ALJDEC - Licensing
2024A-12267-RFA-LS-ROC · Registrar of Contractors · 2025-08-20
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Brett Forsgren,
COMPLAINANT,
v.
Reaction Air LLC
License No. ROC 301534,
RESPONDENT.
No. 2024A-12267-RFA-LS-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: July 31, 2025.
APPEARANCES: Assistant Attorney General Mona Baskin appeared for the Registrar of Contractors. Brett Forsgren appeared for Complainant. Respondent did not appear.
ADMINISTRATIVE LAW JUDGE: Samuel Fox
EXHIBITS ADMITTED INTO EVIDENCE: Department’s Exhibits 1 to 10. Complainant’s Exhibits 1 to 16.
_____________________________________________________________________
FINDINGS OF FACT
Reaction Air LLC (Respondent) was the holder of License No. 301534 issued by the Arizona Registrar of Contractors (Registrar).
On or around December 19, 2023, Brett Forsgren (Complainant) hired Respondent to perform work on the property. They did not complete the work.
On or around June 24, 2024, Complainant hired R&B Air Conditioning, LLC, (R&B) to finish some of the work on its contract with Respondent.
On or about November 4, 2024, the Registrar received a Complaint against Respondent from Complainant.
On November 14, 2024, Investigator David Fagerburg investigated the property, and on December 3, 2024, the investigator issued a written directive to correct the work.
The Registrar issued a Citation against Respondent charging possible violations of Arizona Revised Statutes (A.R.S.) §§ 32-1154(A)(2)(a); 32-1154(A)(2)(b); 32-1154(A)(3), specifically R4-9-108(A); 32-1154(A)(3), specifically R4-9-108(B); and 32-1154(A)(22).
Respondent failed to file an answer. On December 14, 2025, the Registrar issued a Final Administrative Decision and Order (Default).
Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of completing or repairing the project. As part of the claim process, Complainant submitted the required information.
The Registrar issued a Notice of Administrative Award, finding that Complainant’s compensable actual damages were $2,633.27.
Complainant appealed the award requested a hearing, believing the payout excluded R&B’s work, which he believed should have been included.
The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.
Erika Hoskin testified for the Registrar. She testified in support of her findings.
Complainant argued that the work R&B had performed in June 2024 should not be held against him because he needed to complete the work before the home was safe.
CONCLUSIONS OF LAW
This matter lies within the Registrar’s jurisdiction.
Respondent was deemed to have received the Notice of Hearing by methods reasonably calculated to effect notice. The Registrar mailed copies of the Notice of Hearing on Contested Case to its address and email address of record, and the Office of Administrative Hearings sent the order setting the virtual hearing to Respondent at its email address of record.
A.R.S. § 32-1132(A) explains the following:
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.
To be “in violation of this chapter or the rules adopted pursuant to this chapter,” the at-issue conduct must have been addressed through the Registrar’s process. If the “alleged violation” has not been deemed a “violation” through that process, it is not in fact a “violation” for the purposes of the Recovery Fund. In short, the property owner files a complaint, and the Registrar assigns an investigator to investigate. After an inspection of the property, the investigator determines whether a potential violation(s) exists; and if so, the investigator issues a Written Directive. The contractor is given an opportunity to correct the violation(s), and if they fail to do so, the Registrar issues a Citation. The contractor has an opportunity for a Hearing, and the Registrar issues a Final Decision.
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.
A.R.S. § 32-1132.01(H) further defines "actual damages" as “the reasonable cost of completing the contract and repairing the contractor's defective performance, minus the part of the contract price still unpaid.”
Complainant 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.
Complainant’s argument that the work he had corrected prior to his complaint should have been considered in the calculation was incorrect. That conduct was not included in the Directive because the inspector was unable to verify it, and the conduct was not incorporated into the Citation or Final Decision. Accordingly, it was not a “violation” for the purposes of the Recovery Fund.
Complainant is not precluded from seeking recovery in a court of general jurisdiction, but the Recovery Fund is a limited fund, and requests that do not comply with the rules cannot be awarded.
The preponderance of the evidence established that the award provided by the Fund accurately reflected Complainants’ actual damages. Accordingly, Complainants are entitled to a payout from the Fund in the amount of $2,633.27.
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 of $2,633.27.
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, August 20, 2025.
/s/ Samuel Fox
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
Reaction Air LLC
[email redacted]
Brett Forsgren
[email redacted]
By: OAH Staff