ALJDEC

99F-024-ROC · Registrar of Contractors · 1998-11-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 24, 1998 APPEARANCES: Plaintiff appeared on his own behalf; Defendant did not appear; the Arizona Registrar of Contractors appeared through his attorney, Patti Shelton, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

Plaintiff and the Registrar of Contractors presented evidence, testimony and legal argument. Based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT

In 1997, Defendant possessed License No. 098364, Class B-, first issued by the Registrar of Contractors on August 3, 1993. In September 1997, Plaintiff paid $119,000 to purchase a parcel of land from Defendant’s cousin, Dany Seymour, as trustee for a family trust. Defendant had advised Plaintiff to purchase the parcel, may have received some of the proceeds from the sale, and represented to Plaintiff that the parcel’s east lot line dimension was 80’, when in fact it was only 50’. If the parcel had had the dimensions represented, it would have consisted of slightly more that 15,000 square feet of land. As it was, the parcel consisted of only slightly more than 11,000 square feet of land. Dany Seymour is not listed on Defendant’s license or any other license issued by the Registrar. Plaintiff subsequently contracted with Defendant to construct a residence on the parcel, and Defendant constructed the residence. On November 18, 1998, Plaintiff complained to the Registrar, alleging that Defendant (1) had misrepresented the parcel’s dimensions; (2) had violated county setback requirements when he had constructed the residence; (3) had failed to provide a county-approved plot plan; and (4) had failed to install smoke alarms. On January 2, 1998, the Registrar issued a corrective work order, ordering Defendant: (1) to correct the setback to bring it into compliance with Navajo County planning and building code, which requires a 20’ setback; (2) to correct missing smoke detectors and to ensure that all smoke detectors function as intended; and (3) to supply Plaintiff with a copy of the county- approved lot/plot plan. Defendant failed to show compliance with the corrective work order and, on February 13, 1998, the Registrar issued a Citation and Complaint in Case No. P98-0102. Defendant failed to answer the Citation and Complaint and, on April 13, 1998, the Registrar suspended Defendant’s contracting license pursuant to A.R.S. § 32-1155(B). At some point, Plaintiff retained an attorney and negotiated a settlement with Defendant and his cousin. The settlement required Defendant and his cousin to purchase from the property owner on the east side of the parcel and to convey to Plaintiff a small triangular piece of land sufficient to bring the setback of the residence into compliance with county zoning requirements.[1] The additional piece consisted of approximately 716 square feet of land, bringing the total size of the parcel to 13,335 square feet, still more than 1,700 square feet less than the size Defendant had represented the parcel to be. Although Plaintiff had intended to construct a garage on the parcel, he cannot do so because there is no place on the property that the garage can be constructed such that it complies with setback requirements. Plaintiff seeks from the Residential Contractors’ Recovery Fund $6,668, which represents the price of 1,700 square feet of land, at a price of $4 per square foot, which is considerably less than what Plaintiff paid for the original piece of land and what Defendant and his cousin paid for the additional piece of land they conveyed to Plaintiff in the settlement.

CONCLUSIONS OF LAW

In this administrative proceeding, Plaintiff bears the burden of proof and must establish both the right to payment from the Residential Contractors’ Recovery Fund and the amount of such payment by a preponderance of the evidence. See Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary at page 1064 (6th ed. 1990). The Arizona legislature established the Residential Contractors’ Recovery Fund “in part ‘to provide improved protection for owners and lessees of property who contract for the construction or alteration of residential structures.’” Shelby v. Registrar of Contractors, 172 Ariz. 95, 97, 834 P.2d 818, 820 (1992) (quoting 1981 Sess. Laws ch. 221, § 1)). A.R.S. § 32- 1132(A) allows an award from the Fund to “any person injured by an act, representation, transaction or conduct of a residential contractor, which is in violation of this chapter or the rules adopted pursuant to this chapter . . . .” [Emphases added.] A.R.S. § 32-1131(3) defines “[p]erson injured” as “any owner of residential real property . . . who [is] damaged by the failure of a residential contractor . . . to adequately build or improve a residential structure or appurtenance on that real property.” [Emphasis added.] A.R.S. § 32-1131(4) defines “[r]esidential contractor” as “a contractor defined in §32-1101 who is licensed to perform work on residential property pursuant to this chapter and who engages in residential contracting.” [Emphasis added.] A.R.S. § 32-1101(A)(7)(a) provides that “‘[r]esidential contractor’ is synonymous with the term ‘residential builder’ and means a person . . . [who] does by himself or by or through others, within residential property lines . . . [c]onstruct . . . any residential structure . . . .” [Emphasis added.] The above statutes and statement of legislative intent in establishing the Residential Contractors’ Recovery Fund make clear that a residential property owner may only recover from the Fund an award for damages caused by a licensed residential contractor’s contracting activities. The sale of real property does not constitute building or “contracting” as the legislature has defined it. Although the Registrar might have been able to award Plaintiff monies sufficient to correct the setback requirements and to bring Plaintiff’s residence into compliance with the county zoning code, the legislature has not empowered the Registrar to award from the Fund civil damages to Plaintiff for an injury not caused by Defendant’s contracting activities.[2]

RECOMMENDED ORDER

Based on the foregoing, it is recommended that the Registrar of Contractors dismiss Plaintiff’s claim against the Residential Contractors’ Recovery Fund and close the complaint in case no. 99/024 without further action.

Done this day, November 27, 1998.

_________________________________ Diane Mihalsky Administrative Law Judge

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

Michael P. Goldwater, Director Registrar of Contractors 800 West Washington, 6th Floor Phoenix, AZ 85007 ATTN: Joyce Armijo

By _______________________________

----------------------- [1] Presumably, as consideration for the settlement, Plaintiff relinquished his civil claim for damages from Defendant. [2] Defendant of course is civilly liable to the same extent as any other person for damages proximately caused by any tortious misconduct, such as misrepresentation or fraud in the sale of real property.

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