VACATE

99F-T0842-ROC · Registrar of Contractors · 1999-12-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

| |(| | |JACOB STERN, |(|Case No.: T99-0842 | |Complainant, |(| | | |(|Docket No.: 99F-T0842-ROC | |vs. |(| | | |(| | |License No. 059651, Class B-05 of|(|Order VACATING | |FIBER INDUSTRIES, INC. (CORP), |(|AND REMANDING | |Respondent. |(| | | |(| | | |(| | | |(| | | |(| | | |(| | | |(| |

The Respondent herein, Fiber Industries, Inc., filed a Motion to Dismiss this matter on November 30th, 1999. Complainant filed his Response thereto on December 2nd, 1999. An understanding of the motion and response can only be fully understood by relating the history of this case and another administrative complaint filed with the Registrar, which was between these same parties. The Complainant herein, Mr. Stern, brought a first Complaint against the Respondent herein, Fiber Industries, Inc., on November 30th, 1998. That Complaint brought to the Registrar issues concerning the Respondent’s construction of a new fiberglass shell in the Complainant’s existing concrete swimming pool at the Complainant’s residence. The Registrar denominated that Complaint as T99-0417. Respondent filed a response to the Complaint, and the matter proceeded to an administrative hearing in the Office of Administrative Hearings (OAH), before Administrative Law Judge M. Douglas. The administrative hearing of T99-0417, before Judge Douglas, was held on June 9th, 1999. Multiple issues were heard at the hearing regarding the Respondent’s work and the Registrar’s inspection of the work and his Corrective Work Order, and the relationship between the parties in terms of whether Respondent was allowed by the Complainant to make necessary corrections. In short, the controversy over the Respondent’s construction of the swimming pool shell was almost completely presented by the parties to J. Douglas on June 9th, 1999. Almost because during the hearing the Complainant sought to raise an issue that was not properly before the Registrar, as not being within the ambit of the Complaint or the Registrar’s inspection. J. Douglas prohibited insertion of this issue into the June 9th, 1999 administrative hearing. Complainant then, the very next day after the hearing of T99-0417, returned to the Registrar’s office and filed a second Complaint. The Registrar denominated this Complaint T99-0842. This Complaint referenced an additional issue regarding the same construction of the same swimming pool shell that was the subject of the hearing before J. Douglas the day previous. It is evident to the point of being obvious that in filing the second administrative complaint, Complainant desired to have heard the subject of his complaint that was precluded at the June 9th, 1999 hearing. As Complainant stated in his Response to the pending Motion to Dismiss, the issue in T99-0417 was “the buckling of the fiberglass walls of the fiberglass pool and the peeling of the fiberglass steps of the fiberglass pool.” Complainant stated T99-0842 regards “the peeling of the fiberglass walls and the fiberglass bottom of the fiberglass pool.” Thus it is obvious that the administrative hearing of T99-0842, presently scheduled for December 8th, 1999, although involving an issue not heard in the June 9th, 1999 hearing, does involve essentially the same set of facts and circumstances that was heard by Judge Douglas. More importantly, T99-0842 attempts to bring into issue a complaint which, although not litigated in the previous administrative proceeding, could have been. This is evident, first, in the record of the prior hearing, second, in the timing of the filing of T99-0842 the day after Complainant was informed in hearing that he was attempting to insert issues not before the Registrar, and third, in the nature of the newly brought Complaint itself being one having to do with the same pool shell construction. Judge Douglas issued his Recommended Decision and Order on July 1st, 1999. The Registrar rejected Judge Douglas’s Recommended Decision and Order, and issued his own on August 4th, 1999. A Petition for Rehearing was filed by the Respondent, and same was denied by the Registrar in his order dated September 24th, 1999. The terms of that order denying rehearing included the finality of the Decision and Order of the Registrar on November 3rd, 1999, unless a Stay Order would issue from the Superior Court on or before that date. The Respondent, on November 3rd, 1999, filed suit in Pima Superior Court, appealing against the final agency decision of the Registrar in Case No. T99-0417, and seeking a stay order (Case No. 336189, assigned to Judge John F. Kelly). The foregoing being the history of these two cases to date, there appears to be a number of reasons why this matter, 99F-T0842-ROC, ought to be vacated from the calendar of the OAH, and remanded to the Registrar for further action. First is the consideration of the bar of collateral estoppel (sometimes known as issue preclusion), second is the doctrine of res judicata (sometimes known as claim preclusion), third is the principle of administrative economy, and fourth, the desire of every state licensing and regulatory agency to avoid rendering inconsistent decisions involving the same set of facts and circumstances. When Respondent, who is not a lawyer, in the motion under consideration argues to dismiss the instant action because the controversy has already once been through the administrative process and been decided, he is stating in lay terms what a lawyer would call collateral estoppel and res judicata. Collateral estoppel and res judicata do apply to administrative hearings. See: J. W. Hancock Enterprises v. Arizona State Registrar of Contractors, 142 Ariz. 400, 690 P.2d 119 (Ariz.App. 1984). Collateral estoppel maintains that a determination of a litigated fact or law which was essential to a valid and final judgment is conclusive between the parties in a subsequent claim. See: Farmers Ins. Co. of Arizona v. Vagnozzi, 138 Ariz. 443, 675 P.2d 703 (Ariz. 1983).

Collateral estoppel . . . . . bars relitigation between parties of issues necessary to a determination in a different proceeding[.] The necessary elements to invoke collateral estoppel are: 1) the issue is actually litigated in previous proceedings; 2) full and fair opportunity to litigate the issue; 3) resolution of such issue is essential to the decision; 4) valid and final decision on the merits; 5) common identity of parties. Hancock, 690 P.2d. at 129.

Clearly what Complainant wishes the Registrar to hear in T99-0842 is not barred by collateral estoppel for the reason that element number one is absent; that is, the issue of “the peeling of the fiberglass walls and the fiberglass bottom” was not litigated in the previous proceeding. It was not litigated there because it was not properly before the Registrar in Complaint T99-0417, and therefore not allowed to be litigated. However, several other issues, issues which touch and concern both T99- 0417 and T99-0842, do meet the five elements of issue preclusion in a subsequent administrative hearing. While it could be said that since there is not a final decision on appeal in Superior Court (or the appellate courts) in the case of T99-0417, element four is not met, and no issue is precluded from being heard in an administrative hearing on December 8th, 1999. That may be true (however, see discussion on finality element relative to res judicata, infra). However, such a position notwithstanding, prudence, and administrative economy would seem to make the better course to follow a wait-and-see approach. The parties, the OAH and the Registrar should wait-and-see just what becomes of the appeal in Pima Superior Court, or beyond, when it will be known what issues are and are not precluded in a subsequent administrative hearing. Proceeding now places all involved in peril of finding out only after the fact that what they addressed and decided in T99-0842 would have been better left alone. Conversely, there is the possibility that the courts will render a judgment that would not collaterally estop any issue from being litigated in this subsequent administrative proceeding. The courts, in the appeal of T99-0417, may see fit to vacate the agency decision and remand that case to the Registrar for further proceedings. In such an event, if this order has been issued, T99-0417 would find itself alongside T99-0842 in the Registrar’s office, and the two could be easily consolidated and heard together in one hearing. Administrative economy would be greatly served if that occurs. The next consideration that supports the issuance of this order is the doctrine of res judicta. Put most simply and basically, this doctrine asserts that something which has already been decided by a court or an agency should not be relitigated. The purpose is to put an end to litigation at some point, and avoid unnecessary and vexatious trouble to all involved. The elements for res judicata to apply are much the same as those for collateral estoppel, with one important difference for present purposes. Collateral estoppel, or issue preclusion, applies only if the issue in question actually was previously litigated. Res judicata, or claim preclusion, applies if the issue in question actually was litigated in the previous proceeding, or if the issue in question could have been litigated in the previous proceeding. See: Aldritch v. Industrial Commn. of Arizona, 176 Ariz. 301, 860 P.2d 1354 (Ariz. App. Div. 1, 1993). It appears from the record to date (related supra) that the subject of Complainant’s complaint in T99-0842 could have been brought in T99-0417. This seems so despite Complainant’s mention in his response to the motion to dismiss that the alleged defects forming the subject of the instant complaint could not be seen until the pool was drained. Complainant offers nothing to show that the pool could not have been drained anytime in order to reveal any alleged defects, and a complainant must bear some responsibility to bring forward his whole case the first time. Moreover, apparently the pool was drained and these alleged defects were seen earlier, based on the record to date. Thus it would seem that all the elements of res judicata exist, and the doctrine applies to bar T99-0842. It might be raised that the element of finality as to the previous Registrar’s decision is not found here since Respondent has appealed to the Superior Court. That would be the minority position, but not the majority position to which the common law of Arizona adheres. In Arizona, even where an appeal is taken against the trial court’s or administrative agency’s final judgment, such does not negate the finality aspect of those decisions for purposes of applying the doctrine of res judicata. See: Arizona Downs v. Superior Court of Arizona, 128 Ariz. 73, 623 P.2d 1229 (Ariz. 1981). Lastly, it is proper to vacate and remand this matter to the Registrar in the desire to avoid the possibility of there emanating from the Registrar’s office inconsistent decisions in two cases involving essentially the same set of facts and circumstances. Proceeding with the administrative process in this case while the earlier case is to be decided in a future judgment of the Superior Court or appellate courts, the nature of which cannot possibly be known at present, would risk an undesirable result which can easily be avoided by entry of this order. In conclusion, it appears manifest that not only the best course, but the only advisable course at the present time, is to vacate the administrative hearing of this matter and remand same to the Registrar for further action. That further action alternatively could be closing or dismissing Complaint No. T99-0842 by application of the principle of res judicata, or holding in abeyance Complaint No. T99-0842 until such time as there is a final decision on appeal in Complaint No. T99-0417, at which time, if ever, it would be appropriate to proceed administratively with this case. If the court remands T99-0417 to the Registrar, a new Request for Hearing could issue to the OAH, and T99-0417 be consolidated with T99-0842. Should the court not remand T99-0417, but decide it any other manner, still a new Request for Hearing could issue to the OAH, and this case be heard with both the Registrar and the OAH having the benefit of knowing what issues are to be heard, and what issues have already been decided by the court, and in what fashion they are binding on the administrative decision in T99-0842. Wherefore, it is hereby ordered, pursuant to A.A.C. R2-19-111.4., that this matter is vacated from the calendar of the OAH and remanded to the Registrar of Contractors for further action.

Dated this 3rd day of December, 1999.

OFFICE OF ADMINISTRATIVE HEARINGS

_________________________________ Grant Winston Administrative Law Judge

Original mailed this day of November, 1999, to:

Fiber Industries, Inc. 4700 N. Stone Ave. Tucson, AZ 85704-5714

Fiber Industries, Inc. 4801 N. First Ave. Tucson, AZ 85718

Jacob Stern 1842 West Lester Tucson, AZ 85745

Jacob Stern P.O. Box 86145 Tucson, AZ 85754

Michael P. Goldwater, Director Attn.: Griselda Ybarra Registrar of Contractors 800 W. Washington, 6th Floor Phoenix, AZ 85007

by:

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