FINACT2018A-06100-CHC-ROC.pdf

2018A-06100-ROC · Registrar of Contractors · 2019-07-01

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

William D LaCour, Case No. 2018-06100 COMPLAINANT, Docket No. 2018A-06100-CHC-ROC v. JS & S Enterprises LLC, FINAL ADMINISTRATIVE DECISION DBA: Grand Canyon Pools and Spas, AND ORDER License No. ROC 258711, RESPONDENT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the Registrar must provide written justification setting forth the reasons for the modification or rejection. REGISTRAR’S ACCEPTANCE In this case, a hearing was held, and the administrative law judge issued a written decision. See Administrative Law Judge Decision, attached. The Registrar reviewed that decision and hereby accepts it. CONCLUSION Because the Registrar has accepted the administrative law judge’s decision, that decision is the final administrative decision in this case and becomes effective on August 7, 2019. IT IS FURTHER ORDERED that Respondent pay a civil penalty in the amount of $500.00 payable to the Registrar on or before 30 days from the effective date of this Order. Payment may be hand- delivered to the Registrar’s physical address or mailed to: Registrar of Contractors P.O. Box 6748 Phoenix, Arizona 85505-6748 FINAL NOTES On page 1, line 22 replace “October 10, 2009” with “October 8, 2009.”

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Dated June 28, 2019.

Registrar of Contractors /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal and Recovery Fund Copy mailed via USPS First Class mail June 28, 2019 to: Respondent JS & S Enterprises LLC DBA: Grand Canyon Pools and Spas 14175 W Indian School Rd Ste B4-429 Goodyear, AZ 85395 Complainant William D LaCour 3889 N Sidney St Buckeye, AZ 85396 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar

Office of Administrative Hearings Jenna Clark, Administrative Law Judge Case No. 2018-06100 / DE

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 6.17.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

William D. LaCour, No. 2018A-06100-ROC COMPLAINANT, ADMINISTRATIVE LAW JUDGE v. DECISION JS & S Enterprises LLC, DBA: Grand Canyon Pools and Spas, ROC License: ROC 258711, RESPONDENT. HEARING: May 30, 2019 at 1:00 PM. APPEARANCES: William D. LaCour (“Complainant”) appeared on his own behalf with Steve Lawton as a witness. No appearance(s) on behalf of JS&S Enterprises LLC (“Respondent”). ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ Having heard the evidence and testimony and having considered the record in

this matter, the undersigned Administrative Law Judge hereby makes the following

Findings of Fact and Conclusions of Law and issues the following RECOMMENDED

ORDER to the Director of the Arizona Registrar of Contractors (“ROC”).

FINDINGS OF FACT

BACKGROUND AND PROCEDURE

1. On October 10, 2009, the ROC issued License No. 258711 for general

dual KA-6 swimming pool, including solar, contracting to Respondent.1 Respondent’s address of record for the license is 14175 W Indian School Rd., Suite B4-429, Goodyear, AZ 85395-8407.2 Jerry Ormal Smith is listed on the license as Respondent’s Member.3

See https://roc.az.gov/contractor-search?Id=a0Yt000000ACUNMEA5. Id. 3 Id. License is Qualifying Party exempt pursuant to Arizona Revised Statute (“ARIZ. REV. STAT.”) § 32- 1125(C). Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 6.17.2019 ROC LEGAL

2. Administrative Notice is taken of Respondent’s prior License record, for License No. 258711, as reflected on the ROC’s public website on May 30, 2019. Such prior License record reflects that Respondent’s license is currently active.4 The license

has not been previously disciplined by the ROC. The record also reflects that there is

one complaint against Respondent’s license, which is presumed to be related to this

matter.5

3. On or about February 08, 2018, Complainant and Respondent entered

into a contract agreement whereby Respondent agreed to remodel Complainant’s

residential property located at 3889 N Sydney St., Buckeye, AZ 85396 for the sum total

of $57,015.16.6 The project commenced on February 14, 2018, and stopped on June

20, 2018.

4. Per contract, a $1,000.00 down payment was to be made, followed by

three payments of $16,804.55 and a final payment of $5,601.51.7

5. A $1,800.00 Addendum was executed between the parties on April 12,

2018, for the added installation of a BBQ and fire pit.

6. Complainant issued a down payment of $1,000.00 to Respondent via

check on February 08, 2018.8 Additional payments were issued to Respondent on February 22, 2018, for $16,804.55,9 March 16, 2018, for $16,804.55,10 April 12, 2018, for $7,401.52,11 May 01, 2018, for $5,601.52,12 May 18, 2018, for $1,016.21,13 June 08, 2018, for $5,602.52,14 and June 09, 2018, for $6,061.52,15 7. On December 26, 2018, the ROC received a poor workmanship complaint from Complainant. On January 08, 2018, the ROC received supporting documentation

Id. However, the license was suspended on June 12, 2019. Id. 6 See Hearing File, page 41. Id. 8 See Hearing File, pages 41 and 50. See Hearing File, pages 41 and 51. See Hearing File, pages 41 and 52. See Hearing File, page 53. See Hearing File, pages 41 and 54. See Hearing File, page 55. See Hearing File, page 56. 15 See Hearing File, page 57. RECEIVED 6.17.2019 ROC LEGAL

from Complainant which included a copy of the contractual agreement between the parties and a copy of all checks Complainant issued to Respondent for the project.16 8. On December 31, 2018, the ROC issued a JOBSITE INSPECTION

NOTIFICATION LETTER to the parties, advising that an onsite review would be conducted

at the project site by an ROC investigator on January 17, 2019, at 10:30 a.m.17

9. On January 17, 2019, ROC investigator Stephen Lawton (“Investigator

Lawton”) conducted a review of the contract executed between the parties and

inspected the work that had been done on the project to date. Investigator Lawton took

seventeen photographs of the project.18 When he was finished, Investigator Lawton

drafted JOBSITE INSPECTION NOTES.19

10. On February 04, 2019, Investigator Lawton issued a DIRECTIVE FROM THE

REGISTRAR to Respondent because he substantiated Complainant’s allegation that

Respondent’s work on the project failed to meet minimum ROC workmanship

standards.20 Specifically, Respondent was ordered to complete the project per contract

via appropriate means.21 Respondent was put on notice that it had until 5:00 p.m. on

February 22, 2019, to notify the ROC of its compliance with the corrective order or face

discipline pursuant to ARIZ. ADMIN. CODE R4-9-108, and ARIZ. REV. STAT. §§ 32- 1154(A)(22) and 32-1154(E).22 11. Respondent failed to timely comply. 12. On March 08, 2019, the ROC issued a CITATION AND COMPLAINT to Respondent for alleged violations of ARIZ. REV. STAT. §§ 32-1154(A)(3); a violation of ARIZ. ADMIN. CODE R4-9-108, and 32-1154(A)(22).23 Respondent was given until March 25, 2019, to respond with its ANSWER or face discipline pursuant to ARIZ. REV. STAT. §§ 32-1154(A)(22) and 32-1155.24 See Hearing File, pages 41-58. 17 See Hearing File, pages 14-16. See Hearing File, pages 111-127 See Hearing File, pages 11-13. See Hearing File, pages 109-110. Id. Id. See Hearing File, pages 24-30. 24 Id. RECEIVED 6.17.2019 ROC LEGAL

13. On February 27, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on April 26, 2019.25 Per the NOTICE OF HEARING26 the issue to be determined is whether the

ROC has cause to discipline Respondent’s license based on the following charges:

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). 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 which 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.”). HEARING EVIDENCE 14. Complainant testified on his own behalf and also called Investigator Lawton as a witness. No testimony for or on behalf of Respondent was offered. The ROC’s electronic hearing file and NOTICE OF HEARING were admitted into the evidentiary record. Investigator Lawton’s testimony 15. Investigator Lawton testified that he was assigned to Complaint 2018- 06100 by ROC. 16. On or about February 15, 2019, Jerry Smith attempted to have the ROC place his license in inactive status as Respondent was “out of business.”27 17. Jerry Smith contacted ROC on March 27, 2019, to provide notice that Respondent’s bond and liability insurance had been canceled.28 18. Respondent’s license was suspended as of April 18, 2019, for lack of bond. 19. Per Investigator Lawton, he issued a DIRECTIVE on behalf of ROC because he had substantiated four of Complainant’s six workmanship complaints. After

See Hearing File, pages 1-2. See NOTICE OF HEARING. 27 See Hearing File, page 7. RECEIVED 6.17.2019 ROC LEGAL

Respondent’s failure to comply he escalated the case to ROC’s legal department on March 05, 2019, with citation recommendations for ARIZ. REV. STAT. §§ 32-1154(A)(3); ARIZ. ADMIN. CODE R4-9-108, and 32-1154(A)(22).29

Complainant’s testimony

20. Complainant testified that he and Jerry Smith used text messaging as a

primary means of communication during the underlying project. In the message

Complainant expressed concerns regarding Respondent’s workmanship, trade

concerns, and worries regarding issuing draw payments when Respondent was not

keeping up with the work as scheduled.30

21. Per Complainant, although he made the project site available,

Respondent never made an attempt to comply with the ROC’s DIRECTIVE.

22. On or about February 26, 2019, Complainant contacted Jerry Smith who

informed Complainant that Respondent was out of business. Complainant attempted to

file a claim with Respondent’s bond company to no avail.

CONCLUSIONS OF LAW

1. The ROC has jurisdiction over this matter pursuant to ARIZ. REV. STAT. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before the Office of Administrative Hearings pursuant to ARIZ. REV. STAT. §§ 41-1092 et seq. 2. The ROC may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.31 3. The purpose of the ROC’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.32 4. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.33 Respondent bears the

See Hearing File, pages 176-178. See Hearing File, page 128. See Hearing File, pages 62-103. See ARIZ. REV. STAT. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990). 32 See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). RECEIVED 6.17.2019 ROC LEGAL

burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.34 5. “A preponderance of the evidence is such proof as convinces the trier of

fact that the contention is more probably true than not.”35 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.”36

6. ARIZ. ADMIN. CODE 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.”

7. ARIZ. REV. STAT. § 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.”

8. ARIZ. REV. STAT. § 32-1154(A)(22) holds, in pertinent part, that “[a] holder

of a license may not fail to take appropriate corrective action to comply with this chapter or 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 which 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. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The ROC has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.”

ARIZ. REV. STAT. § 41-1092.07(G)(2); ARIZ. ADMIN. CODE R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). See ARIZ. ADMIN. CODE R2-19-119(B)(2). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 36 BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). RECEIVED 6.17.2019 ROC LEGAL

9. ARIZ. REV. STAT. § 32-1154(E) holds, in pertinent parts, that the ROC may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the

automatic revocation of the license thirty days after the effective date of the order

providing for the civil penalty. It also holds that no future license may be issued to an

entity consisting of a person who is associated with the contractor, unless payment of

any outstanding civil penalty is tendered.”

10. Here, the material facts are not in dispute.

11. It is undisputed that Complainant contracted with Respondent for a

residential pool project that Complainant paid the agreed upon contract price for, and

that Respondent’s work fell below the ROC’s minimum workmanship standards. It is

further undisputed that the ROC issued its DIRECTIVE to Respondent on February 04,

2019, which required Respondent’s full compliance by February 22, 2019. It is also

undisputed that Respondent failed to comply.

12. Therefore, the only issue in dispute is whether Respondent raised a

sufficient justification or excuse for failing to address the remediation action items

outlined in the ROC’s DIRECTIVE by the compliance deadline. This is an affirmative defense that Respondent bears the burden to establish. Respondent did not provide evidence in mitigation to refute Complainant’s evidence or justify his inaction in this matter. Thus, Respondent’s burden has not been sustained. The record shows that Respondent failed to adhere to an ROC corrective work order, and had no affirmative defense(s) for doing so. 13. Because Complainant established by a preponderance of the evidence that Respondent failed to adhere to an issued DIRECTIVE regarding Respondent’s poor workmanship, Complainant has also established cause for the ROC to take disciplinary action against Respondent’s contractor’s license under ARIZ. REV. STAT. §§ 32- 1154(A)(3); ARIZ. ADMIN. CODE R4-9-108, and 32-1154(A)(22). 14. Complainant may petition the ROC’s Recovery Fund for financial recompense regarding this matter, as this Tribunal has no jurisdiction to award a refund of the underlying amount contracted between the parties. RECEIVED 6.17.2019 ROC LEGAL

RECOMMENDED ORDER

Based on the foregoing findings of fact and conclusions of law,

IT IS RECOMMENDED that the five days after the effective date of the FINAL

ORDER in this matter, Respondent JS & S Enterprises LLC, dba Grand Canyon Pools

and Spas ROC License No. 258711, be revoked based on its violations of ARIZ. ADMIN.

CODE R4-9-108 and ARIZ. REV. STAT. §§ 32-1154(A)(3) and 32-1154(A)(22).

IT IS FURTHER RECOMMENDED that ROC require Respondent JS & S

Enterprises LLC, dba Grand Canyon Pools and Spas to pay the sum total of $500.00 in certified funds as a civil penalty pursuant to ARIZ. REV. STAT. § 32-1154(E). 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, June 17, 2019. /s/ Jenna Clark Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors