ALJDEC decisions subject to certification as final

07F-0518-ROC-com · Registrar of Contractors · 2009-04-28

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 31, 2008, March 17 and April 8, 2009 APPEARANCES: Complainants: Rene and Monica Sierra appeared, pro per. Respondent: Michael Sandoval, member and qualifying party, appeared at all three hearings; William Bowman, member, appeared on December 31, 2008 and April 8, 2009. Registrar of Contractors: Inspector Warren Duncan appeared at the December 31, 2008 and March 17, 2009 hearings on behalf of the Registrar of Contractors. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. The record indicates that the original hearing in this matter took place August 20, 2007, before Administrative Law Judge Strickland. Prior to the presentation of any testimony or evidence, the parties concluded a settlement agreement and stipulated that the matter be closed as settled. The essential terms of the settlement agreement were read into the record and set forth in the Administrative Law Judge Decision dated August 20, 2007, attached as Exhibit A thereto. 2. By the terms of the settlement agreement, the parties agreed, in pertinent part, that “[i]n accordance with the terms of the parties’ STIPULATION AND AGREEMENT, Respondent…has agreed to pay for corrective work and to continue otherwise with its warranty coverage.” [Emphasis in original.] 3. Exhibit A to the settlement agreement provided, inter alia, that, “[i]n consideration for the following action undertaken by Respondent, Complainants agree to withdraw [their complaint] and release Respondent from all claims and demands that Complainants may have had against Respondent in this matter.…Complainants will obtain three (3) estimates from properly-licensed Contractors to perform the unfinished and/or improperly accomplished corrective work. Respondent will pay for the lowest estimate minus the amount owed on the contract (lowest estimate - $899.00). Respondent affirms that the original warranty shall remain effective and in force despite this agreement.” 4. Based on the parties’ settlement agreement, Administrative Law Judge Strickland vacated the August 20, 2007 hearing and remanded the matter to the Registrar of Contractors (“ROC/Registrar”) for further appropriate action. 5. By Order of Closing dated September 18, 2007, the Registrar approved the settlement agreement between the parties and ordered Case No. 07-0518 closed as settled. 6. This Complaint was re-opened by the Registrar pursuant to its August 25, 2008, Order Reopening Complaint and Setting Compliance Hearing as a result of Complainants’ correspondence received by the ROC November 28, 2007, wherein they alleged that Respondent “refused to comply with the agreement signed on August 20, 2007 before Administrative Law Judge Strickland.” 7. The Registrar issued a Notice of Compliance Hearing (“Notice”) on November 26, 2008, whereby a compliance hearing was scheduled for December 31, 2008. 8. The matter convened for compliance hearing on December 31, 2008. Prior to the presentation of any testimony or evidence, it was determined that Complainants failed to comply with the terms of the parties’ August 20, 2007 settlement agreement by providing Respondent with only two (2) of the agreed upon three (3) estimates for remedial work. At that time, Respondent asserted, inter alia, that, given Complainants’ failure to provide the requisite three estimates, it was unable to comply with its obligations under the settlement agreement. Respondent further asserted that the scope of the two estimates already provided by Complainants exceeded the work required by the Corrective Work Order (“CWO”) issued by the Registrar in this matter and, in effect, that anticipated by the parties under the settlement agreement. As a result of the above-referenced situation, this tribunal issued an Order Continuing Hearing on January 9, 2009 (“Order”), whereby Complainants were provided until January 31, 2009, to provide Respondent a third estimate from a duly licensed contractor for the corrective work to be performed the scope of which was to be discerned from the CWO. The Order also provided a timetable for the parties to arrange a jobsite meeting for their respective experts to review the project and set the matter for continued hearing on March 17, 2009. 9. The matter convened for continued hearing at the time, date and place set forth in the above-referenced Order. The parties did not conclude the presentation of evidence in the allotted time. As a result, the matter convened for further hearing on April 8, 2009. 10. Pursuant to the Registrar’s Notice, this compliance hearing was being conducted “in order to determine whether Respondent has substantially complied with the terms and conditions of the Decision and Order issued on September 18, 2007, and reconsideration of the appropriateness of the disciplinary penalty imposed or that may be imposed as a result of this hearing.” 11. At the compliance hearing, Complainants Rene Sierra (“R. Sierra”) and Monica Sierra (“M. Sierra”) testified and submitted Exhibits B and C which were marked, admitted and considered. Exhibits A1 through A27 were admitted over objection for the limited purpose of addressing those items set forth in the CWO. Thomas Larsen (“Larsen”) and Jose Covarrubias (“Covarrubias”) also testified on behalf of Complainants. 12. Michael Anthony Sandoval (“Sandoval”), member and qualifying party, and David William Bowman (“Bowman”), member, testified on behalf of Respondent and submitted Exhibits 1, 2 and 3 which were marked, admitted and considered. Greg Garrett (“Garrett”) and William Boyd Grigsby (“Grigsby”) also testified on behalf of Respondent. 13. Inspector Warren Duncan (“Duncan”) testified on behalf of the Registrar at the March 17, 2009, hearing and described his observations and conclusions regarding his original jobsite inspection which generated the CWO and pre-compliance hearing inspection on March 17, 2009. 14. The CWO[1] addressed seven (7) items of concern on the subject pool and related area (“project”): (1) Deck coating chipping peeling; (2) Crack at skimmer; (3) White spots in bottom of pool; (4) Pool light not working as intended; (5) Pool fittings not consistent color, three different colors; (6) Excessive settlement of trench at edge of pool; and (7) Exposed in-ground PVC at rear of water feature. 15. At the hearing, Complainants stipulated that only items (1), (2), (3) and (5) remained in issue. 16. Pursuant to the parties’ August 20, 2007 settlement agreement, Complainants obtained three estimates which they assert address the remedial work to be performed on the project. A January 13, 2009 estimate from Innovative Pool & Spa Systems, Inc. (“Innovative”), the least costly of the three, provided a cost of $11,287.00. (Exhibit C) 17. Innovative’s representative, Covarrubias, testified that he prepared his estimate after reviewing the CWO and opined that the entire deck and pool interior must be removed and replaced to avoid the appearance of “patching.” Covarrubias further testified that Innovative only did complete remodels and not partial repairs due to its concern for patchwork results and its inability to provide a warranty for such partial work. 18. Covarrubias also testified that he had never before dealt with a CWO or its requirement to “correct by appropriate means.” 19. Inspector Duncan testified that at his March 17, 2009 pre- compliance hearing inspection it appeared that some corrections had been attempted with respect to CWO item (1) Deck coating chipping peeling and that only portions of the south and west pool deck required remedial work.[2] 20. With respect to item (2) Crack at skimmer, Duncan testified that it appeared it had been corrected and, although he observed a crack from the water feature to the skimmer, it was within acceptable ROC tolerances and, therefore, met minimum workmanship standards. 21. R. Sierra testified that the crack in the skimmer is causing a water leak which is resulting in significantly higher water bills. 22. Inspector Duncan could not render an opinion regarding item (3) White spots in bottom of pool due to his inability to observe them because of the murky status of the water at the pre-hearing jobsite inspection. 23. Similarly, although he could not see all of the fittings (CWO item (5)), Duncan related that they should all be consistent in color. 24. Garrett and Grigsby, both licensed pool contractors, testified that the outstanding CWO items (1) Deck coating chipping peeling; (2) Crack at skimmer; (3) White spots in bottom of pool; and (5) Pool fittings not consistent color, three different colors could be corrected individually without the need for total replacement of the deck and/or pool interior and at significantly less cost than that quoted by Innovative. Sandoval concurred with Garrett and Grigsby’s assessment. 25. Inspector Duncan also opined that all of the outstanding CWO items can be done without a full refurbishing of the pool although he emphasized the ROC does not dictate how repairs are to be accomplished. … … CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32- 1154(A). 2. Since they alleged non-compliance with the Registrar’s Order, Complainants have the burden of proof and must establish statutory violations by a preponderance of the evidence. A.A.C. R2-19-119. Proof by “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994); Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not. Black’s Law Dictionary 1182 (Rev. 6th ed. 1990). 3. Based on the evidence elicited at the hearing, it is evident that a good faith dispute exists between the parties regarding the scope of the remedial work to be performed on the subject project and, therefore, the cost associated therewith pursuant to the parties’ August 20, 2007 settlement agreement and the CWO. A review of the CWO and settlement agreement confirms that ambiguities exist regarding the necessary remedial work required thereby and, therefore, what Respondent must remit to Complainants.[3] Given this good faith dispute, it cannot be said that either party has acted inappropriately in this instance and, as a result, it cannot be found that Respondent’s actions and/or inaction warrant the imposition of any disciplinary penalty at this time. However, the weight of credible, probative and relevant evidence established at the hearing that a complete replacement of the subject decking and pool interior is not necessary to comply with the parties’ settlement agreement and the CWO. 4. The Registrar has the power to not only order disciplinary sanctions, but also to remove disciplinary sanctions. The facts and circumstances presented at the instant compliance hearing militate for the conclusion that reconsideration of the appropriateness of the original disciplinary sanction is warranted and said reconsideration and/or clarification, for purposes of this Registrar’s Complaint only, shall effectively relieve Respondent of its responsibilities required by the original settlement agreement. Thus, under all of the facts and circumstances presented herein, it is determined and concluded that a modification of the parties’ settlement agreement is warranted. 5. In light of the facts presented herein, it is further determined and concluded that Respondent shall be allowed one, and only one, opportunity to provide to Complainants with three (3) bids/estimates from duly licensed contractors who are ready, willing and able to correct the deficiencies, absent the entire replacement of the pool deck and/or pool interior, set forth in the settlement agreement and CWO items (1) Deck coating chipping peeling; (3) White spots in bottom of pool; and (5) Pool fittings not consistent color, three different colors. 5. It is further determined and concluded that Complainants did not establish by a preponderance of evidence that CWO item (2) Crack at skimmer had not been substantially complied with by Respondent.

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that, on or before the effective date of the Registrar’s Order entered in this matter, Respondent shall provide Complainants with three (3) bids/estimates from duly licensed contractors who are ready, willing and able to correct the deficiencies to minimum workmanship standards, absent the entire replacement of the pool deck and/or pool interior, set forth in the settlement agreement as pertain to CWO items (1) Deck coating chipping peeling; (3) White spots in bottom of pool; and (5) Pool fittings not consistent color, three different colors. Such bids/estimates shall be delivered to Complainants by certified mail, return receipt requested. IT IS FURTHER RECOMMENDED that, within seven (7) days of Complainants’ receipt of the above-referenced three (3) bids/estimates, Complainants shall notify Respondent in writing by certified mail, return receipt requested, of the bid/estimate they choose. IT IS FURTHER RECOMMENDED that, within seven (7) days of Respondent’s receipt of the written bid selection, Respondent shall pay or tender to Complainants the sum of that bid/estimate less the $899.00 balance due on the parties’ contract. IT IS FURTHER RECOMMENDED that, in the event Respondent timely pays or tenders to Complainants the sum of the bid/estimate selected by Complainants, Respondent shall be deemed to be in substantial compliance with the parties’ settlement agreement and this Recommended Decision and Order and the matter be closed. IT IS FURTHER RECOMMENDED that, in the event Respondent fails to timely provide the above-referenced three (3) bids/estimates and/or pay or tender to Complainants the sum of the bid/estimate selected by Complainants less the referenced $899.00 as provided above, Respondent’s Class KA-05 license be suspended until it complies with such requirement(s).[4] Done this day, April 28, 2009.

_______________________ Brian E. Smith Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2009, to:

Registrar of Contractors William A. Mundell c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012, Director

By __________________________ ----------------------- [1] In that neither party introduced it into evidence at the hearing, the Administrative Law Judge took administrative notice of the subject Corrective Work Order. [2] Inspection Duncan further testified that Complainants pointed out numerous other cracks in the transparent coating which were not part of his original inspection and, therefore, not addressed here.

[3] In an effort to get more clarity, the undersigned reviewed the recording of the August 20, 2007 hearing before Administrative Law Judge Strickland. As is stated in Exhibit A to the settlement agreement, corrective work is to be done on the pool and pool deck to those portions which were unfinished and/or improperly completed. However, no specific portions of the pool deck and/or pool are delineated. [4] 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 in this matter will be forty (40) days from the date of that certification.

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