ALJDEC decisions subject to certification as final

2015A-1160-ROC-rf · Registrar of Contractors · 2016-08-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 11, 2016 APPEARANCES: Complainant Thomas T. Panchesin appeared on his own behalf. William Briggs, Qualifying Party, appeared on behalf of Respondent Progressive Pools and Spas LLC. The Arizona Registrar of Contractors ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ Respondent challenges a proposed payout by the Residential Contractors’ Recovery Fund (the Fund). The Fund has issued notice that it intends to make a payout to Complainant for the amount of $6,865.9. Respondent requested a hearing, challenging the proposed payout amount as being too high. Based upon the record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order for payout in the amount of $350.00. FINDINGS OF FACT 1. Respondent was the holder of License No. 180636 issued by the Registrar of Contractors (the Registrar). 2. On or about January 16, 2014, Complainant entered into a contract with Respondent to perform work on Complaint’s spa, specifically as follows: 1. Pressure test all return lines. Locate and mark damaged returns/jets. 2. Remove tile on outer spa wall. Install new tile of customer’s choice (3”x3”, NT 336 Cobalt, and Mosaic style, DGS 836 Cobalt), grout, and waterproof membrane when all structural work is completed. 3. Access through gunite leaking return(s) fixtures. Repair leaks. Re-apply new gunite and seal wall. Note: If interior of spa (ie tile, or finish), through our actions, or inactions, is the cause of future leakage, in the spa present condition, Progressive Pools and Spas. Will chip out and remove interior mossaic tile and waterline tile. Remove and replace returns and drain covers. Epoxy all access points. Install new waterproof membrane, waterline tile, and mosaic tile throughout the entire interior of spa. This includes re-plastering, utilizing a blue tint dye. Any damages that occurs by acts of god, other people, or naturally, will void this guarantee. Progressive Pools and Spas will complete this work at 50% below current estimate of $3,250.00. If the cost of materials, labor, etc. have increased, that would have to be taken in consideration.

3. On or about March 13, 2015, Complainant filed a complaint alleging poor workmanship by Respondent. Upon investigation, the Registrar issued a Directive, on or about May 7, 2015, which provided as follows: After investigations, 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. Spa is leaking after repairs. Assess the problem of the leaks. Correct by Appropriate means per agreement between both parties.

4. Respondent did not complete the work required in the Directive. 5. On or about July 10, 2015, the Registrar issued a Citation to Respondent alleging possible violations of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3), and A.R.S. § 32-1154(A)(22). 6. On or about January 20, 2016, Respondent’s license was revoked after a default finding of poor workmanship and failure to comply with a directive from the Registrar by Respondent in relation to Complainant’s complaint. 7. Complainant made a claim to the Fund on March 28, 2016. With the claim, Complainant submitted an April 17, 2014 invoice from American Leak Detection for $350.00 indicating “[a] partial detection was done on the spa. Jet line was tested and dye testing was done. Gaps were found around all of the jets. All patched with epoxy. No charge for epoxy.” Complainant also submitted a bid totaling $6,190.00 from Patio Pools & Spas, a licensed contractor, to perform the following work: Re-finishing interior of spa to include removal and disposal of existing interior finish and waterline tile, pressure testing of existing spa plumbing, repairing plumbing and leaking areas inside of gunite wall, structural steel stitching as required. Thoroseal coating of interior of spa, installing new Pebble Sheen interior and new waterline tile in our choice of standard selections. Includes start up of pool equipment once spa is filled and all necessary chemicals to balance new water. This will stop the leaking that is occurring in the spa.

8. Based on the invoice and estimate, the Fund determined that Complainant was eligible for payout from the Fund in the amount of $6,865.90. 9. Respondent objected to the proposed payout. Mr. Briggs testified at hearing that the original work performed by Respondent was only to the exterior of the spa and did not include any work in the interior of the spa. He also noted that the original contract included an additional cost if any work needed to be performed on the interior of the spa. Mr. Briggs also asserted that the source of the leaking had not been determined and could not be attributed to any work performed by Respondent. Further Mr. Briggs presented pictures that show a bubbler in the spa runs over the side of the spa and may be the cause of the apparent leaks on the exterior of the spa. Mr. Briggs stated that the scope of the initial contract and the bid submitted with the claim to the Fund were totally different. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action. Utah Construction Company v. Berg et al., 68 Ariz. 285, 205 P.2d 367 (1949); A.A.C. R2-19- 119(B). Further, the standard of proof at hearing is by preponderance of the evidence. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2- 19-119(A). The Notice of Claim for Administrative Payout states that Complainant bears the burden of proof to show entitlement to any amount other than that in the Notice. Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that the proposed payout amount is not reasonable and proper. 2. Complainant is an injured person within the definition in A.R.S. § 32-1131(3) and is, therefore, entitled to recovery from the Fund. 3. According to A.R.S. § 32-1132(A), an award from the Fund is limited to “actual damages suffered by the complainant as a direct result of the contractor’s violation . . .,” not to exceed the cost of repair or replacement. “Actual damages” are those that will put the injured party in the position in which he was before he was injured. United States Fidelity & Guaranty Co. v. Davis, 3 Ariz. App. 259, 263, 413 P.2d 590, 594 (1966). 4. Under the facts and circumstances of this case, the Fund is empowered to determine and award, based on actual damages, an appropriate payment to Complainant pursuant to A.R.S. § 32-1132 and A.R.S. § 32-1154(F). 5. The Directive in this matter ordered Respondent to assess the problem of the leaks. The $350.00 invoice from American Leak Detection was consistent with the Directive in that respect. However, the invoice indicated that gaps were found around all of the jets and those gaps were patched with epoxy. Nothing indicated the source of additional leaks, much less that, if they existed, additional leaks were attributable to Respondent’s work on the spa. It is further noted that if additional work needed to be done on the interior of the spa to address leaks, the original contract included a provision that the work would be done by Respondent at half the cost, therefore, Complainant would still have an outstanding balance on the underlying contract that would have been deducted from any payout from the Fund if such a payout were appropriate. 6. The evidence of record supports an award to Complainant in the amount of $350.00, all of which shall be chargeable against Respondent and persons on the license as set forth in A.R.S. § 32- 1139(B). RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors make payment from the Residential Contractors’ Recovery Fund to Complainant in the amount of $350.00. 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 Decision will be 30 days from the date of that certification. Done this day, August 1, 2016.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors -----------------------

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