ALJDEC

98F-222-ROC · Registrar of Contractors · 1998-04-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 1, 1998

APPEARANCES: -Plaintiff appeared on her own behalf. -Wallace Rasmussen appeared on behalf of the Defendant. -Assistant Attorney General Terrie Zenoff represented the Contractors’ Recovery Fund.

ADMINISTRATIVE LAW JUDGE: Casey J. Newcomb _____________________________________________________________________

On April 1, 1998, a hearing was held to determine the Plaintiff’s eligibility for payment from the Contractors’ Recovery Fund pursuant to A.R.S. §§32-1132(A) & 32-1154(E). Plaintiff Stephanie Penick appeared on her own behalf. Wallace Rasmussen appeared on behalf of the Defendant. Assistant Attorney General Terrie Zenoff represented the Contractors’ Recovery Fund. Evidence and testimony were presented. Based upon a review of the entire record, the following Findings of Fact, Conclusions of Law and Recommended Decision are made.

FINDINGS OF FACT

1. On or about October 17, 1996, the Plaintiff and the Defendant entered into a written contract (the “Contract”) requiring the Defendant to install a new air conditioning unit at the Plaintiff’s home. See State’s Exhibit #1. The Plaintiff paid the Defendant $2,400.00 as a down payment.

2. The Defendant failed to install the air conditioning unit. The Defendant last performed work at the Plaintiff’s home on November 27, 1996. See Plaintiff’s Complaint.

3. The Defendant did not have a residential contractor’s license when the parties signed the Contract on October 17, 1996. The Defendant did not have a residential contractor’s license when the Defendant last performed work at the Plaintiff’s home on November 27, 1996. The Defendant was issued a residential contractor’s license on January 29, 1997.

4. The Plaintiff testified that she assumed that the Defendant was licensed at the time that she signed the Contract. The Plaintiff testified that Mr. Rasmussen’s wife told her that the Defendant had a residential contractor’s license. The Plaintiff conceded that the Defendant never explicitly told her that he had such a license.

5. On February 13, 1997, the Plaintiff filed a Complaint with the Registrar of Contractors (the “ROC”). See Plaintiff’s Complaint.

6. The Plaintiff made repeated attempts over a prolonged period of time to have the Defendant install the air conditioning unit. On March 25, 1997, the Plaintiff wrote a letter to the Defendant informing him “that your failure to provide my Goettl, 10 year warranty air conditioning unit, will make it necessary to hire an air conditioning company by April 4, 1997, to finish the home.” See Plaintiff’s Exhibit A.

7. On May 5, 1997, the Plaintiff wrote another letter to the Defendant informing him that another air conditioning company completed the installation of the air conditioning unit. The Plaintiff also requested reimbursement of the $2,400.00 down payment. See Plaintiff’s Exhibit C.

8. On July 29, 1997, a hearing was held to determine if the Defendant had violated provisions of A.R.S. §32-1154(A). Administrative Law Judge Mark Silver found that the Defendant had abandoned the Contract after he was licensed. See RECOMMENDED DECISION OF ADMINISTRATIVE LAW JUDGE, dated July 31, 1997, page 3, para. 10. On August 8, 1997, the Registrar adopted this finding and ordered that the Defendant’s Class C-61 license be suspended until the Defendant paid the Plaintiff $2,400.00.

9. The Defendant has never paid the $2,400.00 to the Plaintiff. However, the Plaintiff did receive $1,000.00 from the Defendant’s bond.

10. A.R.S. §32-1132(A) provides, in pertinent part, “any person injured by an act, representation, transaction or conduct of a residential contractor . . . may be awarded . . . not more than twenty thousand dollars for damages sustained by the act, representation, transaction or conduct.” A.R.S. §32-1132(A)(emphasis added). This statute further provides that an award from this fund is limited to actual damages and shall not be awarded for injury caused by a contractor who is unlicensed “at the time of the contract.” Id. (emphasis added).

11. The Plaintiff seeks $1,400.00 from the Contractors’ Recovery Fund. The Plaintiff argued that the phrase “at the time of the contract” means that an injured party is entitled to an award from the Contractors’ Recovery Fund if the contractor was licensed at any time during the life of the contract. The Plaintiff argued that the Contract was still in effect until she hired a new contractor in April of 1997. The Plaintiff further argued that the Defendant became licensed as a residential contractor prior to the termination of the Contract. Finally, the Plaintiff argued that she was still expecting the Defendant to install the air conditioning unit after the Defendant became licensed.

12. The Contractor’ Recovery Fund argued that the phrase “at the time of the contract” means that the contractor must be licensed when the parties signed or entered into the contract. The Defendant was not licensed when the parties signed the Contract. Therefore, the Plaintiff is not entitled to payment from the Contractors’ Recovery Fund.

13. The undersigned Administrative Law Judge could find no legal authority defining the phrase “at the time of the contact.” The undersigned Administrative Law Judge finds that the Plaintiff’s interpretation of A.R.S. §32-1132(A) is reasonable. If the drafters of this statute had desired to limit the phrase “at the time of the contract” to when the parties signed or entered into a contract, then the drafters should have specifically included this language in this statute. The undersigned Administrative Law Judge is fully aware that it is not always clear when a contract has expired or has been terminated. However, it can also be equally unclear as to the date of entering into a contract (especially if it is an oral contract).

14. The undersigned Administrative Law Judge finds that during the life of the Contract to install the air conditioning unit, the Defendant caused injury to the Plaintiff while the Defendant was licensed. The undersigned Administrative Law Judge finds that the Plaintiff should be allowed access to the Contractors’ Recovery Fund and that her claim for an award of $1,400.00 in actual damages is reasonable.

CONCLUSIONS OF LAW

1. The Registrar of Contractors is empowered to determine and award proper payment to the Plaintiff from the Contractors’ Recovery Fund pursuant to A.R.S. §32-1154(E).

2. The undersigned Administrative Law Judge finds that the evidence supports an award to the Plaintiff in the amount of $1,400.00 as set forth in Findings of Fact #13 & 14.

RECOMMENDED DECISION

In view of the foregoing, the undersigned Administrative Law Judge recommends on the effective date of this Order that the Registrar of Contractors shall commence and finalize payment procedures from the Contractors’ Recovery Fund to the Plaintiff in the amount of $1,400.00.

Done this day, April 3, 1998.

______________________________________ Casey J. Newcomb Administrative Law Judge

Original transmitted by mail this ____ day of April, 1998, to:

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

ATTN: Joyce Armijo

By ___________________________ -----------------------

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