ALJDEC

99F-258-ROC · Registrar of Contractors · 1999-07-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 12, 1999. APPEARANCES: The Plaintiffs appeared personally. The Defendant did not appear. The Residential Contractors’ Recovery Fund (“Fund”) was represented by Assistant Attorney General Mary Delaat Williams. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

1. The Citation and Complaint were amended at the commencement of the hearing to reflect Kaye B. Evans as a Plaintiff along with her husband. 2. The scope of this hearing is to determine if an award and payment from the Fund to Plaintiffs pursuant to A.R.S. §32-1154(E) is justified by the evidence. 3. On or about October 7, 1997, Plaintiff Norm Evans entered into a written contract with Defendant for the application of concrete decorative coating at Plaintiffs’ residence. 4. Defendant’s Class C-09 license was suspended by the Registrar of Contractors on March 10, 1997, in Case No. T97-1024. Defendant’s license was to remain on suspension until it complied with the terms and conditions set forth in the Order in that case. 5. The suspension of the Defendant’s Class C-09 license prohibited it from contracting until it complied with the Order entered in Case No. T97- 1024. 6. The Defendant’s license was suspended at the time the parties entered into their written agreement and during the performance of the contracted work. 7. The Defendant’s owner and qualifying party informed Plaintiffs that it had an active license despite that license being in a suspended status. Plaintiffs did not contact the Registrar of Contractors to determine the status of the Defendant’s license either prior to entering into the written agreement or during the performance of the contracted work. 8. On or about August 26, 1998, Plaintiff Norm Evans filed a complaint with the Registrar of Contractors alleging that the Defendant had violated provisions of the State’s contracting laws during the performance of the project. The complaint initiated a disciplinary action by the Registrar of Contractors against the Defendant. The Plaintiffs are under a mistaken belief that the Registrar gave them incorrect forms. Such is not the case. A claim for an administrative payout from the Fund involves a separate procedure which had not been initiated by Plaintiffs at that point in time. 9. Plaintiffs have established that they have been damaged due to the Defendant’s poor workmanship. 10. On or about August 27, 1998, the Registrar of Contractors advised the Plaintiffs by letter that the Defendant’s contractor’s license had been revoked on March 5, 1999. As a result of the revocation, the Plaintiffs were advised that the Registrar was declining to take administrative action on their filed complaint, which was then closed as unresolved. The letter further advised the Plaintiffs that they might be eligible to file a claim with the Fund. 11. The Plaintiffs subsequently filed a claim with the Registrar of Contractors for an administrative payout from the Fund. 12. During the processing of the Plaintiffs’ claim the Registrar determined that the Defendant was suspended at the time the parties entered into the written agreement and during the performance of the contracting work. 13. By letter dated March 9, 1999, the Registrar of Contractors advised the Plaintiffs that their claim would be closed with no payment from the Fund because the Defendant’s license was under disciplinary suspension at the time of the contract. 14. Plaintiffs timely filed a request for an administrative hearing to contest the denial of their claim. 15. It is determined that the Plaintiffs are ineligible for an award and payment from the Fund due to the Defendant’s Class C-09 license having been suspended at the time the parties entered into the written agreement and during the performance of the contracting work.

CONCLUSIONS OF LAW

1. The Registrar of Contractors is empowered to determine and award proper payment to plaintiffs from the Residential Contractors’ Recovery Fund pursuant to A.R.S. § 32-1154(E). 2. Although the Plaintiffs have established that they have been injured by the Defendant, they are nonetheless ineligible for an award and payment from the Fund due to the suspension status of Defendant’s contracting license at the time of the contract. A.R.S. §32-1132(A) mandates that “an award from the fund shall not be available to persons injured by an act, representation, transaction or conduct of a residential contractor whose license was in an inactive status, expired, revoked or suspended pursuant to §32-1154, subsection A at the time of the contract”. (emphasis added). The statute does not give the Registrar of Contractors the discretion to make an award and payment from the Fund to the Plaintiffs because the Defendant’s contracting license was suspended as the result of a prior disciplinary proceeding at the time the parties entered into their contract and during the time the work was performed. 3. The Plaintiffs failed to sustain their burden of proving that the Registrar’s prior determination that they were ineligible for an award and payment from the Fund should be reconsidered. Therefore, the Plaintiffs’ appeal should be dismissed. 4. The Fund has established that the Plaintiffs are ineligible for an administrative payout from the Fund. 5. The Registrar’s position that the Plaintiffs’ claim be closed with no payment from the Fund should be affirmed and upheld.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that the Plaintiffs’ appeal be dismissed and the prior denial of their claim by the Registrar of Contractors should be affirmed and upheld. Done this day, July 30, 1999.

______________________________________ BRIAN BRENDAN TULLY Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1999, to:

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

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

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826