ALJDEC decisions subject to certification as final

2011A-1594-ROC · Registrar of Contractors · 2013-05-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 18, 2013, at 8:00 a.m.; the record was held open until May 13, 2013, to allow the parties to submit post-hearing legal memoranda. APPEARANCES: Complainant TL Qik Stop Market Inc. was represented by Lawrence J. Felder, Esq., Wilenchik & Bartness, P.C.; Respondent Pro Form Concrete Inc. was represented by David M. Bell, Esq., David Bell & Associates, P.L.L.C. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure The Arizona Registrar of Contractors (“the Registrar”) issued License No. L- 9.172100-C to Pro Form Concrete Inc. (“Respondent”). Debbie Nguyen, the owner of TL Qik Stop Inc. (“Complainant”), filed a Complaint on its behalf with the Registrar against Respondent. According to the Complaint, Complainant hired C 3 Construction Inc., License No. B- 1.102488-C (“C3”) to substantially renovate an old gas station located at 3233 South 48th Street, Tempe, Arizona 85282, and C3 hired Respondent to perform concrete work on the project. Complainant alleged that during Respondent’s concrete work, it pierced the regular unleaded gas pipe and that, as a result, gasoline contaminated the soil at the site. Complainant requested that the Registrar require Respondent to clean up the contamination to resolve the Complaint. The Registrar assigned the Complaint to its Inspector, Dennis Cook, for investigation. Inspector Cook performed a jobsite inspection. Inspector Cook’s notes of his jobsite inspection provided in relevant part as follows: The complainant alleges that the respondent is responsible for a gasoline leak and the loss of 9,948 gallons of gasoline. The subsequent soil contamination is likely to require extensive and expensive clean-up and the complainant holds the contractor responsible for the cost of the remediation.

The respondent denies responsibility for the damage[d] pipe and the leak. The leak was repaired by the general contractor the day after it was discovered. The concrete contractor completed his contracted work and the gas station and store are open for business. On the day of the jobsite inspection, it was not possible for this inspector to confirm that [Respondent] caused the damage resulting in the gasoline leakage.

Inspector Cook later sent a letter to the parties to inform them that because he could not determine whether Respondent was responsible for the damage to the gas pipe, a citation would not be issued. Inspector Cook also informed the parties that Complainant could request further review of its Complaint. After Complainant requested that a formal citation be issued against Respondent’s license, the Registrar issued a Citation and Complaint charging a possible violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9- 108. Respondent filed a timely written answer to the Citation and Complaint denying any statutory violation. Respondent affirmatively alleged that that it had not damaged the gas pipe and that any contamination caused by the gas leak resulted from Complainant’s failure to comply with statutes and regulations of the Arizona Department of Environmental Quality (“ADEQ”) that required owners of underground storage tanks (“USTs”) to install leak detection and prevention equipment before placing gasoline in the USTs. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. A hearing was scheduled on April 18, 2013. At the beginning of the scheduled hearing, Complainant requested that the hearing be continued to allow the Registrar to refer to the OAH Complainant’s Complaint against C3, which was based on the same facts, so that it could be consolidated with this matter. Respondent opposed the motion to continue as untimely and its attorney stated on the record that it chose to go forward, despite the risk that an inconsistent result in Complainant’s complaint against C3 could require a rehearing. The Administrative Law Judge denied Complainant’s request for a continuance and conducted the hearing on the scheduled date. Because Inspector Cook was no longer employed in state service, the Registrar’s Inspector, Jim Dimond, testified about his review of Inspector Cook’s file and the Registrar’s policies and procedures. Complainant submitted five exhibits and presented the testimony of Ms. Nguyen. Respondent submitted thirteen exhibits and presented the testimony of three witnesses: (1) Peter Stahura, C3’s superintendent on Complainant’s project; (2) Jeffrey Lampson, Respondent’s qualifying party and officer; and (3) Donald Esperson, who testified as an expert on ADEQ’s regulation of USTs. Additional Evidence Beginning in 2005, Ms. Nguyen and her ex-husband operated gas stations with convenience stores in Apache Junction and Mesa, Arizona. Ms. Nguyen testified that because those stations were operational when she and her ex-husband purchased them, she was not familiar with ADEQ’s requirements for opening a new gas station. Ms. Nguyen testified that she was not familiar with the forms that ADEQ required for USTs.[1] Before Mr. Esperson retired, he served as Circle K Corporation’s manager of environmental compliance and as a member of a committee that helped draft ADEQ’s regulations relating to USTs. Mr. Esperson testified that ADEQ’s regulation of USTs have been in effect since 1988. Mr. Esperson testified that ADEQ’s statutes and regulations required owner-operators to be responsible for compliance. Mr. Esperson testified that Ms. Nguyen’s testimony that she did not understand and was not aware of ADEQ’s regulations concerning USTs made no sense from an owner-operator. The gas station located in Tempe where Respondent performed the work (“the gas station”) had been closed for several years. Ms. Nguyen testified that because the closed gas station had only a little booth for a cashier and gas stations make most of their profit on the attached convenience store, substantial renovation of the property would be necessary. Mr. Esperson testified that if USTs are put in temporary closure for more than 12 months, they are no longer considered USTs or subject to regulation by ADEQ. Mr. Esperson testified that unless Complainant notified ADEQ, it would not have known that Complainant was preparing to re-open the gas station unless one of ADEQ’s employees happened to go by the gas station and notice that renovations were underway. Complainant purchased the gas station in October 2008. However, it did not have financing in place to construct the substantial renovations that would be required to make the gas station profitable. Ms. Nguyen and her ex-husband separated in April 2009, but did not get formally divorced until October 2009, after Complainant had obtained funding for the renovations. Mr. Esperson testified that ADEQ’s regulations and statutes require owner- operators of USTs to notify ADEQ of any change in ownership and to refile the UST form within a short time of any transfer of ownership. Mr. Esperson testified that according to ADEQ’s file for the location, Complainant did not file a UST Registration Form when it purchased the property in Tempe. Ms. Nguyen testified that when she finally was able to start renovations, the divorce and the delay in opening the gas station had depleted her finances. Ms. Nguyen testified that she is a single mother with primary custody of two teen-aged daughters. Complainant made arrangements to operate the gas station as a Valero franchise. The gas station had three USTs. Ms. Nguyen testified that she planned to convert one UST to hold diesel fuel and that she planned to install a device to blend the premium unleaded gasoline and regular unleaded gasoline from the remaining two USTs to be able to sell a medium grade of unleaded gasoline. In October 2009, Complainant entered into a contract with C3 to build the convenience store and to perform other improvements at the gas station. C3 subcontracted the concrete work to Respondent. C3 also subcontracted some work on the gas pipes that linked the USTs to the fuel dispensers to E P A Business Solutions Inc. DBA: Tank Solutions, License No. AE.144129-C (“Tank Solutions”). Mr. Stahura testified that Complainant purchased equipment for the gas station’s fuel dispensing system directly from a company named ANS Wholesale Petroleum Equipment (“ANS”) and that Complainant also hired a company named Maverick Petroleum (“Maverick”) to install components of the fuel dispensing system that Complainant purchased from ANS. Ms. Nguyen denied that Complainant had ever contracted directly with ANS or Maverick. Ms. Nguyen testified that C3 arranged all the inspections of the gas station by various government agencies. At some point, C3 or its subcontractor demolished the existing building and other improvements at the gas station in Tempe. On or about November 11, 2009, Respondent dug the footings for the convenience store. Mr. Stahura testified that he warned Respondent about the underground pipes from the USTs to the fuel dispensers. Mr. Stahura acknowledged that C3 did not blue stake, spray-paint, or otherwise note the location of the pipes. On or about January 21, 2010, the State Fire Marshall inspected the fuel pipes. The project passed the vapor recovery line inspection but failed the visual and pressure test due to a pinhole leak in the fuel line in one of the dispensers. On or about January 29, 2010, the project passed the State Fire Marshall’s visual and pressure test. On or about February 4, 2010, Tank Solutions installed three new fuel dispensers. The installation relieved the test pressure from the fuel pipes that had been applied for the tests that the Fire Marshal performed on January 21, 2010, and January 29, 2010. On or about February 24, 2010, Respondent constructed the sidewalks at the project. Respondent used 2’ long stakes to hold in place the concrete forms for the sidewalks. Mr. Stahura testified that before Respondent constructed the sidewalks, he again warned about the underground pipes. Mr. Stahura acknowledged that C3 did not blue stake, spray-paint, or otherwise note the location of the pipes and that he did not personally witness Respondent’s work on February 24, 2010. Mr. Lampson denied that Mr. Stahura or C3 ever warned Respondent about the underground pipes. Mr. Lampson testified that although he was not on site when Respondent constructed the sidewalk, he would have been the one to attend any safety meetings that C3 may have scheduled about conditions at the site. On March 16, 2010, two of the USTs on the site were pumped out in preparation for receiving unleaded gasoline. On March 24, 2010, the UST that was intended to hold diesel was pumped out. Mr. Esperson testified that until pressure was restored to the gas pipes, the USTs would not have leaked, even if the gas pipe had been punctured and there was residual fuel in the USTs. On March 16, 2010, Mr. Stahura sent an e-mail to Ms. Nguyen, informing her in relevant part as follows: [ANS] looked at one of the turbines and said the mechanical leak detectors will need replacing. Then, when they try to start the pumps there may be other parts that won’t work either.

I asked Tom from ANS to put together a bid for you showing everything they know is missing or broken right now. Internal turbine parts cannot be evaluated until startup to make sure they are still good.[2]

After the leak was discovered and repaired, Mr. Stahura prepared a timeline of the project that stated that his “impression from the conversation [with ANS’s employee was] that ANS may be selling the client things she does not need.”[3] Mr. Stahura testified that what he meant by the entry was that the leak detectors should be tested to see if they worked before they were replaced. Mr. Stahura denied that he communicated his concern about ANS possibly taking advantage of Complainant to Ms. Nguyen because it was beyond the scope of his employment. Ms. Nguyen testified that she purchased the leak detectors on C3’s advice, but that C3 never told her than she needed to hire someone to install the leak detectors. Ms. Nguyen testified that ANS was only a supplier and that it did not install the equipment that it sold. Ms. Nguyen testified that she relied on C3 and its subcontractors to advise her of any equipment that she needed to install on the USTs. Mr. Stahura testified that the owner of a UST is responsible for installing any mechanical parts such as a leak detector. Mr. Stahura testified that ANS was not C3’s subcontractor or supplier and that C3 did not contract to bring the USTs into compliance with ADEQ’s requirements. Mr. Stahura testified that all C3 did was coordinate its work with ANS and Maverick. On or about April 13, 2010, enough fuel was delivered to the USTs to allow the fuel delivery system to be tested. Mr. Esperson testified that the fuel pipes would have been purged to remove all air from them as preparation for testing the fuel delivery system. Mr. Esperson testified that ADEQ requires owner-operators of USTs to provide proof of financial responsibility and of compliance with all regulatory requirements for USTs, including that the pipes are tight and that a leak detector has been installed, before any fuel is placed in the USTs. Mr. Esperson testified that testing was not done in this case. Ms. Nguyen testified that her insurance agent at John Hancock Insurance Company informed her that because the gas station had been closed, Complainant could not obtain insurance for environmental contamination until the fuel delivery system was certified by ADEQ.[4] Mr. Esperson testified that Ms. Nguyen was testifying about premises liability insurance, not the proof of financial responsibility that ADEQ required before regulated products were placed in USTs. The USTs did have functioning Veeder Root gauges that measured how much fuel was in them. In early May 2010, Ms. Nguyen noticed that the Veeder Root inventory for the UST that held regular unleaded gasoline was dropping even though Complainant was not making any sales of fuel to the public. Ms. Nguyen suspected that someone was stealing fuel. On or about May 3, 2010, Mr. Stahura sent an e-mail to Brad Jones, another employee of C3, to forward to Ms. Nguyen, in relevant part as follows: Since you had your Veeder Root installed, got it running, and determined that some of your fuel has been stolen, we would strongly suggest you have a vacuum test performed on that tank as soon as possible to be safe and to rule out any chance of a leak.

You have told us that you had core samples taken from around the site before you purchased the property to make sure there weren’t any leaks. Our subcontractor did not work on the tanks themselves, only rerouting the vent piping to separate the diesel vent from the other vents. Therefore there is no reason to suspect a leak on the system.

The vacuum test that should be performed is the same one done by the State of Arizona. You have stated that you would normally have this test done independently of the State to make sure you are in compliance. Our recommendation is that you do not delay in getting the test done so that we can all know 100% that the fuel was stolen just as you determined it was.[5]

Mr. Stahura testified that he did not know whether Mr. Jones forwarded the e-mail to Ms. Nguyen. On or about May 3, 2010, the fuel delivery system passed the Fire Marshal’s inspection. Mr. Esperson testified that the Fire Marshall’s inspections were to certify the “basic stuff,” such as soak testing joints and inspecting what was visible prior to backfilling a UST, not to check for leaks or that the system complied with ADEQ’s requirements. On or about May 7, 2010, another fuel delivery was made to substantially fill the USTs in preparation for opening Complainant’s Valero gas station/convenience store. Ms. Nguyen testified that she would not have opened the Valero gas station/convenience store without passing ADEQ’s inspection. Ms. Nguyen testified that she and her ex-husband had hired a contractor to check the system before they contacted ADEQ to perform an annual test of the gas stations that had operated in the past to ensure that the stations would pass ADEQ’s test. Ms. Nguyen testified that the annual test was to verify that that the gauges on the pumps were correctly measuring the amounts of gasoline sold to customers. Ms. Nguyen testified that Bruce Miller of Premier Petroleum was scheduled to perform the pretest on Complainant’s fuel delivery system at the Tempe gas station on Sunday, May 9, 2010. Mr. Esperson testified that the tests that Ms. Nguyen referred to were vapor recovery tests of the gasoline dispensers and a test of the accuracy of the metering of the fuel delivery system. Mr. Esperson testified that neither test concerned the integrity of the USTs or provided protection against soil contamination. USTs have a submersible pump inside them that pumps fuel to the fuel dispensers. Ms. Nguyen denied that she turned on the submersible pump for any of the USTs. She stated that C3 just handed her a key and told her that she could start preparing to open the Valero gas station/convenience store. According to the Veeder Root inventory reading, the volume of gasoline in the UST that held regular unleaded gasoline was 6153 gallons on May 7, 2010, at 1:13 p.m. Over the next day and a half, the Veeder Root readings showed that the volume was steadily dropping, as follows: May 8, 2010, 8:54 a.m., 3030 gallons; May 8, 2010, at 1:14 p.m., 2072 gallons; May 8, 2010, at 3:58 p.m., 1488 gallons; and May 8, 2010, at 6:46 p.m., 1270 gallons.[6] At approximately 6:00 p.m. on May 8, 2010, Ms. Nguyen shut off the power to the submersible pump in the UST for regular unleaded gasoline to see if the fuel level continued to drop. At 7:58 a.m. on May 9, 2010, the UST still held 1270 gallons of regular unleaded gasoline. Because it appeared that the missing fuel was attributable to a leak from the UST for regular unleaded gasoline rather than theft, Ms. Nguyen contacted C3 and requested that it contact Premier Petroleum to determine whether the fuel system was leaking. On the morning of May 9, 2010, Mr. Miller on behalf of Premier Petroleum inspected the system at the gas station and located a punctured fuel pipe near a planter box under the sidewalk that Respondent had constructed on February 24, 2010. Based on fuel inventory reports, Mr. Miller estimated that approximately 9,000 gallons of fuel had leaked out of the UST for regular unleaded gasoline into the ground on the premises of Complainant’s gas station/convenience store. Mr. Miller found the leak detectors still in their boxes. On May 9, 2010, Premium Petroleum installed the leak detectors in the USTs. Mr. Esperson testified that a leak detector greatly restricts the flow of fuel if a pipe is not tight due to a leak. Mr. Esperson testified that if a leak detector had been installed, the flow of product would have been restricted to 3 gallons/hour and the estimated 9,000 gallons would not have leaked into the ground on the site of Complainant’s gas station/convenience store. Mr. Esperson testified that normally the submersible pump in the UST is activated by a customer lifting the handle of the gas dispenser. Mr. Esperson testified that because Complainant was not selling fuel to the public and no one was lifting the handle of the gas dispenser, the submersible pump in the UST for regular unleaded gasoline must have been wired to run continuously even when the dispenser handle was not lifted. Mr. Esperson testified that the pump may have been wired to run continuously to quickly purge air from the system before gasoline was first delivered in April 2010. Mr. Esperson testified that if the pump had not been wired to run continuously, it would not have pumped 9,000 gallons of unleaded gasoline into the ground. On May 10, 2010, at C3’s request, Tank Solutions repaired the punctured gas pipe at Complainant’s gas station/convenience store. On May 10, 2010, Premier Petroleum tested the leak detectors and determined that they were functioning correctly. On May 11, 2010, Mr. Stahura on behalf of C3 and Mr. Lampson on behalf of Respondent attended an inspection of the gas pipe that Tank Solutions had repaired. Respondent submitted photographs that were taken at the inspection.[7] The photographs show irrigation pipes between the punctured pipe and the top of the ground, where Respondent had constructed the sidewalk. Mr. Stahura testified that C3’s subcontractor would have installed the irrigation system before Respondent constructed the sidewalk. A photograph of a measuring tape inserted into the ground shows 24” and the legend states that “[f]rom the gasoline pipe up to the sidewalk is 2’ and the insured (who was present) states the steel stake they use for forming is 2’.”[8] Mr. Lampson denied that he had acquiesced to Mr. Stahura’s statements at the May 11, 2010 inspection that Respondent probably had damaged the gas pipe with its stakes. Mr. Lampson testified that he was surprised that the fuel pipes were only 2’ below grade. Mr. Lampson testified that 5” or 6” of the metal stakes would have needed to have been above ground to hold the concrete forms. Mr. Lampson testified that even if the 2’ stakes had been driven completely into the ground, they would have been barely long enough to graze the top of the pipe and would not have punctured the pipe. On May 12, 2010, C3 issued a check to Complainant in the amount of $10,000.00. On that same date, Ms. Nguyen signed a document on C3’s stationery that stated that “[w]hen check is received from Insurance Company, Debbie or Tron will pay C3 Construction Inc. $10,000.00 reimbursement for fuel.”[9] Complainant’s Valero gas station/convenience store in Tempe subsequently passed ADEQ’s and other agencies’ inspections and opened for business. Mr. Stahura testified that Complainant has not paid C3 for the cost of the fuel or the full contract price of the renovations. Ms. Nguyen testified that it will cost hundreds of thousands of dollars to clean up the contamination from the leak in the regular unleaded gas pipe. Complainant did not present evidence to liquidate the cost of soil remediation due to the gas leak allegedly caused by Respondent’s construction of the sidewalk. Instead, Complainant requested that the Registrar require Respondent to be responsible for the remediation of the soil contamination caused by the gas leak. Inspector Dimond testified that Complainant filed a complaint against C3 in Case No. 2011-1600 that the Registrar assigned to Inspector Randy Cason for investigation. Inspector Dimond testified that Inspector Cason did not require C3 to take any action with respect to Complainant’s complaint against C3 because Tank Solutions had repaired the leak. Inspector Dimond testified that he would have expanded Inspector Cook’s letter in this matter to inform the parties that the Complaint would be closed not only because it could not be determined whether Respondent had damaged the gas pipe, but because Tank Solutions had repaired the leak. Inspector Dimond explained that due to the repair, A.R.S. § 32-1155(C)(2) precluded the Registrar from issuing a citation against Respondent.[10] Inspector Dimond testified that Complainant’s claim for the damages that allegedly resulted from Respondent’s alleged damage to the gas pipe was better suited to a different venue. CONCLUSIONS OF LAW The Registrar has jurisdiction to determine whether Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.[11] The Registrar does not have jurisdiction to enforce ADEQ’s statutes and regulations.[12] Complainant bears the burden of proof to establish Respondent’s violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, by a preponderance of the evidence.[13] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[14] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[15] Complainant did not establish that Respondent failed to construct the sidewalk in a professional and workmanlike manner and in compliance with applicable code requirements. Even if Respondent had damaged the gas pipe, the gas pipe was repaired by others before Complainant filed the Complaint with the Registrar. As Inspector Dimond pointed out, normally contractors must be afforded an opportunity to correct deficient workmanship before their licenses may be disciplined.[16] Therefore, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4- 9-108.[17] Although under some circumstances, the Registrar may award restitution as a result of a proven contracting law violation,[18] the Registrar cannot award consequential damages.[19] Even if Complainant established that on February 24, 2010, Respondent damaged the gas pipe that later leaked and even if Complainant fully liquidated the cost of soil remediation at the site, the contamination of the soil at Complainant’s property is a consequential damage that is not available in this administrative forum.[20] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final Order, Complainant TL Qik Stop Market Inc.’s Complaint in Case No. 2011-1594 against Respondent Pro-Form Concrete Inc.’s License No. L- 09.172100-C shall be dismissed. 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 20, 2013.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] After the hearing, Respondent produced documents that showed that Complainant’s ex-husband had signed documents that ADEQ required for USTs in Apache Junction and Mesa. See Exhibits 3 and 6 to Respondent’s Supplemental Hearing Memorandum. The only document that Respondent submitted that Ms. Nguyen signed certifying to ADEQ compliance with ADEQ statutes and regulations that was dated before the gas station in Tempe was remodeled was an ADEQ UST form for a facility located at 16202 South 29th Drive in Phoenix, Arizona, dated March 4, 2008. See Exhibit 4. Ms. Nguyen did not identify that facility among the gas stations that she and her husband previously had owned and operated. [2] Respondent’s Exhibit 31 at 5. [3] Respondent’s Exhibit 31 at 6. [4] After the hearing, Respondent produced a document that Ms. Nguyen had signed on May 26, 2010, attesting that Complainant had commercial insurance to provide proof of financial responsibility to ADEQ. See Exhibit 1 to Respondent’s Supplemental Hearing Memorandum. [5] Respondent’s Exhibit 31 at 7. [6] See Respondent’s Exhibit 9. [7] See Respondent’s Exhibit 35. [8] See Respondent’s Exhibit 35 at 6, photograph 12. [9] Complainant’s Exhibit C. Tron was Ms. Nguyen’s ex-husband’s first name. [10] A.R.S. § 32-1155(C)(2) provides in relevant part as follows: The registrar shall not issue a citation for failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards if . . . [t]he contractor's work has been subject to neglect, modification or abnormal use. [11] See A.R.S. §§ 32-1151 to 32-1169. [12] See A.R.S. § 49-1010(A). That statute provides that statutes that “relate to the identification, prevention and remediation of releases of regulated substances from underground storage tanks are of statewide concern [and] shall not be subject to further local regulation.” Although A.R.S. § 49-1010(B) allows the director of ADEQ to delegate enforcement to another agency, ADEQ has not delegated any enforcement authority to the Registrar. [13] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [14] See A.A.C. R2-19-119(B)(2). [15] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [16] See A.R.S. § 32-1155(C)(2); see also A.R.S. § 32-1154(A)(23) (including 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”). [17] 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.” [18] See A.R.S. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990). [19] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (App. 1984). [20] “‘Consequential damages are such as are not produced without the concurrence of some other event attributable to the same origin or cause; such damage, loss, or injury as does not flow directly and immediately from the action of the party, but only from the consequences or results of such act.’” State v. Morris, 173 Ariz. 14, 17, 839 P.2d 434, 437 (App. 1992) (Restitution in the criminal context does not include consequential damages (quoting 25 C.J.S., Damages, § 2 at 617)). The contamination at the site was not caused solely by Respondent’s alleged damage to the pipe but by the subsequent presence of gasoline in the pipe, Complainant’s failure to follow ADEQ regulations for inspecting the delivery system, the lack of a functioning leak detector, and the continuously operating submersible pump.

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