the Registrar incorrectly determined Complainant was not eligible for a payout from the Fund.

After review of all the evidence, the Tribunal concludes that the denial of an award from the Fund was in error. Rather, Complainant is entitled to a payout from the Fund in the amount of $2600.00, the amount paid to Respondent on the contract for the Desert Lane property.

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 $2600.00.

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 forty (40) days from the date of that certification.

-54864001

001

-137160-45720000Done this day, November 13, 2023.

/s/ Tammy L. Eigenheer

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Royal HVAC LLC

[email redacted]

Abhinav Puri

[email redacted]

Registrar of Contractors

[email redacted]

By: OAH Staff