ALJDEC decisions subject to certification as final

11A-100187-OPM · Office of Pest Management · 2011-04-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 8, 2011, at 8:00 a.m. APPEARANCES: The Arizona Office of Pest Management appeared through Keely Verstegen, Esq., Assistant Attorney General; John McClure appeared on his own and Tacit Services, L.L.C.’s behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure The Office of Pest Management (“the OPM”) is the duly constituted authority that licenses and regulates the performance of pest management services in Arizona. The OPM was known as the Structural Pest Control Commission (“the Commission”) until July 1, 2008. The OPM issued Business License No. 8123 to Tacit Services, L.L.C. (“Tacit”) and Qualifying Party License No. 8118 to John McClure (“Respondents”).[1] Mr. McClure is the qualifying party for Tacit. After the OPM received and investigated two consumer complaints against Respondents and was unable to resolve these complaints, it referred them to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. On February 3, 2011, the OPM issued a Complaint and Notice of Hearing in consolidated Case Nos. 100187 and 100192 against Respondents, setting forth certain alleged facts. The Complaint and Notice of Hearing further stated that those alleged facts furnished cause to impose discipline as defined by A.R.S. § 32-2321(A) on Respondents’ licenses under A.R.S. § 32-2321(B)(1), namely A.A.C. R4-29-302(A)(1) through (4), R4-29-501, R4-29-608(D), R4-29- 609(F), and R4-29-702(F). After one continuance at the OPM’s request, a hearing was held on April 8, 2011. The OPM submitted two exhibits that consisted of numerous subparts and presented the testimony of three witnesses: (1) David L. Colvin, an investigator at the OPM, who investigated the complaint in Case No. 100187; (2) Alan Pugh, a supervisor of investigators at the OPM who before his promotion started the investigation in Case No. 100192; and (3) Kellie Smith, an OPM investigator who continued the investigation in Case No. 100192. Respondents submitted one exhibit that consisted of numerous photographs of the property at issue in Case No. 100187 and presented the testimony of Mr. McClure. Hearing Evidence Case No. 100187 On December 9, 2009, the OPM received a complaint from Donna Howard that alleged that Tacit had pretreated her home at 15017 South 231st Way in Queen Creek, Arizona in 2006 (“the Howard residence”), but had refused to respond to her complaints in August 2009 of termite activity. On December 22, 2009, the OPM assigned Mrs. Howard’s complaint to Investigator Colvin for investigation. Investigator Colvin located the Termite Action Report (“TAR”) forms that Tacit had filed to the OPM for pretreatment of the Howard residence in January and June 2006. Investigator Colvin testified that pretreatment for termites requires licensees to apply a “new construction treatment” where the slab will be poured and after the house has been completed, to apply a “final grade treatment” along the stem wall. The TAR form identifies the pesticide used, the Environmental Protection Agency (“EPA”) regulation for the pesticide, if known, the concentration of the active ingredient in the pesticide, the amount of the pesticide used, the total number of square feet where the licensee has applied the pesticide for the new construction treatment, and linear feet where the licensee has applied the pesticide for the final grade treatment. Investigator Colvin testified that statutes require business licensees to provide a warranty for termite pretreatments for five years. Inspector Colvin further testified that statutes require licensees to submit TAR forms to the OPM for its database and to maintain the forms for every retreatment, even those performed under warranty. On December 22, 2009, Investigator Colvin interviewed Mrs. Howard. Mrs. Howard said that Tacit had performed five retreatments for termites since performing the pretreatment but that she did not remember the exact dates.

The OPM did not have any TAR forms for termite retreatments at the Howard residence after 2006. Mrs. Howard provided an e-mail exchange with Mr. McClure’s wife, Morgan McClure, dated between November 26 and November 30, 2009, in which Mrs. Howard requested the documentation and Mrs. McClure stated that Tacit did not provide a receipt because Tacit had performed the termite retreatments under warranty and Mrs. Howard did not pay for the retreatments. On December 22, 2009, Investigator Colvin called Mr. McClure and informed him of Mrs. Howard’s complaint. Mr. McClure told Investigator Colvin that he would contact Mrs. Howard within 24 hours to schedule a termite retreatment. Mr. McClure did not contact Mrs. Howard after December 22, 2009, to schedule a termite retreatment. On December 30, 2009, Investigator Colvin inspected the Howard residence and found evidence of current termite activity in numerous areas, as well as drill holes and other evidence of past retreatments for termites. On January 5, 2010, Mr. McClure made a telephone call to Vince Craig, the OPM’s Assistant Director of Compliance Enforcement, and informed him that Tacit could not perform post-construction treatment due to plants and shrubbery being too close to the Howard residence, resulting in excess moisture. On January 5, 2010, Investigator Colvin, on behalf of the OPM, sent via certified mail addressed to both Respondents[2] a 24-Hour Notice of Request for Records, requesting that they provide all records of inspections and wood-destroying insect treatments at the Howard residence on or before January 12, 2010. Although the certified mail receipt showed that Respondents received the January 5, 2010 24-Hour Notice of Request for Records, they never responded to the letter or furnished any records of treatments at the Howard residence. Mr. McClure testified that his former business partner, Eric Schneider, had operated a branch office of Tacit’s business in Queen Creek and, unbeknownst to Mr. McClure, sold the branch office to “Andy,” who was a former member of the Commission and the president of one of the two major pest control trade associations in Arizona. Mr. McClure testified that he did not know “Andy’s” last name, but that “Andy” took control of Tacit’s records from the Queen Creek branch office and “cherry-picked” clients by refusing to honor certain warranties. Mr. McClure testified that “Andy” demanded that Respondents pay $40,000.00 for additional warranty work for former clients. Mr. McClure testified that he did not file a lawsuit against Mr. Schneider or “Andy” because the lawyer that he had consulted required $10,000.00 to pursue Respondents’ claims. On January 5, 2010, Investigator Colvin, on behalf of the OPM, also sent Respondents a letter to notify them that pursuant to Assistant Director Craig’s request, Investigator Colvin would perform a second inspection at the Howard residence. Investigator Colvin asked Mr. McClure to contact him to arrange a time to schedule the inspection. On January 6, 2010, Investigator Colvin, on behalf of the OPM, resent the letter requesting that Mr. McClure join OPM inspectors for an inspection of the Howard residence to Respondents’ updated address. Although the certified mail receipt showed that Respondents received the letter, they never responded to it. Mr. McClure testified that Investigator Colvin had investigated an earlier complaint that had been made against him and that Investigator Colvin had treated him unfairly, causing unnecessary stress to his family. Mr. McClure testified that he would not deal with Investigator Colvin because he was “out to get” Respondents. On January 12, 2010, Investigator Colvin inspected the Howard residence a second time and took photographs that the OPM submitted at the hearing. Investigator Colvin’s photographs showed that landscaping was planted at least six inches from the stem walls and that there was no excessive water or moisture at the Howard residence. Investigator Colvin testified that if landscape plants were planted with the root ball at least six inches from the stemwall, the planting would not breach the chemical barrier applied at the final grade application. On February 4, 2010, the OPM sent to Respondents via certified mail a Notice of Complaint that required them to respond in writing within 20 days to charged violations of A.A.C. R4-29-609(F) and R4-29-608(D) and (F) at the Howard residence. Respondents did not respond in writing to the February 4, 2010 Notice of Complaint. Mr. McClure submitted photographs that he testified he had taken of the Howard residence in late 2008 or 2009. Mr. McClure’s photographs showed water around potted plants, algae, mud, moisture wicking into the structure from drip irrigation lines, and a moisture “bloom” from an air conditioner condensate line. Mr. McClure testified that he told Mrs. Howard that until she resolved the moisture problems around her home, retreatment would not be effective because termites thrive on moisture. Mr. McClure testified Respondents performed three retreatments at the Howard residence. Mr. McClure testified that on the third trip, Mrs. Howard told him that her husband “wanted to kill” Mr. McClure because termites had damaged a wooden chair from her husband’s childhood that had great sentimental value. Mr. McClure testified that because he felt that Mrs. Howard had threatened his life, he left the residence without leaving the paperwork and was afraid to return to the Howard residence. Mr. McClure acknowledged that Mrs. Howard is approximately five feet tall, weighs 100 pounds, and is at least sixty years old. Case No. 100192 On December 12, 2009, the OPM received a complaint from Steve Hall that alleged that Tacit had pretreated his home at 4403 North 195th Avenue in Litchfield Park, Arizona (“the Hall residence”), but that “John” stated that the company was under new ownership and refused to respond to his complaint of termite activity. The OPM assigned Mr. Hall’s complaint to Investigator Pugh for investigation. Investigator Pugh located the TAR forms that Tacit had filed to the OPM for pretreatment of the Hall residence on December 21, 2004. The OPM sent a copy of Mr. Hall’s complaint to Respondents. They did not file a written response. On December 16, 2009, Investigator Pugh inspected the Hall residence and observed subterranean termite shelter tubes in various locations in the house. On January 19, 2010, Investigator Pugh assumed his new duties at the OPM and reassigned the investigation into Case No. 100192 to the OPM’s investigator, Kellie Smith. On January 19, 2010, Investigator Smith, on behalf of the OPM, sent a 24- Hour Notice of Request for Records to Respondents regarding the Hall residence, requesting treatment records, proposals, TAR reports, and the safety data sheets for the products used at the residence on or before January 25, 2010. Although Mr. McClure signed the certified mail receipt for the 24-Hour Notice of Request for Records regarding the Hall residence, Respondents did not produce any records to the OPM or at hearing. On January 25, 2010, Investigator Smith contacted Mrs. Hall, who informed her that three weeks earlier, on January 9, 2010, Mr. McClure had come to the Hall residence and performed retreatment in the master bedroom and in Mrs. Hall’s son’s bedroom, but had not left any documentation or treatment notification. Mrs. Hall also told Investigator Smith that Mr. McClure had instructed her to leave the termite tubes in place for at least three weeks, but had not warned her to keep her children and pets away from the treated areas until the product dissipated. On February 1, 2010, Investigator Smith made a courtesy telephone call to Respondents regarding her investigation and left a detailed message, reminding them that the records of work at the Hall residence had been due on January 25, 2010. On February 3, 2010, Investigator Smith, on behalf of the OPM, sent Respondents a 2nd Request 24-Hour Notice of Request for Records for work that Respondents performed at the Hall residence. On February 10, 2010, Investigator Smith received the return receipt for the letter that Mr. McClure had signed. Investigator Smith testified that her supervisor advised her to “hold off” mailing the Notice of Complaint because Mr. McClure had contacted Assistant Director Craig, but she understood that Mr. McClure never resolved the issue of Respondents’ failure to cooperate with the OPM’s investigation in Case No. 100192. On February 22, 2010, Investigator Smith, on behalf of the OPM, sent via certified mail a Notice of Complaint that charged Respondents with violating A.A.C. R4-29-609(F) at the Hall residence and required them to respond in writing within 20 days. Investigator Smith testified that she received the certified mail receipt for the February 22, 2010 Notice of Complaint on February 26, 2010, with Mr. McClure’s signature on it. Inspector Smith testified that Respondents did not respond to the February 22, 2010 Notice of Complaint. On May 24, 2010, Investigator Smith, on behalf of the OPM, sent to Respondents via certified mail an Addendum to the 24-Hour Notice of Request for Records for treatment records at the Hall residence that required Respondents to furnish records on or before June 1, 2010. On May 24, 2010, Investigator Smith, on behalf of the OPM, also sent to Respondents via certified mail an Addendum to the Notice of Complaint that required them to respond in writing within 20 days. Investigator Smith testified that she received the certified mail receipts for both of the May 24, 2010 letters on May 27, 2010, with Mr. McClure’s signatures on them. Inspector Smith testified that Respondents did not respond to either of the May 24, 2010 letters. Mr. McClure testified that he did not respond to Investigator Smith’s letters because he went to Assistant Director Craig’s office several times to discuss Mr. Hall’s complaint. Mr. McClure testified that Respondents did not possess most of the records for work that Respondents performed at the Hall residence, and that he did not produce the record of the January 9, 2010 treatment because the 24-Hour Notices of Requests for Records requested all records. Mr. McClure did not produce a record for the January 9, 2010 retreatment at hearing, but testified that he was willing to produce the record. CONCLUSIONS OF LAW This matter lies within the OPM’s jurisdiction under A.R.S. § 32-2301 et seq. The OPM bears the burden of proof to establish cause to discipline Respondents’ licenses by a preponderance of the evidence.[3] Respondents bear the burden to establish affirmative defenses by the same evidentiary standard.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[6] A.A.C. R4-29-608(D)[7] does not recognize moisture at the residence as an excuse for a licensee’s noncompliance. In addition, Mr. McClure did not remember exactly when he took the photographs of the Howard residence that Respondents submitted. Mrs. Howard’s statement in her December 9, 2009 complaint that Respondents did not respond to her call for service in August 2009, supports an inference that the last time Respondents were at the Howard residence was in the latter part of 2008. Because Investigator Colvin’s photographs taken more than a year later do not show excessive moisture and the Howard residence was still under warranty in January 2010, Respondents’ evidence of excessive moisture at the Howard residence in late 2008 does not excuse Tacit from its statutory obligation to retreat the Howard residence after Mrs. Howard observed termite activity in August and December of 2009. Respondents failed to retreat the Howard residence after termites appeared within five years after Tacit performed pretreatment or new construction treatment. Therefore, the OPM established that Respondents violated A.A.C. R4-29-608(D). Mr. McClure was required to “ensure the supervision and training of all employees of [Tacit] in the business of structural pest control” as Tacit’s qualifying party.[8] Mr. McClure did not adequately supervise Mr. Schneider when he sold Tacit’s Queen Creek office to “Andy,” without providing a means for Tacit’s future compliance with the OPM’s regulations. Moreover, even if most of Tacit’s records were not available, Respondents failed to provide any written response to any of the 24-Hour Notices of Requests for Records or to provide records of Respondents’ January 9, 2010 retreatment of the Hall residence. Therefore, Mr. McClure’s testimony about the loss of Tacit’s records to “Andy” is not a valid defense to the charged violation of A.A.C. R4-29-609(F).[9] Tacit failed to furnish or to make available for the OPM’s review any records of pesticide applications at the Howard and Hall residences in response to the OPM’s repeated 24-Hour Notices of Requests for Records. Therefore, the OPM established that Tacit violated A.A.C. R4-29-609(F). The OPM established that Tacit violated A.A.C. R4-29-302(A)[10] when its applicator failed to leave the required written notices with the consumers at the Howard residence or for the January 9, 2010 retreatment at the Hall residence. Mr. McClure’s failure to leave the required written documentation at the Hall residence after the January 9, 2010 treatment constitutes an additional violation under A.A.C. R4-29-501.[11] Respondents failed to file written responses to the OPM’s Notices of Complaint regarding the Howard and the Hall residences. Because whatever communications that Mr. McClure may have had with Assistant Director Craig were not in writing, the OPM established that Respondents violated A.A.C. R4-29-702(F).[12] Respondents’ numerous violations of the charged administrative regulations constitute grounds under A.R.S. § 32-2321(B)(1)[13] for the OPM to take disciplinary action against their licenses under A.R.S. § 32- 2321(A).[14] Respondents’ numerous violations and repeated failures to provide any written explanation to the OPM’s assigned investigators or to produce even records that they acknowledged that they possess demonstrate that at this time, they cannot be regulated. Therefore, protection of the public health and safety requires the OPM to impose no lesser penalty than revocation. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Acting Director of the OPM revoke Tacit Services, L.L.C.’s Business License No. 8123 and John McClure’s Qualifying Party License No. 8118 under A.R.S. § 32-2321(A)(1). It is further recommended that the Acting Director of the OPM impose a civil penalty on Respondents jointly in the amount of $2,000.00 under A.R.S. § 32-2321(A)(5) and that if in the future, the Respondents establish that they are able and willing to submit to the OPM’s regulation, Mr. McClure’s Qualifying Party License No. 8118 and Tacit’s Business License No. 8123 not be reissued or reinstated until the full amount of the civil penalty has been paid. 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 five days from the date of that certification. Done this day, April 27, 2011. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: Ellis M. Jones, Acting Director Office of Pest Management ----------------------- [1] The business licensee is solely responsible for compliance with certain administrative regulations. Therefore, the Administrative Law Judge in certain Findings of Fact and Conclusions of Law refers solely to Tacit. Because statutes require that a business licensee have a qualifying party and that the qualifying party train and supervise the business licensee’s employees, the business licensee legally cannot operate independently of the qualifying party.

[2] The OPM addressed all the notices, requests for information, requests for documents, and requests for written responses to both Respondents at Tacit’s address of record. [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] Black’s Law Dictionary at page 1220 (8th ed. 1999). [7] A.A.C. R4-29-608(D) provides as follows:

If subterranean termites occur in or on a residential or commercial structure within five years after a business licensee first performs a pretreatment or new-construction treatment of the structure, the business licensee shall re-treat the structure free of charge in accordance with the label specifications of a termiticide available for use. If subterranean termites occur in or on an addition that does not abut the slab of a residential or commercial structure within five years after a business licensee first performs a pretreatment or new-construction treatment of the non-abutting addition, the business licensee shall re-treat the non-abutting addition free of charge in accordance with the label specifications of a termiticide available for use. For the purpose of this subsection, the business licensee is the business licensee who performed the pretreatment or new- construction treatment or a successor that acquired the business assets pertaining to category B2 or B8. [8] A.R.S. § 32-2301(24). [9] A.A.C. R4-29-609(F) provides as follows:

Upon written request by the Commission, a business licensee shall make the records required under this Section available for review by the Commission. The business licensee from whom records are requested shall make the records available to the Commission within 24 hours or by a later date specified by the Commission. The business licensee shall make the records available at the Commission office by hand delivery, electronic mail or fax. The business licensee shall be available to interpret the submitted records if requested by the Commission. [10] A.A.C. R4-29-302(A) provides as follows:

An applicator shall provide a written notice to a customer for whom the applicator provides a pest management service that: 1. Identifies the pesticide used; 2. Provides all information required by the label or labeling; 3. Provides all information required by local ordinance; and 4. Includes the following statement printed in at least an eight-point font: “Warning—Pesticides can be harmful. Keep children and pets away from pesticide applications until dry, dissipated, or aerated. For more information, contact [business licensee’s name and business license number issued by the Commission] at [business licensee’s telephone number].” [11] A.A.C. R4-29-501 provides as follows: “A qualifying party shall comply with every provision in Article 3 regarding applicator duties and responsibilities.” [12] A.A.C. R4-29-702(F) provides as follows: “If the Commission provides notice that it has filed a complaint against an individual or entity, the individual or entity shall submit to the Commission a written response that addresses the allegations in the complaint within 20 days of the date of the notice.” [13] This statute provides among the grounds for disciplinary action, “[v]iolating this chapter, rules adopted pursuant to this chapter or a written order of the acting director.” [14] A.R.S. § 32-2321(A) provides as follows:

After an opportunity for a formal hearing or pursuant to a consent order, the acting director may take any of the following disciplinary actions, in combination or alternatively: 1. Revoke a license. 2. Suspend a license. 3. Refuse to renew a license. 4. Impose probation requirements that require a business licensee, licensed applicator or qualifying party to comply with one or more specific provisions of this chapter or rules adopted pursuant to this chapter and that require reporting by or monitoring of the business licensee, licensed applicator or qualifying party. 5. Impose a civil penalty in an amount of not more than one thousand dollars for each violation except for grounds prescribed in subsection B, paragraphs 8 and 9 of this section. 6. Require a qualifying party to report to the acting director the qualifying party's role in the management of a business license. 7. Issue an administrative warning.

-----------------------

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