PDF copy: ORDER

2023A-12715-CHC-ROC · Registrar of Contractors · 2024-08-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS Justin Peterson, No. 2023A-12715-CHC-ROC COMPLAINANT, v. ORDER Dell Mar Homes LLC License No. ROC 235307, RESPONDENT.

On July 22, 2024, Respondent filed a Motion to Vacate Hearing and Dismiss

Complaint (Motion) on the basis that the action is barred by the applicable statute of

limitations. Complainant did not file a Response as of the date of this Order.

A.R.S. § 32-1162(A)(1) states that a “a written complaint pursuant to section 32-

1155 . . . must be filed . . . [for] new home builds or other new building construction, within

two years after the earlier of the close of escrow or actual occupancy.”

Respondent stated that:

1. The project was a new home build;

2. Escrow closed in April 2021; and

3. The complaint was filed in November 2023.

Section 10 of the Purchase Agreement, attached to the Motion as Exhibit A,

provided that “Purchaser agrees to close escrow within (5) days of completion of

construction.”

Complainant’s email to the Registrar of Contractors, attached to the Motion as

Exhibit B, included with additional information needed to process the complaint. In the

email, Complainant included the following information:

• Date Work Started- 6/1/2021 (estimate)

• Date Work Stopped-11/30/2022

• Date Work Was Completed- 11/30/2022

• Close of Escrow (New Home)- 4/27/2021 (One-time close construction loan)

• Move-In Date (New Home) 12/1/2022 Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 A Combined Settlement Statement, attached to the Motion as Exhibit C, indicated

that escrow on the home closed on April 28, 2021, more than one month before work on

the home started.

In Arizona, when construing statutes, we look first to a statute’s language as the

best and most reliable index of its meaning. If the statute’s language is clear and

unambiguous, we give effect to that language and apply it without using other means of

statutory construction, unless applying the literal language would lead to an absurd result.

Words should be given “their natural, obvious, and ordinary meaning.”1 Statutes should

be interpreted to provide a fair and sensible result.2

While the parties may have had a “close of escrow” on April 27, 2021, it was not a

“close of escrow” as the term is commonly understood. In the context of real estate

transactions and construction, “close of escrow” refers to that time when both parties have

completed their portion of the contract, the funds may be released, and the purchaser

may take possession of the property. This understanding is demonstrated by the parties’

purchase contract, which states the close of escrow will occur within five days after

construction is completed.

Applying the common understanding of “close of escrow” results in a fair outcome

and avoids an absurd outcome. The statute of limitations at issue is for filing a complaint

with the Registrar for “an act that is cause for suspension or revocation of a license.”3 By

using the common understanding of “close of escrow,” the limitations period begins once

the project is complete and the owner can take possession of the property or actually

occupies the property. This means that, for a new build home, the cause of any complaint

is both in existence and discoverable by the owner when the limitations period begins.4

1 Arpaio v. Steinle, 201 Ariz. 353, 355 ¶ 5, 35 P.3d 114, 116 (App. 2001) (footnotes and citations omitted). Gutierrez v. Indus. Comm’n of Ariz.; see also State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) (“Courts will not place an absurd and unreasonable construction on statutes”). A.R.S. § 32-1155. 4 Statutes of limitations promote justice, in part, by ensuring claims are timely made and that evidence is not lost or unreliable. 2 The proposed alternative interpretation would start the statute of limitations before the

cause of the complaint came into existence,5 which is an absurd outcome.

IT IS ORDERED denying the Motion. The hearing remains scheduled to convene at 1:00 p.m. on September 17, 2024.

Done this day, August 9, 2024. /s/ Samuel Fox Administrative Law Judge

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

Tom Cole, Director Registrar of Contractors c/o Legal Department [email redacted] Justin Peterson [email redacted] Jason Clark, Esq. [email redacted] [email redacted]

Gregory Johndrow [email redacted] By: OAH Staff

5 The proposed interpretation could mean that ongoing work is immune from complaints to the Registrar if the new build project takes longer than two years to complete. 3