ALJDEC decisions subject to certification as final

07F-F0021-ROC-RHG · Registrar of Contractors · 2007-11-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 29, 2007 APPEARANCES: The Complainant appeared in his own behalf. The Respondent appeared through its Qualifying Party. ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Preliminary Findings and Conclusions on the Statute of Limitations This matter was originally heard on January 17, 2007. The decision of the Registrar adopted the recommendation of the Administrative Law Judge (ALJ) to dismiss the Citation and Complaint because the Complaint was filed after the expiration of the applicable two year Statute of Limitations (SOL). The Complainant timely filed a motion for rehearing which was granted. This matter came on for rehearing to allow the Complainant to present additional evidence and argument regarding the running of the (SOL), and if successful, to argue his case. According to the Respondent, the pool was filled with water on or about July 23, 2004. The Complainant objected to the testimony for lack of foundation. In light of the revised decision regarding the SOL with respect to this case, the filling of a swimming pool is not crucial under the facts of the case and is rejected for the reason that the mere filling of the pool does not necessarily mean it will cause the SOL to begin to run[1]. The pool construction contract between the parties included the installation of a gas pool heater. The Complainant testified the pool heater was not connected to the gas line until August 5, 2004 and the gas was not turned on August 6, 2004. This would be the first time it could be determined if the heater worked properly. The Complainant’s argument is that the contract was not completed until all things required to be done under the contract were done.[2] The Complaint was filed on August 2, 2006. Based on the above facts it is concluded the SOL did not begin to run before the heater was connected and able to be tested to determine if it was operational.[3] The Complaint was filed within the two year SOL. Findings of Fact 1. The following findings of fact are based on the evidence presented at the initial hearing and at the rehearing. 2. The parties entered a contract in March, of 2004, whereby the Respondent, doing business as Sun Splash Pools[4] would install a pool with a salt chlorinating system (System) 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.[5] 3. The Complainant testified he was concerned about the potential for corrosion of the flagstone because his son had experienced problems with his System and slate decking. Upon questioning the Respondent about the potential for corrosion, the Complainant testified he was told by the Respondent that the Respondent had installed numerous pools with the System without deck corrosion problems. 4. According to the Respondent, the pool was completed and filled with water on or about July 22, 2004. For reasons which no longer require no further discussion, the City of Sedona did not issue a final approval until early 2006. 5. 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. The Fisher affidavit cannot be given substantial weight because of insufficient information regarding Fisher’s qualifications and knowledge concerning the facts he is asserting. 6. The Complainant 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 System manufacturer who claimed the System would not cause the problem if the chemical balance of the water was correctly maintained[6]. 7. The contractor who had installed the flagstone had no remedy to correct the damage to the flagstone. Application of a sealer to the flagstone[7] did not solve the problem. In May 2006, the Complainant had the flagstone covered with concrete (Durabond) and acrylic coating at a cost of $3,476.00. 8. The Complainant offered to settle the matter with the Respondent for the cost of covering the flagstone.[8] 9. On July 6, 2006, the Respondent sent the Complainant a check for $1,738.00 50% of the cost to cover the flagstone. 10. On July 30, 2006, the Complainant asserted[9] 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]. 11. The Complainant filed the Complaint with the Registrar of Contractors (ROC) on August 2, 2006. 12. The Complainant testified he checked the pool chemicals once a week and maintained the proper chemical balance.[11] The Complainant introduced newspaper articles at the hearing which stated the Systems could be corrosive to Kool Deck or flagstone decking. Newspaper articles of this nature constitute highly suspect hearsay[12]and the articles do not establish whether the problem is caused by poor chemical balance or would be caused under ideal chemical conditions. Although admitted into evidence, they are given little weight[13]. 13. The Respondent testified that if the chemical balance in the pool is kept at the appropriate level, no flagstone corrosion should occur. The Respondent presented no clear evidence to confirm the assertion. Both parties would have been well advised to submit evidence which is more specific to the facts of this case in support of their respective positions[14]. 14. The Respondent acknowledged the Complainant’s cost for the flagstone was $10,200.00.[15] The Complainant challenged this amount as undervalued. 15. The Complainant is seeking reimbursement for the cost of the flagstone which is now covered by concrete. He listed his total claim as $19,476.00[16] ($15,355.00 in Exhibit CA-30). 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 and must establish statutory violations by a preponderance of the evidence Culpepper v. State, 187 Ariz. 431 (1996 App.)[17], A.A.C. R2-19-119. Proof by “preponderance of the evidence” means that it 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). 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). 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). 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. 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. 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 was no specific or direct evidence regarding a violation of (A)(15)[18]. 5. Even if it could be determined that a properly balanced salt water system was at fault for the flagstone problem, there no competent evidence that the Respondent falsely advertised the system. The Respondent is still of the opinion that a properly balanced system will not cause the problem. Aside from the Complainant’s representations regarding conversations with Respondent, the accuracy of which the Respondent disputes, there is no specific showing of any advertisement (false or otherwise), by the Respondent. There is no violation of (A)(16). 6. A.A.C R4-9-108 requires work to be done in professional manner and applicable building codes or industry standards. There is no showing that the salt water system was improperly installed or did not function properly. There is no violation of (A)(3). 7. This leaves only (A)(7) as a possible violation. There is no argument but that the Complainant has been injured financially. Whether the flagstone cost was $10,000.00+ as acknowledged by the Respondent or some higher amount as claimed by the Complainant, the question is whether the Respondent’s conduct was wrongful. Assuming water is properly balanced for the System, and the water still corrodes flagstone, the wrongful act which could be attributed to the Respondent is negligence for failing to know this and inform the Complainant of this fact.[19] However, first it must be proven that even if the System was properly balanced, the flagstone would nonetheless be damaged. Absent such proof, the more likely conclusion is that the water was improperly balanced and that this was Complainant’s responsibility. 8. The Complainant also asserts the Respondent told him that the Respondent had installed numerous Systems and had experienced no problems. This was not shown to be a misleading statement. There is no evidence the Respondent knew otherwise. The Respondent denied giving the Complainant false assurances. The Complainant contends the Respondent should have informed him of a disclaimer much like the Paddock disclaimer. According to the Respondent, he was not aware of the problems of the nature subsequently encountered by the Complainant. 9. The Complainant claims he was aware of the potential problems with the System and this is why he asked the Respondent the questions regarding the System. Given this testimony by the Complainant, certain questions come to mind. Specifically, since the damage in this case occurred over a period of a year and a half and the Complainant claimed he was aware of the potential for damage before the pool was built and Fisher was aware of the problem shortly after the pool was finished, why did the Complainant not address the problem (either by taking and retaining water chemical data, removing the salt water system, or other steps to mitigate the damage), in a more timely manner? 10. It is concluded the Complainant has to meet the burden of proof in that has failed to prove any violation by a preponderance of the competent evidence. Recommended Order It is recommended the Citation and Complaint upon which it is based be dismissed[20].

Done this day, November 15, 2007

______________________________________ Allen Reed Administrative Law Judge

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

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

By ___________________________

----------------------- [1] The Complainant’s hearing arguments regarding hypothermia (at 73 F. degrees and the danger of hose water for swimming), are considered too general to be relevant or to be given any weight. In light of the decision on the SOL they merit no further discussion. [2] As presented by the Complainant, this argument is more reasonable under the facts of this case than attempting to determine when the pool was first “occupied” under the previously cited Attorney General’s opinion. [3] This finding and conclusion makes additional issues raised by the Complainant relating to the SOL (inspection by the city, filling the pool with hose water, hypothermia, and issuance of an approval by Sedona), irrelevant. [4] The Respondent has since sold this business but retains the license as Midkiff Construction, Inc. [5] The cost without the flagstone was $42,415.09 (Exhibit CA-1). [6] This is unreliable hearsay. As noted above the Respondent presented no documentary evidence which would confirm that a System even if properly chemically balanced, would not cause corrosion to flagstone. [7] According to the Complainant, this was in late summer 2004, and in early 2005 [8] Prior offers of settlement may be addressed in administrative hearings. In this case, the Complainant accepted a portion of the demanded payment.

[9] Exhibit C-4 [10] It is uncertain under what theory the Complainant accepted partial payment from the Respondent on the settlement offer but then increased the amount for settlement. The amount sought in restitution is still higher. [11] Aside from a Paddock Pool e-mail (C-8) and Exhibit C-9, neither party presented significant evidence of what the acceptable chemical limits (salt, acid, pH) should be for the Complainant’s pool to avoid damage to the flagstone. The Paddock Pool disclaimer clearly states damage to flagstone is possible “if salt level’s exceed the manufacturer’s limits” Neither party presented evidence on the methodology for testing, how water samples were in fact tested, or the accuracy of testing. The parties confuse generalized assertions of purported fact, as evidence. The Respondent claimed the system manufacturer said the System would not cause harm if properly balanced. The Complainant makes the assertion he maintained the proper balance when the proper balance was never clearly established and no detailed record of the Complainant’s test results submitted. This latter fact is noted because according to the Complainant, the flagstone problem was initially noted as early as late 2004, not long after the pool was installed. However, except for a sealant, the flagstone was not covered until May of 2006 or approximately a year and a half after the problem began. If the Complainant had concerns about the System and the flagstone, the year and a half delay is unexplained as is the failure to maintain a water test record to show proper chemical balance which the Complainant asserts. [12] Newspaper articles are often incomplete and sometimes incorrect when providing information. Furthermore, generalities do not address facts which relate to a specific case. It is questionable how probative the general information is with respect to the facts of this case. [13] The question of whether the System can cause corrosion is not doubted. However, the articles do not specifically identify all the factors and their interrelationship which may influence corrosion. It articles certainly do not address the specific facts of this case. [14] Evidence which is specific to the Complainant’s pool and has sufficient data with a scientific basis to establish the asserted claim as true. [15] 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 addressed. [16] Attachment to the Complaint. Other evidence indicates the Complainant was willing to settle the case for $5,000.00 sometime prior to the hearing. Exhibit C-30 refers to Exhibit C-29 (a photograph of the pool and deck), and states “ …the excellent, non corrosive finish that I had expected and was promised from Sunsplash with flagstone.” This is mentioned only because the language implies the Complainant is satisfied with the appearance of the deck. Irrespective of the final decision with respect to any violation in this case, no restitution will be awarded. If damages are sought they can be sought in a civil forum. [17] 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. [18] Evidence may be in the documentation which was submitted for the hearing. However, such evidence was not identified or specifically addressed at the hearing. [19] Under a “should have known” standard, as already stated, there is no evidence the Respondent knew, or willfully or intentionally withheld this information from the Complainant. [20] The effective date of this Order is forty (40) days from the date of the Order or from the date of certification if certified by the Director of the Office of Administrative Hearings.

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