ORDER

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

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Justin Peterson,

COMPLAINANT,

v.

Dell Mar Homes LLC

License No. ROC 235307,

RESPONDENT.

No. 2023A-12715-CHC-ROC

ORDER

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:

The project was a new home build;

Escrow closed in April 2021; and

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

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.” Statutes should be interpreted to provide a fair and sensible result.

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.” 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. The proposed alternative interpretation would start the statute of limitations before the cause of the complaint came into existence, 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