ALJDEC decisions subject to certification as final

2019A-03102-RFA-LS-ROC · Registrar of Contractors · 2021-08-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Steven Terry Blanco,

COMPLAINANT,

v.

Endless Summer Swimming Pool Construction Inc.,

dba Endless Season Pool Construction,

ROC License No. 221919,

RESPONDENT.

No. 2019A-03102-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 23, 2021 at 9:00 AM.

APPEARANCES: Assistant Attorney General John Tellier, Esq. appeared on behalf of the Arizona Registrar of Contractors with Gail Matthews as a witness. Steven Blanco (“Complainant”) appeared on his own behalf. Jesus “Jessie” Petti appeared on behalf of Endless Summer Swimming Pool Construction, Inc. (“Respondent”). Nadine Petti observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.

FINDINGS OF FACT

Background and Procedure

According to the Registrar’s public website, on July 12, 2006, the Registrar issued ROC License No. 221919 for General Residential B-5 Swimming Pool contracting to Respondent. Jesus Petti is the Qualifying Party and Officer on this license. Nadine Petti is also listed on the license as an Officer. Respondent’s address of record on the license is 14270 W. Ventura St. Surprise, AZ 85379-9324.

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. The license is active and renewed through July 31, 2022. The license has been disciplined by the Registrar on 1 prior occasion, which is presumed to be related to this matter. On November 05, 2020, a $9,000.00 surety bond issued by Ohio Casualty Insurance Company for the license was cancelled.

On June 17, 2019, the Registrar received a 7-item complaint filed by Complainant alleging abandonment and poor workmanship of a residential pool remodeling project.

On February 24, 2020, Registrar investigator Chris Fultz (“Investigator Fultz”) conducted a jobsite inspection at the project site. Respondent was not present. Investigator Fultz substantiated complaint items 1-2 and 4-5.

On February 27, 2020, Investigator Fultz issued a Directive from the Registrar (“Directive”) to Respondent because he determined that the work Respondent had performed on the project failed to meet minimum workmanship standards. Respondent was put on notice that he had until 5:00 p.m. on March 20, 2020, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(22), and 32-1154(E).

On March 26, 2020, Investigator Fultz performed a compliance jobsite inspection at the project site. Investigator Fultz determined that Respondent had not complied with the Directive, and specifically noted that “the contractor caused more issues.”

On April 01, 2020, the Registrar issued a Citation 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). Respondent was given until April 16, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1155(C).

On April 10, 2020, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. On June 05, 2020, an administrative evidentiary hearing took place at OAH to be determined whether the Registrar had 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.”).

On July 06, 2020, the Registrar issued a Final Administrative Decision and Order to the parties whereby Respondent was held to be in violation of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). As such, the Registrar suspended Respondent’s license for fourteen (14) business days and imposed a $500.00 civil penalty under Ariz. Rev. Stat. § 32-1154. On August 15, 2020, the Final Administrative Decision and Order became effective.

On February 24, 2021, the Registrar received Complainant’s petition for payment from the Residential Contractors’ Recovery Fund (“Fund”), pursuant to Ariz. Rev. Stat. §§ 32-1132(A) and 32-1154(G), in the amount of $30,000.00. In compliance with a written request by the Registrar, Complainant subsequently provided proof of $24,000.00 in payments to Respondent, a Release and Assignment from Respondent’s bond company for a $9,000.00 payout, Complainant’s Quitclaim Deed and a Residential Parcel Assessment for Complainant’s property by the Maricopa County Assessor’s Office, and two remediation estimates from appropriately licensed contractors.

On April 26, 2021, the Registrar issued a Notice of Claim for Administrative Award to the parties which held Complainant was awarded $29,888.00 from the Fund.

On or about May 14, 2021, the Registrar received an appeal letter from Respondent contesting Complainant’s award amount from the Fund.

On May 19, 2021, the Registrar again referred the matter to the Office of Administrative Hearings for an independent evidentiary hearing. Per the Notice of Hearing sent to the parties on June 08, 2021, the issue for hearing is to determine if Complainant’s award from the Fund was properly calculated and appropriately issued pursuant to Ariz. Rev. Stat. §§ 32-1132 to 32-1133.01 and 32-1154(F), as justified by the evidence.

Hearing Evidence

At the hearing, the Registrar called Gail Matthews as a witness and submitted Exhibits 1-7 and 8-19. The Notice of Hearing was also admitted into the record. Complainant and Respondent both declined to testify. The substantive evidence is as follows:

Complainant owns residential property located at 10809 N. 54th Cir. Glendale, AZ 85304, which is the site of the underlying project at issue.

Ms. Matthews is a Legal Assistant II for the Registrar. Ms. Matthews made the determination that Complainant was eligible for a payout from the Fund.

In order to be eligible for an administrative payout applicant(s) must meet several requirements. An individual is eligible for an award from the residential contractors’ recovery fund if they both: (1) own residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance, and (2) actually occupy or intend to occupy the residential real property as the individual’s primary residence.

Here, Complainant satisfied all statutory requirements for an administrative payout from the Fund.

Ms. Matthews determined the contract price was $25,000.00, of which Complainant paid Respondent $24,000.00.

Ms. Matthews chose the lowest bid provided by Complainant; totaling $39,888.00, because it did not exceed the scope of items identified in the Registrar’s Directive for remediation.

Ms. Matthews deducted Complainant’s $1,000.00 outstanding balance on the contract, as well as the $9,000.00 surety bond payout Complainant received, from the bid amount; resulting in an administrative payout award of $29,888.00.

In closing, the Registrar argued that Respondent failed to sustain its burden of proof in the matter, and that the record reflected that Ms. Matthews had taken all relevant evidence into consideration and correctly calculated Complainant’s eligibility and administrative payout award.

In closing, Respondent essentially argued that it was unfair that it be held liable for repairs in excess of its original contract amount.

Complainant declined to provide a closing argument.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

Respondent bears the burden of establishing by a preponderance of the evidence that the Fund’s payout amount was incorrect and/or improperly issued. The Registrar bears the burden to establish factors in mitigation by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

Pursuant to Ariz. Rev. Stat. § 32-1132(B)(1), in order to be eligible to access the Recovery Fund an applicant must be an individual who both (a) Owns residential real property that is damaged by the failure of a residential contractor to adequately build or improve a residential structure or appurtenance, and (b) Actually occupies or intends to occupy the residential real property described in subdivision (a) of this paragraph as the individual's primary residence.

Pursuant to Ariz. Rev. Stat. § 32-1132(C), in order for an applicant to be eligible to access the Recovery Fund the contractor at issue must also have been appropriately licensed either (1) on the date that the underlying contract was signed, (2) on the date the first payment was made, or (3) on the date that work on the underlying commenced.

Ariz. Rev. Stat. § 32-1154(F) provides that “if a contractor’s license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter the registrar may order payment from the residential contractors’ recovery fund to remedy the violation.”

Statutes shall be liberally construed to affect their objects and to promote justice. In interpreting a statute, “[w]e first consider the language of the statute and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter, historical background, effects, consequences, spirit, and purpose.”

Statutes should be interpreted to provide a fair and sensible result. “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”

The Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.

In the case at bar, however, a detailed factual analysis is not necessary because Respondent failed to present any substantive evidence at hearing. As such, Respondent failed to sustain its burden of proof in this matter.

The record reflects that the Registrar soundly established Complainant’s eligibility and how Complainant’s payout award amount was properly calculated at $29,888.00. Ms. Matthews credibly testified that she diligently made calculations to allow items from the lowest bid chosen by the Registrar and disallow outstanding balances and bond payments, which is how she reached her final figure.

Because Respondent offered no credible evidence to rebut Ms. Matthews’ testimony, the undersigned Administrative Law Judge must conclude that Complainant was properly awarded a $29,888.00 payout from the Fund. Therefore, Respondent’s appeal must be denied.

RECOMMENDED ORDER

Based on the foregoing,

it is recommended that Respondent’s appeal be denied.

IT IS FURTHER RECOMMENDED that the Registrar affirm the $29,888.00 payout from the Fund as outlined in the Notice of Claim for Administrative Award, as issued on April 26, 2021.

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 forty (40) days from the date of that certification.

Done this day, August 23, 2021.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors