FINACT2019A-03208-CHC-ROC-FinalAgencyAction-6677.pdf

2019A-03208-CHC-ROC · Registrar of Contractors · 2019-12-10

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

James Bateman Goodell, Case No. 2019-03208 COMPLAINANT, Docket No. 2019A-03208-CHC-ROC v. Blue Agave Pools And Spas LLC, FINAL ADMINISTRATIVE License No. ROC 296643, DECISION AND ORDER 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 of each finding of fact or conclusion of law.

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 accepts it.

CONCLUSION AND ORDER

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 January

18, 2020.

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

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 Dated December 9, 2019. By: /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Copy mailed via USPS First Class mail December 9, 2019 to: Respondent Blue Agave Pools And Spas LLC 18521 E Queen Creek Rd Ste 105 Queen Creek, AZ 85142 Complainant James Bateman Goodell 4814 S Eastern Run Mesa, AZ 85212 Complainant’s Attorney Mark J. Bainbridge Esq. 2122 E Highland Ave Ste 260 Phoenix, AZ 85016 Copy sent electronically this same date to: Office of Administrative Hearings Diane Mihalsky, Administrative Law Judge Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar Complainant’s Attorney at email address of record with Registrar Case No. 2019-03208 / VE

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 RECEIVED 11.20.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

James Bateman Goodell, No. 2019A-03208-CHC-ROC

COMPLAINANT, ADMINISTRATIVE LAW JUDGE DECISION v.

Blue Agave Pools and Spas LLC, License No. ROC 296643,

RESPONDENT.

HEARING: November 12, 2019, at 8:30 a.m. APPEARANCES: James Bateman Goodell (“Complainant”) was represented by Mark J. Bainbridge, Esq., The Bainbridge Law Firm; Blue Agave Pools and Spas, LLC (“Respondent”) appeared through Denny Allen Barnett, one of its members. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

FINDINGS OF FACT BACKGROUND AND PROCEDURE 1. According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website,1 on March 20, 2015, the Registrar issued License No. ROC 296643, for General Residential B-5 General Swimming Pool Contracting to Respondent. 2. On June 19, 2019, Complainant filed a complaint with the Registrar, alleging that Respondent had failed to complete its contract to install a pool at Complainant’s residence at 4814 S. Eastern Run, Mesa, Arizona 85212, and had performed poor work on the work it had started. According to the complaint, Complainant had paid Respondent $43,000.00 of the $50,480.00 contract amount.2

See A.A.C. R4-9-117 (“In any disciplinary proceeding conducted by the registrar, the licensee’s entire license file including the record of prior citations and decisions may be considered by the registrar in making a decision and order in the case.”). See Respondent’s Exhibit 1 at 128-129. Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 11.20.2019 ROC LEGAL

3. Complainant attached to his complaint an undated document for the construction of a pool for $40,432.00 that was signed by both parties on or about November 1, 2018. The document included the pool’s dimensions and some design

specifications.3 The document did not include an estimated date of completion, apprise

Complainant of his right to file a complaint with the Registrar for a violation of A.R.S. §

32-1154(A) within the time allowed by A.R.S. § 32-1155(A), or include the Registrar’s

website address and telephone number.

4. At some point, Respondent prepared a second contract to construct a pool

with additional features and materials for $50,480.00. The amended contract was not

signed and did not include an estimated date of completion, apprise Complainant of his

right to file a complaint with the Registrar for a violation of A.R.S. § 32-1154(A) within

the time allowed by A.R.S. § 32-1155(A), or include the Registrar’s website address

and telephone number.4

5. The complaint was assigned to the Registrar’s Investigator Beau Cruz for

investigation. On August 2, 2019, Investigator Cruz performed a jobsite inspection,

which Respondent did not attend.

6. On August 5, 2019, Investigator Cruz on behalf of the Registrar issued a directive that required Respondent to correct the certain items on or before August 20, 2019, at 5:00 p.m., in relevant part as follows: Respondent is to complete project per the agreement between the parties.

Complaint Item 1: Pool construction is not completed in a timely manner. There are weeks without progression. Respondent is to complete project per the agreement between the parties. Complaint Item 2: The concrete was not painted and has cracks. Stucco was a fine coat unlike original. Failed to paint exterior of CMU return wall from shared CMU wall with neighbor to north (N) of property, and base block of CMU pilaster for pool gate adjoining CMU See Complainant’s Exhibit 1 at 1-7; Respondent’s Exhibit B. 4 See Complainant’s Exhibit 1 at 8-34. RECEIVED 11.20.2019 ROC LEGAL

return wall from shared wall with neighbor to north (N) of property, is cracked.

Complaint Item 4: Coping has a 1 inch or more of grout line. Un-grouted joints between are uneven in width and measured between 1 ¼ at outer curve radius and, to ¼ at inner curve radius. It should be noted that project is not complete and in initial state of applying coping stone and, coping has only been applied around outer pool step area on the southeast (S/E) radial curve of pool.

Complaint Item 8: The tile of the water line was not installed straight and broken tiles were used. Missing tiles on top border of water line tile below water feature. Complaint Item 9: Water supply line extends past the corner of the wall. PVC water line on north (N) side of house was no installed plumb with wall, and protrudes beyond west (W) wall of house. Complaint Item 10: Shotcrete has large cracks. Shrinkage cracks in shotcrete by base of pool leading up to steps.5 7. On August 30, 2019, Investigator Cruz sent Respondent a warning letter that its contract with Complainant did not include all the elements required by A.R.S. § 32- 1158(A). 8. On September 3, 2019, the Registrar issued a Citation against Respondent’s contractor’s license, charging cause to suspend or revoke the licenses under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, A.R.S. § 32-1154(A)(12), namely A.R.S. § 32- 1158, and 32-1154(A)(22). 9. Respondent’s member, Denny Barnett, on its behalf filed a timely written answer to the Citation, denying any statutory violation. Respondent alleged that it had

5 Complainant’s Exhibit 1 at 133-134. RECEIVED 11.20.2019 ROC LEGAL

not repaired or completed the project because Complainant refused to pay Respondent. 10. The Registrar referred the matter to the Office of Administrative Hearings,

an independent state agency, for an evidentiary hearing.

11. A hearing was held on November 12, 2019. Complainant testified on his

own behalf, presented the testimony of his wife, Julie Tai, and submitted one exhibit

that consisted of 146 Bates numbered pages. Mr. Barnett testified on behalf of

Respondent and submitted two exhibits. Investigator Cruz also testified.

ADDITIONAL HEARING EVIDENCE

12. Investigator Cruz testified consistently with his jobsite inspection notes and

the directive. Investigator Cruz testified that he had performed a prehearing jobsite

inspection on November 7, 2019, at 8:15 a.m. and that no additional work had been

performed at the project.

13. Investigator Cruz testified that, although the project was incomplete, Respondent’s work also did not comply with the Registrar’s workmanship standards and standards in the construction industry. 14. Investigator Cruz acknowledged that, on August 27, 2019, and August 29, 2019, after the deadline on the directive had passed, Mr. Barnett had called him to inform him that he had gone to Complainant’s house to provide a new proposal to complete the job, but that Ms. Tai had refused to sign the proposal or to commit to paying Respondent any more money.6 Investigator Cruz also testified that Complainant and his wife said that they allowed Respondent access to repair and complete the project. 15. A third unsigned contract that Respondent presented to Complainant on August 20, 2019, provided for certain landscaping work for an additional contract price of $18,865.63. This document also did not include an estimated date of completion, apprise Complainant of his right to file a complaint with the Registrar for a violation of

6 See Respondent’s Exhibit A (Investigator Cruz’s Notes for Case). RECEIVED 11.20.2019 ROC LEGAL

A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A), or include the Registrar’s website address and telephone number.7 16. Complainant testified that he and Ms. Lai have three sons, ages 10, 9, and

3, and that the incomplete pool poses a safety risk to his sons. Complainant testified

that he had paid Respondent more than $43,000.00, but that the pool was still

incomplete. Complainant testified that there was no financial dispute between the

parties that prevented completion of the pool.

17. Complainant testified that the project was plagued by lack of

communication from Respondent about scheduling work on the project and ordering

materials to complete the pool.

18. Complainant submitted Mr. Barnett’s April 20, 2019 text that stated he had

ordered the tile and coping and that it would be delivered to the jobsite the following

Thursday.8

19. Complainant testified that he met with Mr. Barnett at National Pool Tile on

May 30, 2019, to pick out materials that would allow Respondent to move forward on

the project. At that time, he picked three-piece Artistic tile based on a photograph that

Mr. Barnett had sent.9 As of June 7, 2019, however, Respondent had made very little progress on numerous aspects of the pool construction.10 On June 7, 2019, Complainant reiterated in a text to Mr. Barnett that he had approved the three-piece Artistic tile and stating that he did not understand why the pavers had not been ordered.11 20. Complainant testified that on June 10, 2019, Mr. Barnett said that his crew would pick up coping for the pool from Artistic tile on the next day.12 Complainant sent a photo to Mr. Barnett of the coping that he had been shown at National Pool Tile.

See Complainant’s Exhibit 1 at 66-71. See Complainant’s Exhibit 1 at 38. See Complainant’s Exhibit 1 at 44, 46. See Complainant’s Exhibit 1 at 47. See Complainant’s Exhibit 1 at 49, 50. 12 See Complainant’s Exhibit 1 at 51. RECEIVED 11.20.2019 ROC LEGAL

21. Complainant testified that the materials did not arrive until June 17, 2019.13 Complainant testified that he did not know the reason for the delay and that, although he had chosen three-piece Artistic tile for the deck, two-piece tile had been delivered.

22. Complainant testified that Mr. Barnett was on vacation when the tile was

delivered. Respondent never scheduled a crew to install or to move the tile from the

curb. Complainant testified that he moved the material to his backyard to prevent a

theft.

23. Complainant testified that on June 18, 2019, when he was not present, Ms.

Lai had met with Mr. Barnett to discuss the materials that Mr. Barnett had promised on

April 30, 2019, but that were not delivered until June 17, 2019. Complainant testified

that his wife and two of his sons who were present later told him that they felt

threatened by Mr. Barnett. Complainant testified that he filed the complaint with the

Registrar the next day.

24. Complainant testified that after June 18, 2019, Respondent did not again

come to the jobsite. On August 9, 2019, after the directive was issued, he sent an

email to Mr. Barnett, asking “what do you need from us to start completing the

project?”14 On August 18, 2019, he sent another email, stating as follows: We haven’t heard anything regarding schedule. When did you have in mind? Our schedule is pretty open, we just need to know what time you’ll be over.15 Complainant testified that Mr. Barnett did not respond to his emails. Respondent never sent a crew or equipment to complete the pool after the directive was issued. 25. Ms. Lai testified that she never denied access to Respondent to repair or to complete the project. 26. Mr. Barnett testified that he did not contest any of Complainant’s evidence. 27. Pursuant to A.A.C. R4-9-117, administrative notice is taken of Respondent’s prior disciplinary history on the Registrar’s public website. On this date,

See Complainant’s Exhibit 1 at 127. Complainant’s Exhibit 1 at 145. 15 Complainant’s Exhibit 1 at 146. RECEIVED 11.20.2019 ROC LEGAL

Respondent’s License No. ROC 296643 had been suspended since October 24, 2019. One prior complaint had resulted in discipline.

CONCLUSIONS OF LAW

1. This matter lies within the Registrar’s jurisdiction.16

2. Complainant bears the burden of proof to establish cause to suspend or

revoke Respondent’s license by a preponderance of the evidence.17 Respondent bears

the burden to establish factors in mitigation of the penalty and affirmative defenses by

the same evidentiary standard.18

3. “A preponderance of the evidence is such proof as convinces the trier of fact

that the contention is more probably true than not.”19 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.”20 4. Because Respondent’s three proposals do not include an estimated date of completion or information about filing a complaint with the Registrar for violations of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A), the evidence established grounds to suspend or revoke Respondent’s license under A.R.S. § 32- 1154(A)(12),21 specifically A.R.S. § 32-1158(A).22 As a factor in aggravation of the

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). See A.A.C. R2-19-119(B)(2). 19 MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). 21 A.R.S. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” A.R.S. § 32-1158(A) provides that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 must be in writing and must include the following minimum terms: 1. The name of the contractor and the contractor’s business address and the license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. RECEIVED 11.20.2019 ROC LEGAL

penalty, the Complainant’s dealings with Respondent would have been easier and less contentious if Respondent’s contract had complied with A.R.S. § 32-1158(A) and Complainant had been made aware of Respondent’s contractual obligations from the

outset.

5. Although Complainant and his wife had not paid the full contract amount,

they had paid most of the contract amount and the project was still substantially

incomplete. Moreover, if a licensed contractor undertakes to perform construction

work, it still must comply with the Registrar’s standards, even if the contractor

subsequently is not paid for the work.23 Based on Investigator Cruz’s August 5, 2019

Directive and hearing testimony, Complainant established that Respondent’s

construction of the pool furnishes grounds to suspend or revoke Respondent’s

contractor’s license under A.R.S. § 32-1154(A)(3),24 namely A.A.C. R4-9-108.25

4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . . If Complainant makes a claim to the Residential Contractors’ Recovery Fund and is found to be an “injured person” as defined by A.R.S. § 32-1131(3), A.R.S. § 32-1132(A) limits payouts from the Fund to “the actual damages suffered by the claimant as a direct result of the contractor's violation but . . . not [to] exceed an amount necessary to complete or repair a residential structure . . . .” For the purposes of A.R.S. § 32-1132(A), “actual damages” are the reasonable cost of repairing the contractor’s defective work and completing the project, minus any portion of the contract price still unpaid to the original contractor. See Ramsey v. Arizona Registrar of Contractors, 241 Ariz. 102, 106, 384 P.3d 316, 320 (App. 2016). 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.” RECEIVED 11.20.2019 ROC LEGAL

6. Construction is not a perfect art and, generally, contractors must be afforded an opportunity to correct their workmanship before their licenses may be suspended or revoked. A property owner’s failure to provide reasonable access to

allow a contractor to comply with a directive is an affirmative defense that the

contractor bears the burden to establish. Respondent failed to establish that

Complainant and Ms. Lai failed to provide reasonable access for it to comply with the

directive. Therefore, Complainant established cause to suspend or revoke

Respondent’s contractor’s license under A.R.S. § 32-1154(A)(22).26

RECOMMENDED ORDER

Based on the foregoing, IT IS ORDERED that on the effective date of the final

order in this matter, License No. ROC 296643 of Respondent Blue Agave Pools and Spas LLC shall be revoked. IT IS FURTHER ORDERED 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 ORDERED 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 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. Done this day, November 19, 2019. /s/ Diane Mihalsky Administrative Law Judge

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.) RECEIVED 11.20.2019 ROC LEGAL

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors