ALJDEC

98F-024-ROC · Registrar of Contractors · 1998-01-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 6, 1998

APPEARANCES: Plaintiff, Jennie Hoyhtya, appeared in her own behalf.

Defendant, Canyon State Floors, Inc., was represented by its attorney, Roger C. Decker.

ADMINISTRATIVE LAW JUDGE: Robert. I. Worth _____________________________________________________________________

FINDINGS OF FACT

1. At the outset of the scheduled hearing, a correction was made to the Notice To Contractor Of Claim For Administrative Payout previously served upon the parties to this proceeding on September 25, 1997 so as to reflect that the actual monetary sum sought by Plaintiff was $3,933.52, representing the amount of the lowest obtained bid, and not the specified $3,149.17, representing the amount of a good faith compromise offer by the Recovery Fund's Inspector. Such compromise offer was never accepted by Plaintiff. The foregoing notice correction is fully supported by the detailed notes contained in the Recovery Fund Inspection Report.

Since Plaintiff's previously expressed willingness to settle for a payout in the sum of $3,525.66, representing the total original contract amount paid to Defendant, was merely a counter-offer which was not acceptable to the Inspector, it appeared fully appropriate and realistic to correct the prior Notice of Claim by inserting the original low bid sum.

2. It was not disputed that Defendant's contractor's license has been suspended as a result of prior disciplinary proceedings between these same parties, and that the corrective work condition set forth in the Suspension Order consisting of the replacement of the wood flooring has not yet been accomplished. Consequently, Plaintiff qualifies as an Injured Person, as defined in the applicable statutes, and would be entitled to receive payment of an award from the Residential Contractor's Recovery Fund for proven damages resulting from Defendant's acts or omissions.

3. Notwithstanding the aforesaid correction to the formal Notice of Claim to reflect the amount actually claimed by Plaintiff to be payable from the Recovery Fund, and mindful of the Registrar's right to possibly oppose any award greater than $3,149.17, despite the fact that no legal representative had appeared at the scheduled hearing on behalf of the Fund, after a prolonged discussion between the parties prior to the presentation of evidence and testimony, with the Administrative Law Judge participating, the parties who were present concluded a settlement agreement, the essential terms of which were read onto the record.

4. Pursuant to the provisions of the parties’ settlement agreement, Defendant agreed to cause another designated entity holding a current contractor's license to properly perform the wood floor replacement work pursuant to a written proposal given by such entity directly to Plaintiff, such work to be at no cost or expense to Plaintiff and to encompass the

furnishing of specified materials for the selected flooring, including matching base shoe material, as well as all necessary labor for removal of the existing flooring and the installation of the new materials. Defendant further agreed that no portion of the delivery, demolition or installation work was to be performed on the jobsite by an identified individual.

5. Plaintiff agreed to grant the licensed specialty contractor's representatives reasonable and timely access to the premises so as to enable performance of the contemplated replacement work, to include her accepting the delivery of all materials which are to remain on the jobsite for a stated time period in advance of the installation phase of the work. Plaintiff also agreed, subject to the contents and impact of the following Finding of Fact Number 6, to withdraw her pending claim for a Recovery Fund Payout award chargeable against Defendant's account, thereby also effectively consenting to a lifting of the disciplinary suspension imposed on Defendant's license which would be deemed to have expired or terminated in good standing.

6. It was further mutually agreed by the parties that a fixed deadline date of March 31, 1998 for ultimate accomplishment of all contemplated work would be applicable, and that the instant Recovery Fund claim would be withdrawn and this matter would be closed if such work was timely completed on behalf of Defendant. In the event that Defendant or the designated licensee fails to timely obtain and deliver or tender the specified materials to Plaintiff's residence or fails to timely complete or tender performance of the contemplated demolition and installation work by March 31, 1998, then "at Plaintiff's election," to be promptly communicated to Defendant and to the Registrar no later than April 10, 1998, either (a) the amount of $3,149.17 shall be paid to Plaintiff from the Recovery Fund, chargeable against Defendant's account

and potentially affecting other licenses on which the same individuals may be listed as "persons," as defined in A.R.S.§32- 1101(A)(5), or

(b) this matter shall be restored to the calendar of the Office of Administrative Hearings and scheduled for a limited evidentiary hearing to determine Plaintiff's possible entitlement to a higher Recovery Fund payout up to and including $3,933.52. The Registrar as well as Defendant shall be notified and shall be afforded an opportunity to participate at such limited hearing in opposition to any higher award, but the parties' agreement contemplates that any proven default in performance by or on behalf of Defendant shall preclude Defendant from subsequently asserting that Plaintiff's entitlement to a Recovery Fund award is any less than the amount of $3,149.17 or that Plaintiff otherwise lacks entitlement to any award.

7. The terms of the foregoing settlement agreement appeared to be fair and reasonable under all the circumstances, and the agreement was determined to be the product of knowing and voluntary action on the part of each party.

CONCLUSIONS OF LAW

1. The policy of the law favors settlements of disputes, and adverse parties should be free to adjust their differences by entry into agreement or stipulations which should be recognized and given effect by all tribunals.

2. The express terms of the settlement agreement reached and submitted during the hearing of this matter, having been found to be reasonable and

voluntarily made, warrants the termination of the instant hearing and the provisional closing of the Plaintiff's pending claim for an administrative payout from the Residential Contractor's Recovery Fund. The impact of the agreement and its terms also warrants the provisional lifting of the disciplinary suspension previously imposed on Defendant's license.

3. The entire case record hereunder, including the contents of the parties' settlement agreement, supports the provisional payment of an award from the Recovery Fund to Plaintiff in the amount of $3,149.17, all of which shall be appropriately chargeable against Defendant or persons on its license as set forth in A.R.S.§32-1139(B), in the event that Defendant or its designee should fail to timely accomplish or tender the contemplated jobsite delivery, demolition and installation work and in the event Plaintiff elects to receive such payout amount in lieu of requesting the convening of a limited evidentiary hearing seeking a higher award from the Fund.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that, if Defendant causes the completion of all demolition, materials delivery and installation work on the jobsite by a designated specialty contractor holding a current license no later than March 31, 1998, as envisioned by the parties' settlement agreement, the pending claim by Plaintiff for an administrative payout of an award from the Recovery Fund under Case Number 98/024 shall be closed effective as of April 1, 1998, and the license suspension previously imposed against Defendant's Class C-08 license shall be lifted, thereby reflecting that such now-expired license has terminated in good standing.

It is further recommended that if Plaintiff files written notice with the Registrar no later than April 10, 1998 that the remedial work envisioned by the parties' settlement agreement has not been timely performed or tendered by or on behalf of Defendant

prior to the above-specified deadline date, then this claim shall not be closed nor shall the license suspension of record be lifted, but instead, at Plaintiff's election, either (a) the Registrar shall commence and finalize payment procedures from the Recovery Fund to Plaintiff in the amount of $3,149.17, or (b) this case shall be scheduled for a limited evidentiary hearing, on advance notice to the Registrar and to Defendant, to determine the Plaintiff's entitlement, if any, to a higher award from the Fund, as outlined in Finding of Fact Number 6.

Notwithstanding the existence of any longer deadline dates stated herein, for the purposes of further administrative or judicial review, this Order becomes effective thirty-five (35) days after the date of mailing by the Registrar.

Dated: January 9, 1998. OFFICE OF ADMINISTRATIVE HEARINGS

_____________________________________ Robert. I. Worth Administrative Law Judge

Original transmitted on ______________________

by: ______________________________ , To:

Mr. Michael P. Goldwater, Director Registrar of Contractors 800 West Washington, 6th Floor Phoenix, AZ 85007

ATTN: Joyce Armijo -----------------------

Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826