ALJDEC

99F-512-ROC · Registrar of Contractors · 1999-12-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 8, 1999 APPEARANCES: Plaintiff appeared on her own behalf and Defendant appeared through its former owner and qualifying party, David Councilor. The Contractors’ Recovery Fund was represented by Assistant Attorney General, Patti Shelton. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. Defendant’s contracting license has been previously suspended by final Order of the Registrar of Contractors. Such suspension is determined to render this Defendant unwilling to remedy the violation of the State’s contracting laws which gave rise to the instant claim for damages.

2. The Registrar of Contractors has received advance notification of the existence and amount of the above named Plaintiff’s claim for an administrative payout from the Contractors’ Recovery Fund.

3. This hearing was convened following Plaintiff’s express request therefor, subsequent to refusal of the Contractors’ Recovery Fund to pay the total amount of her claim.

4. Plaintiff seeks to recover the sum of $20,000.00 from the fund.

5. Evidence of record established that there had been a prior license disciplinary hearing involving the parties named herein, in Registrar of Contractors’ case no. A98-0243. The hearing in question took place on August 12, 1998. Plaintiff appeared at that hearing on her own behalf and Defendant was represented by his attorney.

6. The Registrar of Contractors issued a Decision and Order in case no. A98-0243 on September 15, 1998. Among other things, said Order of the Registrar indicated that Defendant “constructed a new residence” for Plaintiff and ordered that Defendant’s contractor’s license would be suspended unless Defendant completed specified remedial work on or before the effective date of the Order. Apparently, Defendant failed to achieve substantial compliance with the terms and conditions of the Registrar’s Order and thus, his contractor’s license was suspended. It should be noted that subsequent to entry of this suspension, Defendant’s license was revoked due to an Order of the Registrar on another case.

7. Both Plaintiff and Defendant expressed dissatisfaction with the above-described Registrar’s Order in case no. A98-0243. Nevertheless, there is nothing in the record to indicate that either party pursued a re- hearing and/or appeal of the Registrar’s Order in the prior license disciplinary hearing. Thus, the prior Order of the Registrar is final and not subject to appeal or collateral attack at the instant Contractors’ Recovery Fund hearing.

8. The following salient facts were adduced at the hearing and are important to note:

a. Plaintiff submitted her claim to the Contractors’ Recovery Fund indicating that the approximate cost for her verbal contract with Defendant for the construction of her new home was $120,000.00. b. Plaintiff also submitted documentation to the Contractors’ Recovery Fund showing that she had canceled checks totaling the sum of $61,455.45 for specified payments she was directed to make by Defendant’s agents during the period of time that Defendant was responsible for the work being performed on the new home construction project. These payments were apparently made to Defendant’s agents. c. In addition to the aforementioned $61,455.45, it was also shown that Plaintiff paid specified suppliers and subcontractors the total sum of $35,653.12 for work performed on the project, as well as for required materials. Thus, Plaintiff was able to substantiate payments totaling $97,108.57 for the project which she claimed was supposed to cost her approximately $120,000.00. These sums paid by Plaintiff were not shown to be unreasonable and were not shown to be unrelated to the project at issue herein. d. Plaintiff submitted three bids from licensed contractors to repair and properly complete the project. These bids ranged from a low bid of $37,753.50 to a high bid of $44,630.00. There was no showing that these bids were unreasonable or that they contemplated work beyond the scope of what was necessary to properly complete the project and/or comply with the prior Order of the Registrar. e. Plaintiff claimed entitlement to damages for a private construction inspector who charged her $603.82 for a home inspection. f. The Contractors’ Recovery Fund determined that Plaintiff was entitled to a payout of $14,862.07. In light of the fact that Plaintiff felt she should receive the maximum allowed by law ($20,000.00), as aforementioned, she requested the instant hearing.

9. It is important to note that Defendant did not present any evidence or testimony at the instant hearing. The Contractors’ Recovery Fund also did not present any testimony at the hearing but did submit into evidence the documentation that it had received from Plaintiff regarding her claim for a payout from the fund. The documentation supplied by the Contractors’ Recovery Fund was submitted to support their position that Plaintiff was entitled to a payout of $14,862.07.

10. Payments made to a private home inspection service are not found to be the type of damages contemplated by the statute providing for the Contractors’ Recovery Fund. Thus, Plaintiff’s claim for the above- described $603.82 is rejected.

11. In considering the actual damages sustained by Plaintiff this Tribunal considered the uncontroverted fact that the original contract for the new home construction project, which Defendant was previously found to be responsible for, was $120,000.00. In addition, this Tribunal considered the total sums paid by Plaintiff pursuant to the verbal contract and the low bid submitted by the subsequent contractor in order to properly complete the project. Under all of the facts and circumstances presented at the instant hearing, it is adjudicated and determined that the actual damages sustained by Plaintiff as a result of Defendant’s violations of the State’s Contracting laws are $14,862.07, thereby warranting a payout to Plaintiff from the Contractors’ Recovery Fund for $14,862.07.

CONCLUSIONS OF LAW

1. Plaintiff is determined to be an injured person as that term is defined in A.R.S. § 32-1131(3).

2. Under the facts and circumstances of this case, the Registrar of Contractors is empowered to determine and award proper payment to Plaintiff from the Contractors’ Recovery Fund pursuant to A.R.S. § 32-1154(E).

3. A.R.S. § 32-1132 provides, in pertinent part, “…an award from the fund is limited to the actual damages suffered by the claimant as a direct result of the residential contractor’s violation but shall not exceed an amount necessary to complete or repair a residential structure” (emphasis added). Plaintiff’s payment to the above-described home inspection service does not all within this statutory framework regarding eligibility for payment from the Contractors’ Recovery Fund.

4. The within record supports an award to Plaintiff in the amount of $14,862.07, all of which shall be appropriately chargeable against Defendant and/or persons on the license as set forth in A.R.S. § 32- 1139(B).

RECOMMENDED ORDER

In view of the foregoing, it is recommended on the effective date of the Order entered in this matter that the Registrar of Contractors shall commence and finalize payment procedures from the Contractors’ Recovery Fund to Plaintiff in the amount of $14,862.07.

Done this day, December 10, 1999

______________________________________ Mark A. Silver 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 ___________________________

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