ALJDEC decisions subject to certification as final

07F-F0021-ROC · Registrar of Contractors · 2007-02-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 17, 2007 APPEARANCES: The Complainant in his own behalf. Jim Midkiff, Qualifying Party, appeared for the Respondent. ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. The facts of the case are relatively straightforward. The parties entered a contract in March, of 2004, whereby the Respondent, doing business as Sun Splash Pools[1] would install a salt water[2] pool at the Complainants’ home in Sedona, Arizona. In addition, the Respondent would also install 850 square feet of flagstone decking. The total price was approximately $55,000.00. 2. The Complainant testified he was concerned about the potential for corrosion of the flagstone because his son had experienced problems with his salt water pool and slate decking. Upon questioning the Respondent, the Complainant was told the Respondent had installed numerous salt water pools without deck corrosion problems. 3. According to the Respondent, the pool was completed and filled with water on or about July 22, 2004. However, the City of Sedona did not issue a final approval until early 2006, because the request for approval had either not been made or had been misplaced and some final work was required on the fence and gate which was part of the overall pool plan. 4. After completion of the pool, one of the Respondent’s employees, Rick Fisher (Fisher), checked the pool in relation to warranty issues. According to Fisher’s affidavit, he checked salt levels to ensure it was within manufacturer’s acceptable limits (Exhibit C10). Sometime thereafter, Fisher noted corrosion of the flagstone deck. 5. The Complainant also noticed corrosion (chipping, discoloration, and flaking) of the flagstone and informed the Respondent who contacted the contractor (Phil Tena), who had installed the flagstone. The Respondent also contacted the salt water system manufacturer who claimed the system would not cause the problem if the chemical balance of the water was correctly maintained. 6. The contractor who had installed the flagstone had no remedy to correct the damage to the flagstone. In May 2006, the Complainant had the flagstone covered with concrete at a cost of $3,476.00. 7. The Complainant offered to settle the matter with the Respondent for the cost of covering the flagstone.[3] 8. On July 6, 2006, the Respondent sent the Complainant a check for $1,738.000 50% of the cost to cover the flagstone. 9. On July 30, 2006, the Complainant asserted[4] to the new Sunsplash owner that he was rescinding the offer to the Respondent even though the Complainant had accepted the partial payment by the Respondent. 10. The Complainant filed the Complaint with the Registrar of Contractors on August 2, 2006. 11. The Respondent acknowledged the Complainant’s cost for the flagstone was $10,200.00.[5] 12. The Complainant is seeking reimbursement for the cost of the flagstone which is now covered buy concrete.

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, (A)(7), a wrongful act with substantial injury, (A)(15), acting as a contractor in a name other than as set forth on the license, and (A)(16), false or misleading advertising. 1. The Complainant has the burden of proof by a preponderance of the evidence under Culpepper v. State, 187 Ariz. 431 (1996 App.)[6] and A.A.C. R2-19-119. 2. 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). 3. 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. The less demanding evidentiary standard in the administrative hearing does not mean that any type of evidence is entitled to serious consideration or significant weight. 4. “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. 5. The initial issue concerns the Statute of Limitations under A.R.S. §32- 1155. The statute states in relevant part: “Upon the filing of a written complaint with the registrar charging a licensee with the commission, within two years prior to the filing of the complaint, of an act that is cause for suspension or revocation…”

Op. Ariz. Atty. Gen, I79-119 provides: “Therefore a homeowner’s complaint is timely if filed within two years of occupancy or discovery of the defect, whichever event first occurred.”

The question to be answered is whether the filling of the pool with water caused the statute to begin to run or whether the statute began to run upon issuance of approval by Sedona. 6. The evidence is that the pool was filled with water in late July, 2004. The Complainant was aware of the potential problem “After a few months the salt water did corrode, chip and flake the flagstone”.[7] The Complainant offered to settle the case and in fact accepted a 50% payment in July 2006, before the expiration of two years from the date the pool was filled with water. The fact that Sedona issued an approval until 2006 is not considered controlling. This is because the approval was not related to issues with the pool but rather with the fence around the pool. To conclude that late approval of the fence somehow tolled the SOL for the pool and flagstone is not reasonable. The pool was filled with water and subject to being used by late July, 2004. The Complainant had concrete poured over the flagstone and accepted the 50% payment from the Respondent, prior to the filing of the Complaint, and prior to the two year period from when the pool was filled. The Complainant then attempted to rescind the offer to settle,[8] and filed his Complaint on August 2, 2006. 7. The Complaint is date stamped August 2, 2006,[9] by the ROC. This is more than two years from late July, 2004, when the pool was filled. This is also considered to be the date of occupancy as to the pool, in light of the cited Attorney General’s opinion. 8. In view of the above, and although the Complainant has submitted evidence of significant financial injury, it is concluded the ROC does not have jurisdiction of the case under the applicable statutes. Recommended Order It is recommended the Citation and Complaint upon which it is based, be Dismissed

Done this day, February 1, 2007

______________________________________ Allen Reed Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

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

By ___________________________

----------------------- [1] The Respondent has since sold this business but retains the license as Midkiff Construction, Inc. [2] The salt water system is used for maintenance (chlorinating) purposes. [3] Prior offers of settlement may be addressed in administrative hearings. Exhibit C-4, letter to the purchaser of the Respondent’s business. [4] Exhibit C-4 [5] The Respondent deducted the cost of a concrete base ($5,100.00 from the total spent by the Complainant $15,500.00 ). The additional difference of $200.00 in Exhibit C-11 is not specifically daddressed. [6] The Culpepper case applies to an administrative agency. However, since any violation established in this case may result in a sanction by the agency, the ruling in the case applies equally to the Complainant. [7] Part of the initial Complaint narrative contained in the hearing file. [8] During the hearing, the Complainant offered to return the 50% payment to the Respondent in order to avoid any potential adverse legal conclusion based on this point. [9] The earliest date stamp.

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