PDF copy: ALJDEC decisions subject to certification as final

2013A-5742-ROC-RF · Registrar of Contractors · 2016-05-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Kenneth Shawn Patterson and No. 2013A-5742-ROC-RF Jacqueline M Patterson, COMPLAINANTS, -v- ADMINISTRATIVE LAW JUDGE DECISION License No.149317 of Arizona Custom Pools Inc., RESPONDENT.

HEARING: March 16, 2016 APPEARANCES: Kenneth Shawn Patterson (Complainant) appeared and represented his own interests. Arizona Custom Pools, Inc. (Respondent) appeared through its authorized representative, member and qualifying party, Daniel J. Magee. The Arizona Registrar of Contractors (Registrar) was represented by Assistant Attorney General Thomas Raine. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ FINDINGS OF FACT

BACKGROUND AND PROCEDURE

1. The Arizona Registrar of Contractors (“the Registrar”) issued License No.

149317 to Respondent.

2. On December 11, 2013, the Registrar received a Complaint against

Respondent from Complainant regarding construction of a spa and water feature at his

residence (the workmanship complaint). The workmanship complaint cited low water

pressure in the jets of the spa, problems with the color of the grout in the tile in the spa

and problems with the installation of the stones in the spa’s water feature. See Exhibit

1.

3. As a result of the workmanship complaint, the Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(3), namely

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826 A.A.C. R4-9-108,1 two separate violations of A.R.S. § 32-1154(A)(12),2 and a violation of A.R.S. § 32-1154(A)(22).3 4. Respondent filed a timely answer to the Citation. An administrative

hearing was held. In her April 24, 2015 Decision, Administrative Law Judge Diane

Mihalsky considered Respondent’s argument that the parties’ contact called for the spa

to have only eight jets but that Respondent’s employee made a side deal with

Complainant to install twelve jets, leading to the low pressure problem. She concluded:

Even if Respondent's employee made a side-deal with Mr. Patterson to add additional therapy jets to the pool, Respondent is responsible for its employees' work. Mr. Magee as qualifying party is responsible for supervising Respondent's employees' work and ensuring that the therapy jets either conformed to specifications or functioned as intended. Therefore, the Registrar established by a preponderance of the evidence that Respondent violated A.RS. § 32-1154(A)(3), namely A.A.C. R4-9-108, due the unacceptably minimal pressure from the therapy jets in the sides of the pool. Exhibit 4 at 9.

5. With regard to both the grout issue and the problems with the stack stone,

Judge Mihalsky found:

The Registrar established that the grout was different colors and mismatched. Respondent did not establish that the mismatched grout was due to Mr. Patterson leaving the pool empty for extended periods of time. Therefore, the Registrar established by a preponderance of the evidence that Respondent violated A.RS. § 32-1154(A)(3), namely A.A.C. R4-9-108, by installing and attempting to repair grout so that it was different colors.

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.” A.R.S. § 32-1154(A)(12) 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." A.R.S. § 32-1154(A) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, (22) “[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.” The Registrar established that Respondent failed to property secure the stone to and left irregular mortar on several stones in the water feature. Therefore, the Registrar established by a preponderance of the evidence that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, by failing to adequately secure stones to or to uniformly apply mortar or cement to the water feature. Id. 6. On May 27, 2015, the Registrar issued a Notice of Acceptance of Administrative Law Judge Decision. See Exhibit 5. 7. On or about December 7, 2015, Complainant filed a claim with the Residential Contractors’ Recovery Fund (“the Fund”) to recover the cost of fixing the problems with the spa and water feature. The claim form indicated that the lowest bid that Complainants had received to correct these items was a $32,340.00 and that Complainants had received $5,000.00 from Respondent’s bond company. See Exhibit 6. 8. The Registrar issued a Notice of Claim for Administrative Payout, finding that Complainant’s actual damages, after deducting the $5,000.00 bond payout and $800.00 still due on the parties’ actual contract, were $18,437.15. See Exhibit 10. Respondent requested a hearing, believing the payout was too high. Complainant did not contest the amount of the administrative payout. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an evidentiary hearing. 9. Hearing was held on March 16, 2016. HEARING EVIDENCE 10. The Corrective Work Order specified that: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9- 108). You are hereby directed to remedy the following violations by the appropriate means: Complaint #1 - Contractor to install second pump to bring jet pressure up to ROC Workmanship standards. Pool Spa jet system was designed for 8 jet heads; however the Respondent's employee had installed 4 additional jet heads. The additional jet heads has change[d] the spa system regarding the amount of pressure coming out of each jet head. Complaint #2 -The brown grout eroded in between tile in the bottom, sides and benches of pool spa. Contractor covered up the areas by installing gray grout throughout the whole pool. Color change was not approved prior to installation. When I asked installers about the color change they told me it was "brown" and it would darken up when it dried. I asked contractor to change grout color back to original color. Original color of grout is Sahara Brown per copy of supplier[‘]s invoice for this project[.]

Complaint #3 - Stacked stone has pieces missing and mortar on stone where i[t] should not be. Contractor did make an attempt to correct but has not completed work and there is still mortar and pieces missing. The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

11. Eric Ulinger testified that he is a claims adjuster for the Fund. He indicated that he reviewed the Corrective Work Order that had been issued regarding the issues in constructing Complainant’s spa and water feature, Judge Mihalsky’s April 24, 2015 Decision regarding the underlying workmanship complaint, and bids submitted by Complainants in calculating Complainants’ actual damages. Because all of the bids contemplated a complete redo of the plumbing of the pool with associated demolition work, Ulinger called the qualifying parties for each of the bidding companies to discuss if such a redo was necessary. Ulinger testified that everyone he spoke to said that the spa had to be redone in order for their company to get involved. Because all three bids were fairly similar as to the scope of repairs, Ulinger chose the lowest bid of $24,237.15 from Shasta Pools & Spas and subtracted both the $5,000.00 Complainants received from the Respondent’s bond company and the $800.00 still due on the parties’ original contract to come up with an administrative payout of $18,437.15. Ulinger testified that Shasta informed him that the only way it would warrant the stack stone was to reapply all the stones.

12. Daniel Magee testified that he had been a licensed contractor in Arizona for 40 years and is considered a “legend” in the pool and spa industry. He believed that Respondent was the victim of a great injustice in this case. He characterized

Complainant as vindictive, the Registrar’s investigators as inept, and vehemently

disagreed with Judge Mihalsky’s Decision regarding the workmanship complaint.

Magee said he was misled by the Registrar into thinking he could not appeal the

Registrar’s final decision regarding the workmanship complaint.

13. Magee said that Complainant’s issues could be solved with a couple

thousand dollars by closing off the four additional jets not called for by the parties’

original contract, replacing some grout, and reapplying a couple of loose stones. Mr.

Magee conceded that in order to have all twelve jets in the spa work with appropriate

water pressure, the plumbing would have to redone and the spa demolished. He

vehemently reargued his point that the parties’ contract called for eight jets, not twelve,

and thus he should not be liable for giving Complainant 12 working spa jets. He said

that he had already given Complainant a heater upgrade worth $2,000.00 in exchange

for his agreement to drop this matter, but Complainant reneged. Magee submitted no

documentation regarding the heater. He said he could obtain Shasta’s commitment to make his recommended fixes to Complainant’s spa because he was a long time dealer for Shasta. 14. Complainant testified that Judge Mihalsky had already decided that the heater was not an issue in the underlying workmanship complainant and told Respondent he would have to pursue any money he claimed Complainant owed him in another forum. Complainant denied owing Respondent any money and said he just wanted to have his spa and water feature fixed to work as intended. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. 2. A.R.S. § 32-1132(A) provides that “[a]n award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. . . .” Respondent bears the burden of proof to establish that the proposed payout from the Fund is incorrect by a preponderance of the evidence.4 3. “A preponderance of the evidence is such proof as convinces the trier of

fact that the contention is more probably true than not.”5 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.”6

4. After review of all the evidence, the Tribunal concludes that the award

provided by the Fund is an accurate reflection of Complainant’s actual damages. The

award appears to properly remedy the workmanship violations for which Respondent

was responsible. Judge Mihalsky already found that Respondent was responsible for

giving Complainant twelve working spa jets. Respondent conceded that in order to

make all twelve jets work properly, the plumbing in the spa had to be redone, resulting

in demolition of the spa. Based upon the evidence provided, the Tribunal finds the

scope of Shasta’s bid is appropriate as to both the spa and the water feature. Complainant is accordingly entitled to a payout from the Fund in the amount of $18,437.15. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainant receive a payout from the Residential Contractors’ Recovery Fund in the amount of $18,437.15. 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.

See 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). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 6 BLACK’S LAW DICTIONARY 1220 (8th ed. 1999). Done this day, April 1, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors