ALJDEC decisions subject to certification as final

2011A-3925-ROC · Registrar of Contractors · 2012-03-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 10, 2012

APPEARANCES: Complainants appeared on their own behalf; Respondent was represented by attorney William R. Richardson, accompanied by Service Manager Ron Gee. At Respondent’s request, Court Reporter Mary Manning recorded the hearing, but the official record of the hearing is the audio recording made by the Administrative Law Judge.[1]

WITNESSES: Ted Gerold, ROC Inspector Laura Quigg Rita Eagleson Chip Grimm, CDC Construction Manager Ron Gee, CDC Service Manager

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainants bring this action complaining about their contract with Respondent to resurface their pool. The Citation and Complaint alleges abandonment of the contract, poor workmanship, and failure to comply with a Corrective Work Order. Respondent denies the allegations. This tribunal entered the complaint file received from the Registrar of Contractors into the record. The parties presented testimony from the witnesses above and other evidence, including Complainant’s Exhibits C16, C17, C18, C19, C20, C21 (all of which are photographs of Complainants’ pool at various stages), C24, and C25. Also entered into evidence are Respondent’s Exhibits R1, R2, R3, R4, R5, R6, R 8, R14, R15, R16, R17, and R18. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding no violation. FINDINGS OF FACT 1. Respondent is the holder of license B-5.121372-R, a general residential contracting license issued by the Registrar of Contractors (“ROC”). The license authorizes Respondent to construct and repair swimming pools and spas for residential properties. Respondent’s Qualifying Party is John Christopher Jones. 2. In April 2011, Complainants hired Respondent to resurface their 25-year-old pool for a total price of $4,867.47.[2] The work began on May 10, 2011, and concluded on or about May 20, 2011. After the old surface was chipped-out, and just prior to application of the new surface,[3] Respondent charged Complainants’ $4,698.00.[4] 3. Complainants had issues with several aspects of the workmanship of the new surface. Respondent believed that the surface was fine. The parties disputed the issues for several days. On June 4, 2011, Ron Gee, Respondent’s Service Manager, met with Complainants to discuss the situation. He asked them what they wanted Respondent to do for them to resolve the dispute. Complainants answered that Respondent should either re-surface the pool or refund their money. Mr. Gee told them that he would take their offer back to the company for consideration and get back to Complainants with an answer. 4. A few days later, on June 6, 2011, Mr. Gee talked with Complainants. According to Complainants, he told them that Respondent had decided to re-surface the pool. Complainants were happy with that decision and allowed Respondent access over the next few days to drain the pool and chip-out the existing surface. Respondent did so. 5. On June 9, 2011, Gee called Complainants and told them that Respondent had decided to refund their money instead of re-surfacing their pool. 6. Mr. Gee testified at the hearing that he told Complainants on June 6, 2011, that Respondent would chip-out the pool, but he made no statements about what would happen after that. He testified that he did not state that Respondent would re-do the pool.[5] He admitted that he did not tell Complainants on June 6, 2011, that they were getting a refund.[6] When asked why he did not tell them, he stated that he did not want to cause more problems with Complainants. 7. Evidence shows that Respondent refunded Complainants’ money by reversing the credit card charges on June 6, 2011.[7] It is likely that the process for reversing the charges began a few days prior to that date, perhaps as early as June 4, 2011. 8. The evidence is clear that Respondent refunded Complainants’ money on June 6, 2011, but did not tell Complainants that it was doing so until June 9, 2011. Respondent withheld informing Complainants about the refund so that Respondent could gain access to the pool and remove the surface it had installed without getting into a further dispute with Complainants. Mr. Gee testified that Respondent did not want to have the liability for the surface of Complainants’ pool without having the payment for it. Also, the surface needed to be removed to prepare it for a new contractor to apply a new surface. 9. On August 8, 2011, ROC Inspector Ted Gerold issued a Corrective Work Order (“CWO”) to Respondent ordering Respondent to complete the pool project. As Inspector Gerold testified, the CWO was based on his determination that no agreement to rescind the contract had been reached by the parties, so the contract was still in place. The CWO is not based on workmanship considerations,[8] but on a legal conclusion. Therefore, it carries no weight, and the Administrative Law Judge will make an independent determination of the legal issues. 10. Evidence regarding what it would cost Complainants to have another contractor re-surface the pool was submitted.[9] That estimate shows that it would not cost Complainants more than the refunded amount.[10] Therefore, the evidence does not support an award of restitution should a violation be found. 11. Unchallenged testimony from Inspector Gerold, Chip Grimm, Respondent’s Construction Manager, and Mr. Gee shows that Respondent conferred a benefit on Complainants by chipping out the new surface at Respondent’s expense. Complainants’ pool is ready for re-surfacing by another contractor, and Complainants do not have to pay the other contractor to chip out the surface put in by Respondent. The witnesses listed above testified that this was a benefit worth $600 to $1000. 12. The evidence shows that Complainants received a full refund of the money they paid Respondent. It also shows that it would not cost Complainants any more than the amount of the refund to have another contractor apply a new surface. Finally, the evidence shows that Respondent conferred a benefit on Complainants by chipping out the surface. 13. The evidence does not show that Complainants have been harmed. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[11] Further, the standard of proof at hearing is by preponderance of the evidence.[12] Therefore, Complainants bear the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[13] Complainants have not met that burden. 2. The Citation and Complaint alleges violations of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(1)(prohibits abandonment of a contract without legal excuse), (A)(3) by way of ROC Rule R4-9-108 (requires that work meet minimum workmanship and industry standards), and (A)(23)(requires that licensees comply with CWOs). The workmanship issues are not pertinent in this case. Although the dispute between the parties began with workmanship issues, it became a contractual issue once Complainants offered Respondent the option to refund their money or re-surface the pool. 3. The evidence shows that Respondent accepted the offer to refund Complainants money, and by implication rescind the contract, on June 6, 2011. This is not abandonment of the project, but a resolution to the issues. Respondent asked its customers what they wanted to do to resolve the problems. 4. Complainants are upset because Respondent withheld the information about the refund from them until after Respondent had removed the surface. However, withholding that information does not constitute abandonment of the contract. Moreover, Complainants were not harmed. 5. The evidence does not show a violation of the provisions cited in the Citation and Complaint. 6. This matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that Citation and Complaint 2011-3925 against Respondent CDC Pools Inc. 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, March 1, 2012.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Respondent’s counsel agreed to provide a copy of the court reporter’s transcript to Complainants at no cost to them. [2] Exhibit 1. [3] Exhibits R1 and R3. [4] $2,000.00 was charged to one credit card and $2,698.00 was charged to another. [5] 2/10/12 Hearing Record (hereinafter “H.R.”) at 2:22:26. [6] Mr. Gee contradicted himself during his testimony. When asked by Respondent’s counsel if he knew that Respondent was going to give Complainants a refund when he talked to them on June 6, 2011, he replied that he did not know at that time. 2/10/12 Hearing Record (hereinafter “H.R.”) at 2:23:37. When asked again by the Administrative Law Judge later in his testimony, he replied that he did know on June 6, 2011, that a refund was going to be given to Complainants. H.R. at 2:42:51. [7] Exhibits C5, R24, and R 25. [8] CWOs based on workmanship, the area of an Inspector’s expertise, carry substantial weight. [9] Exhibit R6. [10] This is the case when items that are outside the scope of the contract Complainants had with Respondent are removed. [11] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [12] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [13] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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