Arizona Court of Appeals Division One Holds That A.R.S. § 32-1138, which States that the Registrar of Contractors “Shall Promptly Enforce” Subrogation Claims, is not a Statute of Limitations.

Frederico Johnston was a licensed contractor.  On April 13, 2005, the Registrar of Contractors (“ROC”) issued a final judgment awarding two of Johnston’s former customers $16,900 in damages to be paid out of the Registrar’s Residential Recovery Fund.  The former customers assigned their judgment to the ROC on June 16, 2005.  Over two years later, on October 22, 2007, the Attorney General, on behalf of the ROC, filed suit against Johnston to enforce its subrogation rights.  The Johnstons filed a motion to dismiss, arguing that A.R.S. § 32-1138 barred the ROC’s claim.  The trial court granted the Johnstons’ motion.  This appeal followed.

The Arizona Appeals Court held that A.R.S. § 32-1138, which requires that “[t]he [ROC] and the attorney general shall promptly enforce all subrogation claims,” is not a statute of limitations.  The Court reasoned that the statute does not contain an express time limitation for the enforcement of the ROC’s subrogation rights, and the term “shall promptly enforce” as used in the statute is not mandatory. 

Judge Weisberg authored the opinion; Judges Gemmill and Barker concurred