ALJDEC decisions subject to certification as final

06F-M2397-ROC · Registrar of Contractors · 2006-11-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 9, 2006. APPEARANCES: Maggie Mumford appeared personally. Arizona Custom Pools, Inc. was represented by its president and qualifying party, Daniel Magee. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT

1. Arizona Custom Pools, Inc. (“Respondent”) is the holder of License No. 149317, a Class B-04 contracting license issued by the Registrar of Contractors. Respondent’s president and qualifying party is Daniel Magee. 2. On or about August 27, 2005, Respondent submitted a written, detailed proposal for constructing a swimming pool at the residence of Maggie Mumford (“Complainant”). The estimate had a subtotal of $27,950.00, plus sales tax in the amount of $1,635.00. The total price on the estimate was $29,500.00.[1] 3. On August 31, 2005, the parties executed a written agreement and addendum for the construction of Complainant’s swimming pool for a contract price of $27,650.00. The contract did not state a start date or a completion date, and did not contain any “time is of the essence” language. 4. The addendum to the contract contained the following payment provisions:

a. A down payment payable on the execution of the contract of not more than one thousand dollars. b. After completion of the excavation work on the swimming pool or spa, a payment of not more than thirty percent of the original contract price plus any written change orders approved by the purchaser. c. After the installation of steel, plumbing and pneumatically applied concrete materials or the installation of a prefabricated swimming pool or spa, a payment of not more than thirty percent of the amount of the original contract price plus any written change orders approved by the purchaser. d. After the installation of decking materials, a payment of not more than thirty percent of the amount of the original contract price plus any written change orders approved by the purchaser. e. Before the application of the finishing interior materials or completion of all work on a prefabricated pool or spa, payment of all remaining sums due on the original contract plus any written change orders approved by the purchaser.

5. On or about August 31, 2005, Complainant paid the $1,000.00 down payment to Respondent by check. 6. The addendum to the parties’ contract also provides that “[a]ny changes, additions or deletions to the work specified in the original contract shall be included in a written change order.” 7. Complainant contends that Mr. Magee said the pool would take six to seven weeks to complete and would be completed prior to his annual trip to his home in Scotland in the late Fall of 2005. 8. On or about October 1, 2005, Respondent commenced work on the swimming pool. There is no evidence that Complainant complained to Respondent about the commencement time. 9. By check dated October 3, 2005, Complainant paid Respondent a progress payment of $8,000.00. 10. The parties decided that it would be better not to remove the northwest concrete masonry unit (“CMU”) wall to access Complainant’s backyard with a Bobcat for excavation. Instead, a section of Complainant’s southeast CMU wall was removed to provide access for a larger piece of equipment, a backhoe, for use in the excavation. 11. Complainant contends that she is entitled to a credit of $650.00 because the Bobcat was not used. While the original proposal itemized the cost of a Bobcat, the parties’ written contract did not itemize it. Further, Complainant failed to establish Respondent’s cost to use the larger backhoe, which was not provided for in the parties’ written agreement. 12. After the commencement of the pool construction, Mr. Magee left for his annual trip to Scotland for several weeks. Mr. Magee’s son was then responsible for supervising Complainant’s project and other ongoing projects for Respondent. 13. On or about December 19, 2005, Mr. Magee returned to Arizona from Scotland. Complainant’s swimming pool was not completed. Respondent contends that the project was delayed due to a market shortage of concrete. 14. By check dated December 30, 2005, Complainant paid Respondent a progress payment of $8,000.00. 15. By check dated January 11, 2006, Complainant paid Respondent an additional progress payment of $8,000.00. 16. There is credible evidence that Respondent proceeded to the final stage of construction in March 2006 without requesting the final progress payment from Complainant. Mr. Magee is found to have requested the final progress payment on June 1, 2006 after the pool had been completed. Complainant has refused to pay the final progress payment due to monetary disputes with Respondent described below. 17. The pool was completed on or about March 10, 2006. 18. Complainant subsequently filed a complaint against Respondent with the Registrar of Contractors alleging statutory and regulatory violations by Respondent. 19. There is no evidence that a Registrar of Contractors’ inspector ever performed a jobsite inspection as a result of the filed complaint.

Electrical Issues

20. The parties’ written contract provided for electrical work to be performed for the swimming pool and for a spa that Complainant would later install on the deck that Respondent installed east of the swimming pool. 21. The electrical work was performed as required by the written agreement. 22. Complainant’s contends that she is entitled to a credit because the electrical line for the swimming pool turned out to be less than the 150 feet specified in the written agreement. The written contract does not specify the cost for the electrical work to the swimming pool. This monetary dispute should be resolved in a civil court of competent jurisdiction. 23. The written contract provided that “spa electric” was included within Respondent’s scope of work. There were no specifications for supplying electricity to the spa location. Respondent fulfilled that scope of work.

Decking Issues

24. Respondent poured the deck for the swimming pool and an additional area east of the swimming pool. There is no change order for the area east of the swimming pool. 25. The cost for the deck for the swimming pool provided for in the written agreement is within the stated contract price. 26. The cost for the deck to the east of the swimming pool, which was not provided for in a written change order as required by the parties’ written agreement, is disputed by the parties. That dispute should be resolved in a civil court of competent jurisdiction.

Sales Tax Issue

27. Complainant contends that Mr. Magee made a verbal representation to her that Respondent might waive the sales tax for the project if she was cooperative, timely in her progress payments, and made referrals on behalf of Respondent. That representation was not a part of the parties’ written agreement. 28. Respondent has not waived the sales tax for the project, which is part of the contract price but not itemized in the parties’ written agreement. 29. Respondent is under no contractual obligation to reduce the contract price by the value of the sales tax.

Volleyball Sleeves

30. The parties’ written contract provided that volleyball sleeves would be installed in the swimming pool deck. 31. Complainant contends that Respondent originally refused to install the volleyball sleeves. Mr. Magee contends that Respondent was instructed not to install them. This issue is deemed moot because the volleyball sleeves have been installed by Respondent.

Kool Deck Issues

32. It is uncontroverted that Respondent undertook four attempts to complete the swimming pool’s kool deck. 33. Complainant failed to establish that the kool deck evidences defective workmanship by Respondent.

Complainant’s Claim For Damages

34. Respondent’s claim for payment of additional funds beyond the stated contract price should be resolved in a civil court of competent jurisdiction. 35. Complainant contends that she is entitled to retain the final progress payment for damages caused by Respondent. She is claiming loss of investment opportunity, breach of contract by Respondent, delay in completing the project, mental anguish and defamation of character. Those claims should be resolved in a civil court of competent jurisdiction rather than before the Registrar of Contractors in an administrative disciplinary proceeding.

Additional Findings

36. With the exception of the final progress payment, Complainant is found to have timely paid the down payment and progress payments to Respondent. 37. Respondent is not found to have deviated from plans or specifications on this project. 38. Respondent is not found to have committed a wrongful or fraudulent act that substantially injured Complainant. 39. Respondent is not found to have failed to have completed Complainant’s project for the price stated in the parties’ written contract. There is a bona fide dispute between the parties as to the cost of additional work agreed to by the parties, but not reduced to a written change order as required by the parties’ contract. That dispute should be resolved in a civil court of competent jurisdiction. 40. Respondent is not found to have failed to meet minimum workmanship standards. While Respondent did perform some deficient workmanship during the course of the project, the evidence of record demonstrated that Respondent performed adequate remedial repairs prior to the completion of the project.

CONCLUSIONS OF LAW

1. The Registrar of Contractors has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in this matter. The standard of proof is preponderance of the evidence. A.A.C. R2-19-119(A). 3. The evidence of record does not demonstrate that Respondent violated the provisions of A.R.S. § 32-1154(A)(2) as cited in the Citation and Complaint issued by the Registrar of Contractors. 4. The evidence of record does not demonstrate that Respondent violated the provisions of A.R.S. § 32-1154(A)(7) as cited in the Citation and Complaint issued by the Registrar of Contractors. 5. The evidence of record does not demonstrate that Respondent violated the provisions of A.R.S. § 32-1154(A)(9) as cited in the Citation and Complaint issued by the Registrar of Contractors. 6. The evidence of record does not demonstrate that Respondent violated the provisions of A.R.S. § 32-1154(A)(3), specifically A.A.C. R4-9- 108, as cited in the Citation and Complaint issued by the Registrar of Contractors.

RECOMMENDED ORDER

The Citation and Complaint issued by the Registrar of Contractors in Case No. M06-2397 is dismissed. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of that certification.

Done this day, November 29, 2006

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2006, to:

Fidelis V. Garcia, Acting Director Registrar of Contractors Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________ ----------------------- [1] The total price appears to be a rounded number, since the subtotal plus tax equals $29,585.00.

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