ALJDEC decisions subject to certification as final

2010A-308477612-ROC · Registrar of Contractors · 2011-07-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 6, 2011, at 1:00 p.m. APPEARANCES: Complainant Hans E. Matthiesen appeared on his own behalf; Respondent Accurate Pool Repair and Service, L.L.C. appeared through members Gary Allen Hutchins, David Leonard Grucella, and Dominick Nicholas Infante. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT In April 2009, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC254311, Class K-6 for dual swimming pool service and repair to Accurate Pool Repair and Service, L.L.C. (“Respondent”). Respondent’s members are Gary Allen Hutchins, David Leonard Grucella, and Dominick Nicholas Infante. On or about December 14, 2010, the Registrar received a complaint from Hans E. Matthiesen (“Complainant”) that Messrs. Hutchins, Grucella, and Infante had acid-washed the swimming pool at his house at 4066 South Cassidy Drive, Fort Mohave, Arizona, and in the process of cleaning the tiles, had chipped or cracked 37 ceramic pool tiles. The complaint was assigned to the Registrar’s inspector, Cliff Corlett, to investigate. After Inspector Corlett sent a copy of the complaint to Respondent, Mr. Hutchins told Inspector Corlett that Complainant had hired an unrelated and unlicensed company, Accurate Pool Supply, to clean the tile, and that Accurate Pool Supply had subcontracted the job to Respondent. Inspector Corlett performed a jobsite inspection. On January 24, 2011, Inspector Corlett sent a letter to the parties informing them that the Registrar had determined to close the complaint because Complainant had not borne his burden to show that Respondent had damaged the tiles. Complainant requested a hearing. On March 2, 2011, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and (10). Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violations and affirmatively alleging that Complainant had damaged the tiles in an earlier cleaning. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A videoconference hearing was held from the Registrar’s office in Lake Havasu City, Arizona on July 6, 2011. Inspector Corlett testified. Complainant submitted ten exhibits, testified on his own behalf, and presented the testimony of Arden Duffy, his live-in companion. Respondent presented the testimony of Messrs. Hutchins, Grucella, and Infante. Additional Evidence Complainant’s pool is between eight and ten years old. Both parties agreed that 37 decorative ceramic tiles at the waterline are chipped or cracked. Complainant acknowledged that in the past, he had cleaned the pool tile at least once, using a wood chisel to remove the calcium scale from the tiles. Complainant denied that he damaged the tile when he cleaned it. Ms. Duffy testified that she has lived with Complainant for four years and helped him clean the pool tile once. Ms. Duffy testified that before Respondent cleaned the tiles, they had been in perfect condition. Complainant testified that he saw Mr. Grucella use a hammer and chisel to clean the tile and that although he told Mr. Grucella that was a “bad idea,” Mr. Grucella insisted that it was “okay.” Mr. Infante testified that Respondent used a soda blasting machine to clean the tiles and that the machine cannot damage tile. Mr. Infante testified that Complainant’s pool had a 1/16” to 1/8” thick deposit of calcium crust that was 1½” to 2” wide at the water line all around the edge of the pool. Mr. Infante testified that he used a chisel to tap against the crust to remove some of the crust before he used the soda blasting machine to remove the remaining crust. Mr. Infante testified that he did not use the chisel to get to the bottom of the crust on the tile, and denied damaging the tile. Mr. Infante denied that Complainant ever objected to his use of the chisel on the tile or asked him to stop. Mr. Infante denied “banging on the tile with a hammer,” as Complainant alleged, and testified that if Complainant had asked him to stop cleaning the tile, he would have stopped. Mr. Infante testified that after Respondent started using the soda blasting machine to remove the calcium crust from the tile, he started noticing signs of damage to some of the tiles that the calcium crust had obscured. Mr. Infante testified that after he pointed out the damage on three tiles to Complainant, Complainant acknowledged having damaged the tiles in the past when he used a wood chisel to clean the tiles. Complainant testified that when he realized that Respondent had damaged the 37 tiles, he went to Respondent’s business office, and Respondent’s employees admitted that they had damaged the tiles and agreed to replace them. Messrs. Hutchins, Grucella, and Infante denied that they ever admitted to Complainant that they damaged the tiles. Instead, as a gesture of good will, Respondent offered to replace the 37 tiles. But, because the tiles no longer are manufactured and cannot be matched exactly, Complainant demanded that Respondent replace all the tiles. With respect to the charged violation that Respondent aided and abetted a licensed or unlicensed person to evade the requirements of Title 32, Chapter 10 that regulates contractors, the record is not clear on the relationship between Respondent and Accurate Pool Supply. Inspector Corlett testified that he asked Respondent’s representatives at the jobsite inspection how they were paid, and they responded that Accurate Pool Supply did not withhold any taxes from their wages and did not provide workers’ compensation insurance. Inspector Corlett testified that Respondent’s representatives also told him that Accurate Pool Supply did not provide an Internal Revenue Service (“IRS”) form 1099[1] for monies paid to Respondent or its members. Inspector Corlett testified that a contractor’s license is not required to clean a pool.[2] However, if a licensed contractor acts as a subcontractor or independent contractor, it must meet Title 32, Chapter 10’s requirements that contractors comply with statutes governing social security, workers’ compensation, and unemployment insurance, and pay income and other taxes.[3] Inspector Corlett testified that by acting as a subcontractor to Accurate Pool Supply, Respondent violated A.R.S. § 32- 1154(A)(10) because it used the subcontract to evade the requirements of Chapter 32, Title 10. Messrs. Hutchins, Grucella, and Infante did not dispute Inspector Corlett’s testimony. According to the Registrar’s record, Respondent’s license is current and in good standing. CONCLUSIONS OF LAW The matter lies within the Registrar’s jurisdiction.[4] Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[5] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[6] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[7] 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.”[8] Complainant did not establish that it is more likely than not that Respondent damaged the 37 tiles at his pool. Therefore, Complainant did not establish cause to discipline Respondent’s license under A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108.[9] The evidence at hearing established that Respondent aided and abetted an unlicensed contractor to avoid reporting the income from the job to the IRS, furnishing cause to discipline its license under A.R.S. § 32- 1154(A)(10).[10] RECOMMENDED ORDER In view of the foregoing, it is recommended that on the effective date of the Registrar’s order, the Registrar suspend Respondent Accurate Pool Repair and Service, L.L.C.’s License No. ROC254311 until Respondent establishes that it has remedied the violation of A.R.S. § 32-1154(A)(10). It is further recommended that if on or before the effective date of the Registrar’s order, Respondent submits satisfactory written proof to the Registrar that it has remedied the violation of A.R.S. § 32-1154(A)(10) by obtaining 1099 forms for all subcontracts performed for Accurate Pool Supply in tax years 2010-2011, and has taken steps to avoid future violations, the Registrar not suspend Respondent’s license but, instead, close Case No. 2010-[number redacted]. 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, July 25, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] A form 1099 is used to notify the IRS of monies paid to independent contractors from which no taxes have been withheld. The IRS requires businesses to submit a 1099 form for every contractor that is paid at least $600.00 for services during a year. See wikipedia.org at 1099 form. [2] See A.R.S. § 32-1101(A)(3)(a) (defining contractor as one who constructs, alters, repairs, adds to, subtracts from, or improves an improvement. [3] See A.R.S. § 32-1154(A)(4) and (5). [4] See A.R.S. § 32-1101 et seq. [5] 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). [6] See A.A.C. R2-19-119(B)(2). [7] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [8] Black’s Law Dictionary at page 1220 (8th ed. 1999). [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)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]iding or abetting a licensed or unlicensed person to evade this chapter, knowingly combining or conspiring with a licensed or unlicensed person, allowing one’s license to be used by a licensed or unlicensed person with intent to evade this chapter.”

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