ALJDEC decisions subject to certification as final

2010A-27993925-ROC · Registrar of Contractors · 2011-05-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 6, 2011. The record was kept open until April 11, 2011, to allow post-hearing filings by the parties. APPEARANCES: Pioneer Family Investments, L.L.C. was represented by its authorized representative, Krishna M. Pinnamaneni, M.D. Taylor Made Pools & Spas, L.L.C. was represented by its attorney, Greg Davis, Esq. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. Taylor Made Pools & Spas, L.L.C. (“Respondent”) is the holder of License No. 212387, a Class B-5 contracting license issued by the Registrar of Contractors (“Registrar”) 2. Pioneer Family Investments, L.L.C. (“Complainant”) is the owner/builder of a residence located at 13220 N. 136th Street, Scottsdale, Arizona. 3. Krishna M. Pinnamaneni, M.D. is the managing member of Complainant. 4. On March 9, 2007, Complainant accepted the terms of Respondent’s Contract dated January 22, 2007 (“Contract”). 5. The parties also executed an AIA® Document A201™ - 1997 Contract (“AIA Contract”). Article 16 ENUMERATION OF SUBCONTRACT DOCUMENTS, §16.1.4 reads as follows: “Exibit [sic] ‘A’ – Taylor Made Pools & Spas, LLC standard contract Exihibit [sic] ‘A’ shall take precedence over all other documents where there are conflicting points.” 6. On February 22, 2010, Complainant filed a written Complaint with the Registrar alleging the following Complaint items: #1. The pool, spa and pond were not completed by Mr. Michael Paul Ethier[1] as per the agreement in a timely fashion despite repeated requests to schedule the work to complete the project. #2. Mr. Michael Paul Ethier did not create a required water spillway system balancing mechanism for the negative edge water falls [sic] into troughs. The project Architect and his (Mr. Michael Paul Ethier’s) pools, spas and pond construction peers (among others, Jeff Mossman of Mossman Brothers Pools, Inc. – Letter dated February 20, 2010 is attached) made it clear it was a negligent omission by Mr. Michael Paul Ethier; but Mr. Michael Paul Ethier declined to respond and thereby abandoned the project with no response or reason. #3. Mr. Michael Paul Ethier must be ordered to rectify or reimburse the costs, about $11288.00 [sic], incurred due to Mr. Michael Paul Ethier’s negligence and abandonment. #4. Order to cease and desist Fraudulent actions by Mr. Michael Paul Ethier, such as repeated attempts to charge for the items that were not called for in the agreement and Mr. Michael Paul Ethier’s poor conduct to slander, defame the Owner’s character and tortuous interference with owner’s other vendors and contractors.

7. The Registrar designated the Complaint as Case No. 10-2799, but later re-designated it as Case No. 2010-27993925. 8. The Registrar issued a Citation and Complaint in Case No. 2010- 27993925 charging Respondent with violating the provisions of A.R.S. § 32-1154(A) (1), (2), (3), namely A.A.C. R4-9-108, (7), and (13), specifically A.R.S. § 32-1124(B). 9. The Registrar forwarded Case No. 2010-27993925 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 10. The Office of Administrative Hearings scheduled Case No. 2010- 27993925 for a one-day hearing on February 28, 2011, at 8:00 a.m. 11. The scheduled hearing was continued to April 6, 2011, due to the inability of the Registrar’s assigned inspector to be present on February 28, 2011. 12. By letter dated March 22, 2011, Dr. Pinnamaneni advised Respondent’s counsel, Greg R. Davis, Esq., that Complainant might call the following witnesses at the hearing: Jeff Mossman, Chris Knight, Robert Brown and John Pentair. The Hearing 13. In the Complaint, Complainant stated that the last date Respondent performed work on the project was “06/28/2007.” On the face of the Complaint, it appears that it was untimely filed beyond the Registrar’s two-year jurisdiction. However, testimony by Mr. Ethier established that the last time Respondent performed work on the project was August 27, 2008. 14. The allegations in the Complaint concerning negligence, slander, defamation, and tortuous interference by Respondent are not cognizable issues to be adjudicated in an administrative disciplinary proceeding before the Registrar. 15. On the day of the hearing, none of Complainant’s proposed witnesses was present. Dr. Pinnamaneni later explained that they were either unavailable that day or had been excused by Dr. Pinnamaneni. After the examination and cross-examination of Inspector Dimond, Complainant called Mr. Ethier as a witness. 16. Based on Dr. Pinnamaneni’s own questioning of Mr. Ethier, it became clear that the parties have a bona fide financial dispute in this matter. Such a dispute should be resolved in a civil court of competent jurisdiction, where the interests of both parties could be fully addressed, rather than a disciplinary proceeding against Respondent before the Registrar, who has no jurisdiction over Complainant. As a result, any prolonged testimony in these administrative proceedings would be rendered irrelevant and a needless consumption of time and resources.[2] Therefore, the Administrative Law Judge directed Dr. Pinnamaneni to call Complainant’s remaining witnesses that afternoon and complete his case presentation. 17. Prior to recessing for lunch, a further hearing date was scheduled to afford Respondent an equal amount of time to present its case and for the parties to deliver closing statements. 18. When the hearing reconvened, no other witnesses for Complainant appeared, and the Administrative Law Judge informed Dr. Pinnamaneni that his examination of Mr. Ethier could proceed for an additional hour, at which time, the Respondent would begin its cross-examination.

19. At the end of his allotted time to conclude his direct examination of Mr. Ethier, Dr. Pinnamaneni protested the restrictions put in place and announced that he was leaving the hearing. The Administrative Law Judge advised Dr. Pinnamaneni that if he left, then the hearing would continue in Complainant’s absence. Dr. Pinnamaneni acknowledged that point and voluntarily left the hearing. The hearing was concluded shortly thereafter following Respondent’s brief presentation and closing statement. 20. After the hearing, Complainant submitted case law that Dr. Pinnamaneni had intended to discuss in Complainant’s closing statement, but which was not addressed at the hearing due to Dr. Pinnamaneni voluntarily absenting himself as Complainant’s authorized representative from the hearing. The record was reopened to consider Complainant’s post-hearing submission and to allow Respondent an opportunity to respond to the submission. The parties’ post-hearing submissions were considered by the Administrative Law Judge. The Parties’ Bona Fide Financial Dispute 21. The parties are determined to have a bona fide financial dispute that should be resolved in a civil court of competent jurisdiction. The Registrar does not have jurisdiction over Complainant, but a civil court of competent jurisdiction would have jurisdiction over both parties. Complainant seeks damages for negligence, slander, defamation, tortuous interference with Complainant’s vendors and contractors. At the hearing, the evidence supports a finding that Respondent is owed money from Complainant for shotcrete overbreak per the Contract, which supersedes the AIA Contract. Also, Respondent performed repairs to the swimming pool for damage cause by others, but Respondent has not been paid for those repairs. The Abandonment Issue 22. Mr. Ethier testified that the last time Respondent performed work on the project was August 27, 2008. Respondent repaired damage to the swimming pool caused by other trades. 23. By letter dated February 19, 2010, Complainant terminated Respondent. At the time of termination, Respondent had not been able to perform any work on Complainant’s swimming pool because Complainant did not make a tile selection that was necessary before Respondent could proceed with other stages of work. 24. The evidence of record failed to establish that Respondent abandoned the project. Allegations of Fraud 25. There is no evidence establishing any fraudulent acts by Respondent. Other Issues 26. Any allegation contained in the Complaint not specifically addressed in the above Findings of Fact is deemed to either lack sufficient evidence to support a finding of a statutory violation or to be outside the scope of the Registrar’s jurisdiction in this disciplinary proceeding. CONCLUSIONS OF LAW 1. Pursuant to A.A.C. R2-19-119(B), Complainant bears the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19-119(A). 2. Complainant failed to sustain its burden of proving that Respondent violated the provisions of A.R.S. § 32-1154(A) (1), as charged in the Citation and Complaint issued by the Registrar. There is no credible evidence that Respondent abandoned the project. On the contrary, there is evidence that Respondent’s inability to perform work from August 27, 2008, until being terminated on February 19, 2010, was due to Complainant’s failure to make the necessary tile selection. 3. Complainant failed to sustain its burden of proving that Respondent violated the provisions of A.R.S. § 32-1154(A) (2), as charged in the Citation and Complaint issued by the Registrar. There is no credible evidence that Respondent deviated from plans or specifications or violated local building codes. 4. Complainant failed to sustain its burden of proving that Respondent violated the provisions of A.R.S. § 32-1154(A) (7), namely A.A.C. R4-9- 108, as charged in the Citation and Complaint issued by the Registrar. There is no credible evidence that Respondent committed any fraudulent acts resulting in substantial injury to Complainant. 5. While the Contract does not properly list Respondent’s contracting license number as required by A.R.S. § 32-1124(B), that omission occurred more than two years prior to the filing of the Complaint. Therefore, the Administrative Law Judge concludes that the Registrar lacks jurisdiction over that issue pursuant to A.R.S. § 32-1155(A). 6. A.R.S. § 32-1156.01 provides that “[a]fter a hearing pursuant to this article, an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.” In light of the finding of a bona fide financial dispute between the parties, the Administrative Law Judge declines to exercise the discretion to recommend any restitution in this matter. The parties’ bona fide financial dispute should be resolved in a civil court of competent jurisdiction, rather than in an administrative disciplinary proceeding before the Registrar, so that the interests of both parties may be fully adjudicated. RECOMMENDED ORDER The Citation and Complaint in Case No. 2010-27993925 shall be dismissed on the effective date of the Order entered in this matter. 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 40 days from the date of that certification.

Done this day, May 2, 2011.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Mr. Ethier is Respondent’s managing member and qualifying party. [2] See A.R.S. § 41-1092-07 and A.A.C. R2-19-116(F).

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