ALJDEC decisions subject to certification as final

2016A-4970-CHC-ROC · Registrar of Contractors · 2017-05-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Donald Gordon Hobson,

COMPLAINANT,

v.

Colorado River Pools & Spas LLC

DBA: Colorado River Landscaping Pools & Spas,

License No: 277560, 234633, 245419, 283236, 276755

RESPONDENT.

No. 2016A-4970-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: Thursday, April 27, 2017 at 8:30am

VIDEO-CONFERENCE APPEARANCES: Don Hobson (“Complainant”); Matthew Mansfield (“Complainant’s Counsel”); Julio Navarte (“Respondent”); T’Shura-Ann Elias (“Respondent’s Counsel”); and Cliff Corlett (“Investigator Corlett” for the Registrar of Contractors (“ROC”)).

TELEPHONIC APPEARANCE: Shane Tucker (“Witness1” for Respondent); Debbie Hurns (“Witness2” for Respondent); and James Wilson (“Witness3” for Respondent).

NON-TESTIFYING ATTENDEE: Barbara Hood (“Wife” of Complainant).

ADMINISTRATIVE LAW JUDGE: Linda Marie Brown

_____________________________________________________________________

The hearing was convened to determine whether Respondent violated the charged provisions A.R.S. §§ 32-1154(A)(3) and 32-1154(A)(22) as alleged by Complainant and as cited by the Registrar. The Arizona Rules of Evidence do not apply in these proceedings, therefore any relevant testimony and evidence may be admitted. Respondent entered Exhibits labeled R1 through R42, with Complainant reserving his right to object during the proceeding to any exhibit that may be deemed irrelevant. Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

Complainant is the owner/occupant of a residence located at 2053 Havasupai Drive, Bullhead City, Arizona 86442.

Respondent is the holder of Arizona Contractor License Nos. B-5.277560-K, CR21.234633-D, CR21.245419-D, CR31.283236-D, and R-9.276755-R issued by the Registrar. Respondent’s License is current on April 27, 2017.

On or about December 12, 2016, Complainant submitted his Complaint with the Registrar alleging against Respondent six (6) complained of items to include poor workmanship issues.

Complainant and Respondent executed a Swimming Pool/Spa Contract on February 15, 2015, for a total of $32,800.00 for Respondent to begin excavation and installation of an outdoor fiberglass pool on approximately March 2, 2015. Complete specifications and description of work and materials were:

Pool Size: 14 x 30 x 6; Name & Model: Desert Springs.

The construction and equipment agreed to, among other things, Builder to provide Plans & Permits & Excavation and Owner responsible for Dirt Removal.

“Due to the inability of either Contractor or Owner to anticipate unusual sub-surface conditions, it is hereby mutually agreed that in the event the Contractor, in excavating the location of said swimming pool shall encounter caliche, subterranean water, granite or other like and unusual sub-surface conditions, mass concrete, large boulders of the like, or shall be required to move piping, cesspools or the like, or that said location should consist of low density fill, expansive soil or soil of inadequate bearing capacity or should contain underground electrical conduit or other obstruction, or if additional work or materials are required to complete the contract, or if blasting or jackhammer work is required Owner agrees to pay for these additional items as an additional amount to the contract price.”

Complainant indicated on his Complaint that work commenced on April 6, 2015, and concluded on June 18, 2015. Complainant provided the following payment receipts made payable to Colorado River Landscape as follows: February 12, 2015, check number 2064 in the amount of $16,400.00; April 14, 2015, check no. 2093 in the amount of $9,500.00; and May 12, 2015, check no. 2108 in the amount of $2,500.00.

On December 29, 2016, Respondent filed its reply to Complaint asserting Respondent did not find anything wrong with their workmanship and it is not responsible for movement of the ground.

Investigator Corlett was assigned to investigate the six (6) item Complaint, and performed a Jobsite Inspection on January 6, 2017. Following his inspection, a Directive was issued on January 23, 2017, setting forth the following substantiated violations to be remedied no later than February 10, 2017:

Complaint Item 1: 1-inch wide crack has developed in pool deck that Respondent repaired as a result of case 2015-2827.

Investigator’s Observation: “Complainant has filled all the concrete control joints and perimeter joint prior to inspection so width of cracks could not be seen or measured. The pool shell is out of level in excess of + or – 1⁄2 inch allowed by NPSI standards indicating possible expansive soils which could lift the pool shell and concrete decks. Testing methods exist to determine the suitability/stability of soil sites and if a contractor chooses not to use them then they assume the responsibility of accepting the soil conditions for the installation of their improvements. RESPONDENT SHOULD DETERMINE CAUSE AND CORRECT BY APPROPRIATE METHODS.

Governing Rule: A.R.S. §32-1154-A (3) (namely A.A.C. 4-9-108: Workmanship Standards for Licensed Contractors.

Complaint Item 3: Ball valve on auto fill does not shut off completely.

Investigator’s Observation: Contractor should repair or replace any leaking faucet or valve unless due to owner negligence. No negligence noted.

Governing Rule: A.R.S. §32-1154-A (3) (namely A.A.C. 4-9-108: Workmanship Standards for Licensed Contractors.

Complaint Item 5: fiberglass pool installed out of level and getting worse

Investigator’s Observation: Waterline reveal indicates that the pool is out of level in excess of the + or – 1⁄2-inch allowed by the NPSI Standards.

Governing Rule: A.R.S. §32-1154-A (3) (namely A.A.C. 4-9-108: Workmanship Standards for Licensed Contractors.

Complaint Item 6: Baja shelf is sinking and creating more out of level appearance. Pool needs to be reset.

Investigator’s Observation: Waterline reveal indicates that the pool shell is out of level in excess of + or – 1/2inch allowed by the NPSI Standards. RESPONDENT SHOULD DETERMINE CAUSE AND CORRECT BY APPROPRIATE METHODS.

Governing Rule: A.R.S. §32-1154-A(3) (namely A.A.C. 4-9-108: Workmanship Standards for Licensed Contractors.

Investigator Corlett performed a Compliance Inspection on February 22, 2017, and noted, “Compliance Jobsite General Notes: E-mails between parties indicate that there has been discussions on possible ways to resolve the issues, however the Respondent has not provided the Registrar with any written proof that the items in the “Written Directive” dated 1/19/17 have not [sic] been resolved.” “Compliance Findings: Respondent is not in compliance. Sending case to ROC legal department.”

On February 23, 2017, a Citation was issued citing the following: Charge 1: A violation of Rule 4-9-108, titled “Minimum Construction Standards,” in the Arizona Administrative Code, and thereby of A.R.S. §32-1154(A)(3); and Charge 2: A violation of A.R.S. 32-1154(A)(22) “Failure 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 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.”

Respondent submitted its Written Answer to the Citation and Complaint by way of counsel on March 6, 2017, denying any violation and requesting a dismissal.

A Notice of Hearing was sent to the parties on December 9, 2016, that a hearing is scheduled for April 27, 2017, on the charges made in the Citation and Complaint to be held before the Office of Administrative Hearings.

HEARING EVIDENCE

Complainant’s Counsel provided his Opening Statement to which he stated Respondent was contracted to install a new fiberglass pool, and that he will provide testimony and evidence at this hearing that Respondent should be disciplined for poor workmanship; specifically, the installation of the fiberglass pools off level wherein one side is higher than the other and water flows over, and further asserted that Respondent was directed by the Registrar to remedy but none of the items have been addressed.

Respondent’s Counsel waived its Opening Statement, to allow more time to call Respondent for further testimony.

COMPLAINANT’S TESTIMONY

Complainant was called as the first witness and testified that installation of the pool began sometime in March 2015.

Complainant testified that on March 2, 2015, he initially purchased a 14’W x 30’L x 6’D fiberglass pool but that pool dimensions were amended on March 26, 2015, to install 11’8”W x 25’1”L x 5’7”D.

Complainant referenced Respondent’s Exhibit R004, titled, Swimming Pool Contract between Complainant and Respondent, and discussed the terms and conditions specifically who bears costs during excavation if soil testing is required to which he responded, Consumer. He testified that during the excavation, Respondent never notified him that a soil test should be conducted.

Complainant testified regarding Respondent’s Exhibit R007, titled, Revised Site Plan for Complainant’s pool (larger pool requested to be installed – 8ft setback from septic tank/leech field).

Complainant provided testimony concerning the leach line from the pool that Respondent submitted to the county for approval, and asserted that French drains were installed to move water from the roof and away from the house. He indicated that this is not required but that he do so to relieve the property from any excess moisture.

When questioned, Complainant described the landscaping to his property as desert landscaping and stated he waters the west side where the pool is situated modestly so no significant amount of water is going into the pool area.

Complainant was questioned and testified that prior to purchasing the pool, he discussed with Respondent possibly installing a concrete versus a fiberglass pool. He credibly testified that he informed Respondent that during the subgrading for his homesite that the grading contractor and soil engineer encountered large deposits of caliche, a clay-type, expansive soil, and that he was advised by Respondent that they have installed pools in that area and they work fine in clay conditions.

Complainant testified that he was not asked for a copy of the soil testing prior to the excavation and that the request was not made until after the ROC Directive was issued.

Complainant testified he was not asked by Respondent to perform a soil testing prior to excavation, and that he was not charged extra by Respondent during the excavation for installation of the fiberglass pool.

Complainant then reviewed the Directive and testified that no corrective action was taken on any of the complained of items that were substantiated.

Complainant referenced the manufacturer’s installation manual in his testimony and stated the manual can be found online by anyone who can self-install the pool. Complainant specifically referenced, Section 1. 5 Selecting Pool Site which suggest advanced knowledge for testing clay problems, and recommends conducting a soil test.

Respondent questioned Complainant on whether during the excavation, if to his knowledge any unusual conditions such as clay or caliche were encountered to which he replied, no.

Complainant was questioned on cross whether he was aware of a soils report prior to the home construction, and if whether they recommended sprinklers (p. 12, ln. 33, para. 2) to which he replied water is used sparingly.

When questioned on why he did not provide a copy of the Soils Report to the Respondent, he replied that he informed them about it.

Respondent also questioned Complainant regarding Respondent’s Exhibits R024, titled, ROC Complaint No. 2016-4970 filed by Complainant (December 8, 2016); R024, titled Emails to and from Complainant and Respondent RE: Crack in decking and alleged new issues with the pool; and R022, titled, Email from Complainant to Cliff Corlett RE: Confirmation Respondent completed all repairs under Complainant 2015 (December 23, 2015), of which was related to an earlier claim that was resolved.

Complainant testified that request were made by Respondent after the Directive was issued for a copy of the Soils Report but that he was out of the state and did not have immediate access to the document being requested.

On redirect, Complainant’s Counsel asked was the report specific for the residence to which he replied, yes. He also asked if Respondent requested any soil testing around the site of the pool to which he replied, no.

Complainant testified that he informed Respondent that the pool was out of level before the complaint was filed with the Registrar.

INVESTIGATOR CORLETT’S TESTIMONY

Investigator Corlett testified he has 18 years’ experience, and that he was assigned to investigate Complainant’s Complaint. He provided a narrative report as to his involvement in the case.

Investigator Corlett testified he relies on certain compliance codes and referenced San Juan’s Installation Manual, specifically, Paragraph 1.0, and 4.0. He testified that he did not have any knowledge if any clay or caliche was encountered by Respondent and he did not ask.

He also referenced Respondent’s Exhibit R034, ICC-ES Evaluation Report for installation of San Juan fiberglass pool shells, that stated, “subject to the code official’s approval, the San Juan Products pool shells may be installed without a soil investigation by a registered design professional, provided none of the following conditions is encountered at the site:

The existence of groundwater within the excavation, where the pool floor will contact the soil at the time of installation;

The existence of uncompacted fill in contact with any portion of the pool shell;

The existence of any expansive-type soil;

The existence of any soil types with an angel of repose that will support the walls of the excavation at desired slopes; and

Danger to adjacent structures posed by the proposed pool location.

If any of the above conditions is encountered, excavation must cease immediately. . . .”

Investigator Corlett credibly testified that expansive soil is prominent in this state. He further stated that he has no personal knowledge of the soil at this site, and that the Directive requires the Respondent to determine the cause and remedy.

The Investigator was asked if whether Respondent should have contemplated and tested the soil to which he replied that the pool and Baja is out of level and that under the Directive the cause should be corrected.

Investigator Corlett was asked if he noticed any grassy areas on the property to which he replied he doesn’t recall but that the landscaping around the pool area was desert type, rock, palms, minimum or low water maintenance.

RESPONDENT JULIO NAVARTE’s TESTIMONY

Respondent credibly testified that he has installed 400 pools and been on several excavations. He stated that the installation process requires several different trade skills such as concrete, plumbing, electrician, excavator, and that he supervises the project.

When questioned whether they encountered any clay or caliche, he stated nothing found on the excavation and no testing was done. He further testified that no test is required unless specified or disclosed by homeowner.

He indicated that soil conditions are noticeable to the naked eye by the density of the soil and that in review of his notes, this job was a standard installation.

Testimony was taken regarding the set back and that the 8 ft. meets minimum set back standards set by Mohave County.

Respondent conceded that the pool is out of level, and that corrective action suggested was not accepted by Complainant.

RESPONDENT’S WITNESS1 SHANE TUCKER

Witness 1 is a pool consultant at Leisure Pool Company. Prior to this position, he worked in sales and oversaw projects at Colorado River Pools & Spas, LLC.

He testified that he does not recall any mention of the soils on the property, and that he was present at the excavation and did not witness any unusual soil conditions. Witness2 has been on about 30-40 installs of San Juan Products.

From his experience, a soils test is likely if during the excavation they hit crust. He also collaborated Respondent’s testimony that clay is visible to the eye.

He does recall grass in the front of the homesite and testified that in January/February 2017, he did not know the poll was out of level.

Witness1 then explained how expansive soil responds like a sponge in dry and wet conditions.

Complainant’s Counsel asked Witness1 if he is a pool contractor to which he replied, no, but stated he was a general contractor from 2002 to 2012 performing work on single family, commercial and industrial tract sites.

Respondent’s Counsel questioned Witness1 regarding soil testing and stated he was not aware and had no way to know. Also that the contract provides a provision on what could happen.

RESPONDENT’S WITNESS2 DEBBIE HURNS

Witness2 is the President of Tri-R Construction and provided credible testimony that she has 20 years’ experience as a contractor and she was contracted by Complainant to grade and prepare the pad for his homesite located at 2053 Havasupai Drive, Bullhead City, Arizona.

Witness2 explained that around the time of the contract, February 2014, the soil conditions were more granular, and that clay deposits were found. Her company was responsible for securing the services of the Geotechnical Engineer to prepare the Geotechnical Engineering Exploration Report. This report was prepared by AMTI Sunbelt LLP dated March 8, 2014.

Witness2 testified that she believes the costs of the soils test was around $1,200.00.

Complainant’s Counsel asked Witness2 if the report was prepared for the excavation of swimming pools, to which she replied AMTI Sunbelt LLP’s purpose was specific to the homesite pad grading only.

RESPONDENT’S WITNESS3 JAMES WILSON

Witness3 is the Director at AMTI Sunbelt LLP and provided a narrative of his background and credentials to which he stated he holds various special licenses and certificates obtained through various organizations including the International Code Conference, and is a engineer in civil, geotechnical, and environment matters.

Witness3 testified that he was responsible for preparing the geotechnical engineering exploration (soils report) for Tri-R Construction.

He testified that the only way to obtain a soil condition is by testing and that a qualified geologist may have a visual manual, method for determining soils prior to testing.

Wtness3 stated that desert landscaping is recommended as there is a potential clay layers subject to swell/expand with overwatering that could cause movement, especially light load areas such as driveways.

Complainant’s Counsel asked if at the time of the soils test, they had any idea that a swimming pool would be installed to which he replied, no idea. They were not advised a pool was going in and the recommendation was for a single-family residence.

Witness3 did testified that his firm does soil testing for swimming pools and is aware that Mohave County does not require soils testing but that certain soil conditions may require overexcavation and reinforcements.

Respondent’s Counsel questioned and reaffirmed that Bullhead City does not require soils testing.

Witness3 was questioned regarding the location of the two (2) test pits used to obtain soil samples to which he replied Test Pit 1 was in the lower Southwest corner and Test Pit 2 was located more center on the north portion of the property closer to where the home is built. Both test pits dug 10 ft. deep, wherein no clay was found in Test Pit 1, and clay was found in Test Pit 2 from 2 ft to 10ft.

RESPONDENT’S TESTIMONY (RECALLED)

Respondent was asked why no action was taken regarding the Directive and he replied need to find the cause.

Respondent referenced the letter from the manufacturer that stated they went out to inspect the Complainant’s property and found no issue with the pool.

Respondent testified that based on the ICC-ES Evaluation Report if they found something, they would have addressed it.

Respondent stated that they depend on the disclosure of the homeowner on soil conditions, if known.

WRITTEN CLOSING ARGUMENTS

Complainant’s Counsel asserts in its closing that it is an undisputed fact the pool is out of level, and that Respondent proposed additional costs be borne by Complainant for Respondent to meet compliance with the Directive. Additionally, Complainant testified that he provided notice to Respondent that adverse soil conditions may exist at the time of install, and that the leach line set back are well within county code and are not contributing to any additional water since they are not in use.

Complainant’s Counsel asserts that they meet their burden that Respondent failed to exercise minimum workmanship standards by failing to exercise due diligence and not following manufacturer’s suggested installation methods by obtaining a soils test prior to installation, install sump line drain, and lay down a thicker deck and it failed to take corrective action without any defenses for its failure, and that discipline should be imposed

Respondent’s Counsel in its closing stated that it is undisputed that Complainant’s pool is moving and/or lifting. However, Respondent asserts that Complainant failed to meet its burden that Respondent did not comply with the law. Respondent stated that both Respondent and Witness1 provided credible testimony that neither were made aware of the existing soil conditions learned during the 2014 soils test in preparing the homesite pad.

Respondent’s Counsel asserts that both Respondent and Witness1 provided evidence that there is no industry standard that requires soils testing, and that the testimony and evidence support that the issue of the pool being out of level has nothing to do with the workmanship of Respondent but rather Complainant’s failure to disclose information known to him and not Respondent, and that the Complainant should be dismissed.

CONCLUSIONS OF LAW

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.

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).

Credible testimony established Respondent performed substandard work, specifically, both the pool and Baja shelf is out of level. Thus, Complainant established Respondent’s work on the items specified in the Directive to be in violation of minimum workmanlike manner, specifically A.A.C. R4-9-108 and thereby of A.R.S. § 32-1154(A)(3).

Respondent misuses “latent defects” as a defense, wherein it asserts “A "latent defect" is defined as a hidden or concealed defect; one which could not be discovered by reasonable and customary observation or inspection... The very nature of a latent defect precludes the discovery of the defect upon a reasonable inspection; otherwise, latent problems with a party could be concealed and hidden behind contract language purporting to shift the risk of nondisclosure to the other party. See Development Co. v. Pima Capital Management Co., 201 Ariz. 10, 31 P.3d 123 (App. 2001).”

In this instance, Witness2 testified that the cost for a soils test may be around $1,200.00. Given the contract value is close to $33,000.00, it appears it would be a reasonable and customary observation or inspection versus foregoing such a soils test even if the county does not require one. This conclusion is based on the precautions set forth in the San Juan’s Installation Manual and the ICC-ES Evaluation. In each, they cite, soil conditions that should not be overlooked. Given the years of experience of the Respondent and Witness1 in working in this geological regional area which is undoubtedly an area of variable or questionable soil, and the likelihood that clay and/or caliche may exist, Respondent should have followed manufacturer’s protocol as it stated it is advisable to hire a soil engineer under these conditions of variable or questionable soil.

Respondent and Witness1 testified that clay can be visibly determined but in review of Witness3’s testimony, who is a trained engineer, he provided credible testimony that it would take a certified geologist to make a visual determination.

Additionally, an A.R.S. § 32-1154(A)(22) violation is substantiated as Respondent testified it apparently made no effort to take corrective action as specified in the Directive.

Investigator Corlett testified that the waterline reveal indicates that the pool is set out of level in excess of + or – 1⁄2-inch allowed by the NSPI standards for the fiberglass pool and Baja shelf is sinking and that upon its Compliance Inspection found the Respondent took no action to the substantiated complaint items to remedy by appropriate methods to determine the cause but rather speculated as to soil without an actual test in its attempt to shift responsibility to the Complainant, and Complainant credibly testified that Respondent failed to properly take corrective action.

The preponderance of the evidence established that Respondent failed to provide adequate remedies in response to the Directive issued by the Registrar. This failure resulted in poor workmanship standards. The Respondent failed to take appropriate means to comply with the Directive, thus the Tribunal concludes that Respondent violated the charged provisions of A.R.S. §§ 32-1154(A)(3), namely, A.A.C. R4-9-108, and A.R.S. 32-1154(A)(22).

RECOMMENDed order

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License Nos. License No: 277560, 234633, 245419, 283236, and 276755 for a period of two (2) days.

It is further recommended that Respondent pay the sum of $500.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. § 32-1154(E). The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractor’s licenses 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 payment of any outstanding prior civil penalty is tendered.

In the event of certification of this 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 the certification

Done this day, May 31, 2017.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors