ALJDEC decisions subject to certification as final

2013A-5837-ROC · Registrar of Contractors · 2016-02-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 9, 2016 APPEARANCES: Todd B. Taylor (Complainant) appeared on his own behalf. Dax Watson, Esq. represented Respondent Sonoran Blue Development LLC dba, Rain Dance Companies. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ Hearing was convened to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (Registrar) and if so, whether restitution is the appropriate remedy. Evidence and testimony were presented, and based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made: FINDINGS OF FACT 1. Complainant Todd B. Taylor is the owner/occupant of a residence located at 10003 East Santa Catalina Drive, Scottsdale,, Arizona 85255. 2. Respondent holds Arizona Contractor’s License Nos. 277516, 284860, 277517, 277518, 277519, and 284861. 3. In May 2012, Complainant entered into a contract with Respondent to perform a substantial landscaping and irrigation project at his home, totaling $88,432.90. The contract included the provision of eight date palm trees, the total price for which was $33,280.00. The contract expressly incorporated the terms of Respondent’s Standard Form Agreement, which provided in pertinent part: 10.3 All landscape material and labor are warranted for a period of sixty (60) days, from the date of installation, after contract is paid in full. Contractor is not responsible for warranty repairs after the expiration of the warranty period. . . . . . . 10.10 Owner is responsible for submitting the HOA Requests for Approval and advising Contractor of their response. Contractor is not responsible for any plant material, Hardscape or other masonry not compliant with HOA guidelines. Homeowner is responsible to supply any paint required, for painting newly constructed, or refinished, surfaces.

4. Complainant lives in the Ladera Vista subdivision, which has a homeowner’s association (HOA) and is subject to certain Covenants Conditions & Restrictions (CC&Rs). Complainant provided Respondent the HOA documents and CC&Rs he had received from the previous owner. Those CC&Rs did not prohibit the planting of date palm trees. 5. Complainant agreed that he provided the CC&Rs “in recognition that certain plant materials may be prohibited.” Exhibit A at 1. 6. Respondent ordered nine date palm trees from California. These mature trees have a high mortality rate and need to be replanted within twenty-four hours. Respondent dug all the holes for the date palms and had planted the first two or three palms when it was informed by the HOA president that date palms were not permitted. 7. Respondent stopped its work and immediately informed Complainant of the problem. Respondent agreed to find a temporary location for the palms. Trey Pfeilsticker, Respondent’s qualifying party, testified that it took three or four days before the palms were replanted on his father-in-law’s lot and that this delayed replanting caused the palms significant stress. 8. Complainant later learned that he had not been provided an amendment to the CC&Rs that expressly prohibits palms that may exceed ten feet. 9. On June 5, 2012, the Complainant and Respondent entered into a signed Memorandum of Understanding (MOU) regarding the date palms (Exhibit B), which stated in full: Related to: Purchase of 9 Date Palm Trees, installation disallowed by Ladera Vista HOA Agreed Upon Facts: The customer paid the vendor $33,280.02 to purchase & install 9 date palms. The vendor credited the customer $16,640.00 (half of the above) which was applied toward outstanding invoices. Agreed Upon Resolution: The vendor will maintain the date palms until such time as they can be sold. Once the date palms have been sold, the balance up to the purchase price ($16,640.00) will be refunded to the customer. The actual refund will be determined after disposal of the palms. Limitations: This agreement is not an admission of liability nor a waiver of legal due process for either party.

10. Respondent completed its work. 11. Sometime thereafter, Complainant learned of the existence of Scottsdale City Ordinance §6.1010 Environmentally Sensitive Lands Ordinance. 6.1070(G)(1)(i) which provides that: Plant materials that are not indigenous to the ESL area shall be limited to enclosed yard areas and non-indigenous plants that have the potential of exceeding twenty (20) feet in height are prohibited. A list of indigenous plants is available from the Planning and Development Services Department. Outdoor community recreation facilities, including parks and golf courses shall be allowed turf as specified in Section 6.1070G1.j.

12. The parties agreed that this ordinance, which was in effective when the parties’ contract was entered into, prohibited the planting of date palms on Complainant’s property. 13. Complainant also began noticing problems with his irrigation system. 14. On June 7, 2013, over a year after Respondent completed its work, Complainant sent Respondent a letter requesting that the irrigation problems be fixed and that Respondent reimburse him $16,640.00 for the date palms in view of its violation of the Scottsdale city ordinance. Respondent declined to do so. 15. On December 17, 2013, Complainant filed a complaint with the Registrar alleging that Respondent had planted date palms in violation of city ordinance and performed deficient work on his irrigation system. 16. The Registrar assigned investigator Theodore Gerold to investigate the complaint. 17. Gerold scheduled a jobsite inspection for March 3, 2015, which both Complainant and Respondent attended. Gerold testified that he substantiated a violation of city ordinance against Respondent after reviewing the written documentation between the parties regarding the date palms and determined that Respondent should have known that date palms were prohibited and also had had more than enough time to sell the date palms. He declined to substantiate workmanship problems with Complainant’s irrigation system given that Complainant had already paid another licensed contractor to correct the issues before the jobsite inspection. 18. On April 7, 2015, Gerold sent Respondent a Directive from the Registrar. The Directive stated in pertinent part as follows: 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: 1) In this inspector’s opinion, Respondent did not adhere to City of Scottsdale code and or ordinance requirements regarding the delivery of the Date Palm trees. Respondent should reimburse Complainant the full amount for the Date Palm trees.

Note: Per ARS32-1155C.2, No action is required of the Respondent for any of the irrigation problems and or the dead and or dying plants and trees. Complainant hired another contractor to work on these deficiencies.

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

19. The Directive contained a completion date of April 22, 2015, at 5:00 pm. During the time period specified in the Directive, the parties did not reach a financial settlement. Gerold therefore forwarded the file to the Registrar’s Legal Department for review. Gerold testified that the Directive suggested restitution because he could see no other remedy for Complainant since the date palms could not be planted on his property. 20. On July 8, 2015, the Registrar issued Respondent a Citation. That Citation contained two charges. Charge 1 referenced “Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect that 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.” Charge 2 specified a violation of A.R.S. § 32-1154(A)(22), namely “[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 written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive.” 21. Trey Pfeilsticker agreed that Respondent violated the Scottsdale city ordinance referenced above. He explained that Respondent worked in many cities and that in its experience HOA CC&Rs are at least as restrictive if not more restrictive than city ordinances and that is why Respondent requires that its customers provide the operative CC&Rs. He noted that had Complainant provided the proper CC&Rs, the issue with the date palms would not have occurred. He disputed that Respondent’s prior work in the city of Scottsdale should have made him aware of the city’s residential prohibition against date palms, noting that Complainant was Respondent’s first customer to ever request date palms be planted on his property. 22. Pfeilsticker maintained that Respondent had already taken responsibility for its ordinance violation by crediting Complainant fifty percent of the cost of the date palms and replanting the date palms in another location. He noted that the palms had taken significant time to return to a saleable condition after the stress involved with their replanting and that even now, the crowns of the trees had just started to emerge. He said he was still willing to attempt to sell the palms, but that advertisements on craigslist from fall 2015 that priced six palms at $425.00 a piece had generated no interest. He stated that three date palm trees had died. He denied disposing of any of the date palms in some other way and believed it was in Respondent’s interest to honor the parties’ MOU. He requested that the Tribunal not order any further restitution for the date palms. 23. Complainant testified as to his emphatic belief that Respondent should accept full responsibility for the HOA disallowing the date palms in view of the ordinance. He noted that Respondent had not honored the MOU because it had not sold the date palms and had no proof that three of the date palms had since died. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (Rev. 6th ed. 1990). 3. Respondent conceded that it failed it failed to comply with Scottsdale City ordinance §6.1070(G)(1)(i). Undisputed credible evidence in the record and confirmed by Gerold at hearing established that this failure of compliance was prejudicial to Complainant. Accordingly, Complainant has met his burden to prove a violation of A.R.S. § 32-1154(A)(2).[1] 4. An A.R.S. § 32-1154(A)(22) violation is present here given that Respondent did not reimburse Complainant for the remaining costs associated with the disallowed date palms. 5. The question then becomes what is the appropriate remedy for these violations in the context of this proceeding against Respondent’s licenses. The Tribunal has authority to order restitution,[2] but concludes that such an order is not warranted on the present facts. Both parties had a part to play in the situation that led to the disallowing of the date palms. Respondent failed to comply with the city ordinance citing ignorance and Complainant unwittingly provided outdated CC&Rs. In recognizing that each had comparative fault in agreeing to landscape with date palms, the parties negotiated an MOU, which appears to provide an appropriate resolution of the matter. Respondent offered credible evidence as to why it has not been able to sell the remaining date palms and there is no evidence it has failed to act in good faith. The fact that Complainant may now regret entering into the MOU is not a basis for the Registrar’s involvement in what is purely a money dispute. RECOMMENDED ORDER Based on the foregoing, it is recommended that no discipline be imposed on Respondent’s licenses and that Complainant’s complaint 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 shall be forty (40) days from the date of certification. Done this day, February 29, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] 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 the state or any political subdivision of the state in any material respect that 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.” [2] A.R.S. 32-1156.01 provides that ”[a]fter a hearing pursuant to this article, an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.”

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