ALJDEC decisions subject to certification as final

2017A-3920-CHC-ROC · Registrar of Contractors · 2018-03-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Harry Owen Preston,

COMPLAINANT,

v.

Solana Outdoor Living LLC,

License No: 309290, 282154,

RESPONDENT.

No. 2017A-3920-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 31, 2018, at 1:00 p.m.

APPEARANCES VIA TUCSON TELEPHONIC: Harry Preston (“Mr. Preston” or “Complainant”); Roxanne Preston (“Mrs. Preston”); John Sundt (“Mr. Sundt” attorney for Complainant); Jodi Bain (“Ms. Bain” attorney for Complainant); Jodi Cavanaugh (“Ms. Cavanaugh” paralegal to Complainant’s Counsel); H. Thomas Crohurst (“Mr. Crohurst” consultant for Complainant); Chuck Hanson (“Mr. Hanson” witness for Respondent); and John Smith (“Investigator Smith” for the Registrar of Contractors “Registrar” or “ROC”).

TELEPHONIC APPEARANCE (DIAL UP): Rick Schomburger (“Mr. Schomburger” representative for Solana Outdoor Living LLC “Respondent”).

ADMINISTRATIVE LAW JUDGE: Linda Marie Brown

_____________________________________________________________________

This matter was set by the Registrar of Contractors as a hearing to determine whether Respondent has violated the following statutory provisions as set forth in its Citation,; (1) A.R.S. § 32-1154(A)(2) Departure from or disregard of plans; (2) A.A.C. R4-9-108 Minimum Construction Standards, and thereby of A.R.S. § 32-1154(A)(3); (3) A.R.S. § 32-1154(A)(12) namely 1124(B) issuance and display of license; (4) A.R.S. § 32-1154(A)(14) acting in the capacity of a contractor; (5) A.R.S. § 32-1154(A)(12), namely 1158(B) contract requirements; (6) A.R.S. § 32-1154(A)(12), namely 1158.01 A. swimming pools, spa construction contracts; and (7) A.R.S. § 32-1154(A)(22) failure to take appropriate corrective action to comply with this chapter or with rules adopted without valid justification. Having heard testimony and evidence, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order.

FINDINGS OF FACT

According to the Arizona Registrar of Contractors (“Registrar”) website, the Registrar issued License No. KB-1.282154-D, Dual Building Contractor to Solana Outdoor Living LLC DBA: Solana, on or about November 20, 2012. The named Qualifying Party is listed as “QP Information Unavailable”. As of January 26, 2018, this License was Expired effective December 1, 2017.

License No. KB-2.309290-D, Residence and Small Commercial was issued to Solana Outdoor Living LLC on November 21, 2016. Richard Andrew Schomburger was listed as the Qualifying Party, and Charles Joseph Hanson as the Manager. The address of record is 12090 N. Thornydale Road, Suite 204, Marana, Arizona 85658-4779. As of January 26, 2018, this license is renewed through November 30, 2018.

Harry Owen Preston (“Complainant”) by way of his attorney John Sundt submitted its complaint on or about July 31, 2017. The complaint stated it contracted with Respondent on September 13, 2016, for a contract amount of $166,911.71, and paid $153,941.51. Work started October 10, 2016, and stopped June 21, 2017. The jobsite address is 18552 West Avra Valley Road, Marana, Arizona 85653.

According to Estimate No. 5925, dated August 13, 2016, included in its complaint, the Scope of Services were “(1) using information provided by client, verify location of existing site walls, drainage areas and elevation changes. Produce a landscape plan with the following amenities and considerations: (A) Pool/Spa Concept & Design; (B) Outdoor Kitchen Concept & Design; (C) Shade Structure Concept & Design; (D) Hardscape with firepit Concept & Design; (2) Modify this plan (once) as required per input from the owner/builder; (3) Produce a final Hardscape, landscaping/lighting plan with site details. Additional design work resulting from architectural changes, once the concept plan has been approved by client, shall be billed at a rate of $105.00 per hour.” Estimate Number 5925 was signed by both Roxanne Preston and Harry Preston on 8/16/16, and Check Number 1269 in the amount of $1,000.00 issued on 08/15/2016, made payable to Solano Outdoor Living.

Complainant also provided in its complaint a copy of the “contract in conjunction with Estimate Number 10009,” executed by the Complainant and Respondent’s representative on September 13, 2016. The Estimate Number 10009 provided a cost breakdown on various segments of the project to include a proposal for swimming pool at the Preston residence.

Complainants alleged a total of forty-six (46) complained of issues against Respondent in its complaint.

The Registrar assigned the Complaint for investigation to its Investigator John Smith. On August 1, 2017, Investigator Smith sent a letter to Respondent notifying it of a formal complaint filed against it and that a jobsite inspection is scheduled for August 24, 2017, at 9:00 a.m..

Due to scheduling conflicts, a jobsite inspection was eventually conducted on September 8, 2017, by Investigator Smith. Persons in attendance were Harry and Roxanne Preston; Thomas Crohurst, a consultant hired by Complainant; and Rick Schomburger for Respondent. Investigator Smith noted this project include a backyard improvement: pool, covered outdoor kitchen area, patio area, landscaping. Photographs were obtained by Investigator Smith during this jobsite inspection and uploaded into Case View Documents file.

During Investigator Smith’s jobsite inspection, he observed various governing rule violations as referenced in his Jobsite Inspection Notes.

On September 13, 2017, Investigator Smith issued to Respondent a warning letter noticing it that it is operating under a name other than its license as found under A.R.S. § 32-1154(A)(14). Specifically, a license was issued to Solana Outdoor Living LLC and documents appear to have listed the licensee as Solana Pools and Spa. See Complaint Item No. 46 of the Jobsite Inspection Notes.

On September 13, 2017, Investigator Smith issued to Respondent a warning letter noticing it that its contract is missing at least one of the required elements under A.R.S. § 32-1158(A). See Complaint Item No. 44 of the Jobsite Inspection Notes.

Investigator Smith also issued Respondent a warning letter on September 13, 2017, noticing that it may have violated A.R.S. § 32-1124(B) because its estimates, invoices, and emails do not include your license number preceded by the acronym “ROC.” See Complaint Item No. 37 of the Jobsite Inspection Notes.

Investigator Smith issued a Directive to Respondent Solana Outdoor Living LLC on September 13, 2017, directing it to remedy twenty (20) violations by appropriate means no later than October 6, 2017.

On October 18, 2017, Investigator Smith conducted its Compliance Inspection. Present were Harry and Roxanne Preston, and Rick Schomburger for the Respondent. Investigator Smith noted the number of days from issuance of directive to the Compliance Inspection is 34. General notes made were corrective work begun but not complete. Respondent stated it is still doing work if the Complainant allows access. Investigator Smith noted items that were complied with in accordance with the Directive as Complaint Item No. 3 Modification of granite slab supporting outdoor grill by drilling a hole without approval or change order --- Item was replaced with granite slab, and Complaint Item No. 6 fans were replaced although Pima County has not approved an intermediate or final inspection (the complainant stated this item has been resolved).

Investigator Smith also obtained a total of 65 photographs and carefully labeled his observations, where relevant, to each of the photographs he obtained during this Compliance Inspection.

On October 20, 2017, the Registrar issued a Citation, charging seven (7) causes to discipline Respondent’s license as under (1) A.R.S. § 32-1154(A)(2) Departure from or disregard of plans; (2) A.A.C. R4-9-108 Minimum Construction Standards, and thereby of A.R.S. § 32-1154(A)(3); (3) A.R.S. § 32-1154(A)(12) namely 1124(B) issuance and display of license; (4) A.R.S. § 32-1154(A)(14) acting in the capacity of a contractor; (5) A.R.S. § 32-1154(A)(12), namely 1158(B) contract requirements; (6) A.R.S. § 32-1154(A)(12), namely 1158.01 A. swimming pools, spa construction contracts; and (7) A.R.S. § 32-1154(A)(22) failure to take appropriate corrective action to comply with this chapter or with rules adopted without valid justification. The Registrar sent the Citation to Respondent by certified and regular mail at its address of record.

Respondent entered its Written Answer to Citation and Complaint on November 6, 2017. Respondent asserted that any delay was in part as a result of Complainant making additional claims, rejecting processes and materials that were previously approved. Respondent further denied the charges stating that the project is not yet completed, and that under Charge 3, Complainant did not have a contract with Solana Pools and Spas, and that is a separate company used as a subcontractor by Respondent for pool installation, that all key documents contain the required information, and payment requirements were adhered to between the general contractor and subcontractors used to install the pool, and finally it continues to work with Complainant in order to address the Directive in a timely manner.

An evidentiary hearing was initially scheduled at the Office of Administrative Hearings (“OAH”), an independent state agency, in Tucson, Arizona, for January 3, 2018, at 8:30 a.m. and was continued to a new date of January 31, 2018, at 1:00 p.m.

Complainant’s attorney, Mr. Sundt, filed on January 25, 2018, with the OAH Complainant’s Disclosure Statement with a copy to Respondent, setting forth its Preliminary Statement and asserting Complainant’s estimated damages relating to correction of Respondent’s work. Included in its Disclosure Statement was a list of witnesses it expected to testify at hearing and exhibits it planned to present at hearing. Complainant continued to assert in its Disclosure Statement that it has been harmed from Respondent’s defective work to total damages of not less than $61,567.74. This amount included an estimated $9,426.74 to install the AVSC large drain per the plans and specifications; $36,641.00 to correct the defective patio paver installation, and an estimated $15,500.00 to correct the stone veneer on the Pergola columns.

Complainant aligned its Disclosure Statement in conjunction to the Citation issued by the Registrar to the Respondent. In support of Charge 1, Complainant relies on the Registrar’s Directive and Compliance Jobsite Inspection Notes of October 18, 2017. In support of Charge 2, Complainant relies on the Registrar’s Directive and Compliance Jobsite Inspection Notes of October 18, 2017. In support of Charge 3, Complainant asserts the last business card received did not contain the Respondent’s ROC number. The Pool Contract did not contain Solana Pools and Spas ROC number, among other things. In support of Charge 4, Respondent’s use of alternating license numbers makes it unclear what name and license Respondent is operating under. In support of Charge 5, Respondent’s contract failed to include an estimated date of completion as required for any contract in an amount of more than $1,000.00; and failed to include notice of Complainant’s rights to file a written complaint with the Registrar, and does not contain the Registrar’s telephone number and website address, or states the applicable time period complaints shall be made to the Registrar. In support of Charge 6, Complainant asserts Respondent’s contract fails to meet every one of the above requirements with the sole exception of 4(B). In support of Charge 7, Complainant argues that Respondent’s delay in remedying the Directive is without valid justification, and that multiple items remain uncorrected, including but not limited to, failure to call for and secure all required inspections required by Pima County, replacement of the stone veneer, correction of the paver installation, correction of the flagstone coping, and installation of the AVSC large debris removal drain per the contract documents.

On January 29, 2018, Respondent filed a motion to continue and it was denied. The hearing convened telephonically on January 31, 2018, at 1:00 p.m.

HEARING EVIDENCE.

Complainant’s attorney, Mr. Sundt, argued that only two (2) of the 20 items listed on the Registrar’s Directive have been complete, and that work remains incomplete. Respondent was not denied access.

Respondent opened that the project has gone well and there were significant delays. It stated that the designer who prepared the plan designs via a CAD program has since been let go.

Investigator Smith testified in narrative format as to his involvement in this matter. Investigator Smith’s testimony further reinforced his findings as provided in his Jobsite Inspection Notes and Compliance Inspection Notes.

Investigator Smith testified that a Prehearing Inspection was conducted on January 26, 2018 and at that time he found 12 of the 20 items listed on the Directive now remedied. Additionally, Respondent stated that on January 25, 2018, the project passed Pima County’s final inspection.

Investigator Smith testified to his findings from the Prehearing Inspection. Based on his Notes provided to the case file, Harry and Roxanne Preston, Thomas Crohurst (consultant), and Chuck Hanson for the Respondent were present. Items left remaining are as follows:

Item 2 from Directive: “Failure to construct backsplash at outdoor grill and install GFCI outlet in accordance with contract documents.”

Current findings: The backsplash has been completed, however; the complainant still has not approved the stone veneer mentioned in complaint item #7 were Item 2, failure to construct backsplash he substantiated 8 out of 25 complaints and that because the Contract was terminated, he did not issue a Directive but sent the matter to legal, and that he handled the addendum complaint in the same manner.

Item 5 from Directive: “Weather exposed outdoor grill light sconces ...loose, not plumb, and damaged.”

Current findings: As noted in an inspection report from Pima County dated 1/24/18, the light fixtures are not fitting flush to the stone veneer. The inspection report requires correction to facilitate reasonable weather-tightness.

Item 7 from Directive: “Failure to install stone veneer on pergola columns in workmanlike manner and industry standard; pieces falling off” As stated in the contract; the natural material is required to be approved by the homeowner...

Current findings: Full size corner pieces were installed on the columns, most of the pieces installed between the corner pieces are smaller in size, and not consistent with the size of the corner pieces.

Additionally, the homeowner has not approved this material, as required by the contract.

Item 8 from Directive: “Failure to install pavers in workmanlike manner,...or industry standard.”

Current findings: The respondent acknowledged they did not do anything to corret the issue of inadequate leveling sand below the pavers.

There are still a couple small areas of voids in the polymeric sand.

There are also several scratch/metal-rub marks on the surface of the pavers due to a vibrating tamper being used.

Item 9 from Directive: “Pool handrail mounting hole not installed in workmanlike manner and cement and hole outline are visible.”

Current findings: The issue of the exposed mounting hole has been corrected, however; the piece of flagstone used does not match the thickness of the adjoining flagstone. Additionally the mortar below the new piece of flagstone does not match the color of the mortar below the adjoining flagstone.

Item 12 from Directive: “Backfill of backyard trenches left in an uneven and uncompleted state...”

Current findings: The excess dirt removed from the utility trenches was spread on the lower surrounding ground. It has not been smoothed out or final graded. Additionally the area the trench was dug on the upper level has settled creating a negative slope for drainage away from the house. During the compliance inspection, the respondent stated he is planning on correcting these issues.

Item 13 from Directive: “Snake fence not installed in workmanlike manner or industry standard & rusted attachments create a safety issue.”

Current findings: As stated by the complainant, all the rusting tie wires have been replaced, however; dirt was dug away from the fencing to allow access to the bottom tie wires. The dirt along the bottom of the fence has not pushed back into place.

Item 15 from Directive: “Failure to install in workmanlike manner: flagstone coping grout cracked and separation cracks in concrete foundation.” This was described to be the flagstone around the pool and around the patio area.

Current findings: At least two pieces of flagstone have been removed and re-set.

The mortar used below the reset pieces is not the same color as the mortar below the adjoining pieces of flagstone.

One section of flagstone has visible voids in the mortar below it.

There are a couple pieces of shipped flagstone.

There are still some cracked mortar joints that the respondent agreed to correct.

Item 16 from Directive: “General construction clean up was not done.” This was described to be remaining construction debris and lack of grading in area where construction materials were stored.

Current findings: This has not been done.

Thomas Crohurst stated he has 33 years working in the construction industry and served as a consultant to the Complainant to assess the workmanship issues alleged against Respondent. He was present at two (2) of the jobsite inspections.

Mr. Crohurst testified that Item No. 5 of the Directive and stated the light sconces that they are not plumb. Mr. Sundt provided to Mr. Crohurst numerous photographs labeled as Complainant’s Exhibit 3, and asked him to address the various workmanship concerns.

Mr. Crohurst stated that from his trained and skilled observations, the stones in the pillars are too big going in a vertical direction (photo 000706); small pieces depicted in photo 000702 create a zipper effect (masonry issue); several stones are loose; and that if you tap it sounds hallow (photos 000667, 000614, 000626). Additional testimony was obtained surrounding photographs and the issues they represent as labeled C001030, C000680, C000647, C000916, C000699, C000939, C001028, C001050, C001178, and C001034. Particular testimony was obtained regarding C000719, and that the contract called for AVSC20 to the pool drain to stop kids from sticking their arm in there, and that this is a safety issue, and yet the Registrar’s Investigator found this not corrected.

Respondent was presented an opportunity to question Mr. Crohurst, and objected to Mr. Crohurst regarding the sconces and stated they are weather tight.

Respondent raised several credibly arguments to Mr. Crohurst’s findings, and asked questions such as how do you recommend handling the gap in non-calibrated stone?

Respondent also asked Mr. Crohurst if the pool drain passed the Pima County inspection?

Additionally questions presented on cross-examination to Mr. Crohurst addressed purported puddling to the hardscape and asked if it was still puddling after 36 hours?

Mr. Sundt on redirect asked Mr. Crohurst to further explain the zipper effect to which he replied that the work performed by Respondent is not in accordance with industry standard.

Mr. Hansen testified as to the ledger stone and referred to it as stacked ledger stone.

Mrs. Preston testified as to the experiences she encountered with Respondent while the project was underway. She stated that based on the terms of their contract, “Natural Material Varies in Size, Color and Texture and no warranty is issued in the contract. All natural material will require homeowner approval before offloading material or material will be returned at the buyer’s expense.” She testified that they were never provided an opportunity to either approve or reject the stone prior to offloading, and that it was noticed afterwards that the stone pieces were non-conformed.

Respondent was provided an opportunity to question Mrs. Preston.

Complainant’s Exhibits 1 through 20 submitted to OAH with a copy sent to Respondent on January 25, 2018, were admitted with the exception that Exhibits 1 and 3 being replaced with revised (condensed) copies submitted to OAH on January 31, 2018.

Complainant argues in its closing that Respondent should be found having violated all charges.

Respondent argued that the matter should be dismissed as it has continued to work to remedy Complainant’s issues, and that it stands ready to send someone to the Complainant’s residence to remedy the remaining concerns.

At conclusion, while not clearly stated, Respondent was provided an opportunity to submit to the OAH any documents it failed to provide prior to the hearing. Respondent submitted on February 7, 2018, as was received by the OAH on February 15, 2018, a cover letter submitting additional documents in support of testimony it provided at during the hearing.

CONCLUSIONS OF LAW

This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§ 32-1104(A)(4), 32-1154(B) and 32-1156.

Complainants bear the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[22] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[23]

The Citation issued by the Registrar of Contractors in this matter alleged potential violations of Charge 1: (1) A.R.S. § 32-1154(A)(2)[16] Departure from or disregard of plans or specifications; A.R.S. § 32-1154(A)(2) provides grounds for suspension or revocation of a contractor’s license for departure from or disregard of plans. This specifications or building codes “in any material respect that is prejudicial to another” without consent of the owner or his or her representative. In review of Investigator Smith initial Jobsite Inspection Notes of September 8, 2017, this charge is based on no backsplash behind grill according to plan, a hole being drilled in the granite, the stone veneer not approved by homeowner prior to offloading and installation, and the piping and pool drains are not according to plans. This tribunal finds that the backsplash has been complete, the granite replaced, and testimony was received that the project passed final inspection on January 25, 2018. Complainant asserted they would provide testimony from Pima County Development Services. Neither of its listed witnesses from Pima County appeared at hearing. Based on Complainant’s Disclosure Statement which relied heavily on the failure of the project to pass inspection, and given that the project has passed its final inspection, Complainant failed to meet its burden.

Charge 2: Rule 4-9-108[17] Minimum Construction Standards in the Arizona Administrative Code (“A.A.C.”) and thereby of A.R.S. § 32-1154 (A)(3). Credible testimony was obtained from Investigator Smith who performed a Prehearing Inspection on January 26, 2017. Based on the findings from his inspection, this Tribunal finds Complaint Item 9A, 11, 12, 14, 19, 22, 25, and 26 from listed on the initial Jobsite Inspection Notes of September 8, 2017, and further reviewed and its updated observations found at the Prehearing Inspection performed on January 26, 2017, to be representative of minimum construction standards. In this instance, Complainant has met it burden.

Charge 3: A.R.S. § 32-1154(A)(12) failure in any material respect to comply with this chapter, namely 1124(B)[18] This Tribunal finds that Complainant has met its burden on this charge based on the supporting documentation it provided attached to its Complaint. Respondent provided to this Tribunal no copies of revised or updated contract, invoices or other documents to demonstrate that corrective action has been taken, nor did it question Investigator Smith whether this charge was administratively remedied.

Charge 4: A.R.S. § 32-1154(A)(14) Acting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth on the license. Complainant failed to meet it burden as no testimony was provided in support of this allegation outside of Investigator Smith’s notation found in his Jobsite Inspection Notes dated September 8, 2017. While Investigator Smith may have noted this, Complainant bears the burden to prove at hearing. Therefore, Complainant failed to meet its burden on this charge.

Charge 5: A.R.S. § 32-1154(A)(12) failure in any material respect to comply with this chapter, namely 1158(B)[19] This Tribunal finds that Complainant has meet its burden on this charge based on the supporting documentation it provided attached to its Complaint. Respondent provided to this Tribunal no copies of revised or updated contract, invoices, or other documents to demonstrate that corrective action has been taken, nor did it question Investigator Smith whether this charge was administratively remedied. Therefore, Complainant met its burden.

Charge 6: A.R.S. § 32-1154(A)(12) failure in any material respect to comply with this chapter, namely 1158.01[20] This Tribunal finds that Complainant has meet its burden on this charge based on the supporting documentation it provided attached to its Complaint. Respondent provided to this Tribunal no copies of revised or updated contract, invoices or other documents to demonstrate that corrective action has been taken, nor did it question Investigator Smith whether this charge was administratively remedied. Therefore, Complainant met its burden.

Charge 7: A.R.S.; § 32-1154 (A)(22)[21] 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. In this instance, Respondent attempts to assert denied access to the jobsite by way of an email dated November 1, 2017, written to Mr. Hanson from Complainant advising that he may come to the property to bring warranty and registration information but that Mr. Schomburger is not permitted to accompany him. This tribunal finds this to be after the time allowed to take corrective action to remedy the items listed on the directive. Additionally, this tribunal finds this email did not represent denial to the property as Respondent’s representative was permitted access. Therefore, Complainant has met its burden.

12. The Administrative Law Judge concludes, based upon the undisputable credible testimony that grounds exist to impose against Respondent’s license on Charges 2, 3, 5, 6 and 7.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the final order in this matter, License Nos. KB-2.309290-D, and KB-1.282154-D shall be suspended for a period of twenty (20) calendar 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(E).

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 this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty days from the date of the certification.

Done this day, March 7, 2018.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors