ALJDEC decisions subject to certification as final

07F-2375-ROC · Registrar of Contractors · 2008-10-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 14, 2008 APPEARANCES: The Complainant appeared in her own behalf. J. Gary Linder, Esq., appeared telephonically on behalf of the Respondent. ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. In May 2006, the Complainant and Respondent entered service agreement for weekly pool maintenance at the Complainant’s home. 2. On August 30, 2006, the Respondent’s employee serviced the Complainant’s pool. The Complainant was not at home at the time of the service. 3. The pool’s automatic fill system was not functioning properly and the Respondent’s employee left the hose running into the pool at a moderate rate. 4. The Respondent’s employee left a service report in the patio- pool area. It informed the Complainant that the water was turned on and running into the pool. 5. The Complainant did not go to the patio-pool area when she returned home and the water remained on overnight flooding the patio area including a lowered wet bar and barbeque area. Additionally, granite counters were submerged and the wood framing damaged, granite floor tile “popped“, the hot tub filter was clogged by gravel, and the water overflowed to a neighbor’s property[1]. 6. The Complainant submitted a claim to her insurance company, American Family (American) which assessed the damages at $3,588.02 and paid the Complainant $2,588.02 after subtracting a $1,000.00 deductible. 7. A separate damage estimate in the amount of $9,805.34 plus the cost of a new barbecue was submitted to the Respondent’s insurer, Allied Insurance/AMCO Insurance (Allied). By letter to the Complainant’s attorney, dated November 26, 2007, Allied offered an additional $1,981.11[2] to the Complainant. 8. By letter dated December 10, 2007, to Allied, the Complainant’s attorney declined the Allied offer of $1,981.11 and claimed damages in the amount of $11,071.62.[3] 9. The Complainant has received an additional $5,310.24 in settlement of her claim.[4] 10. The Complainant testified she has spent approximately $2,000.00 for clean up and repairs to date. However, the Complainant submitted only one invoice dated August 16, 2007, in the amount of $80.52 for cleaning the system filter, and a $500.00 estimate for some electrical work. 11. The Complainant testified her insurance premiums were increased by approximately $371.00 a year for three years because she filed a claim as a result of the Respondent’s actions. Counsel for the Respondent strongly objected to this hearsay as to the amount of the increase which is attributable to the Complainant filing her claim.[5] 12. The Complainant has received approximately $7,900.00 in insurance proceeds. The actual amounts spent to date to make repairs are not adequately documented. The total amount required to make all necessary repairs are also not adequately documented. The fact that an insurer accepted a final figure of $10,531.02 in the Settlement Amount Report does not establish that amount as necessarily accurate in light of the fact that prior amounts were significantly less[6]. Conclusions of Law The Citation and Complaint alleges violations of A.R.S. §32- 1154(A)(3)/A.A.C. R4-9-108, workmanship standards and (A)(7) a wrongful act with substantial injury. 1. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Vazzano v. Superior Court, 74 Ariz. 369, 249 P.2d 837 (Ariz. 1952); Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A “preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence, §5 (1960). 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 (6th ed. 1990). 2. The evidence in an administrative hearing must be “substantial, reliable and probative” (A.R.S. §41-1092.07(F)(1)). This means the Complainant has the affirmative responsibility to present sufficient competent evidence to meet the preponderance standard. 3. “Substantial evidence is evidence possessing something of substance and relevant consequence and which furnishes substantial basis of fact from which issues tendered can be reasonably resolved.” Black’s Law Dictionary, Special Deluxe Fifth Edition, (St. Paul Minn.: West Publishing Co., 1979) p. 1281, citing State v. Green, 218 Kan. 438, 544 P. 2d 356, 362. 4. There is no evidence that the actual work done by the pool service did not meet workmanship standards. The cause of the damage was the fact that the Respondent’s employee left the hose running in the pool, left a written message to this effect on the service report in the patio area expecting the Complainant to timely receive the information[7]. However, these actions do not relate to workmanship. There is no (A)(3)/A.A.C. R4-9-108 violation. 5. The question of whether the Respondent’s act was wrongful, is problematic. It is clear that irrespective of the fact that the Complainant has received insurance proceeds, she has sustained “substantial harm” as envisioned by the statutory provision[8]. The question is whether the act of leaving the hose running (an act in furtherance of servicing the pool), was wrongful. Black’s Law Dictionary defines a “wrongful act” as: “ Any act which in the ordinary course will infringe upon the rights of another of to his damage, unless it is done in the exercise of an equal or superior right…”[9] . The definition in Black’s Dictionary goes on to equate the term with conduct that is negligent, criminal, willful, wanton, reckless and other acts which in the ordinary course will infringe on the rights of others. 6. The act being evaluated is filling the pool by leaving the hose running and assuming the Complainant would return home, and timely read the pool maintenance report that the water was on. The Respondent’s alternatives were to leave the water off and inform the Complainant she needed to fill the pool herself (presumably the safer alternative), or attempt to telephone the Complainant to tell her the water was on. If a violation is to be found, it would have to be concluded that the Respondent was not justified (was negligent) in assuming the Complainant would timely read the pool maintenance report. The fact is that absent evidence to the contrary, there is no basis for the Respondent’s employee to reasonably conclude the Complainant would return home in a timely manner, or go to the patio, or read the maintenance report and avoid the substantial harm which was caused. It is therefore concluded that the Respondent’s negligence (an improper assumption by the Respondent’s employee) in this case constituted a wrongful act resulting in significant damage to the Complainant’s property. Although the violation may appear tenuous, it is concluded that irrespective of the apparent blameless intent of the Respondent’s act, the act and its consequence is such that a violation of (A)(7) is established. 7. The Administrative Law Judge (ALJ) declines to set an amount in restitution because the amount of damages the Complainant has incurred have not been satisfactorily identified and because the Complainant has received significant reimbursement through insurance[10]. Recommended Order In view of the foregoing it is recommended that no penalty or other sanction be imposed. The decision is effective forty 40 days after signing or forty 40 days after certification if certified by the Director of the Office of Administrative Hearings

Done this day, October 28, 2008

______________________________________ Allen Reed Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Armando Contreras , Director Registrar of Contractors 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________

----------------------- [1] There was also damage to an electrical and gas line. [2] The total property damage release offered by Allied was $4,689.13 (According to the letter, that amount was based on the American Family damage estimate of $3,558.02, $988.11 in an additional damage assessment, $150.00 to Pool Master and $252.00 for BBQ installation. These itemized amounts add up to $4,948.13. The discrepancy is unexplained but not material to a decision in the case). [3] The Complainant’s reliance on this letter from her attorney as establishing damages is misplaced. The estimates are hearsay on hearsay without any competent evidence to support the amounts claimed. [4] The revised damages for the Claim Settlement Report dated April 2, 2008, were in the amount of $10,531.02. It is uncertain which insurer paid this amount but it appears to have been the Complainant’s insurer (there were some ancillary subrogation issues raised). In addition, the Claim Settlement Report shows that there is a deferred amount of $2,632.76 which may be claimed, or is for actual costs of replacement of covered items. [5] Although insurance premiums absent a claim being filed, it is generally understood that the filing of a claim will often result in a higher premium (depending on the specific facts and circumstances surrounding the claim). [6] The original estimate of $3,558.02 by American and the total property damage release by Allied in the amount of $4,689.13.

[7] A not necessarily unreasonable but clearly an erroneous expectation. [8] The problems related to the flooding clearly fall within the “substantial harm” of the statute. [9] Black’s Law Dictionary, 1446 (Special Deluxe 5th ed. 1979).

[10] The Complainant may indeed be entitled to additional compensation from the Respondent but she has not established a reasonably accurate amount which would justify restitution under A.R.S. §32-1156.01.

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