ALJDEC decisions subject to certification as final

2014A-2729-ROC · Registrar of Contractors · 2015-04-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 17, 2015, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Seth T. Hargraves, Esq., Assistant Attorney General; Arizona Custom Pools, Inc. (“Respondent”) was represented by Daniel Joseph Magee (“Mr. Magee”), its President and Qualifying Party. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On October 4, 1999, the Registrar issued License No. B-4.149317-R for General Residential Engineering Contracting to Respondent. Mr. Magee is listed as Respondent’s Qualifying Party and President. 2. The Registrar on its own motion issued a Citation and Complaint against Respondent’s License No. B-4.149317-R, charging in four counts violations of various statutes as cause to discipline Respondent’s license, as follows: 1. Count One: Respondent violated A.R.S. § 32-1154(A)(3),[1] namely, A.A.C. R4-9-108,[2] in its performance of a contract with Kenneth Shawn Patterson (“Mr. Patterson”) to build a therapy pool at Mr. Patterson’s residence located at 2976 E. Pistachio Street in Gilbert, Arizona. 2. Count Two: Respondent violated A.R.S. § 32-1154(A)(12)[3] by not including in its contract with Mr. Patterson all of the elements that A.R.S. § 32-1158(B) requires.[4] 3. Count Three: Respondent violated A.R.S. § 32-1154(A)(12) by not including its license number preceded by the acronym, “ROC,” on the business card that was given to Mr. Patterson, as A.R.S. § 32- 1124(B) requires.[5] 4. Count Four: Respondent violated A.R.S. § 32-1154(A)(22)[6] by failing to comply with the directive that the Registrar issued in Mr. Patterson’s complaint. 3. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 4. An evidentiary hearing was held on April 17, 2015. The Registrar submitted nine exhibits and presented the testimony of two witnesses: (1) Mr. Patterson; and (2) Randy Cason, the Registrar’s investigator who was assigned to investigate Mr. Patterson’s formal complaint. Respondent submitted two exhibits and presented Mr. Magee’s testimony. Hearing Evidence Counts Two and Three 5. Mr. Magee acknowledged that Respondent’s contract with Mr. Patterson did not include all of the terms that A.R.S. § 32-1158(B) requires. Respondent submitted its revised form contract.[7] However, the form contract did not contain the Registrar’s public website address. 6. Mr. Magee also acknowledged that the business card that he gave to Mr. Patterson did not include Respondent’s license number, preceded by the acronym, ROC. Respondent submitted Mr. Magee’s current business card, which contains Respondent’s license number, preceded by the acronym, ROC.[8] Counts One and Four 7. On or about June 7, 2012, Mr. Patterson signed to accept Respondent’s proposal to construct a therapeutic pool at his residence for a total contract price of $19,000.00. 8. The parties developed a dispute about certain aspects of the construction of the pool. Mr. Magee on behalf of Respondent requested that the Registrar conduct a courtesy inspection through the Building Confidence Program (“BCP”). 9. On or about July 26, 2013, the Registrar’s Investigator Ted Gerold conducted a courtesy inspection. As a result of the courtesy inspection, Investigator Gerald issued a BCP notice that opined that Respondent’s workmanship on certain items of construction did not meet the Registrar’s standards, in relevant part as follows: (1) The therapy jets had very little pressure and did not function properly; (2) The grout toward the deep end of the pool was mismatched; and (3) Stones were missing and mortar was visible where it should not appear on the stacked stone.[9] 10. On or about December 11, 2013, Mr. Patterson filed a formal complaint with the Registrar. According to the complaint, Mr. Patterson had paid Respondent $18,200.00 of the contract price and still owed $800.00. 11. Mr. Patterson’s formal complaint alleged the same three items of workmanship as the request for BCP courtesy inspection. In addition, Mr. Patterson alleged that the pool heater was starting to leak water. The Registrar assigned the formal complaint to Investigator Cason for investigation. 12. On or about February 20, 2015, Investigator Cason scheduled a jobsite inspection. When Investigator Cason arrived, however, Mr. Patterson had drained the therapeutic pool because he said that water from the leaking pool heater was starting to run into his garage. Investigator Cason explained that Investigator Gerold’s BCP inspections were not the same as a formal inspection and that the pool needed to be operational for him to verify Mr. Patterson’s complaints.[10] 13. On or about March 13, 2014, Investigator Cason performed a formal jobsite inspection of Mr. Patterson’s therapy pool. Investigator Cason was able to perform the inspection because Mr. Patterson had filled the pool. Investigator Cason’s jobsite inspection notes state that no one appeared for Respondent at the March 13, 2014 jobsite inspection, but that it had repaired the pool heater leak prior to the inspection.[11] 14. Over the next six weeks, Investigator Cason discussed with and obtained additional information from both parties about the workmanship deficiencies that he had observed at the March 13, 2014 jobsite inspection. On or about May 1, 2014, Investigator Cason on behalf of the Registrar issued a directive to Respondent to remedy by appropriate means on or before May 20, 2014 the following deficient workmanship: (1) The low pressure in the therapy jets; (2) The mismatched grout; and (3) The loose stones and misplaced mortar on the stacked stone water feature.[12] 15. Mr. Magee stated that at Mr. Patterson’s request, Respondent had upgraded the pool heater, but that Mr. Patterson had refused to pay Respondent what was owed for the pool and that Mr. Patterson had offered to drop the complaint if Respondent did not pursue its claim for payment. 16. Mr. Patterson submitted a notarized statement that he had paid Respondent $17,200.00 in cash and that with a $1,000.00 credit for the salt system that was not installed by mutual consent, he only owed Respondent $800.00.[13] Mr. Patterson testified that he paid Respondent cash at Mr. Magee’s request. The Pressure in the Therapy Jets (Item No. 1 on the Registrar’s Directive) 17. Investigator Cason testified that at his March 13, 2014 jobsite inspection, the therapy jets along the sides of the pool had minimal pressure. Although the jets in the bottom of the pool had good pressure, the jets in the sides of the pool did not meet the Registrar’s workmanship standards. 18. The parties’ contract specified eight therapy jets and one multi- speed motor.[14] 19. The pool as constructed has twelve therapy jets, ten jets in two levels along the sides of the pool and two jets in the bottom of the pool. 20. Respondent’s schematic that was attached to Mr. Patterson’s complaint does not show the number or location of therapy jets.[15] 21. Mr. Patterson explained that he has had nineteen surgeries and wanted to use the pool for his therapy. Mr. Patterson testified that Respondent built the pool according to his drawing, which showed the therapy jets that were constructed. Mr. Patterson’s drawing was not submitted. 22. Mr. Patterson testified that he was concerned that the single pump would not have enough power to cause the therapy jets to have sufficient pressure and that he offered to buy a second pump. Mr. Patterson testified that Mr. Magee guaranteed that the pump would have enough power and stated that if it did not, Respondent would install an additional pump at no cost to Mr. Patterson. 23. Mr. Magee testified that he recently fired Respondent’s plumber because he was doing jobs on the side. Mr. Magee testified that he learned that the plumber had made a side deal with Mr. Patterson to install additional therapy jets. Mr. Magee testified that the motor did not have sufficient power for the additional therapy jets. 24. Investigator Cason testified that Mr. Magee said that the plumber was Respondent’s employee, not an independent subcontractor. Mr. Magee did not dispute this testimony. 25. Investigator Cason acknowledged that the pool did have a bypass from the therapy jets and that the bypass had a valve for the upper and lower jets on the side of the pool. Investigator Cason also acknowledged that a dirty filter could restrict air flow. Inspector Cason testified that although he did not inspect the filter, he believed that Respondent’s construction caused the poor pressure in the therapy jets on the sides of the pool. The Mismatched Grout (Item No. 2 on the Registrar’s Directive) 26. The parties’ contract did not specify a grout color. 27. Investigator Cason testified that Mr. Patterson’s pool definitely had different grout colors throughout, which did not comply with the Registrar’s workmanship standards. 28. Mr. Patterson testified that originally the grout that Respondent installed between the tiles was Sahara Brown and that although Respondent’s supplier, Noble Tile, would not release its invoice, the saleswoman agreed to write down on an invoice what Respondent had purchased for the job.[16] Mr. Patterson testified that Respondent used excessive thinset when it installed the pool tiles and that the thinset could be seen between the tiles. 29. Mr. Patterson testified that after the BCP inspection, Respondent performed corrective action on the mismatched grout, but that the grout it used was grey. Mr. Patterson testified that currently the grout was three mismatched colors. 30. Mr. Magee testified that Respondent only uses dark and light grey grout, depending on the color of the tile. Mr. Magee denied that Respondent originally installed brown grout and testified that anyone could have created the Noble Tile invoice. 31. Mr. Magee testified that the inconsistent color of the grout was due to the effect of sun and weather after Mr. Patterson drained the pool and left it for long periods without water in it. 32. Although Inspector Cason acknowledged that not having water in the pool could cause the grout to dry out and discolor, he testified that he was only aware of once at the February 20, 2014 jobsite when Mr. Patterson drained the pool to avoid flooding his garage. Investigator Cason testified that he believed that Respondent was responsible for the mismatched grout. The Loose Stones and Misplaced Mortar on the Stacked Stone Water Feature (Item 3 on the Registrar’s Directive)

33. The parties’ contract specified a “stacked face” masonry water feature near the pool.[17] 34. Investigator Cason testified that stacked stone may be “dry stacked,” meaning that no mortar was visible, or “wet stacked,” meaning that mortar or cement was visible. Regardless of the construction style, stone should not be loose and the appearance should be consistent. If the masonry was dry stacked, no mortar or concrete should be visible and if the masonry was wet stacked, the mortar or concrete should be consistently present over the feature. 35. Investigator Cason testified that Mr. Patterson showed him areas on the right side of the water feature where stones had fallen out and that a small stone fell out of the water feature while he was there. Investigator Cason testified that stones should be secured to masonry features. 36. Investigator Cason testified that a few but not all the stones had mortar on them, but that the mortar was not uniform over the water feature. Investigator Cason testified regardless of whether a masonry structure was wet or dry stacked, it should be uniform. 37. Mr. Magee testified that Mr. Patterson had chosen very irregularly shaped stone veneer at Arizona Stone and that the water feature looked exactly like Arizona Stone’s display. Mr. Magee testified that the only way that Respondent could make the stones tighter was to cut individual stones. 38. Mr. Magee speculated that Mr. Patterson had loosened the stones by inserting a screwdriver into the water feature. 39. Inspector Cason testified that although Respondent had made attempts to repair the stacked stone water feature, it still did not comply with the Registrar’s workmanship standards. If contractors constructed dry stacked masonry features, they need to fit the stones together like a puzzle. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[18] 2. The Registrar bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[19] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[20] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[21] 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.”[22] 4. Mr. Magee acknowledged that Respondent violated A.R.S. § 32- 1154(A)(12), namely A.R.S. § 32-1124(B), by not including its license number preceded by the acronym ROC on the business card that he gave to Mr. Patterson and by not including the terms that A.R.S. § 32- 1158(B) required in its contract with Mr. Patterson. Mr. Patterson established that he has changed Respondent’s business cards and form contract to remedy the violations, with the exception that the form contract does not include the Registrar’s website address. 5. 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.[23] 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, due the unacceptably minimal pressure from the therapy jets in the sides of the pool. 6. 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.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, by installing and attempting to repair grout so that it was different colors. 7. 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. 8. The Registrar also established that Respondent failed to perform appropriate corrective work to comply with the three deficiencies noted on the Registrar’s May 1, 2014 directive. Therefore, the Registrar established that Respondent violated A.R.S. § 32- 1154(A)(22). 9. If a licensed contractor performs work, it must comply with the Registrar’s standards. Mr. Patterson’s alleged failure to pay Respondent the full contract price is a civil matter between Mr. Patterson and Respondent, not an excuse or defense to Respondent’s failures to meet the Registrar’s workmanship standards. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the order in this matter, License No. B-4.149317-R of Respondent Arizona Custom Pools, Inc. shall be suspended for a period of three days. It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(D).

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s Order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty. 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 five days from the date of that certification. Done this day, April 24, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] 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.” [2] 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.” [3] 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.” [4] A.R.S. § 32-1158(B) provides that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 must be in writing and must include the following minimum terms: 1. The name of the contractor and the contractor’s business address and the license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . . Emphasis added. [5] A.R.S. § 32-1124(B) requires that licensed contractors include their license number “preceded by the acronym ‘ROC’” on “all written bids submitted by the licensee and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.” [6] A.R.S. § 32-1154(A)(22) includes 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.” [7] See Respondent’s Exhibit A. [8] See Respondent’s Exhibit B. [9] See id. At 5. [10] See the Registrar’s Exhibit 3. [11] See the Registrar’s Exhibit 4 at 2. [12] See the Registrar’s Exhibit 7. [13] See the Registrar’s Exhibit 8. [14] See the Registrar’s Exhibit 2 at 14, Item Nos. 17 and 21. [15] See the Registrar’s Exhibit 2 at 19. [16] See the Registrar’s Exhibit 5 at 2. [17] See the Registrar’s Exhibit 2 at 13, Item Nos. 49. [18] See A.R.S. § 32-1154(A). [19] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [20] See A.A.C. R2-19-119(B)(2). [21] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [22] Black’s Law Dictionary at page 1220 (8th ed. 1999). [23] See A.R.S. § 32-1127.

-----------------------

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