ALJDEC decisions subject to certification as final

2014A-4875-ROC-RF · Registrar of Contractors · 2016-07-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 5, 2016 APPEARANCES: Complainant Melvin R. Purchase appeared and represented himself. Monster Pool Company LLC (“Respondent”) appeared through its authorized representative, member and qualifying party, William Parr. The Arizona Registrar of Contractors was represented by Assistant Attorney General John Tellier. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ FINDINGS OF FACT Background and Procedure 1. The Arizona Registrar of Contractors (“the Registrar”) issued License No. 187544 to Respondent. 2. On December 3, 2014, the Registrar received a Complaint against Respondent from Complainant regarding Respondent’s installation of a new pool in his backyard (“the workmanship complaint”). See Exhibit 1. 3. On December 27, 2014, after an inspection, Stephen Lawton, an investigator with the Registrar issued a Directive containing four items of substantiated poor workmanship by Respondent. See Exhibit 2.

4. As a result of the Complaint, on May 15, 2015, the Registrar issued a Citation against Respondent charging a possible violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.[1] See Exhibit 3. 5. Respondent failed to file a timely answer to the Citation. On December 21, 2015, the Registrar issued a Default Decision and Order finding that Respondent had violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. See Exhibit 4. Pursuant to the Order, the Registrar suspended Respondent’s license for one day. See id. 6. On March 21, 2016, Complainant filed a claim with the Residential Contractors’ Recovery Fund (“the Fund”) to recover the cost of fixing the issues with his pool. The claim form indicated that the lowest bid that Complainant had received to correct these items was a $29,984.00. See Exhibit 5. 7. The Registrar issued a Notice of Claim for Administrative Payout, finding that Complainants’ actual damages, were $29,984.00. Respondent requested a hearing, believing the payout was too high. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an evidentiary hearing. 8. Hearing was held on July 5, 2016, at 1:00 pm. Hearing Evidence 9. The Directive specified that: 1. Decking has chipped travertine stone paver at east end of the pool. Correct by appropriate means. 2. Plywood forms were not removed before decking was installed. Correct by appropriate means. 3. Pool is short in width by 4.5 inches. Correct by appropriate means. 4. Tile imbedded in the plaster with grout shows plaster on the grout. Correct by appropriate means.

10. Douglas Ulmer, claims adjuster for the Fund, testified that he reviewed the Directive that had been issued regarding the issues in Complainant’s matter, the Default Decision and Order, the parties’ original contract and payment history, and bids submitted by Complainant in calculating Complainant’s actual damages. 11. Of the three bids provided, Ulmer indicated that he utilized the lowest bid of $29,984.00 from Desert Blue Custom Pools, Inc. because it covered the scope of the issued Directive including demolition of north wall to widen the pool, landscaping to repair any damage done to Complainant’s backyard as a result of the repair and the removal of any debris. See Exhibit 7. Ulmer did not use a bid by Thunderbird Pools & Spas (“Thunderbird Pools”) because it called for a complete redo of the pool for $40,000.00 and was therefore excessive. 12. Ulmer agreed that the purpose of the Fund was to put the Complainant back in the position the Complainant would have been if Respondent had done work that met the workmanship standards in the first place. He said that Complainant was not entitled to an upgrade in material used on the interior of the pool. 13. Ulmer denied any prior relationship with Complainant and indicated he began working at the Registrar after Complainant left the Registrar’s employment. Ulmer was aware that Complainant had previously worked as an employee of the Registrar. He confirmed that he followed the ordinary practice of the Registrar when processing the claim and did not give Complainant any preferential treatment. 14. William Parr, the owner of and qualifying party of Respondent, testified that he understood there were problems with the installation of Complainant’s pool that needed to be fixed, but believed the bids Complainant submitted were grossly excessive. In particular, he believed that the bid used as the basis for the administrative payout was excessive because work not called for by the directive (moving the pool light and pool drain, moving/demolishing the pool bench, and replacing far more tile and deck coping than was necessary). Parr viewed the use of Quartzscapes plaster on the pool interior as an upgrade. He also disputed the need for any landscaping work during the repair. 15. Parr also opined that the charges included in the bid were more than Respondent would charge for the same work. He submitted an invoice purporting to show that Respondent could do the repair work required on Complainant’s pool for $6,280.00. See Exhibit A. 16. Parr also submitted a revised bid, from Cole Workman of Thunderbird Pools dated the day of the hearing in this matter and totaling $10,402.00. See Exhibit B. Workman did not testify in this matter so it is unclear why Thunderbird Pools bid changed so dramatically. 17. Complainant testified that when Workman first came to his house he indicated Thunderbird Pools would not take responsibility for any work done on the pool unless it was completely redone. 18. Parr said that he asked Workman for a revised bid because he believed that the administrative payout was too high. 19. Workman wrote back to “Billy” that the revised bid was what he “came up with.” Exhibit B. The Tribunal finds that Workman’s updated bid on behalf of Thunderbird Pools is not a true reflection of the market cost of repair. 20. Complainant testified he was told that once the pool was widened, the entire interior of the pool would have to be redone. He also indicated that there was no way to widen the pool without demolishing the pool bench. Complainant opined that the lights and drain had to be relocated to ensure that they remained in the center of the pool as anticipated. He further noted that all of the pool tile would require replacement if the existing tile could not be matched. Finally, Complainant said he was told that plaster was no longer used and Quartzscapes was the low-end product now used for pool interiors. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. 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.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] 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.”[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. In the absence of contemporaneous market value bids that suggest otherwise, the award is in fact appropriate. Complainant is not required to utilize Respondent for the repair work, nor must he utilize a bid revised after friendly discussions with the Respondent. 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 $29,984.00. 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, July 14, 2016.

/s/ Suzanne Marwil 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.” 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.” [2] 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). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] Black’s Law Dictionary 1220 (8th ed. 1999).

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