ALJDEC decisions subject to certification as final

2024A-01373-RFA-LS-ROC · Registrar of Contractors · 2025-07-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Tarek Elmaghraby,

COMPLAINANT,

Home Solutionz, LLC

License No. ROC 317500,

RESPONDENT.

No. 2024A-01373-RFA-LS-ROC

ADMINISTRATIVE LAW

JUDGE DECISION

HEARING: July 21, 2025

APPEARANCES: Complainant Tarek Elmaghraby appeared on his own behalf. Respondent Home Solutionz, LLC did not appear. Assistant Attorney General Charles Hover III represented the Arizona Registrar of Contractors. Gail Mathews appeared as a witness.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

EXHIBITS ADMITTED INTO EVIDENCE: Complainant Tarek Elmaghraby’s Exhibits 1-15; the Arizona Registrar of Contractors’ Exhibits 1-12

FINDINGS OF FACT

Background and Procedure

According to the Arizona Registrar of Contractors’ (“Registrar”) public website, on January 23, 2018, the Registrar issued License Number 317500, General Dual KB-2 Dual Residential and Small Commercial contracting license to Home Solutionz, LLC (“Respondent”).

In or about March 2024, the Registrar received a Complaint filed by Tarek Elmaghraby (“Complainant”) against Respondent alleging poor work with respect to the project performed by Respondent. The Registrar assigned Robert Di Alto (“Investigator Di Alto”) to investigate the Complaint.

Investigator Di Alto conducted a Jobsite Inspection at the project site on April 1, 2024. During that inspection, Investigator Di Alto took photographs of Respondent’s work. After the inspection, Investigator Di Alto drafted Jobsite Inspection Notes.

On April 9, 2024, the Registrar issued a Citation to Respondent for alleged violations of A.R.S. §§ 32-1154(A)(1) and 32-1154(A)(3), namely A.A.C. R4-9-108(a).

Respondent failed to timely file an Answer to the Citation. Consequently, on April 29, 2024, the Registrar issued a Final Administrative Decision and Order (Default) (“Order”) concluding that Respondent had violated the charged provisions of this State’s contracting laws. The Order revoked Respondent’s contracting license effective on the issuance date of the Order.

On or about January 6, 2025, the Registrar received Complainant’s claim for payment from the Residential Contractors’ Recovery Fund (“Fund”) in the amount of $26,000.00.

On April 18, 2025, the Registrar issued a Notice and Order of Recovery Fund Ineligibility.

Complainant appealed the Registrar’s denial and the matter was referred to the Office of Administrative Hearings for an evidentiary hearing.

Hearing Evidence

At the hearing, the Registrar called Gail Mathews as a witness. Complainant testified on his own behalf. Respondent did not appear. All of the Registrar’s exhibits were admitted.

Ms. Mathews is a Legal Assistant II for the Registrar and she reviewed Complainant’s claim to the Fund. Ms. Mathews testified that one of the statutory prerequisites for eligibility for payment from the Fund is that the claimant must actually occupy or intend to occupy the property as their primary residence. In reviewing this claim, Ms. Mathews determined that the jobsite address is classified as a residential rental property, and not as Complainant’s primary residence. Consequently, Ms. Mathews made the determination that Complainant was not eligible to recover from the Fund.

Ms. Mathews testified that initially, the property was classified as Complainant’s primary residence, however, in or about 2024, the classification changed to residential rental. Therefore, at the time Complainant filed the claim with the Fund, the property was classified as a rental property, and not a primary residence.

Ms. Mathews testified that on September 1, 2023, Complainant purchased a property located at 10737 E. Mescal Street, Scottsdale, Arizona 85259 (“Mescal Property”), and that Complainant changed the legal classification of the jobsite property to a rental at that time and the Mescal Property was classified as Complainant’s primary residence. Ms. Mathews further testified that the Mescal Property return address was placed on the envelope received by the Registrar containing Complainant’s claim to the Fund. In his request for hearing, Complainant stated that he has “removed the rental listing to prevent any future bookings and to prepare for a complete move-in following repairs.”

During her testimony, Ms. Mathews referenced another case that had been ruled upon by Administrative Law Judge Samuel Fox in Docket Number 2023A-12723-RFA-LS-ROC. While not binding, the Administrative Law Judge reviewed that case and finds that the facts in that matter are dissimilar to the instant matter.

A damages analysis was not completed due to the Registrar’s determination that Complainant was ineligible for an award from the Fund.

Complainant testified that he resided at the jobsite property for seven years from 2016 to 2023, during the time he contracted with Respondent, made the payments on the contract, and during the time Respondent performed its work. The parties’ contract date was September 15, 2021. Complainant testified that Respondent began work on the project and that corrective work continued into January 2023. Complainant filed an initial complaint with the Registrar in 2022. That complaint had been assigned to Investigator Mark Nipp. Complainant testified that after Investigator Nipp’s Jobsite Inspection, Investigator Nipp advised Complainant to wait and file another complaint when the condition of the flooring worsened, as the tiles “were not popping out.” When the condition of the floor “got bad enough to file another complaint,” Complainant “followed the process” and filed the instant Complaint.

Complainant credibly testified that he is the sole provider for his parents and that he has purchased their vehicles, pays for their cell phones, purchases their groceries, and rents a home for them in Gilbert, Arizona. Complainant credibly testified that he purchased the Mescal Property for them to reside in once their lease expired and he was able to remodel it sufficiently, as it is a “fixer upper.”

Complainant further credibly testified that he resided at the jobsite property until late 2023, when he moved into the Mescal Property because he grew “tired of moving in and out” of the property every time the floor needed repairs. Complainant rented the jobsite property from early 2024 through March 2025, and lived at the Mescal Property while he was remodeling it for his parents and while waiting on a payout from the Fund in order to have the floor at the jobsite property properly repaired before moving back in. Complainant had intended to use the monies received from the Fund to make the required repairs and then move back into the property once the repairs were complete. However, Complainant has since moved back into the property and currently occupies it. Complainant testified that he changed the legal classification of the jobsite property to be in compliance with tax regulations.

Complainant argued that the controlling statute is silent as to when a claimant must intend to occupy the property as their primary residence, and that the statute does not specify that a claimant must reside at the property at the time a claim with the Fund is filed. Complainant lived at the jobsite property during the time the injury occurred. Complainant argued that the Registrar has ignored the second prong of the statute, namely, “intend to occupy.”

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before the Office of Administrative Hearings.

Complainant bears the burden of establishing by a preponderance of the evidence that the Fund improperly denied his claim.

“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.”

A.R.S. § 32-1133.01(A) provides that “if a contractor license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter, the registrar may order payment from the residential contractors’ recovery fund to remedy the violation.”

Pursuant to A.R.S. § 32-1132:

A. The residential contractors' recovery fund is established to be administered by the registrar for the benefit of claimants that are damaged by an act, representation, transaction or conduct of a residential contractor that is licensed pursuant to this chapter and that is in violation of this chapter or the rules adopted pursuant to this chapter.

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.

In this case, Complainant occupied the residence for seven years, during which time he contracted with Respondent, Respondent performed the deficient work, and Complainant filed two complaints with the Registrar, the second of which resulted in the revocation of Respondent’s license. Complainant credibly testified that he moved out of the jobsite property because he grew weary of having to move out every time corrective work was performed and that he intended to move back into the property once appropriate corrective work was completed. Such repairs are costly and Complainant was relying on a payout from the Fund in order to effectuate those repairs prior to permanently moving back in. In the interim, Complainant moved into the home he purchased for his parents to reside in and decided to rent the jobsite property. While the jobsite address was classified as a rental property at the time Complainant filed his claim with the Fund, the credible, probative, and substantial evidence of record established that the jobsite home is currently the home in which Complainant resides and was the home in which Complainant resided during the time the injury occurred. Moreover, Complainant testified under oath that he always intended to occupy the home upon the completion of the repairs.

In light of the fact that the statutes governing the administration of the Fund do not provide a timeframe by which a person must intend to occupy the residence as their primary residence, and Complainant’s credible testimony that he currently occupies and intends to continue to occupy the jobsite property as his primary residence, the Administrative Law Judge concludes under the particular facts and circumstances presented in this matter, that Complainant is eligible to receive an award from the Fund.

RECOMMENDED ORDER

Based on the foregoing,

it is recommended that Complainant’s appeal be granted.

IT IS FURTHER RECOMMENDED that the Registrar reverse the denial of Complainant’s claim to the Fund and perform a damages analysis of Complainant’s claim.

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, July 30, 2025.

/s/ Sondra J. Vanella

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Tarek Elmaghraby

[email redacted]

Home Solutionz, LLC

[email redacted]

Charles Hover III

Assistant Attorney General

[email redacted]

By: OAH Staff