ALJDEC decisions subject to certification as final

2018A-1775-CHC-ROC · Registrar of Contractors · 2019-03-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 19, 2019 and February 4, 2019. APPEARANCES: Marlene Vairo, Complainant, Paul Levine, Esq., Complainant’s counsel, Steven Vairo, Robert Jensen and Rene Jensen, Respondents, Jaimie Hanson, Esq. Respondent’s counsel, Steve Kline, Investigator, ROC. ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson, Esq. _____________________________________________________________________ FINDINGS OF FACT Respondent. Imperial Concepts, Inc. d/b/a, Imperial Pools & Landscape, (hereinafter, “Imperial”) is the holder of license numbers 309450 and 223368 issued by the Arizona Registrar of Contractors (the “Registrar”).[1] On or about February 21, 2017, Complainant Marlene Vairo (hereinafter, “Vairo”) entered into a contract with Imperial[2] to, among other things provide materials and labor to construct a swimming pool with water features, a fire pit, hardscape, and an outdoor kitchen. On or about April 16, 2018, the Registrar received a Complaint against Imperial from Vairo alleging Imperial performed poor work. A previous Complaint[3] was filed by Vario against Imperial arising from the same contract and project involved in the case at bar. The Registrar assigned the complaint to Investigator Steve Kline. After written notice to the parties, a Jobsite Inspection [“JSI”], was conducted on May 25, 2018 by Investigator Kline. Mr. Kline’s JSI notes[4] indicated: This complaint is related to 2017-4985 which has gone to hearing and the license was disciplined. Items 4 and 6 were already addressed at the hearing.

Complaint Item 1: Landing at garage door not to code. Investigator’s Observation: Respondent states the pool work has been approved by the building department. I’m unable to determine if the building inspector inspected the landing. Have the work inspected and approved by the proper governing authority.

Governing Rule: No action required by the Respondent.

Complaint Item 2: Electrical on deck jets is not per manufactures specifications, voids manufacturer’s warranty. Investigator’s Observation: The pool work has been approved by the building department. I’m unable to determine if the building inspector inspected the electrical. Have the work inspected and by the proper governing authority.

Governing Rule: No action required by the Respondent.

Complaint Item 3: Underground electrical not to code. Investigator’s Observation: The pool work has been approved by the building department. I’m unable to determine if the building inspector inspected the landing. Have the work inspected and by the proper governing authority. Governing Rule: No action required by the Respondent.

Complaint Item 4: Cutout dimensions for BBQ and side burner not per manufactures instructions providing correct clearances. Investigator’s Observation: This complaint item was addressed on complaint 2017-4985 and is again included in complaint 2018- 1775 it will not be able to be re-investigated as it was previously part of a Written Directive that was sent out on complaint 2017-4985, also was subsequently not properly completed at that time and referred to OAH for citation. A citation was issued regarding the complaint item on case 2017- 4985 and the Respondents license received discipline. For this reason the new complaint item that is the same as the previous case will not be re-addressed. It appears that the wording of the complaint items are similar but not exact. In review of this complaint item, I have determined that they are indeed the same and will not be re-addressed.

Governing Rule: No action required by the Respondent.

Complaint Item 5: Fire is unsafe – flames penetrate along all joints of tile. Investigator’s Observation: Respondent agreed to grout the joints. Governing Rule: Violation of Any Rule Adopted By the Registrar 32-1154 A-3 Namely Rule R4-9-108.

Complaint Item 6: Gas line to BBQ not to sleeved as per code. Investigator’s Observation: The BBQ work has been approved by the building department except a bubble cover at the receptacle. I’m unable to determine if the building inspector inspected the gas line. Have the work inspected and by the proper governing authority.

Governing Rule: No action required by the Respondent.

Complaint Item 7: Swimming pool, water feature and irrigation system leak. Investigator’s Observation: Complainant supplied a third party report stating there is a leak. Governing Rule: Violation of Any Rule Adopted By the Registrar 32-1154 A-3 Namely Rule R4-9-108.

Complaint Item 8: Grass previously repaired is not consistent with original install and is not satisfactory to me. Investigator’s Observation: Verified a gap between the grass and concrete that is inconsistent with the rest of the work. Governing Rule: Violation of Any Rule Adopted By the Registrar 32-1154 A-3 Namely Rule R4-9-108.

Complaint Item 9: Final inspection on Ramada is not passed. Investigator’s Observation: Red tag item should be corrected and re-inspected by the local building depart [sic]. Governing Rule: Violation of Any Rule Adopted By the Registrar 32-1154 A-3 Namely Rule R4-9-108.

Complaint Item 10: Per contract 16’ lineal feet of BBQ structure was to be built; only 14’ was constructed. Investigator’s Observation: Verified job wasn’t completed per contract. Respondent states adjustments were made to make the structure fit and had a change order he can provide. Respondent shall complete project per original contract agreement, properly executed change orders, local building codes and manufacturer’s installation instructions. Governing Rule: Violation of Any Rule Adopted By the Registrar 32-1154 A-3 Namely Rule R4-9-108.

Complaint Item 11: Railing at pool entrance not installed per manufactures instructions and is no longer removable. Investigator’s Observation: This complaint item was addressed on complaint 2017-4985 and is again included in complaint 2018- 1775 it will not be able to be re-investigated as it was previously part of a Written Directive that was sent out on complaint 2017-4985, also was subsequently not properly completed at that time and referred to OAH for citation. A citation was issued regarding the complaint item on case 2017- 4985 and the Respondents license received discipline. For this reason the new complaint item that is the same as the previous case will not be re-addressed. It appears that the wording of the complaint items are similar but not exact. In review of this complaint item, I have determined that they are indeed the same and will not be re-addressed. Governing Rule: No action required by the Respondent.

On May 29, 2018, Investigator Kline issued a Written Directive to Imperial containing a Corrective Work Order [“CWO”}[5] which in relevant portions stated as follows: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4- 9-108). . . . You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on 6-15-18. You are hereby directed to remedy the following violations by the appropriate means: . . .

Complaint Item 5: Fire is unsafe – flames penetrate along all joints of tile. Respondent agreed to grout the joints.

Complaint Item 7: Swimming pool, water feature and irrigation system leak. Complainant supplied a third party report stating leaks were found. Respondent shall correct by the appropriate means.

Complaint Item 8: Grass previously repaired is not consistent with original install and is not satisfactory to me. Verified a gap between the grass and concrete that is inconsistent with the rest of the work. Respondent shall correct by the appropriate means.

Complaint Item 9: Final inspection on Ramada is not passed. Red tag item should be corrected and re-inspected by the local building depart

Complaint Item 10: Per contract 16’ lineal feet of BBQ structure was to be built; only 14’ was constructed. Respondent shall complete project per original contract agreement, properly executed change orders, local building codes and manufacturer’s installation instructions. . . . .

Following the issuance of the written directive, Imperial did not comply with or otherwise correct any of the items listed in the CWO before the deadline of 5:00 p.m. on June 15, 2018. Imperial asserts that actual notice of the CWO was not received until June 15, 2018, that Imperial requested an extension of time to comply which was denied and that it was denied access to conduct the repairs. On June 18, 2018, the Registrar issued a Citation against Imperial, charging possible violations of A violation of Rule 4-9-108[6] and thereby of A.R.S. § 32-1154(A)(3)[7] and A.R.S. § 32-1154(A)(22).[8] Hearings were held before the Arizona Office of Administrative Hearings, an independent agency, on November 19, 2019 and February 4, 2019. ROC Investigator Kline testified, consistent with his findings reported in his JSI Inspection Notes,[9] that a number of issues in the April 16, 2018 Complaint repeated matters alleged in the previously filed and adjudicated Complaint in Case Number 2017A-4985-CHC-ROC. He confirmed that JSI was conducted on May 29, 2018 and that the Complainant and Robert Jensen were present at the JSI. He testified that in his May 29, 2018 CWO, he noted and excluded each item raised by Vario in her prior case. Mr. Kline said all of the remaining items listed in the May 29, 2018 CWO were discovered by Vario after the JSI was conducted in the 2017A-4985-CHC-ROC Complaint. Mr. Kline testified that each of the items listed in the CWO was work done by Imperial that was below the Standard of Workmanship. Mr. Kline stated he had not previously inspected any of the items listed in the May 29, 2018 JSI which are under consideration in the present hearing. Mr. Kline testified that he was aware, by telephone contact from Imperial, that June 15, 2018 [the deadline date for compliance under the CWO] was the date that Imperial asserts that it first received any notice of the CWO because the entire company was closed down for its annual two week vacation. He said that Imperial, on June 15, 2018, requested an extension of time to complete the requirements of the CWO since they did not have actual notice of the CWO until the day of the deadline. Mr. Kline conferred with the Complainant Vario about the extension request and Vario refused. Mr. Kline denied the extension of the CWO compliance deadline. By e-mail, Mr. Kline confirmed that no work had been attempted and no compliance achieved on any of the listed CWO items on or before the deadline of 5:00 p.m. on June 15, 2018. Marlene Vairo testified that she is the Complainant and that she had filed a previous Complaint under the same Contract regarding Imperial which involved workmanship matters. She confirmed that most of the items in her 2nd Compliant [the matter now before the Tribunal] were discovered after the JSI was conducted on her initial complaint. She denies refusing Imperial access to her residence [which is the job site] at any time before June 15, 2018. She admits access refusal after the June 15, 2018 CWO deadline date. She acknowledged receiving a phone call on June 15, 2018, while she was at work, from Mr. Kline indicating that Imperial had requested an extension of time to comply with the CWO because they had just that day first received notice of the CWO. She confirmed that Mr. Kline advised that Imperial was on an annual company two week closure, no one was picking up their mail and that this was the reason for requesting an extension. Ms. Vairo stated that she refused to allow an extension of time because Imperial had enough time to complete compliance. She said Imperial did not call until the very last day of their deadline, “So I didn’t give my permission for an extension.” She confirmed that as of the date and time of the CWO deadline, Imperial had not grouted the joints of the fire pit; had not repaired the swimming pool, water feature and irrigation system leak; had not repaired the verified gap between the grass and the concrete; had not obtained a final permit inspection for the Ramada; and had not remedied, the per contract, 16’ lineal feet of BBQ structure that was to be built where only 14’ was constructed. Ms. Vario confirmed that she retained the service of Amazing Leak Detection to perform water leak testing and they produced a report that she gave to Mr. Kline and the JSI to review. No one appeared at the hearings from American Leak Detection.[10] Testifying for Imperial was its Qualifying Party, Robert Jensen. Mr. Jensen testified that for the two weeks leading up to the June 15, 2018 CWO deadline, Imperial was closed for business. Mr. Jensen and all other employees of Imperial were away on the company’s annual vacation. He stated that Rene Jensen, the company’s office manager [who is also Robert Jensen’s spouse], picked up Imperial’s mail from its Post Office box when she returned from vacation. Contained in the two weeks of mail was the Registrar’s Directive. Mr. Jensen said he had never seen or read the Directive before June 15, 2019. Mr. Jensen asserts that Imperial was unable to comply with the Directive because Imperial was repeatedly denied access by Vario. There is no evidence introduced to show that Imperial was denied access prior to the CWO deadline of June 15, 2018. All of Mr. Jensen’s access evidence related only to attempts to set up a date and time for Imperial to come on site for work at a time after the June 15, 2018 deadline. Also testifying for Imperial was Rene Jensen, wife of Qualifying Member Robert Jensen and the office manager for Imperial. She testified that Imperial was closed for two weeks for the company’s annual vacation. Just after her husband attended the JSI, she and Robert Jensen left for vacation on May 29, 2018. She testified that no one picked up mail from the company’s P.O. Box during the vacation. She stated that she returned from vacation with her husband, Robert Jensen, on June 14, 2018, but did not open company mail until she returned to the office the next day on June 15, 2018. It was on June 15, 2018 that Mrs. Jensen said she opened the office’s two weeks worth of mail. It was then, June 15, 2018, she testified, that she first saw and read the CWO. She stated that she immediately contacted Inspector Kline to request an extension of time to comply with the CWO. On June 19, 2018, she contacted Vario by e-mail[11] to request an extension of time, but Vario refused. Investigator Kline denied the extension request. In her June 19, 2018 e-mail to Vario, Mrs. Jensen wrote that on June 13, 2018, she left a message with Vario requesting an extension of the CWO deadline. She testified that she wrote Imperial’s June 26, 2018 Answer to the Complaint and Citation.[12] Mrs. Jensen asserted that Imperial was unable to comply with the Directive because Imperial was repeatedly denied access by Vario. There is no evidence introduced to show that Imperial was denied access prior to the CWO deadline of June 15, 2018. All of Mrs. Jensen’s refusal of access evidence related only to attempts to set up a date and time for Imperial to come on site for work at a time after the June 15, 2018 deadline. Administrative notice is taken of Imperial’s prior License record as reflected on the Registrar’s public website on March 9, 2019. Such prior License record reflects that Imperial’s License No. 256686 was first issued on August 28, 2006 and is now current. Imperial was previously disciplined with a 5 day license suspension arising out of the Complainant’s prior Complaint in 2017A-4985-CHC-ROC. No other discipline is recorded against Imperial. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. Vairo bears the burden of proof to establish Imperial’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). There is no dispute and the record presents credible evidence to support the finding that Imperial and Vario were the parties on the previous Compliant in 2017A-4985-CHC-ROC (where Vario was the prevailing party and Imperial was found to have violated the same statutes as alleged in the Citation at bar incurring discipline from the ROC of a five day license suspension. There is no dispute and credible evidence to support the finding that Robert Jensen was present for the JSI. Imperial has not contested the accuracy of Investigator Kline’s JSI findings and testimony or that the CWO listed items, each of which presented below workmanship standards of construction. Imperial has introduced evidence and has argued that it did not violate A.R.S. § 32-1154(A)(22) because it was denied access by Vario to perform the CWO work. All of Imperial’s refusal of access evidence related only to attempts to set up a date and time for Imperial to come on site for work at a time after the June 15, 2018 deadline. Inasmuch as there was no evidence introduced to show that Imperial was denied access prior to the CWO deadline of June 15, 2018, there was no denial of access encountered. Imperial asserts the doctrine of res judicata applies in this matter to bar consideration of Vario’s new workmanship claims.[13] Although the parties were the same in both 2017A-4985-CHC-ROC and the case at bar and the issues similar in that both cases were and are adjudicating whether Imperial violated A.A.C. Rule 4-9-108 and thereby of A.R.S. § 32-1154(A)(3) and A.R.S. § 32-1154(A)(22), the two cases heard distinctly different facts. In the 2017A-4985-CHC-ROC, evidence was received to determine whether there were workmanship standards violation arising from a JSI performed on November 3, 2017 resulting in the Registrar issuing a Directive, dated November 7, 2017. As to the case at bar, evidence was received to determine whether there were workmanship standards violation arising from a JSI conducted on May 25, 2018 that resulted in a Directive being issued May 29, 2018. Inspector Kline was the Inspector in both cases. Evidence was introduced at hearing through Mr. Kline in this case that the items listed in his May 29, 2018 Directive did not include any of the identified workmanship items contained in the previous case. Inspector Kline did not inspect any of the items identified in the May 29, 2018 CWO before his May 25, 2018 JSI. The items listed in the Directive of the prior case did not include any of the items listed in the May 29, 2018 Directive. Since 2017A- 4985-CHC-ROC “[was] not a final decision on the merits of the underlying issue [in the current Imperial Complaint] and thus may not be given [claim preclusion] ... effect when a subsequent claim for relief is made in the courts."[14] The specific items of poor workmanship were distinctly separate and apart from one another in 2017A-4985-CHC-ROC and he case at bar. The same underlying facts in the case at bar were not “...actually litigated in a previous proceeding" and "the parties ... [did not] have…a full and fair opportunity and motive to litigate the issue.[15] Res Judicata does not apply in this case. The credible evidence presented at hearing established that Imperial violated A.A.C. Rule 4-9-108 and thereby of A.R.S. § 32-1154(A)(3). [16] Specifically, a. The fire pit demonstrates flames penetrate along all joints of tile. Respondent agreed to grout the joints. b. The Swimming pool, water feature and irrigation system leak. c. The grass previously repaired is not consistent with original install and is not satisfactory…Verified a gap between the grass and concrete that is inconsistent with the rest of the work. d. Final inspection on Ramada is not passed. Red tag item should be corrected and re-inspected. e. Per contract 16’ lineal feet of BBQ structure was to be built; only 14’ was constructed.

1. 2. 3. 4. In the center of the controversy surrounding this case is whether Imperial ought to be strictly held to the CWO’s stated deadline for compliance [as Vario insists] or instead [as Imperial insists] whether Imperial should be allowed to extend its compliance date based upon its theory that insufficient advanced notice of the compliance deadline was provided. Imperial complains that actual notice of the CWO was not obtained until the very date of the deadline for compliance. Imperial offers that it was not provided a reasonable time to comply with the CWO given that Imperial did not pick up or read its business mail from May 29, 2018 to June 15, 2018. a) Rene Jensen: i) In her June 19, 2018 e-mail to Vario, Mrs. Jensen wrote that on June 13, 2018, she left a message with Vario requesting an extension of the CWO deadline. This statement is inconsistent with Mrs. Jensen’s testimony at hearing that it was not until June 15, 2018, she testified, that she first saw and read the CWO.

ii) According to her testimony, Mrs. Jensen crafted and filed Imperial’s June 26, 2018 Answer to the Complaint and Citation.[17] Confirming her previous dating of Imperial’s notice of the CWO in her e-mail of June 19, 2018, Mrs. Jensen wrote in her Answer: “Our Company was closed Jun 1 - June 18. During this time is when vacations are taken. Renee Jensen notified Marlene Vairo on June 13 by voice mail that we would be away, an [sic] unable to address the directive by June 15. We asked for a two week extension…” This statement is inconsistent with Mrs. Jensen’s testimony at hearing that it was not until June 15, 2018, as she testified, that she first saw and read the CWO. The Answer’s statement is also contrary to Robert Jensen’s self- serving testimony that he first became aware of the CWO and deadline on June 15, 2018.

Inasmuch as Rene Jensen’s contention at hearing that she first read the CWO on June 15, 2018 is inconsistent and contrary to her Answer and her prior statements, it is found that Rene Jensen’s testimony is not credible on the question of the date when Imperial received notice of the CWO and is disregarded as to that issue. Moreover, Imperial contends it ought to be able to enjoy the benefit of an extension of time for compliance or that Imperial has proven it has a “valid justification” for failure to comply by the deadline of the CWO in that Imperial’s business was closed from June 1, 2018 to June 15, 2018 where, for two weeks, no mail was picked-up from Imperial’s business P.O. Box and no phone or other messages were taken. Thus, Imperial was caused to first become aware of the CWO and its deadline on the last day for compliance. Having exhausted its administrative remedies in the 2017 Case (for violating the same statutes and rules alleged in this case), it is not convincing that Imperial lacked a clear understanding of the Registrar’s Complaint process, the CWO procedure and the compliance deadline process. Within a day of the May 29, 2018 JSI (which Robert Jensen attended) Robert and Rene Jensen left for vacation for two weeks. No one was tasked to pick up mail from the company’s P.O. Box during the two week vacation. Since Imperial had just suffered a five day ROC license suspension order, one must suspend credulity, viewing the history of these parties and their two Complaint cases, to believe that Robert Jensen gave no thought about Imperial literally turning a deaf ear to the likelihood that the Registrar would be presenting a Directive by mail within days of the JSI. It is a very poor, risky business practice to fail to read company mail for two weeks during a time when an ROC action is being maintained against one’s license. Imperial offered no explanation for why it did not contact either Inspector Kline or Ms. Vairo sometime prior to June 15, 2018 to keep its eye on the progress of the Directive/CWO. It is not contended that Imperial did not receive the Directive and Notice of the CWO deadline. Rather, Imperial defends that it did not have actual notice of the Directive until the day of compliance. There is insufficient credible evidence to prove that date Imperial actually received the Directive. Regardless of the date of receipt, no matter how inconvenient in timing, Imperial caused the timing of the receipt of the Directive by its own poor business practice of letting mail sit stale in their P.O. Box without anyone being responsible to monitor expected mail from the Registrar after the JSI. Under the circumstances, Imperial’s has not proven it has a valid justification for failure to comply with the CWO within a reasonable period of time after receiving a written directive from the registrar. By a preponderance of the evidence, Vario has met its burden to establish that Imperial violated A.R.S. § 32-1154(A)(22). A.A.C. R4-9-131 provides for the assessment of civil penalties under specified circumstances: In assessing a civil penalty as provided for under A.R.S. § 32- 1166(A), the Registrar shall give due consideration to whether the person cited or any individual acting on that person's behalf has committed one or more of the following acts in determining the gravity of the cited violation:. . .8. Performed work that failed to meet minimum acceptable trade or industry standards or practices or was not performed in a good and workmanlike manner.

A $500.00 Civil Penalty ought to be ordered in this case. In light of the five day license suspension discipline ordered in 2017A-4985-CHC-ROC, the facts presented in this case do not require an additional suspension. RECOMMENDED ORDER Based on the foregoing, IT IS RECOMMENDED that the Registrar shall impose a Civil Penalty of $500.00 against Imperial Concepts Inc. d/b/a, Imperial Pools & Landscape, ROC license numbers: 309450 and 223368. 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 civil penalty.

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 9, 2019.

/s/ Randolph D. Wolfson, Esq. Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] Administrative Judicial Notice is taken of the entirety of the Registrar’s files, including but not limited to, electronic and physical files and the Registrar’s public access website. Also, Judicial Notice is taken of the Registrar’s and the Office of Administrative Hearing’s files in ROC case number 2017-4985-ROC. [2] Exhibit 11, Proposal, “Bate Stamped” pages #0082-#0090. [3] Case Number 2017A-4985-CHC-ROC. Vario filed this Complaint October 2, 2017. After hearing, Judge Geddes issued his Findings of Fact, Conclusions of Law and Recommended Order. After having found Imperial’s violations of A.R.S. § 32-1154(A)(3) [below workmanship standards] and A.R.S. § 32- 1154(A)(22) for the failure by Imperial to comply with the Directive in the case within a reasonable time without justification. Judge Geddes recommended a five day license suspension. He notes in his Findings of Fact that there were workmanship type matters raised at hearing that were note stated as part of the Citation in the case which were apparently discovered by Vairo after the JSI on the October 2, 2017. See, Agency Record in 2017A-4985-CHC-ROC, Findings of Fact, Conclusions of Law and Recommended Order dated March 15, 2018. The Registrar issued its Final Administrative Decision and Order in 2017A-4985-CHC-ROC on March 24, 2018, accepting Administrative Law Judge Geddes’s decision effective May 2, 2018. That Order is, by the passage of time, a Final Order.

[4] Agency Record,”Rcc100 Job Site Inspection Notes1.rtf1.” Emphasis in the quotation is added. [5] See, Agency Record, “R014 Corrective Work Order1.rtf.” [6] Rule 4-9-108 titled “Minimum Construction Standards,” in the Arizona Administrative Code. [7] A.R.S. § 32-1154(A)(3). Violation of any rule adopted by the registrar. [8] 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. [9] Agency Record,”Rcc100 Job Site Inspection Notes1.rtf1,” supra. [10] Amazing Leak Detection’s report confirming system leaks is found at Exhibit 11, #0138. [11] June 19, 2918 e-mail, Exhibit 3, bate stamped “Imperial 0035” [12] See Agency Record, “Lg Citation2.pdf.” The Answer states: “Our company was closed Jun 1 - June 18. During this time is when vacations are taken. Renee Jensen notified Marlene Vairo on June 13 by voice mail that we would be away, an [sic] unable to address the directive by June 15. We asked for a two week extension…” [emphasis added]. [13] The res judicata (claim preclusion) and collateral estoppel (issue preclusion) doctrines may "apply to decisions of administrative agencies acting in a quasi-judicial capacity." Hawkins v. State, 183 Ariz. 100, 103, 900 P.2d 1236, 1239 (App.1995). The doctrines are not rigidly applied, however, and "are qualified or rejected when their application would contravene an overriding public policy or result in manifest injustice." Tipler v. E.I. duPont deNemours & Co., 443 F.2d 125, 128 (6th Cir.1971); accord Ferris v. Hawkins, 135 Ariz. 329, 331-32, 660 P.2d 1256, 1258-59 (App.1983). The Arizona Court of Appeals has held:

The doctrine of “collateral estoppel” is a doctrine of issue preclusion. It bars a party from relitigating an issue identical to one he has previously litigated to a determination on the merits in another action. The elements necessary to invoke collateral estoppel are: the issue is actually litigated in the previous proceeding, there is a full and fair opportunity to litigate the issue, resolution of such issue is essential to the decision, there is a valid and final decision on the merits, and there is a common identity of the parties. Gilbert, 155 Ariz. at 169, 745 P.2d at 622 (quoted in Hawkins, 183 Ariz. at 103, 900 P.2d at 1239).

Under claim preclusion, a judgment on the merits "in a prior suit involving the same parties ... bars a second suit based on the same cause of action." Chaney Bldg. Co. v. City of Tucson, 148 Ariz. 571, 573, 716 P.2d 28, 30 (1986). [It] is not a final decision on the merits of the underlying issue and thus may not be given [claim preclusion] ... effect when a subsequent claim for relief is made in the courts." Edna H. Pagel, Inc. v. Teamsters Local Union 595, 667 F.2d 1275, 1280 (9th Cir.1982). Consequently, [if there] was no "final decision on the merits," claim preclusion does not apply. Issue preclusion bars "relitigation of issues actually litigated regardless of whether the prior action is based upon the same claim as the second suit." Matusik v. Arizona Pub. Serv. Co., 141 Ariz. 1, 3, 684 P.2d 882, 884 (App.1984). But issue preclusion applies only when the issue has been "actually litigated in a previous proceeding" and "the parties ... have had a full and fair opportunity and motive to litigate the issue[ ]." Garcia v. General Motors Corp., 195 Ariz. 510, ¶ 9, 990 P.2d 1069, ¶ 9 (App.1999). Accordingly, issue preclusion "prohibits relitigating an issue" …when "the issue [wa]s actually litigated." Central States, Southeast & Southwest Areas Pension Fund v. Old Dutch Foods, Inc., 968 F.Supp. 1292, 1298 (N.D.Ill.1997); accord Martin v. Garman Constr. Co., 945 F.2d 1000, 1004 (7th Cir.1991). [14] Ibid. [15] Id. [16] A.R.S. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure 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.” (Emphasis added). [17] “See Agency Record, “Lg Citation2.pdf.”, supra.

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826