{"id":897016,"date":"2020-01-30T10:52:56","date_gmt":"2020-01-30T17:52:56","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=897016"},"modified":"2020-01-30T10:53:45","modified_gmt":"2020-01-30T17:53:45","slug":"registrar-of-contractors-residential-contractors-recovery-fund","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/registrar-of-contractors-residential-contractors-recovery-fund\/","title":{"rendered":"The Registrar of Contractors and the Residential Contractors\u2019 Recovery Fund: One Size Does Not Fit All"},"content":{"rendered":"\n<p>Creighton Dixon | <a href=\"https:\/\/information.swlaw.com\/REACTION\/2020\/Newsletters\/UnderConstruction\/0121_UC_WEB.html\">Snell &amp; Wilmer<\/a><\/p>\n\n\n\n<p>The Arizona Court of Appeals recently published a decision examining the Registrar of Contractor\u2019s (\u201cROC\u201d) handling of a homeowner\u2019s claim involving the Residential Contractors\u2019 Recovery Fund (the \u201cFund\u201d). The decision,&nbsp;<em>Gordon v. Arizona Registrar of Contractors<\/em>, 247 Ariz. 146 (App. 2019), is a helpful reminder that while the ROC and the Fund can be useful to resolve certain disputes, they are not the right solution for every problem.<\/p>\n\n\n\n<p>Though the Homeowner and ROC were the named parties, the dispute with the ROC was rooted in the Homeowner\u2019s relationship with InHouse Home Warranty (\u201cInHouse\u201d). InHouse sold home warranty policies, and it was licensed by the ROC, as well as Arizona\u2019s Department of Insurance. InHouse\u2019s contractor\u2019s license specifically covered air system repair, and InHouse would otherwise coordinate with independent contractors to fix other work.<\/p>\n\n\n\n<p>The Homeowner bought a home warranty policy from InHouse. Under the policy, InHouse was obligated to cover repairs on a variety of household systems. Eventually, InHouse stopped answering the Homeowner\u2019s calls for service, and the Homeowner in turn filed a complaint with the ROC. The Homeowner\u2019s complaint alleged that InHouse worked outside the scope of its contractor\u2019s license, aided and abetted an unlicensed contractor, operated as an insurance company without a license, and failed to respond to new requests for service. Notably, the Homeowner did not include any complaints about the actual workmanship. After InHouse failed to respond, the ROC issued a default decision and order revoking InHouse\u2019s contractor\u2019s license.<\/p>\n\n\n\n<p>This is when the dispute began between the Homeowner and the ROC. After succeeding against InHouse, Homeowner sought to recover from the Fund. For those unfamiliar with the Fund, the Fund is described by the ROC\u2019s website as \u201ca form of financial protection provided by licensed Arizona residential contractors to residential homeowners.\u201d Essentially, it provides money that can be used to complete or repair work, provided the residential homeowner meets the legislative requirements.<\/p>\n\n\n\n<p>However, in this case, the ROC found that the Homeowner could not recover from the Fund because the \u201chome warranty policy\u201d was not a construction contract. The Homeowner appealed the decision first to the Superior Court, and then to the Arizona Court of Appeals. Both courts affirmed the ROC\u2019s decision. The Court of Appeals determined there were three independent reasons to deny the request to recover from the Fund: (1) as the ROC had noted, the \u201chome warranty policy\u201d was not a construction contract; (2) the Homeowner was not a \u201cperson injured\u201d as required by the relevant statute because the issues in his complaint (e.g. unnecessary labor and high cost) were not related to the type of damage the Fund is meant to address (e.g. incomplete work); and, (3) the Homeowner did not \u201csuffer damage compensable by the Fund.\u201d<\/p>\n\n\n\n<p>This case is a helpful reminder that the Fund cannot solve every problem parties may face against a contractor. Here, there were at least two reasons the square problems of the Homeowner did not fit into the round solutions the Fund was intended to address. First, the \u201chome warranty policy\u201d was essentially insurance, not a construction contract. Parties should consider this distinction (and the specific contours of their own disputes), as not every \u201ccontract\u201d meets the statutory requirements to recover from the Fund. Second, the problems the Homeowner had with InHouse did not meet the requirements to recover from the Fund. In Gordon, there were no workmanship issues to address. Other bars to consider include the statutory prohibition preventing commercial property owners from recovering from the Fund. See A.R.S. \u00a7 32-1132.01(A) (\u201cAn award from the residential contractors\u2019 recovery fund is limited to residential real properties. The Fund may not issue an award covering damages to commercial property.\u201d). Overall, Gordon is a timely reminder that the ends you are looking for (e.g. money, directive to complete the work), do have an important role in determining your means. Take the time to consider if the Fund can award the remedy you want.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Creighton Dixon | Snell &amp; Wilmer The Arizona Court of Appeals recently published a decision examining the Registrar of Contractor\u2019s (\u201cROC\u201d) handling of a homeowner\u2019s claim involving the Residential Contractors\u2019 Recovery Fund (the \u201cFund\u201d). The decision,&nbsp;Gordon v. Arizona Registrar of Contractors, 247 Ariz. 146 (App. 2019), is a helpful reminder that while the ROC and&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/registrar-of-contractors-residential-contractors-recovery-fund\/\">Continue reading <span class=\"screen-reader-text\">The Registrar of Contractors and the Residential Contractors\u2019 Recovery Fund: One Size Does Not Fit All<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[436],"tags":[9895,204,11068,11069],"class_list":["post-897016","post","type-post","status-publish","format-standard","hentry","category-dispute-resolution-2","tag-advise-consult","tag-construction-disputes","tag-registrar-of-contractors","tag-residential-contractors-recovery-fund","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Registrar of Contractors and the Residential Contractors\u2019 Recovery Fund: One Size Does Not Fit All - Advise &amp; 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