ALJDEC decisions subject to certification as final

2021A-03420-OMC-LS-ROC-RE · Registrar of Contractors · 2021-10-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT,

American Pools, LLC

License No. ROC 319458,

RESPONDENT.

No. 2021A-03420-OMC-LS-ROC-RE

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 20, 2021

APPEARANCES: Assistant Attorney General John Tellier appeared on behalf of the Arizona Registrar of Contractors. Lance Savard appeared on behalf of Respondent American Pools, LLC.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

American Pools, LLC (AP) holds KA-5 Dual Swimming Contractor

license number 319458 issued by the Arizona Registrar of Contractors (the Registrar).

On August 27, 2021, the Arizona Registrar of Contractors (Registrar) issued an Order of Summary Suspension, Order Of Consolidation, and Notice of Promptly Instituted Proceeding (Order). In the Order, the Registrar presented its determination that the public welfare imperatively required emergency action and it summarily suspended AP’s license. Citing Ariz. Rev. Stat. § 41-1092.11(B). The Registrar notified AP that it should be prepared to show cause why its license should not be revoked. The Registrar also notified AP that a hearing would be conducted at the Office of Administrative Hearings in Phoenix, Arizona where the Registrar would seek revocation of AP’s license.

On September 3, 2021, the Registrar notified AP that the hearing would convene at 9:00 a.m. on September 20, 2021.

On September 7, 2021, the Registrar issued a Supplemental Notice to clarify and detail the specific charges against AP.

The Supplemental Notice provided a Statement of Facts and a Formal Statement of Alleged Violations in which the Registrar alleged that AP had committed three violations of Ariz. Rev. Stat. section 32-1154(A)(1), seven violations of Ariz. Rev. Stat. section 32-1154(A)(3), seven violations of Ariz. Admin. Code R9-22-108(a), four violations of Ariz. Rev. Stat. section 32-1154(A)(12), four violations of Ariz. Rev. Stat. section 32-1158(A), three violations of Ariz. Rev. Stat. section 32-1158.01, six violations of Ariz. Rev. Stat. section 32-1154(A)(22), and one violation of Ariz. Rev. Stat. section 32-1154(A)(2).

The Registrar requested that AP’s license be revoked.

In August of 2021, the Registrar received two additional complaints against AP which were consolidated into this single proceeding.

Because of this public safety issue and to protect the public welfare by eliminating the risk that other consumers would enter contracts with AP, the Registrar issued its Order summarily suspending AP’s license.

At hearing, the Registrar presented the testimony of its Assistant Chief Counsel, Robert Stirling, and Ruben Perez, an Investigator for the Registrar.

The Registrar submitted exhibits 1 through 76. AP presented the testimony of its Director of Operations, Lance Savard.

Mr. Stirling issued the Order. Mr. Stirling explained that the Registrar has received additional complaints against AP’s license that are currently being investigated.

Stephen Kiholm (Case 2021-01477)

On or about November 13, 2020, Stephen Kiholm entered into a construction contract with AP wherein AP would install a swimming pool deck at Kiholm’s home for $21,029.47. AP did not sign the contract. The contract did not advise Kiholm of his right to file a complaint with the Registrar. Additionally, AP did not provide an estimated date of completion.

In November of 2020, AP stated work on the project.

In March of 2021, AP stopped work on the project.

On or about April 5, 2021, Kiholm filed a complaint with the Registrar alleging that AP abandoned and failed to complete the construction project.

On or about July 20, 2021, Investigator Perez conducted a job-site inspection regarding the complaint. See Exhibit 2. At the job-site inspection, Investigator Perez observed that the swimming pool deck project was incomplete.

16. On July 20, 2021, Investigator Perez issued a Directive to AP directing AP to complete the swimming pool deck project by appropriate means no later than August 4, 2021.

17. On August 6, 2021, Investigator Perez conducted a compliance job-site inspection and observed that the swimming pool deck project was still incomplete.

18. On August 9, 2021, the Registrar issued a Citation against AP’s

license, charging cause to suspend or revoke the license under Ariz. Rev. Stat. section 32-1154(A)(3) (specifically, Ariz. Admin. Code section R4-9-108(a); Ariz. Rev. Stat. section 32-1154(A)(22).

Jonathan Creiglow, Case 2021-02524

19. On or about August 20, 2020, AP agreed to install a new pool at Jonathan Creiglow’s home. See Exhibit 16. According to the contract, the project was expected to last 8-12 weeks. See Exhibit 16, Bates 0054.

20. On or about September 28, 2020, AP started work on the project.

21. On or about November 24, 2020, AP stopped work on the project.

22. On or about June 4, 2021, Creiglow filed a complaint with the Registrar alleging that AP abandoned and failed to complete the construction project. Creiglow listed 23 items in the complaint.

23. On or about June 22, 2021, Investigator Perez conducted a job-site inspection and observed that AP performed poor work in connection with the pool installation. See Exhibit 16.

24. On June 29, 2021, Investigator Perez issued a Directive to AP directing AP to correct complaint items 1, 6, 9, 10, 13, and 19 by appropriate means, no later than July 29, 2021. See Exhibit 17.

25. On August 3, 2021, Investigator Perez conducted a compliance job-site inspection and observed that the swimming pool deck project was incomplete. Investigator Perez found that AP had not corrected complaint items 1, 6, 9, and 10.

26. On August 10, 2021, the Registrar issued a Citation against AP’s

license, charging cause to suspend or revoke the license under Ariz. Rev. Stat. section 32-1154(A)(3) (specifically, Ariz. Admin. Code section R4-9-108(a); Ariz. Rev. Stat. section 32-1154(A)(22).

Robert Millard (Case 2021-02656)

27. On or about November 18, 2020, AP agreed to install a new home at Robert Millard’s home. See Exhibit 22. Pursuant to the contract, the project was expected to last 16 weeks from the date of excavation. See Exhibit 23.

28. On or about January 27, 2021, AP started work on Millard’s home.

29. On or about June 2, 2021, AP stopped work on Millard’s home.

30. On or about June 12, 2021, the Registrar received a complaint from Millard alleging abandonment and poor work on the part of AP.

31. On or about July 1, 2021, Investigator Perez conducted a job-site inspection. See Exhibit 15. Investigator Perez substantiated two complaint items. Investigator Perez discovered that the building permit for the swimming pool was obtained on March 15, 2021. See Exhibit 26, Bates 0148.

32. On July 6, 2021, Investigator Perez issued a Directive to AP.

The Directive provided, in relevant part, as follows:

After investigation, the Registrar has 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(E) of up to $500.00. You must provide the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on August 6. 2021.

DIRECTIVE REQUIREMENTS

Compliance Item 1: Damage to my property: Hit corner of new house with Bobcat. Damaged section of new block wall. Damaged concrete landing garage man door.

Investigator’s Observation: Northeast corner of residence was observed with damage to stucco and repair work being done. One block in bottom row of block wall on North side of residence was observed damaged/broken. Concrete pad outside garage door on North side was observed dislocated by 2” from foundation and chipped on one side. Respondent to correct by appropriate means.

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Compliance Item 2: Contract states 16 weeks to build which should have been completed the week of May 24th. Pool at best 50% completed.

Investigator’s Observation: The contract for this pool was signed on 11/21/2020 and it was to be completed within 4 months. Swimming pool was observed incomplete. Respondent to correct/complete by appropriate means.

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33. On August 23, 2021, Investigator Perez conducted a compliance job-site inspection. Investigator Perez found that AP had not complied with the July 6, 2021 Directive.

34. On August 25, 2021, the Registrar issued a Citation against AP’s

license, charging cause to suspend or revoke the license under Ariz. Rev. Stat. section 32-1154(A)(3) (specifically, Ariz. Admin. Code section R4-9-108(a); Ariz. Rev. Stat. section 32-1154(A)(22).

Julie McDaniel (Case 2021-02816)

35. On or about October 28, 2020, Julie McDaniel entered into a contract with AP, wherein AP would install a new pool at McDaniel’s home for $62,000. Under the contract, McDaniel was required to pay a down payment of 10% of the contract price, and 30% of the contract price at the time of excavation.

36. AP failed to include the following elements in its contract with McDaniel:

(a) a provision that advised McDaniel of her rights under Title 44 Chapter 14

(b) a provision that advised McDaniel of her right to request a standard contractor’s payment and performance bonds in a form approved by the Registrar

(d) AP’s signature

37. On or about October 28, 2020, AP started work on McDaniel’s home.

38. On or about June 12, 2021, AP stopped work on McDaniel’s home.

39. On or about June 21, 2021, the Registrar received a complaint from McDaniel alleging abandonment and poor work on the part of AP.

40. On or about July 1, 2021, Investigator Perez conducted a job-site inspection regarding the McDaniel’s complaint. See Exhibit 15. 27.

41. On July 6, 2021, Investigator Perez conducted a job-site inspection and discovered that a permit for the pool was issued on November 25, 2020.

42. Investigator Perez substantiated complaint item 6 from McDaniel’s complaint regarding poor workmanship. Investigator Perez observed, “Several stone veneer pieces were observed loose/falling off around spa.” See Exhibit 36, Bates 0203.

43. On July 7, 2021, Investigator Perez issued a Directive to AP directing AP

to complete the pool installation and correct complaint item #6 by appropriate means, by August 9, 2021. See Exhibit 38.

44. On August 12, 2021, Investigator Perez conducted a compliance job-site inspection and observed that AP had not complied with the Directive. Investigator Perez observed, “Swimming pool and spa were completed and functional however, the automation system was not working properly. A bubbler was not installed I pool either. Additional time was given to correct the automation system.” Although Investigator Perez granted AP additional time to correct the automation system, AP did not correct the system. Investigator Perez conducted a follow p compliance inspection on August 20, 2021 and discovered that AP had not corrected the automation system.

45. On August 20, 2021, the Investigator Perez recommended to the Registrar’s legal department that a citation be issued against AP’s license in connection with the McDaniel complaint for possible violations of Ariz. Rev. Stat. section 32-1154(A)(3) (specifically, Ariz. Admin. Code section R4-9-108(a); Ariz. Rev. Stat. section 32-1154(A)(22); Ariz. Rev. Stat. section 32-1154(A)(12) and Ariz. Rev. Stat. section 32-1158.01.

Travis A. White (Case 2021-02905)

46. On or about November 23, 2020, Travis A. White entered into a contract

with AP, wherein AP would install a new pool at White’s home. See Exhibit 43. Pursuant to the contract, the project was expected to last 16 weeks from the date of initial excavation.

47. On or about January 4, 2021, AP started work on White’s home.

48. On or about June 17, 2021, AP stopped work on White’s home.

49. On or about June 24, 2021, the Registrar received a complaint from White alleging abandonment and poor work on the part of AP.

50. On or about July 13, 2021, Investigator Perez conducted a job-site inspection. During the job-site inspection, White discovered that a building permit was obtained for the project on April 8, 2021. Investigator Perez observed that the project was incomplete.

51. On July 13, 2021, Investigator Perez issued a Directive to AP directing AP

to complete the pool construction project and correct compliance item #6 by appropriate means, no later than August 13, 2021. See Exhibit 48.

52. On August 12, 2021, White filed an addendum to his compliant.

53. On August 26, 2021, Investigator Perez conducted a second job-site inspection and observed additional evidence of poor workmanship based on the addendum. See Exhibit 49.

Leann Sanders (Case 2021-03436)

54. On August 27, 2020, Leann Sanders entered into a contract with AP wherein AP would remodel her pool and install a spa.. The project was anticipated to last 12-16 weeks.

55. On or about September 27, 2020, AP started work on the Sanders project.

56. On or about March 15, 2021, AP stopped work on the Sanders project.

57. On July 26, 2021, Sanders filed a complaint against AP alleging abandonment and poor work on the part of AP.

58. On August 9, 2021, Investigator Perez conducted a job-site inspection. AP began instruction before obtaining a permit for the project. Investigator Perez discovered that AP applied for a permit for the Sanders project on July 20, 2021.

59. On August 10, 2021, Investigator Perez issued a Directive against AP’s license. The Directive provided, in relevant part, as follows:

After investigation, the Registrar has 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 August 25, 2021.

DIRECTIVE REQUIREMENTS

Compliance Item 1: Project was never permitted with the county, project violates county statues

Investigator’s Observation: This project was done without obtaining a building permit. Building permit was recently applied for and is pending approval. Respondent should obtain permit, all inspections and approval by local jurisdiction.

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Compliance Item 3: Incorrect spa heather installed and has not been corrected, spa will not heat (natural gas unit installed on propane system)

Investigator’s Observation: Respondent reported they installed the wrong heather and it is not working properly. Respondent added they will replace it with correct one. Respondent to correct by appropriate mans.

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Compliance Item 10: Chipped/broken tile on border, plaster overspray on tile that homeowner cannot remove.

Investigator’s Observation: Tile on raised spa was observed with excess plaster on it. A tile piece on spa side at spillway was observed cracked. Tile on pool side under spillway was observed missing a section of tile, Respondent to correct by appropriate means.

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Guy Scavetta (Case 2021-03178)

60. On October 1, 2020, Guy Scavetta and AP entered into a residential pool construction project. The anticipated length of the project pursuant to the contract was 8-12 weeks.

61. On October 1, 2020, AP began work at Scavetta’s home.

62. On August 5, 2021, AP stopped work at Scavetta’s home.

63. On July 9, 2021, the Registrar received a complaint from Scavetta alleging abandonment on the part of AP.

64. On August 11, 2021, Investigator Perez conducted a job-site inspection. 65. On August 11, 2021, Investigator Perez issued a Directive to AP directing AP to install the handrail and repair the Badu stream by appropriate means, by August 25, 2021.

66. On August 27, 2021, Investigator Perez conducted a compliance job-site inspection and discovered AP had corrected the Directive items.

Dale Sloan (Case 2021-03938)

67. On January 15, 2021, AP agreed to build a pool for Dale Sloan.

68. On or about August 16, 2021, Sloan filed a complaint with the Registrar alleging abandonment on the part of AP. See Exhibit 69.

69. On September 1, 2021, Registrar Investigator Perez conducted a job-site inspection regarding the Sloan complaint. The permit for the Sloan project was obtained on April 27, 2021. Investigator Perez observed that the project was incomplete. See Exhibit 69.

Michael Thomas Alford (Case 2021-03941)

70. On January 27, 2021, AP agreed to build a pool for Michael Thomas Alford. See Exhibit 71. AP began construction of the pool on January 27, 2021. The contract provided that construction would last 16 weeks. See id.

71. A permit was obtained for the Alford project on May 5, 2021. See Exhibit 71.

72. On August 15, 2021, the Registrar received a complaint from Alford that AP performed poor work in connection with a pool construction contract. See Exhibit 71.

73. On August 30, 2021, Investigator Perez conducted a job-site inspection. See Exhibit 71.

74. Investigator Perez discovered that no plaster work had been performed at the Alford residence.

AP’s construction work in Yuma, AZ on August 31, 2021

75. On August 31, 2021, Investigator Perez received a report that AP performed construction work at two locations in Yuma, Arizona while on a suspended license. The two locations were 12319 S. Drucille Ln and 14667 E. 40th Place (40th Place). On August 31, 2021, Investigator Perez visited both locations but observed no work being competed. However, Investigator Perez noticed that fresh work had been completed at 40th Place. See id.

76. On August 31, 2021, Investigator Perez drove to 10147 S. Orion Avenue in Yuma, Arizona because he was familiar with projects being performed in Yuma, AZ by AP. Upon arrival, Investigator Perez noticed a white work truck with tools in the bed parked in front of the side gate of the home. Investigator Perez knocked on the front door, but no one answered. Investigator Perez walked to the side yard and observed two adult males working on stucco repair. Investigator Perez recognized one of the adult males from another one of AP’s cases. The adult male reported that Savard sent him to complete work at the home. Investigator Perez notified the adult male that AP’s contractor’s license was currently suspended and the adult male ceased work. See id.

77. On September 23, 2021, Investigator Perez recommended that the legal department issued a citation against AP’s license for a possible violation of A.R.S. section 32-1154(A)(17) based on AP’s construction work in Yuma, AZ on August 31, 2021. See Exhibit 72.

AP’s construction work in Yuma, AZ on September 1, 2021

78. On September 1, 2021, Investigator Perez returned to the job-site at 40th Place in Yuma, AZ. See Exhibit 75. Investigator Perez noticed that the side block wall had fresh cement. The mortar cement on the top row of the wall was still wet. Investigator Perez spoke with the homeowner who explained that she hired AP in April of 2021. The homeowner reported that AP’s employees had been working on the block wall that morning. Investigator Perez called Savard about the matter. Savard reported that he did not send his workers to work on the wall. Investigator Perez admonished Savard that he was not permitted under the law to perform construction work while his license was suspended. See id.

79. On September 3, 2021, Investigator Perez recommended that the legal department issued a citation against AP’s license for a possible violation of Ariz. Rev. Stat. § 32-1154(A)(17) based on AP’s construction work in Yuma, AZ on September 1, 2021. See Exhibit 76.

80. At hearing, Savard apologized that the construction projects were delayed. Savard explained that in June of 2021, his co-worker became ill which made it more difficult to complete the projects. Savard also stated that some projects were delayed because parts were not available. Savard explained that AP currently has pending contracts and that some clients have filed complaints because AP’s license has been suspended. Savard requested that the Registrar lift the summary suspension and allow Savard to maintain its license. Savard pleaded with the tribunal that AP be allowed to continue working because AP has several employees.

CONCLUSIONS OF LAW

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2).

Respondent’s suspended license does not deprive Complainants of their

right to prosecute the complaints or prevent the Registrar from determining the merits of the complaints. See Ariz. Rev. Stat. § 32-1154(D).

Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code section R2-19-119.

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

A.R.S. section 32-1154(A) provides that

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

*****

Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” A.R.S. section 1-211(B).

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

The Registrar established by a preponderance of the evidence that AP violated Ariz. Rev. Stat. §§ 32-1154(A)(1), (A)(2), (A)(3), (A)(12), (A)(22); Ariz. Rev. Stat. § 32-1158(A); Ariz. Rev. Stat. § 32-1158.01, and Ariz. Admin. Code R9-22-108(a).

Consequently, Respondent’s should be revoked.

ORDER

IT IS ORDERED that on the effective date of the final Order in this matter,

License No. 319458 held by American Pools, LLC is revoked.

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 is forty days after the date of that certification.

Done this day, October 1, 2021.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors