ALJDEC decisions subject to certification as final

2017A-3588-CHC-ROC · Registrar of Contractors · 2018-03-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Dennis George Marsalek Jr

COMPLAINANT

-v-

Dynamic Pool Designs LLC

License No(s). KA-5.307448-D

RESPONDENT

No. 2017A-3588-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 7, 2018

APPEARANCES: Dennis Marsalek, Complainant, Paul Loucks, Esq., Complainant’s attorney; Dynamic Pool Designs LLC, Carlos Arzate, Respondent and Qualifying Party; Arlo Houston, ROC Investigator

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

_____________________________________________________________________

FINDINGS OF FACT

Respondent Dynamic Pool Designs LLC, Carlos Arzate, Qualifying Party. (Respondent) is the holder of License No. KA-5.307448-D issued on August 26, 2016 by the Arizona Registrar of Contractors (Registrar) [hereinafter “DPD”].

Another entity, Dynamic Pools, LLC, [hereinafter “DP”] is not a licensed Arizona contractor.

David Dimaggio is the Managing Member of DP and Patrick Crone is a Member of DP. [Exhibit R-9]. Patrick Crone is a former member of DPD. [Exhibit C-6].

Neither David Dimaggio nor Patrick Crone were subpoenaed or testified in these proceedings.

Articles of Amendment filed with the Arizona Secretary of State on October 18, 2017 [Exhibits C-E, C-F, R-9 & R-10] filed November 7, 2017 reflect that Patrick Crone is removed as member from DPD.

As reflected by invoices attached to the complaint, on or between February 6, 2017 and March 16, 2017 the Complainant entered into a contract with DP to provide equipment and install a solar and gas heating system for Complainant’s pool. These invoices [attached to complaint] were presented to the Complainant on DP letterhead. Payments on the invoices were made to DP, not DPD.

On or about July 14, 2017, the Registrar received a complaint against Respondent from Complainant alleging Respondent performed poor work, failure to obtain a required building permit and a failure of a building permit inspection.

The Registrar assigned the complaint to its Investigator, Arlo Houston. On or about August 14, 2017, Mr. Houston conducted a formal job-site inspection. Present for this inspection was Complainant Dennis Marsalek, Patrick Crone and David Dimaggio.

On or about August 23, 2017, after the formal jobsite inspection, Investigator Houston issued a written directive containing a Corrective Work Order [CWO] to DPD that provided as follows:

You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on September 11, 2017.

You are hereby directed to remedy the following violations by the appropriate means:

Failed inspection of Pima Co permit P17BP04287.

Pima County Development Services has determined work and materials do not meet minimum code requirements – see Pima County Permit Record P17BP04287.

Roof mounted water line has kink.

Roof mounted thermostat sensor not securely attached to roof mounted water line.

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

After the September 11, 2017 CWO deadline for compliance, the corrective action ordered by the CWO was not undertaken.

On or about September 19, 2017. The Registrar issued a citation against Respondent DPD, charging three possible violations, to wit:

Charge 1: A violation of A.R.S. § 32-1154(A)(2)

Charge 2: 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). Furthermore, on August 23, 2017, the Registrar issued Dynamic Pool Designs LLC a written directive to take appropriate corrective action. Under A.R.S. § 32-1154(A)(22), Dynamic Pool Designs LLC’s license may not be revoked or suspended, nor may any other penalty be imposed on Dynamic Pool Designs LLC, for a failure to take that appropriate corrective action until after a hearing has been held.

Charge 3: A violation of A.R.S. § 32-1154(A)(22)

A hearing on the matters raised by the citation was held on March 7, 2018.

THE TESTIMONY

Investigator Arlo Houston testified that at the formal job-site inspection on August 23, 2017, he observed work performed that did not appear to meet code requirements. He testified that he also observed that a roof mounted water line was kinked and that the roof mounted thermostat sensor was not securely attached to the roof mounted water lines at its attachment points. Mr. Houston, noted referring to a Pima County Development Services inspection record from Stacy Reeves on July 12, 2017 [Exhibit C-9], that specified:

Work and materials do not meet minimum code requirements as outlined by IRC. Minimum bonding of electrical equipment not per manufacturers installation instructions. Work buried prior to inspection tracer wires not installed per Pima County SOP 310.1. Make connections using materials listed for application and scheduled inspections per IBC 110.1 General. No gas pressure test at time of inspection. [The] contractor responsible for installing the work did so without applying for a permit.

At the formal job-site inspection, present was the Complainant, Dennis George Marsalek Jr. Also present was Patrick Crone and David Dimaggio. Mr. Crone presented a business card to Mr. Houston identifying himself as a Partner of Dynamic Pool Designs, LLC, licensed and bonded ROC #307448, but both Crone and Dimaggio stated to Mr. Marsalek and Mr. Houston that they were employees of DP.

A pre-hearing job-site inspection was conducted on March 6, 2018. Mr. Houston determined and testified at hearing that there had been no changes to the work performed from that which he observed at the formal job-site inspection and there was still non-compliance with the CWO.

Mr. Houston acknowledged that the reason his investigation pursued DPD rather than DP was not decided by Mr. Houston. Rather, DPD was pursued because when the complaint was received by the Inspector, the department of the Registrar that referred the matter to him for investigation identified DPD as the entity to be investigated and because the complaint listed ROC license number 307448 as the ROC Number for the Complaint. Mr. Houston testified that from the estimates, invoices and payment records he has viewed, it appears that the estimates were made by DP to the Complainant, the Invoices were presented by DP to the Complainant and payment was made to DP for the work reflected by the Invoices.

Complainant, Dennis George Marsalek, Jr., testified that his real estate agent referred and introduced him to Patrick Crone to upgrade his pool by upgrading an install of solar and gas pool heater equipment. In February of 2017, David Dimaggio came to Complainant’s residence and prepared and then presented written estimates for DP to re-do his pool. Mr. Crone stated, before the work commenced, that DP was not a licensed ROC contractor. Before work was commenced the Complainant was well aware that he was engaging DP and that DP was an unlicensed contractor. Complainant Marsalek stated that at the beginning, Crone told him that he did not even need a license for this work. Mr. Crone said, if any work needed to be done that required a license, Mr. Crone would do the work under his “sister company”, DPD. In an e-mail [ibid], DP submitted its estimate to the Complainant and therein also stated that DPD will be submitting an estimate for the pool’s deck. No deck estimate was submitted and neither DP nor DPD worked on a deck for the Complainant.

The Complainant stated that Mr. Crone claimed DP was a d/b/a for DPD and that Mr. Crone stated he owned both DP and DPD. Mr. Crone stated that this job did not need a permit and none was applied for before completion of the work.

In March of 2017, Mr. Marsalek undertook to have some landscaping done on his premises. It was at this time that Mr. Marsalek learned that the lines related to the construction that is the subject matter of this complaint were buried too shallow, were cut when landscapers hit it, and that the line placement did not meet code. Mr. Marsalek immediately contacted permitting at Pima County and was advised that the work undertaken under the estimates and invoices in this case required a permit be issued. He learned from Pima County permitting that no permit had been applied for or issued for the work described in the complaint.

Thereafter, Mr. Marsalek filed an Application and drawings requesting a permit. On July 12, 2017, a permit inspection was conducted, but failed inspection. The Permit Application is still open and pending as of the date of the hearing in this matter.

The Respondent and Qualifying Party for DPD, Carlos Arzate, testified that Patrick Crone owned and operated a pool cleaning service business called Dynamic Pools, LLC. Patrick Crone also operated another pool cleaning service business called Dynamic Pools. Mr. Arzate stated that he applied to become the Qualifying Party for DPD’s license because his construction experience qualified him for the license whereas Mr. Crone was just a pool cleaner. Mr. Crone had approximately 150 customers on his pool cleaning route.

Mr. Arzate’s intention was to go into business with Mr. Crone, but to separate the function and operation of DPD Company’s work as a pool construction contractor from Mr. Crone’s pool cleaning business. Mr. Crone’s business was seen as complementing DPD as a ready referral source for new customers.

Without providing an exact date in his testimony, Mr. Arzate stated that he went into business with Crone through the DPD Company. At the time, Mr. Crone was still a member. By September or November of 2017, Mr. Crone stopped reporting to work and the relationship between Crone and Azate ended. Mr. Arzate, without providing a date or amount in his testimony, testified that he purchased DPD. He has no interest in nor has he ever held an interest in DP. By an Article of Amendments dated October 18, 2017, Mr. Crone is removed from DPD and Mr. Arzate is declared a member of DPD, a member managed LLC. [Exhibits C-E, C-F, R-9 & R-10]. Mr. Arzate emphasized that DPD has performed no work at the Complainant’s residence or for the Complainant.

Until Mr. Arzate visited the Complainant’s residence at the pre-hearing inspection conducted by Inspector Houston on March 6, 2018, Mr. Arzate had never contracted with, been paid by, performed any work for, spoken to or had ever met the Complainant. Mr. Arzate had requested to be present at the pre-hearing inspection. Mr. Arzate stated that at the pre-hearing inspection, just days before the hearing, Complainant Dennis George Marsalek, Jr., told Mr. Arzate, “I know you had nothing to do with this. Sorry to have dragged you into this.”

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); 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). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

The credible evidence presented at hearing established that at the time of the complaint there were items of Complainant’s project that needed to be completed. Specifically, the project failed inspection of Pima Co permit P17BP04287; Pima County Development Services has determined work and materials do not meet minimum code requirements, the roof mounted water line has kink and the roof mounted thermostat sensor was not securely attached to roof mounted water line.

Respondent Dynamic Pool Designs LLC (DPD) and Dynamic Pools, LLC (DP) are separate and distinct legal entities. Whereas DPD is a licensed ROC Contractor, DP is not a licensed ROC contractor.

At various times, David Dimaggio and Patrick Crone made statements to the Complainant that would lead a reasonable person in the same or similar circumstances to believe David Dimaggio and Patrick Crone had apparent authority to perform work under DPD’s contractor’s license for work which the law requires only a licensed contractor can perform.

There is no evidence of record demonstrating that either David Dimaggio or Patrick Crone or both of them had actual authority, written or otherwise, to use DPD’s contractor’s license [See, A.R.S. § 29-654].

At all times relevant to the matters herein, the preponderance of the evidence demonstrates that DPD did not provide estimates to the Complainant, did not deliver invoices for payment to the Complainant, performed no work for the Complainant and the Complainant did not compensate DPD for any work on this project.

The preponderance of the evidence demonstrates that

Dynamic Pools, LLC (DP) responded in person to the Complainant’s residence through the person of David Dimaggio (and later through Patrick Crone ) who, on Dynamic Pools, LLC letterhead, submitted an estimate and bid to the Complainant in the approximate amount of $18,000.00

Payment from the Complainant in the amounts reflected by the Dynamic Pools, LLC estimates were made to Dynamic Pools, LLC, not to Dynamic Pool Designs, LLC.

The Complainant knew before engaging Dynamic Pools, LLC that if Dynamic Pool Designs, LLC. were to provide any contractor services – such services would be limited to work on the pool deck. There was no pool deck estimate, bid or work performed by either Dynamic Pool Design, LLC. or Dynamic Pool, LLC.

The Complainant knew or certainly should have known that he was hiring an unlicensed entity to do the work described in the Estimate provided to him on DP stationary.

The Complainant knew that DPD was a separate company from the unlicensed DP that might do work limited to pool decking.

The weight of the evidence proves that the Complainant was never told that the contracted work would be done under DPD's license.

As to the issue of poor workmanship, the evidence established that the work provided the Complainant was below professional and workmanlike standards and, if it were proven that this work was provided by an Arizona licensed contractor, then the licensed contractor would naturally be in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3). However, the Complainant has failed, by a preponderance of the evidence to meet its burden of proof to show the Respondent estimated, bid, contracted to work, performed work or was compensated for any of the work complained of in this complaint.

Inasmuch as Complainant has failed to meet its burden, by a preponderance of the evidence, to establish that Respondent violated A.A.C. R4-9-108 or thereby A.R.S. § 32-1154(A)(3), then too, Complainant has failed to meet its burden of proof to prove Respondent violated A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

IT IS RECOMMENDED that on the effective date of the Order, the Registrar shall dismiss the complaint filed by Dennis George Marsalek, Jr. against Dynamic Pool Designs, LLC, ROC License number KA-5.307448-D.

FURTHER IT IS RECOMMENDED remanding this matter to the Registrar for such further action as may be necessary and proper.

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, March 14, 2018.

/s/ Randolph D. Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors