ALJDEC decisions subject to certification as final

2021A-00518-CHC-ROC · Registrar of Contractors · 2021-06-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Edward Curtis Graham,

COMPLAINANT,

v.

Legend Pool Builders Inc.

License No. ROC 213464,

RESPONDENT.

No. 2021A-00518-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 07, 2021 at 9:00 AM.

APPEARANCES: Edward Graham (“Complainant”) appeared on his own behalf. Scott Bowman (“Respondent”). Ann Phipps-Graham observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the Arizona Registrar of Contractors (“Registrar”).

FINDINGS OF FACT

Background and Procedure

On November 22, 2005, the Registrar issued ROC License No. 213464 for General Residential B-5 Swimming pool contracting to Respondent. Respondent’s address of record for the license is 29355 N. 125th Dr. Peoria, AZ 85383-2443. Scott Allen Bowman is listed on the license as a Qualifying Party/Officer.

Pursuant to Ariz. Admin. Code R4-9-117 Administrative Notice is taken of Respondent’s prior license record for ROC License No. 213464, as reflected on the Registrar’s public website. Such prior license record reflects that Respondent’s license is active and renewed through November 30, 2021. The license has been previously disciplined on two prior occasions. The record also reflects that there is one open complaints against Respondent’s license, which is presumed to be related to this matter. Respondent has an active $9,000.00 surety bond for the license issued through RLI Insurance Company effective September 27, 2016.

On or about February 04, 2021, the Registrar received Complaint No. 2021-00518 filed by Complainant alleging abandonment. Attached to the complaint was a copy of Respondent’s original quote, the parties’ contract, design specifications, design appendix, and proof of payment.

On February 08, 2021, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by an investigator on February 22, 2021, at 10:00 a.m.

On February 22, 2021, Registrar investigator Mike Wiskow (“Investigator Wiskow”) inspected the work that had been done on the project to date and took 8 photographs of the project. Respondent was not present. When he was finished, Investigator Wiskow drafted Jobsite Inspection Notes.

On February 22, 2021, Investigator Wiskow issued a Directive from the Registrar to Respondent because he substantiated Complainants’ allegation that Respondent had abandoned their project. Respondent was ordered to complete the project per contract via appropriate means. Respondent was further put on notice that it had until 5:00 p.m. on March 15, 2021, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A), 32-1154(A)(22), and 32-1154(E).

On March 03, 2021, 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 March 15, 2021, Investigator Wiskow issued a Compliance Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site on March 18, 2021, at 12:30 p.m.

On March 18, 2021, Investigator Wiskow inspected the project site and took 6 photographs. When he was finished, Investigator Wiskow drafted Compliance Jobsite Inspection Notes. Ultimately, Investigator Wiskow determined that “no work, required by directive or otherwise, has been completed” by Respondent.

On March 18, 2021, Investigator Wiskow escalated Complaint 2021-00518 to the Registrar’s legal department with a Citation Recommendation.

On March 19, 2021, 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 April 05, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On April 05, 2021, the Registrar received Respondent’s Answer. In pertinent part, Respondent argued that because of the global COVID-19 pandemic it experienced “[E]xcessive construction growth delays” and was “waiting on a PPP COVID-19 relief help.” Respondent asked the Registrar for a 30-45 day extension to finish the project.

On April 12, 2021, Complainant submitted a letter to the Registrar in opposition to Respondent’s request for additional time to complete their project.

On April 09, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on June 07, 2021. Per the May 05, 2021, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following charges:

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

Charge 2: A.R.S. § 32-1154(A)(22)

On May 13, 2021, Investigator Wiskow issued notice to the parties that he would not be able to participate as a witness in the above-captioned hearing because he had a scheduling conflict.

On May 18, 2021, OAH advised the parties that either could file a Motion to Continue due to Investigator Wiskow’s unavailability for hearing. Neither party responded.

Hearing Evidence

Complainant testified on his own behalf, and submitted Exhibits 1-4 into the record. Respondent called Scott Bowman as a witness. The Registrar’s agency file was admitted into the record as its own exhibit. The substantive evidence of record is as follows:

Complainant owns secondary residential property located at 17810 N. 114th Circle Surprise, AZ 85374.

Complainant’s primary residence is in Ketchikan, AK.

On or about November 10, 2018, the parties entered into a contract agreement whereby Respondent agreed construct a residential pool for the sum total of $46,500.98.

The draw schedule for the project began with a $1,000.00 down payment, followed by three 30% progress payments at excavation, shotcrete, and decking, and then a final 10% payment prior to interior finish.

Complainant paid for the contract in full, however, because he authorized one or more Change Orders he paid a total of $48,741.98 to Respondent for the project.

On or about November 26, 2019, work on the project began. Work stopped on or about March 10, 2020.

During Investigator Wiskow’s jobsite inspection he observed that neither the handrail nor the salt cleaning system for the pool had been installed or was present on site. In addition, there were several visible cracks in the decking.

Although Respondent timely received a copy of the Registrar’s Directive, he did not comply prior to the expiration of the compliance deadline.

On an unknown date Respondent received a PPP loan from the federal government.

On March 31, 2021, Respondent provided notice to Complainant that he was able to hire trades to complete the job. Respondent sent workers to the jobsite on June 02, 2021, but the project site was locked as Complainant had already returned home to Alaska.

Complainant incurred an excessive amount of unexpected flight-related costs because he made multiple changes to flight itineraries from Alaska to Arizona over the course of the project, and beyond.

In closing, Complainant argued that the underlying project commenced prior to the onset of the COVID-19 pandemic and that the primary reason it had not been completed was due to Respondent’s financial mismanagement and poor communication. Complainant expressed that he was at his “wits’ end” nearly 560 days after the start of the project, and did not have faith that Respondent would finish the job in a workmanlike manner.

In closing, Respondent apologized for causing Complainant frustration and offered to have the project finished within “a couple of weeks” from the hearing date.

CONCLUSIONS OF LAW

The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

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.

Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses 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.”

Ariz. Rev. Stat. § 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.”

Ariz. Admin. Code 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.”

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 “[i]mpose 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 material facts in the case at bar are not in dispute.

It is undisputed that the parties entered into a contractual agreement for the installation of a residential pool. It is also undisputed that Complainant paid for the project in full. It is also undisputed that Respondent began the construction of Complainant’s pool, did not finish construction, and that some of the work Respondent performed fell below the Registrar’s minimum workmanship standards for which a Directive was issued. It is further undisputed that Respondent made little to no attempt to remediate and/or complete the project per the Registrar’s Directive, nor did Respondent enter into a financial settlement agreement with Complainant to resolve the underlying matter.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and complete Complainants’ project per contract. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent essentially argued that he was financially unable to complete the project in a timely manner. The record, however, does not support Respondent’s contention. Respondent admitted that Complainant paid for the project in full, and further admitted that he did not “hold the funds in escrow” but instead used them on other projects; in the hopes that additional projects would fund the completion of Complainant’s project, which did not occur. This Tribunal does not find Respondent’s excuse(s) credible, nor does this Tribunal find Respondent’s excuse(s) a factor in mitigation. The fact that Respondent used all of Complainant’s money on other projects is a factor in aggravation.

Because Complainant established violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five (5) days after the effective date of the Final Order in this matter, Respondent Legend Pool Builders Inc., ROC License No. 213464, be suspended for ten (10) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $500.00 in certified funds as a civil penalty.

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 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 Ariz. Rev. Stat. § 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 40 days from the date of that certification.

Done this day, June 23, 2021.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors