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2018A-4070-ROC · Registrar of Contractors · 2019-05-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Andy and LaVern Holthe, No. 2018A-4070-ROC

COMPLAINANTS, ADMINISTRATIVE LAW JUDGE DECISION v.

Rex Alan Wolterman, DBA: Rexon Pools and Spas, ROC License: ROC 103029, RESPONDENT.

HEARING: April 19, 2019, at 1:30 p.m. APPEARANCES: Andy and LaVern Holthe (“Complainants”) were represented by T’shura-Ann Elias, Esq., Lundberg & Elias, PLLC; Rex Alan Wolterman DBA: Rexon Pools and Spas (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________ FINDINGS OF FACT

1. According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public

website, on or about June 30, 1994, the Registrar issued License No. ROC 103029 for

General Residential B-5 General Swimming Pool Contracting to Respondent, a sole

proprietor. Respondent’s address of record is 1990 McCulloch Blvd. N. #371, Lake

Havasu City, Arizona 86403-5749.

2. According to the Registrar’s public website, on or about February 7, 2017,

the Registrar issued License No. ROC 311231 for General Residential B-4 General

Residential Engineering Contracting to Brent Alan Wolterman DBA: Lake Havasu Pools

& Spas, a sole proprietor. Brent Wolterman’s address of record is 1646 Outrigger Dr.,

Lake Havasu City, Arizona 86404-1157.

3. On or about August 28, 2018, Complainants’ attorney filed a complaint with

the Registrar against Lake Havasu Pools & Spas, LLC that alleged that Brent

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 Wolterman had performed poor work on his contract to build a pool and spa project at Complainants’ house at 2931 Indian Land Drive, Lake Havasu City, Arizona 86406. The complaint provided both Respondent’s and Brent Wolterman’s license numbers,

which Complainants’ attorney explained was due to the circumstances of Brent

Wolterman’s representations, in relevant part as follows:

Jay and LaVern Holthe own the residential property located at 2931 Indian Land Drive. Andy Holthe, their son, also resides at the residence. On or about April 26, 2018, Andy Holthe contracted with Lake Havasu Pools & Spas, LLC for the construction of a pool at the above residence. . . . At all relevant times, Andy Holthe dealt with Lake Havasu Pools & Spas, LLC’s qualifying party, Brent Wolterman. . . .

When the pool contract was presented to Andy Holthe, he noticed the contract had the name “Rex Wolterman, dba Lake Havasu Pools and Spas” and ROC License Number 103029. Mr. Holthe asked Brent Wolterman who owned Lake Havasu Pools & Spas, LLC, Brent Wolterman represented he was the owner of the company. Mr. Holthe, relying [on] this representation, signed the agreement. . . .

According to the records with the Arizona Corporation Commission and the records with the Arizona Secretary of State, Rex Wolterman has no ownership interest or membership interest in Lake Havasu Pools & Spas, LLC, nor does he own the trade name “Lake Havasu Pools & Spas.” . . . According to the public records with the [Registrar], ROC License number 103029, which appears on the contract for Lake Havasu Pools & Spas, LLC belongs to a company known as Rexon Pool and Spas, which is owned by Rex Wolterman. The ROC License Number for Lake Havasu Pools & Spas, LLC is 311231. . . . There are no records indicating any common affiliation between the two (2) companies.1 As noted above, the Registrar issued License No. ROC 311231 to Brent Wolterman DBA: Lake Havasu Pools & Spas, a sole proprietorship. Neither Respondent’s nor Brent Wolterman’s licenses list a limited liability company in any capacity.

1 The Registrar’s electronic file at pdf page 105-106. 4. According to the complaint, Complainants had paid Brent Wolterman $46,000.00 of the $54,283.00 contract price.2 Complainants’ attorney’s letter also specifically enumerated 24 items of deficient workmanship.3

5. The Registrar assigned the complaint to its Investigator, Cliff Corlett, for

investigation. Investigator Corlett performed a jobsite inspection, which both

Respondent and Brent Wolterman attended.

6. On September 28, 2018, Investigator Corlett on behalf of the Registrar

issued a directive to Respondent to repair eighteen items on Complainant’s’ complaint

on or before 5:00 p.m. on October 20, 2018. The directive also noted that, at the

jobsite inspection, Respondent had agreed to repair two additional items.4

7. On February 7, 2019, Investigator Corlett performed a compliance jobsite

inspection. His Compliance Jobsite Inspection Notes stated that seven items had not

been repaired to comply with the Registrar’s standards, in relevant part as follows:

Complaint Item 8: Spa tile at spillway broken, raw tile/chipped. Investigator’s Observation: Agree with Complainant. Respondent agreed to remove and properly replace the spa. Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4- 9-108 Workmanship Standards for Licensed Contractors. Compliance Inspection Opinion: NEW SPA SPILLWAY TILE APPEARS SLIGHTLY [CHIPPED] FROM TILE SAW.

Complaint Item 13: Baja Shelf is too big- it was only supposed to be in line with the edge of the spa. Investigator’s Observation: Respondent agreed to properly reduce the size of the Baja shelf. Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4- 9-108 Workmanship Standards for Licensed Contractors. Compliance Inspection Opinion: Pool drawing / sketch shows the Baja shelf to be narrower. Respondent agreed at original inspection to correct and there has been no change.

See the Registrar’s electronic file at pdf page 146. See id. at pdf page 106-107. 4 See id. at pdf page 136-139. Complaint Item 15: Uneven coping to travertine. Investigator’s Observation: Agree with Complainant. Respondent should properly remove, replace, [and] reset any/all coping / travertine to achieve a more uniform installation. Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4- 9-108 Workmanship Standards for Licensed Contractors. Compliance Inspection Opinion: Respondent has replaced some Travertine coping however the edge is not straight with the other coping and has not been properly sanded/grouted.

Complaint Item 17: Raw edges on coping at house side because not installed properly. Investigator’s Observation: Agree with Complainant. Respondent should properly finish all exposed edges of coping. Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4- 9-108 Workmanship Standards for Licensed Contractors. Compliance Inspection Opinion: Respondent has replaced some Travertine coping however the edge is not straight with the other coping and has not been properly sanded/grouted.

Complaint Item 18: Grout not complete on tile. Investigator’s Observation: Agree with Complainant. Respondent should properly complete all tile grout. Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4- 9-108 Workmanship Standards for Licensed Contractors. Compliance Inspection Opinion: Agreed, some additional grout/sanding was needed. Complaint Item 21: Bottom step to raised deck: (a) Edges not polished; (b) Grind marks on steps; (c) Saw cuts on travertine; (d) Overhang not the same; (e) Gaps. Investigator’s Observation: Agree with Complainant. Respondent should properly finish all exposed edges of coping. Respondent should properly replace any/all travertine tiles with exposed grinder marks and or cuts. Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4- 9-108 Workmanship Standards for Licensed Contractors. Compliance Inspection Opinion: Appeared that the Respondent still had some additional edge polishing and or cleaning to do and there was an unsightly gap in the stacked stone on the side of the step.

Complaint Item 22: Umbrella table-holder crooked in cement so umbrella will always be crooked. Investigator’s Observation: Agree with Complainant. Respondent agreed to properly correct. Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4- 9-108 Workmanship Standards for Licensed Contractors. Compliance Inspection Opinion: Respondent had torn out the umbrella sleeve but had not replaced it nor installed the tabletop.5 8. Investigator Corlett referred the complaint to the Registrar’s Legal Department. On February 11, 2019, the Registrar issued a Citation against Respondent’s license, charging cause to suspend or revoke the license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(22). The Citation did not charge cause to suspend or revoke Respondent’s license under A.R.S. § 32- 1154(A)(9)6 or (14).7 9. Respondent filed a timely written answer to the Citation, denying any statutory violations.

10. The Registrar referred the matter to the Office of Administrative Hearings,

an independent state agency, for an evidentiary hearing on April 15, 2019, at 8:30 a.m.

On March 4, 2019, the Registrar issued a Notice of Hearing, which was sent to

Respondent at his address of record.

11. Complainants requested that the hearing be continued. On March 19,

2019, the Administrative Law Judge assigned to the matter issued an order continuing

the hearing to April 19, 2019, at 1:30 p.m. OAH staff sent the order to Respondent at

his address of record.

5 Id. at pdf pages 142-144. A.R.S. § 32-1154(A)(9) includes among the grounds to suspend or revoke a contractor’s license, “[a]iding or abetting a licensed or unlicensed person to evade this chapter, knowingly combining or conspiring with a licensed or unlicensed person, allowing one’s license to be used by a licensed or unlicensed person with intent to evade this chapter.” A.R.S. § 32-1154(A)(14) includes among the grounds to suspend or revoke a contractor’s license, “[a]cting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth upon the license.” 12. On April 18, 2019, Respondent notified OAH and the Registrar that he would not be attending the hearing on April 19, 2019, because he had relocated out of the area.

13. An evidentiary hearing was held via videoconference from the Registrar’s

Flagstaff office on April 19, 2019. Complainants submitted 40 exhibits and presented

Andy Holthe’s testimony. Investigator Corlett also testified.

14. Respondent did not request to appear telephonically and did not request

that the hearing be continued a second time. Respondent did not appear, personally or

through an attorney. Consequently, Respondent did not present any evidence to

defend his license.

15. Investigator Corlett testified consistently with the September 28, 2018

directive and his Compliance Jobsite Inspection Notes.

16. Investigator Corlett testified that Respondent had agreed to hire an

engineer to rebuild the spa, which was complaint item #8, and to provide proof that the

proposed repair had been engineered, but that Respondent had not provided such

proof. Investigator Corlett testified that both parties attended the compliance jobsite

inspection. 17. Andy Holthe testified that the first time he met Respondent was ten days before the first jobsite inspection and that, during construction of the pool and spa, the only person he dealt with was Brent Wolterman. 18. Andy Holthe testified that Brent Wolterman said he did not know or deal with Respondent. Andy Holthe testified that Respondent was never at his house and that he did not think that he had made a contract with Respondent. Andy Holthe testified that, at the first jobsite inspection, Respondent agreed unconditionally to repair all deficient workmanship. 19. Andy Holthe testified that he agreed to extend the time for Respondent to comply with the September 28, 2018 directive, but that it failed to do so. 20. Andy Holthe testified that Respondent agreed to remove and replace the spa. Instead, Respondent removed three of the four walls and one-third of the fourth wall, promising to get engineering to make sure repairs were performed correctly. Andy Holthe testified that the walls of the spa were still concave and crooked. 21. Pursuant to A.A.C. R4-9-117, administrative notice is taken of

Respondent’s prior disciplinary history as shown on the Registrar’s public website on

this date. Respondent’s license is current and in good standing. No discipline has

ever before been taken against the license and Complainant’s appears to be the only

complaint pending against the license.

CONCLUSIONS OF LAW

1. The order that OAH staff mailed to Respondent at his address of record was

reasonable, and it appears that he actually received notice of the continued hearing.8

2. This matter lies within the Registrar’s jurisdiction.9

3. Complainants bear the burden of proof to establish cause to suspend or

revoke Respondent’s license by a preponderance of the evidence.10

4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”11 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.”12 5. The record does not establish the relationship between Respondent and Brent Wolterman or that Brent Wolterman is responsible for the poor work on Complainants’ project. The Registrar did not cite Brent Wolterman and he did not receive notice of the hearing or continued hearing. The Registrar may want to further investigate these matters.

See A.R.S. §§ 41-1092.04; 41-1092.05(D). See A.R.S. § 32-1154(A). See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 12 BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). 6. Because Respondent did not disavow and, instead, accepted responsibility for this project, the Registrar’s citation properly charged Respondent’s license. 7. Complainants established cause to suspend or revoke Respondent’s

contractor’s license under A.R.S. § 32-1154(A)(3),13 namely A.A.C. R4-9-108,14 and

A.R.S. § 32-1154(A)(22)15 in the workmanship on the seven items identified on

Investigator Corlett’s Compliance Jobsite Inspection Notes and in his hearing

testimony.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the final

order in this matter, License No. ROC 103029 of Respondent Rex Alan Wolterman

DBA: Rexon Pools and Spas shall be suspended for a period of thirty (30) calendar

days.

It is further recommended that Respondent shall 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 final order, the Registrar shall 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 the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification.

A.R.S. § 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.” A.A.C. 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.” 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.” Done this day, May 16, 2019.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors