ALJDEC decisions subject to certification as final

2010A-308474693-ROC · Registrar of Contractors · 2011-11-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING DATES: June 27, 2011, at 8:00 a.m. and October 14, 2011, at 1:00 p.m. APPEARANCES: Complainant Mike Woods appeared on his own behalf; Respondent Bloom Design and Landscape, L.L.C. appeared through Stephen Reichmuth, its qualifying party and member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky ____________________________________________________________________

FINDINGS OF FACT Background and Procedure In May 2005, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC207969, Class C-21 for residential landscaping and irrigation systems to Bloom Design and Landscape, L.L.C. (“Respondent”). On or about July 27, 2010, the Registrar received a complaint from Mike Bloom (“Complainant”) against Respondent regarding its performance of a $19,671.00 contract to renovate the pool and to install hardscape at Complainant’s residence at 3489 North 301st Drive, Buckeye, Arizona. Complainant’s complaint stated seven specifically enumerated items, including that although the contract required Respondent to install bullnose travertine tile coping around the edge of the pool, it had cut the edge of regular travertine tiles for the bullnose rather than using bullnose tiles that had been fabricated at the factory. As a result, Complainant alleged that “[t]he work is poor and embarrassing” and that Respondent’s on-site fabrication of the bullnose tile “ruined the whole project.” Complainant also alleged that Respondent’s promise in the contract to install bullnose travertine tiles was fraudulent. Complainant attached to the complaint a copy of his contract with Respondent. The contract provided for bullnose coping, but did not specify whether the bullnose would be fabricated on-site or in a factory. The contract did not include an estimated completion date, provide for an advance deposit or progress payments, or advise Complainant of his right to file a complaint to the Registrar. The complaint was assigned to the Registrar’s inspector, Rick Oelke. On July 30, 2010, Inspector Oelke sent Respondent a letter, which reads in relevant part as follows: Our records indicate that you have a current class C-21-R Landscaping license.[1] However, we have information indicating you are performing or offering to perform work which would be covered under the scope of a class B-5 General Swimming Pool Contractor license[2] regarding improvements on and adjacent to the swimming pool at 3489 N 301st Dr., Buckeye, AZ 85396.

Arizona Revised Statutes, Section §32-1154, sets forth numerous grounds for suspension or revocation of a license. A.R.S. §32- 1154 A.17 reads:

“Knowingly contracting beyond the scope of the license or licenses of the licensee.”

Under these circumstances, the agency can seek disciplinary action against your license. You should review our most recent statutes and rules book to familiarize yourself with the scope of your license(s).

(Emphasis in original; footnotes added.) On September 3, 2010, Inspector Oelke performed a jobsite inspection. On September 9, 2010, Inspector Oelke, on behalf of the Registrar, issued a Corrective Work Order (“CWO”), directing Respondent to correct certain deficiencies within fifteen days, in relevant part as follows: License # C-21.207969-R issued to Bloom Design and Landscape LLC is classification #C-21R Landscaping and is not appropriate to complete part or all of the work listed below. Work must be completed by an appropriately licensed contractor. . . . .

3) Gapping of the paver edge to the foundation of the home was observed to be inconsistent and beyond allowable Workmanship Standards. “Gaps should not exceed 3/8” at the edge of pavers”. Contractor should correct the gapping at the foundation of the home by appropriate means.

4) The complaint of the poorly finished bull nosed [sic] coping has been verified. It is this Inspector[‘]s opinion that the contractor’s philosophy of utilizing the same material for the pool coping as the paver field is sound, however; it is also reasonable to expect the material to have a clean consistent finish on all exposed areas. Any deviations from “normal/reasonable” expectations should be conveyed to, and approved by the customer. Contractor should correct the bull nosed edge scoring marks by appropriate means. . . . .

6) Alleged fraud and misrepresentation could not be verified at the time of the jobsite inspection. If further action regarding these allegations is desired, an administrative hearing may be requested.

Complainant later made an addendum to the complaint regarding the stone facing that Respondent had installed on the waterfall into the pool and a deco drain that Respondent had installed on the deck that allowed water to puddle. Complainant subsequently requested a hearing. The Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(2), (3), namely A.A.C. R4-9-108, (7), (13), namely A.R.S. § 32- 1158, (17), and (23). Respondent filed a timely written answer to the Citation and Complaint, affirmatively alleging that it did not know that fabrication and installation of the bullnose coping around Complainant’s pool was beyond the scope of its C-21 license, and that it had hired Caribbean Pools and Spas, Inc., License No. ROC118783, Class B-5 (“Caribbean Pools”) to perform the repairs. Respondent also alleged that Complainant was unsatisfied with Caribbean Pools’ repairs and insisted that new factory-fabricated bullnose coping be installed. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. Hearing Evidence A hearing was held on June 27, 2011. Inspector Oelke testified that the repairs to the bullnose coping did not comply with the Registrar’s standards, and that repair might not be possible, especially due to the fact that Respondent’s initial fabrication of the bullnose was beyond the scope of its C-21 license. Inspector Oelke testified that it was uncommon for contractors to attempt to fabricate bullnose travertine tile in the field, and that the bullnose tiles at the jobsite had a different profile and showed more imperfections than factory-fabricated bullnose tiles. Inspector Oelke noted that if Caribbean Pools attempted repairs, it was required to warranty its repairs for two years. Based on Inspector Oelke’s testimony, the parties agreed that Complainant would allow Caribbean Pools to attempt repairs to the bullnose tiles, and if repair proved impossible, to replace the bullnose tiles. The parties entered into a settlement that required Respondent or Caribbean Pools to correct the following items of complaint: (1) Excessive gaps in the travertine pavers; (2) The poor appearance of the bullnose travertine coping; (3) The poor adhesion and flaking of the stone on the columns of the water feature; and (4) Drainage. The parties were unable to resolve their dispute, and a further hearing was held on October 14, 2011. Inspector Oelke testified that he performed a second prehearing jobsite inspection on or about September 28, 2011. Inspector Oelke testified that although the project was not perfect, repairs that been made to the bullnose travertine coping around the pool and to the gaps in the pavers, and that the project now met the Registrar’s minimum workmanship standards.

Complainant submitted 12 photographs of the bullnose coping that showed that some parts of the bullnose edges appeared to be orange or gold. Complainant testified that the photographs were taken at different times of the day, and that his children’s friends had asked whether the edges were colored orange for Halloween. Respondent’s qualifying party and member, Stephen Reichmuth, disputed that the photographs accurately depicted the appearance of the bullnose edges in most daylight conditions. Complainant showed a piece of factory-fabricated bullnose travertine tile that he testified he had purchased from Respondent’s material supplier, National Pool Tile, that would match the travertine tile around the pool. On cross-examination, Complainant was unable to testify whether the bullnose tile was available when Respondent originally performed the contract. Complainant testified that acid had been applied to the bullnose tile, that the acid “continued to draw materials from the stone,” and that the bullnose edges “would never be right.” Complainant testified that he and his wife had saved for 7½ years to complete their backyard, and planned to raise their family and retire in the home. Complainant testified that now, his wife is stressed “all the time” and that he and his family were ashamed of the appearance of the backyard. Complainant acknowledged that he is employed as a professor of business at Pepperdine University in California, and that he has no special expertise in contracting or stonework. Complainant also testified that the northwest portion of the patio did not drain properly. Inspector Oelke testified that because the complaint about the deco drain concerned another area of the patio, he did not perform a water test at the second prehearing inspection on the area of the patio that Complainant alleged did not properly drain. According to the Registrar’s electronic record, Respondent’s license is current and in good standing. This complaint appears to be the only one pending against Respondent’s license. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[3] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[4] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[5] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[6] Because due process requires that Respondent have notice of and an opportunity to correct workmanship deficiencies before the Registrar disciplines its license based on such deficiencies, the Administrative Law Judge does not address Complainant’s complaint about drainage on the northwest portion of the patio. Complainant did not establish that Respondent committed fraud under A.R.S. § 32-1154(A)(7)[7] or that it departed from specifications or building codes under A.R.S. § 32-1154(A)(2).[8] Because construction is not a perfect science, contractors generally must be allowed an opportunity to correct their work, and the Registrar’s workmanship standards do not require that contractors achieve perfection in their corrections. Although Complainant’s photographs showed some degree of color variation on the bullnose edges of the travertine coping, Inspector Oelke opined that the repairs met the Registrar’s standards, and lighting conditions can be manipulated to emphasize minor color variations in photographs. Therefore, Complainant did not establish at hearing that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[9] or A.R.S. § 32-1154(A)(23)[10] in its construction of or failure to correct the improvements at Complainant’s residence. Respondent acknowledged in its answer that the improvements that it made to Complainant’s pool were beyond the scope of its C-21 license, but asserted that it did not violate A.R.S. § 32-1154(A)(17) because it did not know the limitations of its license scope. “‘Knowingly’ imports only a knowledge that the facts exist which bring the act or omission within the provisions of the statute using the word. It does not require any knowledge of the unlawfulness of the act or omission.”[11] “‘Notice of facts and circumstances which would put a man of ordinary prudence and intelligence on inquiry is . . . equivalent to knowledge of all the facts a reasonably diligent inquiry would disclose.’”[12] The Registrar’s regulations define the scope of Respondent’s license, and Respondent could have ascertained whether its license permitted the scope of work described in its contract with Complainant before it proposed, entered, or performed the contract. Therefore, the evidence at hearing established that Respondent violated A.R.S. § 32-1154(A)(17). As a factor in mitigation of the penalty, after the violation was called to Respondent’s attention, it subcontracted corrective work that was beyond the scope of its C-21 license to a properly licensed subcontractor. The evidence established that Respondent’s written contract with Complainant violated A.R.S. § 32-1158(B)[13] because it did not contain an estimated date of completion, provide for an advance deposit or progress payments, or advise Complainant of his right to make a complaint to the Registrar. Respondent’s violation of A.R.S. § 32-1158(B) provides grounds for the Registrar to discipline Respondent’s license under A.R.S. § 32- 1154(A)(13).[14]

RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, the Registrar suspend Respondent Bloom Design and Landscape, L.L.C.’s License No. ROC207969 until it remedies its violation of A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1158(B). It is further recommended that the Registrar not suspend Respondent’s license and, instead, close the complaint in Case No. 2010-[number redacted] if on or before the effective date of the Registrar’s order, Respondent provides written proof that is satisfactory to the Registrar that Respondent has revised its contract form(s) to comply with A.R.S. § 32-1158(B). It is further recommended that, in addition to any license suspension that may result from this matter, Respondent’s Class C-21 license be placed on disciplinary probation for a period of 30 days, commencing on the effective date of the Registrar’s order or the date on which Respondent files notice of compliance, whichever is later. 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, November 3, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] A.A.C. R4-9-103 provides the scope of a C-21 license for landscaping and irrigation systems in relevant part as follows:

Preparation and alteration of land for horticulture and arboriculture. Installation of irrigation systems and controls. Carpentry is limited to decorative fences and screens, planter boxes, and plant tubs common to the industry. Excluded are retaining walls over 3 feet, decorative walls or fences over 6 feet, perimeter walls, fences, and load bearing slabs and walkways. . . .

[2] A.A.C. R4-9-103 also provides the scope of a B-5 license for general swimming pool contractor in relevant part as follows:

Construction and repair of swimming pools and spas. Installation of fencing around the swimming pool or spa and installation of utilities from the point of service to the pool equipment. . . .

[3] See 32-1101 et seq. [4] 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). [5] See A.A.C. R2-19-119(B)(2). [6] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [7] A.R.S. § 32-1154(A)(7) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[t]he doing of a fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” [8] A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of any state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” [9] A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [10] A.R.S. § 32-1154(A)(23) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.” [11] A.R.S. § 1-215. [12] Maricopa Utilities Co. v. Cline, 60 Ariz. 209, 214, 134 P.2d 156 (1943) (quoting Schneider v. Henley, 61 Cal. App. 758, 763, 215 P. 1036, 1038 (1923)). [13] A.R.S. § 32-1158(B) requires that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 to be in writing and to include certain minimum terms, including the following: 4. The estimated date of completion of all work to be performed under the contract. . . . . 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . . [14] A.R.S. § 32-1154(A)(13) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.”

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