ALJDEC - Licensing
2023A-13342-RFA-LS-ROC · Registrar of Contractors · 2025-06-16
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Melissa Tohlakai,
COMPLAINANT,
v.
Copper State Materials LLC
DBA: Copper State Site Services,
License No. ROC 339659,
RESPONDENT.
No. 2023A-13342-RFA-LS-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: May 28, 2025.
APPEARANCES: Assistant Attorney General Mona Baskin appeared for the Registrar of Contractors. Melissa Tohlakai appeared for Complainant. Steve Fuller appeared for Respondent.
ADMINISTRATIVE LAW JUDGE: Samuel Fox
EXHIBITS ADMITTED INTO EVIDENCE: Department’s Exhibits 1–10.
_____________________________________________________________________
FINDINGS OF FACT
Copper State Materials LLC (Respondent) was the holder of License No. 339659 issued by the Arizona Registrar of Contractors (Registrar) on July 25, 2022, and voluntarily cancelled on September 19, 2024.
On or about October 29, 2024, Complainant filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of completing or repairing the project at issue. As part of the claim process, Complainant submitted the required documents and information.
The Registrar issued a Notice of Administrative Award, finding that Complainant’s compensable actual damages were $14,419.00.
Respondent appealed, disagreeing with the scope of work approved by the Fund. Specifically, Respondent argued that only the leach lines should have been included, and Respondent had already corrected those.
According to the Directive, all of the work was completed except for the septic system, and Respondent was required to do the following by appropriate means: “Respondent shall complete the installs and obtain final approval from the building department.” Respondent did not do so.
The Registrar accepted two bids.
The first bid was to repair and finish the work, which included excavation and resetting the septic tank (which had tilted, making it inoperable), pumping and filling, installation of the clean out, removal of debris, grading around the dwelling, installing remaining components, and completing the drainage field.
The second bid was to reimburse Complainant for the value of work she personally completed to protect improperly exposed pipes against additional sun exposure damage: it included backfilling and grading the service line, leach fields, and around the dwelling.
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.
As the appealing party, Respondent bears the burden of proof to establish that the proposed payout from the Fund is 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.”
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,” unless defined by the legislature.
If work is not completed to workmanship standard, it is reasonable for a bidding contractor to include removal of prior work. The bidding contractor is not obligated to accept the condition of existing work.
Respondent had an opportunity to correct the faulty work following the written directive from the Registrar and failed to do so. Accordingly, Respondent forfeited the right to complete or repair the work how Respondent believed it should have been done.
The Fund may reimburse a Complainant for necessary work performed to protect their property from additional harms if that risk of harm was caused by Respondent; such work is a necessary, if temporary, repair to avoid greater repairs. However, such reimbursement is limited to actions necessary to protect the property.
The preponderance of the evidence established that the entire first bid was appropriate.
For the second bid, the preponderance of the evidence established that covering the pipes was necessary to prevent damage to the pipes that Respondent left uncovered; such damage would have resulted in a higher expense and additional repairs. Accordingly, they were a necessary expense. However, the preponderance of the evidence did not establish that the grading was necessary to (1) temporarily repair defective work to prevent additional damages, (2) complete the work, or (3) permanently repair the work. Furthermore, the final grading is included in the first bid and that cost for grading is the work to complete the project.
Therefore, the second bid was appropriate in part and inappropriate in part. The second bid does not provide line-item costs, so the appropriate cost for backfilling, without grading, is not established in the record.
The preponderance of the evidence established that most of the award provided by the Fund accurately reflected Complainants’ actual damages. Accordingly, Complainants are entitled to a payout from the Fund of $12,219.00 plus an appropriate amount for backfilling to protect the pipes.
RECOMMENDED ORDER
Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainants receive a payout from the Residential Contractors’ Recovery Fund in the amount to be determined in accordance with the above, specifically $12,219.00 plus an appropriate amount for backfilling to protect the pipes without grading.
It is recommended that, prior to issuing its final order, the Registrar accept an updated bid from Dirty Deeds Tractor Service that includes backfilling only.
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, June 16, 2025.
/s/ Samuel Fox
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
Melissa Tohlakai
[email redacted]
Registrar of Contractors
[email redacted]
Copper State Materials LLC
DBA: Copper State Site Services
[email redacted]
By: OAH Staff