ALJDEC decisions subject to certification as final

2020A-04848-OMC-LS-ROC · Registrar of Contractors · 2021-08-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT,

v.

Imperial Pools And Design LLC,

License No. 316814,

RESPONDENT.

No. 2020A-04848-OMC-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 18, 2021, May 04, 2021, and July 12, 2021.

APPEARANCES: Assistant Attorney General Sarah Asta, Esq. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with Chance Peterson, Callie LeRoy, Gregory Johndrow, Arlo Houston, and Steve Nelson as witnesses. Marshall Hunt, Esq. appeared on behalf of Complaint 2020-04754 with Tami Hallman and Micky Hallman as witnesses. German Yusufov, Esq. appeared on behalf of Complainant 2020-02430 with Ned Keltner and Terrie Keltner as witnesses. Bernardo M. Velasco, Esq. appeared on behalf of Respondent with Alyssa Crone and Patrick Crone as witnesses.

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

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s license file as shown on the Registrar’s public website. On December 02, 2017, the Registrar issued ROC License No. 316814 for General Dual KA-6 Swimming Pool contracting to Respondent. The license is active and renewed through December 31, 2021. Patrick Rafferty Crone is listed on the license as its Qualifying Party and Member. Alyssa Nicole Crone is also listed on the license as Member. The address of record for the license is 3805 W. River Rd. Ste. 105 Tucson, AZ 85741-3796. There have been 21 complaints filed against license; including those in the above-captioned matter, 2 of which have resulted in disciplinary action against the license. No bond information is listed for the license on the Registrar’s website.

On or about July 27, 2020, the Registrar received a 9-item complaint, Complaint No. 2020-03602, from Callie LeRoy alleging poor workmanship and abandonment of their pool construction project. Registrar investigator Arlo Houston (“Investigator Houston”) was assigned to investigate the complaint.

On or about May 14, 2020, the Registrar received a 3-item complaint, Complaint No. 2020-02430, from Ned Keltner alleging poor workmanship of their pool construction project. Registrar investigator Mike Springer (“Investigator Springer”) was assigned to investigate the complaint.

On or about October 06, 2020, the Registrar received a 4-item complaint, Complaint No. 2020-04754, from Tami Hallman alleging abandonment of their pool construction project. Registrar investigator Gregory Johndrow (“Investigator Johndrow”) was assigned to investigate the complaint.

Upon investigation, the Registrar substantiated all three complaints regarding abandonment of contract and/or poor workmanship. Given the circumstances, the Registrar determined that the public health, safety or welfare imperatively required emergency action under Arizona Revised Statutes (“Ariz. Rev. Stat.”) § 41-1092.11(B).

Subsequently, the complaints were consolidated and referred for an evidentiary hearing before the Office of Administrative Hearings (“OAH”), an independent state agency, located in Phoenix, Arizona. Pursuant to the Amended Notice of Hearing issued December 29, 2020, the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on violation(s) of the following charges:

Complaint 2020-02430

Charge: 1 A.R.S. § 32-1154(A)(3) - R4-9-108(a)

Charge: 2 A.R.S. § 32-1154(A)(12) - A.R.S. § 32-1158

Charge: 3 A.R.S. § 32-1154(A)(12) - A.R.S. § 32-1158.01

Charge: 4 A.R.S. § 32-1154(A)(22)

Complaint 2020-03602

Charge: 1 A.R.S. § 32-1154(A)(2)(a)

Charge: 2 A.R.S. § 32-1154(A)(3) - R4-9-108(a)

Charge: 3 A.R.S. § 32-1154(A)(12) - A.R.S. § 32-1158

Charge: 4 A.R.S. § 32-1154(A)(12) - A.R.S. § 32-1158.01

Charge: 5 A.R.S. § 32-1154(A)(22)

Complaint 2020-04754

Charge: 1 A.R.S. § 32-1154(A)(3) - R4-9-108(a)

Charge: 2 A.R.S. § 32-1154(A)(22)

At the hearing, the Registrar was represented by Assistant Attorney General Sarah Asta, Esq., who submitted Exhibits 1, 3-7, 8-17, 20-25, 27-31, 34, 37-38, 41-56, 60 and into the record and presented the testimonies of Chance Peterson – Assistant Chief Counsel, homeowner Callie Leroy, and Investigators Houston, Nelson, and Johndrow. The Registrar’s agency file was also admitted as its own exhibit. Tami Hallman and Mick Hallman testified on their own behalves and submitted Exhibits 8-16 into the record. Ned Keltner and Terrie Keltner testified on their own behalves and submitted Exhibits 2-19 & 21-23 into the record. Respondent called Alyssa Crone and Patrick Crone as witnesses and submitted Exhibits 2, 5, 16, 7-10, 12, 14-15 into the record.

Hearing Evidence

Homeowner Complaints

LeRoy (Complaint No. 2020-03602)

Ms. LeRoy owns residential property located at 4912 N. Calle Calmado Tucson, AZ 85718.

On or about January 28, 2020, Ms. LeRoy entered into an $87,500.00 residential pool construction contract with Respondent. Ms. LeRoy paid $56,875.00 on the contract. Work on the project commenced February 24, 2020, and stopped on June 06, 2020.

On August 20, 2020, Investigator Houston reviewed the contract agreements between the parties; including Change Orders and city approved specifications, inspected the work that had been done on the project to date, and took 35 photographs of the project. Respondent was not present. When he was finished, Investigator Houston drafted Jobsite Inspection Notes. Ultimately, Investigator Houston substantiated 5 of Ms. LeRoy’s 9 complaint items. Specifically, Investigator Houston found that complaint items 1-3, and 6-7 were in need of remediation and/or completion by Respondent.

On September 17, 2020, Investigator Houston issued a Directive from the Registrar (“Directive”) to Respondent based on the workmanship allegations he substantiated during his jobsite inspection. Respondent was put on notice that he had until 5:00 p.m. on October 23, 2020, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3); Arizona Administrative Code (“Ariz. Admin. Code”) R4-9-108, 32-1154(A)(22), and 32-1154(E).

On October 13, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in its contracts.

On October 13, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158.01 for Respondent’s failure to include all four (4) required minimum elements in its pool construction contracts.

On October 13, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(16) because Respondent’s allegedly performed contracting outside the scope of his license.

On October 26, 2020, Investigator Houston performed a Compliance Jobsite Inspection and took 5 photographs of the project. Respondent was not present. When he was finished, Investigator Houston drafted Compliance Jobsite Inspection Notes. Ultimately, Investigator Houston determined that complaint items 1-3, and 6-7 remained at issue and had not been satisfactorily remediated by Respondent.

On October 30, 2020, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(12); namely 32-1158, 32-1154(A)(12); namely 32-1158.01, and 32-1154(A)(22). Respondent was given until November 14, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On November 13, 2020, the Registrar received Respondent’s Answer whereby Respondent denied all of the Registrar’s charges. Respondent affirmatively alleged that it “completed all repairing issued related to the directive” and was “actively seeking resolution of any outstanding issues to the reasonable satisfaction” of Ms. LeRoy.

Keltner (Complaint No. 2020-02430)

Mr. Keltner and his wife own residential property located at 2025 N. Donner Ave. Tucson, AZ 85749.

On or about April 12, 2019, Mr. Keltner entered into a $74,656.00 residential pool construction contract with Respondent. Mr. Keltner paid $67,190.00 on the contract. Work on the project commenced April 12, 2019, and stopped on May 05, 2020.

On May 19, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in its contracts.

On May 19, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158.01 for Respondent’s failure to include all four (4) required minimum elements in its pool construction contracts.

On May 19, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(16) because Respondent’s allegedly performed contracting outside the scope of his license.

On June 08, 2020, Investigator Springer reviewed the contract agreements between the parties, inspected the work that had been done on the project to date, and took 2 photographs of the project. When he was finished, Investigator Springer drafted Jobsite Inspection Notes. Ultimately, Investigator Springer did not substantiate any of Mr. Keltner’s workmanship complaint items.

On June 08, 2020, Complaint No. 2020-02430 was dismissed by the Registrar.

Upon receipt of a Request to Reopen, supplemented with additional information and 21 addendum complaint items, Complaint No. 2020-02430 was reopened by the Registrar.

On August 25, 2020, Investigator Springer conducted a second jobsite inspection of the project. Investigator Springer reviewed construction plans and county inspection documents. Ultimately, Investigator Springer substantiated 12 of Mr. Keltner’s addendum complaint items. Specifically, Investigator Springer found that complaint items 4-7, 9, 11, 13, 16-18, and 21-22 were in need of remediation and/or completion by Respondent.

On September 02, 2020, Investigator Springer issued a Directive to Respondent based on the workmanship allegations he substantiated during his jobsite inspection. Respondent was put on notice that he had until 5:00 p.m. on October 02, 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 October 14, 2020, Investigator Springer performed a Compliance Jobsite Inspection of the project. When he was finished, Investigator Springer drafted Compliance Jobsite Inspection Notes. Ultimately, Investigator Springer determined that complaint items 1-3, and 6-7 remained at issue and had not been satisfactorily remediated by Respondent.

On October 21, 2020, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(12); namely 32-1158, 32-1154(A)(12); namely 32-1158.01, and 32-1154(A)(22). Respondent was given until November 05, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On November 13, 2020, the Registrar received Respondent’s Amended Written Answer to Citation (“Amended Answer”) whereby Respondent denied all of the Registrar’s charges and asked that the matter be dismissed for the Registrar’s alleged failure to issue a Directive in the matter.

On March 15, 2021, Investigator Springer performed a prehearing jobsite inspection whereby he observed that the project had not entirely been completed.

Hallman (Complaint No. 2020-04754)

Mrs. Hallman and her husband own residential property located at 17914 S. Deer Lodge Ct. Sahuarita, AZ 85629.

On or about April 12, 2019, Mrs. Hallman entered into a $103,548.82 residential pool construction contract with Respondent. Mrs. Hallman paid $93,619.72 on the contract. Work on the project commenced March 10, 2020, and stopped on July 18, 2020.

On October 19, 2020, Investigator Johndrow reviewed the parties’ contract agreement and other related documentation, inspected the work that had been done on the project to date, and took 10 photographs of the project. When he was finished, Investigator Johndrow drafted Jobsite Inspection Notes. Ultimately, Investigator Johndrow substantiated 2 of Mrs. Hallman’s 4 complaint items. Specifically, Investigator Johndrow found that complaint items 1 and 3 were in need of remediation and/or completion by Respondent.

On October 23, 2020, Investigator Johndrow issued a Directive to Respondent based on the workmanship allegations he substantiated during his jobsite inspection. Respondent was put on notice that he had until 5:00 p.m. on November 30, 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 October 23, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in its contracts.

On October 13, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158.01 for Respondent’s failure to include all four (4) required minimum elements in its pool construction contracts.

On October 13, 2020, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(16) because Respondent’s allegedly performed contracting outside the scope of his license.

On December 07, 2020, Investigator Johndrow performed a Compliance Jobsite Inspection of the project. When he was finished, Investigator Johndrow drafted Compliance Jobsite Inspection Notes. Ultimately, Investigator Johndrow determined that complaint items 1 and 3 remained at issue and had not been satisfactorily remediated by Respondent.

On December 09, 2020, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until December 24, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On December 24, 2020, the Registrar received Respondent’s Answer whereby Respondent both of the Registrar’s charges. Respondent affirmatively alleged that “any defect in its performance has been cured” with “reasonable satisfaction” of Mrs. Hallman. Respondent also accused Investigator Johndrow of allowing an insufficient amount of time for Respondent to comply with the Registrar’s Directive.

On March 12, 2021, Investigator Johndrow performed a prehearing jobsite inspection whereby he observed that the project was “incomplete and nonoperational.”

Closing Arguments

Respondent’s closing argument

In closing, Respondent opined that it does excellent work and is trying to “do right” by its customers. Respondent noted that post remedial contract provision measures taken after receipt of Warning Letters issued by the Registrar. Respondent asserted that it stood ready to submit to the Registrar’s regulation and contract requirements, and denied engaging in any intentional conduct that may have been perceived as unprofessional by any of the complainants in this matter. Respondent argued that pool constructions follows very definite sequence, and that the global COVID-19 pandemic impacted its ability to timely perform on the underlying projects because labor and materials became expensive and scarce.

Regarding Complaint No. 2020-03602, Respondent argued that it completed the project one day after the Directive’s compliance deadline.

Regarding Complaint No. 2020-02430, Respondent conceded that the project was incomplete but argued that the Keltners bore the responsibility for the lack of completion because they did not complete/remediate the prerequisite fencing, or at a minimum provide notice of correction completion, until the May hearing. Respondent also argued that the Keltners owe an outstanding balance that must be paid prior to completion of the project. Respondent accused the Keltners of using their complaint as leverage to reduce the balance owed, and obtain refunds on multiple items. Respondent conceded that it executed a number of verbal change orders with the Keltners, but argued that they were not invalid or nullified because they were not in writing. To that end, Respondent opined that because verbal modifications are binding and enforceable, Respondent is deemed to have fully performed based on those agreements.

Regarding Complaint No. 2020-04754, argued that it had “substantially completed” the Hallman’s project and that only “punch list items” remained outstanding. Respondent argued that the Directive’s compliance deadline was arbitrary, and that a verbal change order executed between the parties after the Directive had been issued by the Registrar eradicated the Directive’s compliance deadline.

Ultimately, Respondent argued that there was insufficient evidence in the record to hold it in violation of any listed charge, but noted that if any such violation(s) existed, that no or minimal discipline would be appropriate in light of the facts.

Hallman’s closing argument

In closing, the Hallmans opined that the evidence of record established that Respondent had temporary abandoned their project, caused undue delay, acted unprofessionally, and performed on the project in an unworkmanlike manner.

The Hallmans opined that any alleged COVID-19 related labor and material shortages should not have impacted the project, because it should have been completed in March of 2020. Moreover, the Hallmans argued that Respondent was being disingenuous about the impact the pandemic had on its business because Respondent continued to sign-up more customers during the pandemic while trying to use it as an excuse for why their project could not be completed.

The Hallmans rejected Respondent’s pandemic related justifications and noted that their project commenced prior to the outbreak of the global virus. To that end, the Hallmans noted that work continued after the COVID-19 outbreak, with Respondent providing dates of completion in June and September of 2020, until work ceased altogether.

The Hallmans also accused Respondent of failing to provide them with an explanation regarding completion delays, and failing to clearly communicate with them until their attorney sent a demand letter to Respondent.

The Hallmans opined that because their project still has not been completed over 18 months after contract signing “severe discipline” against Respondent’s license was warranted.

Keltner’s closing argument

In closing, Keltners argued that Respondent’s actions were not singular or honest, but displayed a pattern of taking money and refusing to perform until ordered to do so by the Registrar; which still did not result in completion of their project. The Keltners opined that Respondent refused to take responsibility for its actions, or lack thereof, which indicated that in the future Respondent would likely continue to harm consumers in a similar manner. Respondent argued that Respondent blamed others for its shortcomings, and was caught on more than one occasion during the hearing changes its excuses for failing to complete the underlying projects and adhere to the Registrar’s Directives.

The Keltners noted that Respondent admitted they paid approximately 95% on their contract as of October 2019, but that the job was still not complete nearly 24 months since the contract was signed.

The Keltners also argued that because Respondent poses a legitimate danger to the public, the Registrar is required to act.

The Keltners beseeched the Tribunal to levy “sanctions” and “maximum penalties” against Respondent in this matter.

Registrar’s closing argument

In closing, the Registrar opined that most of Respondent’s testimony had been unsubstantiated self-serving statements in an attempt to improperly bolster his credibility. The Registrar argued that such statements did not constitute affirmative defenses.

The Registrar noted that while Respondent did make admissions on cross that projects had not been completed per their respective contracts, Respondent spent most of its time on direct placing blame on subcontractors, former employees, its own investigators, and the COVID-19 pandemic for all of its shortcomings and inaction.

The Registrar offered that it was statutorily compelled to act on the underlying complaints it received against Respondent, as Respondent’s license had already been suspended twice, been issued multiple warning letters, and had already received 11 other complaints against it. The Registrar opined that Respondent remained “unfazed by threats of discipline” and that it could not permit Respondent to continue upending customer’s lives and residences under the Registrar’s purview.

The Registrar argued that the evidence of record overwhelmingly showed that the Registrar had sustained its burden of proof in the matter. As such, the Tribunal should impose the maximum allowable civil penalties against Respondent’s license, and revoke Respondent’s license as well.

CONCLUSIONS OF LAW

These matters lie within the Registrar’s jurisdiction, and 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.

The Registrar may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.

A pending administrative hearing regarding the status of a respondent’s licenses does not deprive the Registrar of its ability to prosecute these complaints or prevent the Registrar from determining the merits of these complaints.

The Registrar bears the burden of proof to establish grounds to take disciplinary action against Respondent’s contractor’s license by a preponderance of the evidence.

“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.”

Ariz. Rev. Stat. § 32-1154(A)(2)(a) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Departure from or disregard of plans or specifications in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.”

Ariz. Rev. Stat. § 32-1154(A)(3) 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.”

Namely, Ariz. Admin. Code R4-9-108(a) states that “[a] contractor shall perform all work in a professional and workmanlike manner.”

Ariz. Rev. Stat. § 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.”

Ariz. Rev. Stat. § 32-1158 provides that a contract between a contractor and property owner amounting to more than one thousand dollars must contain the following information in writing:

The name of the contractor and the contractor's business address and license number.

The name and mailing address of the owner and the jobsite address or legal description.

The date the parties entered into the contract.

The estimated date of completion of all work to be performed under the contract.

A description of the work to be performed under the contract.

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.

The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.

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.

That the property owner has the right to file a written complaint with the Registrar for an alleged violation of Ariz. Rev. Stat § 32-1154(A). The contract shall contain the Registrar's telephone number, website address, and shall state that complaints must be made within the applicable time period as set forth in Ariz. Rev. Stat § 32-1155(A). The information must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor.

Ariz. Rev. Stat. § 32-1158.01 provides, in pertinent parts, that a contractor’s residential in-ground swimming pool contract must contain the following information in writing:

A provision providing the purchaser the opportunity to request standard contractor's payment and performance bonds in a form approved by the registrar, securing the completion of the work and payment for services and materials. The cost of the payment and performance bond shall be paid by the purchaser of the swimming pool or spa and the contractor shall not charge a surcharge or a service charge.

The following payment provisions: (a) A down payment payable on the execution of the contract of not more than fifteen percent of the original contract price; (b) After the completion of the excavation work on the swimming pool or spa, a payment of not more than twenty-five percent of the amount of the original contract price plus any written change orders approved by the purchaser; (c) After the installation of steel, plumbing and pneumatically applied concrete materials or the installation of a prefabricated swimming pool or spa, a payment of not more than twenty-five percent of the amount of the original contract price plus any written change orders approved by the purchaser; (d) After the installation of decking materials, a payment of not more than twenty-five percent of the amount of the original contract price plus any written change orders approved by the purchaser, and (e) Before the application of the finishing interior materials or completion of all work on a prefabricated pool or spa, payment of all remaining sums due on the original contract plus any written change orders approved by the purchaser.

A provision that gives notice to the purchaser, in a form that is approved by the registrar and that is in at least ten point type, of the purchaser's right to receive written material that advises the purchaser of the provisions of this section and of the procedures provided for by the registrar for the resolution of claims and disputes with licensed contractors.

A provision in a form that is approved by the registrar and that is in at least ten point type, advising the purchaser of the purchaser's rights under title 44, chapter 15.

Ariz. Rev. Stat. § 32-1154(A)(22) provides, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or 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. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.”

Ariz. Rev. Stat. § 32-1154(E) holds, in pertinent parts, that the Registrar may impose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also holds that no future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.

The substantive facts of record are clear in this matter.

The record reflects that Respondent contracted with Ms. LeRoy, the Kelterns, and the Hallmans (collectively “Complainants”) for residential in-ground pool projects and Complainants tendered payments for Respondent’s services and/or materials, Respondent did not complete any of the projects, and the work Respondent performed on all of the projects fell below the Registrar’s minimum workmanship standards. The record also reflects that, on at least one occasion, Respondent did not adhere to government approved plans and build specifications.

It is also clear that while Respondent did make attempts to remediate deficient work and complete the projects, his work was poor and/or incomplete by the dates of the compliance jobsite inspections in each case.

The record further reflects that Respondent’s contracts for the projects in Complaint Nos. 2020-03602, 2020-02430, and 2020-04754 did not meet statutory requirements.

Therefore, the only issue in dispute is whether Respondent raised sufficient justifications or excuses for failing to timely and completely finish the underlying projects at issue per their respective agreements. These are affirmative defenses that Respondent bears the burden to establish.

Here, Respondent has not sustained his burden of proof.

Respondent’s pattern of taking payments on new contracts, while failing to fulfill existing contracts, jeopardizes public safety and welfare. When a consumer tenders payment to a provider for materials and/or services, it is entirely reasonable for said consumer to expect complete and timely performance. While it is true that exigent circumstances outside of a provider’s immediate control may excuse the timeliness of performance, it does not nullify a provider’s obligation to satisfy the terms of a lawful agreement. In the underlying complaints at bar, Respondent may have had several occasions were the COVID-19 pandemic impeded its ability to timely perform. The viral outbreak did not, however, impede Respondent’s ability to openly communicate with its customers, cause Respondent to overpromise and underperform, or perform substandard work when attempting to complete the project.

Because the Registrar established violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(12); namely, 32-1158 and 32-1158.01, and 32-1154(A)(22), by a preponderance of the evidence, the Registrar has also established cause to discipline Respondent’s contractor’s license.

Complainants may petition the Registrar’s Recovery Fund for financial recompense regarding these matters.

RECOMMENDED ORDER

In light of the foregoing,

IT IS RECOMMENDED that the Registrar require Respondent to pay the sum total of $1,500.00 in certified funds; $500.00 per complaint in cases 2020-03602, 2020-02430, and 2020-04754, as a civil penalties.

IT IS FURTHER RECOMMENDED that on the effective date of the Final Order in this matter, Respondent Imperial Pools And Design LLC, ROC License No. 316814, shall be revoked by the Registrar.

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, August 06, 2021.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors