ALJDEC decisions subject to certification as final

2020A-03847-CHC-ROC · Registrar of Contractors · 2021-02-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

William John Smith,

COMPLAINANT

Luxury Living Homes LLC,

License No. 315984,

RESPONDENT

No. 2020A-03847-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 28, 2021

APPEARANCES: Complainant William John Smith appeared via Google Meet on his own behalf. Gregory Kovacs appeared via Google Meet on behalf of Luxury Living Homes LLC. Chris Fultz appeared on behalf of the Registrar of Contractors.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

FINDINGS OF FACT

Luxury Living Homes LLC (Respondent) is the holder of License No. 315984 issued by the Arizona Registrar of Contractors (Registrar) on October 6, 2017.

On or about May 25, 2018, William John Smith (Complainant) signed a contract with Respondent for construction of a swimming pool in Scottsdale, Arizona for $2,716,975.00.

On or about August 11, 2020, the Registrar received a Complaint containing four items against Respondent from Complainant alleging poor work with respect to the project.

The Registrar assigned the complaint to Investigator Chris Fultz. The initial jobsite inspection was performed on September 3, 2020.

Investigator Fultz then issued a written directive on or about September 15, 2020, to Respondent that provided as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on October 13th 2020.

. . .

You are hereby directed to remedy the following violations by the appropriate means:

Compliance Item: 1 - 3 independent home inspections noted that Weep Screeds were not completed properly. Stucco covered weep screed. Tile covers Weep Screeds. Contractors repair was to cut stucco and paint over the cut. Stucco was not repaired. Are the Weep Screeds now to code?

Investigator’s Observation: The Weep Screeds are missing the metal screed. It appears that they were cut through.

Governing Rule: ARS §32-1154 (A) (3), Poor work not performed in accordance with professional industry standards.

Compliance Item: 3 - Pool tiles are falling off. Contractor advised the tiles were defective and needed to be replaced. Contractor has not replaced tile.

Investigator’s Observation: Several Pool tiles were observed to not be in place. this will need to be repaired by appropriate means.

Governing Rule: ARS §32-1154 (A) (3), Poor work not performed in accordance with professional industry standards.

Compliance Item: 4 - Pool is leaking. At close of escrow (4/19/19) the pool was not complete. Once the pool was finished there were multiple issues with leaks. 5 attempts were made to fix the leak. Contractor said root cause was pebble tech finish. Pool is leaking again. Contractor sent out a Technician who said the leak is coming from "scuppers". He advised us to not run the "scuppers" and it wouldn't leak. He also advised he would be back in touch to schedule a repair. We did not run the "scuppers" and it continued to leak. An Independent Inspection indicated the leak is likely coming from missing pool tiles or defects in the Pebble Tech coating. Leak is at water level. When we contacted Contractor he said we should "call the Technician to schedule a repair of the "scuppers".

Investigator’s Observation: There is a leak consistent were the water line meets at the back wall of the pool. This will need to be repaired by appropriate means.

Governing Rule: ARS §32-1154 (A) (3), Poor work not performed in accordance with professional industry standards.

(All errors contained in the original).

Following the issuance of the written directive, a compliance jobsite inspection occurred on October 22, 2020. In his Notes regarding the same, Investigator Fultz noted that Respondent failed to comply with Directives 3 and 4.

On November 6, 2020, the Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A) and A.R.S. § 32-1154(A)(22).

On December 28, 2020, a Notice of Hearing on Contested Case was issued, which set a hearing on January 28 2021 at 9:00 a.m. at the Office of Administrative Hearings, an independent state agency. The Registrar mailed copies of the Notice of Hearing to Respondent at its address and email address of record.

On January 4, 2021, the tribunal issued an Order converting the hearing to Google Meet, and this order was mailed and emailed to Respondent at its addresses of record.

Investigator Fultz testified generally about the Registrar’s involvement and his notes from his inspections.

Investigator Fultz testified that he noticed tiles were coming off and that leaking was still present, at least on the day of the compliance inspection, despite Respondent’s video to the contrary.

Investigator Fultz also testified that Respondent did not have a representative at the compliance jobsite inspection.

Finally, Investigator Fultz testified that he believed that the time to comply with the Directive was reasonable, and to his knowledge there was no denial of access to the property by Complainant.

Complainant testified on his own behalf and offered 15 exhibits into evidence.

Complainant testified that in early June 2020, he notified Respondent that the tiles were beginning to fall off and the pool was leaking on the west wall.

With regard to the tiles, Complainant testified that Respondent had supplied new tiles and those were used to replace the tiles that had fallen off, but that Respondent had not re-tiled the entire pool as Complainant believed was supposed to happen.

With regard to the leaking, Complainant testified that it was his understanding that the joint had to be above the water level to prevent the leaking, but it was right at or below the water level.

Complainant testified further that he hired Leak Detective to inspect the pool on August 21, 2020. That report determined it appeared “that a wall was added after initial pour of concrete. This creates a ‘cold joint’.” Further, Complainant testified that Leak Detective had recommended that the pool be drained, the tile removed and inject the cold joint with epoxy.

Complainant further testified that after Respondent made the repairs, he hired Leak Detective again to inspect the pool on October 20, 2020. Complainant testified that after a dye test, leaks were still present on the walls.

In addition, Complainant testified that Perfect Pools performed the repairs, and that Mr. Kovacs had only been at the property once, and would not come out to inspect until the jobsite inspection on September 15, 2020.

Finally, Complainant testified that this was a serious and expensive, but not difficult problem to remedy, and Respondent failed to comply with the Directive.

Respondent presented the testimony of its Qualifying Party, Gregory Kovacs and offered 13 exhibits into evidence.

Mr. Kovacs testified that during his time in the pool business, he had built 10-20 high end pools, and this was his first involvement with the Registrar. Mr. Kovacs also testified that the pool was built to the plans and specifications and passed every inspection from the City of Scottsdale.

With regard to the pool tiles, Mr. Kovacs testified that he believed that the pool’s chemicals were the causing the tiles to fall off. However, Mr. Kovacs further testified later that it was determined that the tiles were from a “bad batch”, and he had ordered new ones to rectify the issue. Mr. Kovacs testified that he was unaware that Perfect Pools only replaced the tiles which had fallen off.

With regard to the leaks, Mr. Kovacs testified it was normal for a block wall to be attached to shotcrete. He further testified that he did not believe the recommendation from Leak Detective was correct, and therefore did not follow the same.

Finally, Mr. Kovacs testified that the pool was not leaking after the repairs were made, and offered a video into evidence.

Administrative notice is taken of Respondent’s prior License record on February 1, 2021. Such prior License record reflects that Respondent’s License No. 315984 was first issued on October 6, 2017 and is currently active. Such prior License record also reflects that there was 1 open complaint, namely the present complaint.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations 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).

The evidence established that Respondent’s work was not in conformity with the Registrar’s standards. Based upon the testimony of Complainant and Investigator Fultz, tiles continued to fall off and leaks were present after the pool construction was completed. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A).

The evidence established that Respondent failed to complete the corrective work following the Directive being issued. While Mr. Kovacs acknowledged the tiles were defective in some manner, and purchased new ones, Perfect Pools only replaced the missing tiles, when there was good reason to believe that the original defective tiles could fall off in the future. With regard to the leaks, again, the tribunal finds that the testimony from Complainant and Investigator Fultz more persuasive in determining that the leaks were not properly corrected. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 315984 for a period of three days.

It is further recommended that the Registrar require Respondent to pay the sum of $300.00 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 Registrar’s final 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)(7), 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 30 days from the date of that certification.

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-137160-45720000Done this day, February 5, 2021.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000