ALJDEC decisions subject to certification as final

2022A-04845-CHC-ROC · Registrar of Contractors · 2022-11-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Lakeisha Warren,

COMPLAINANT,

v.

Saguaro Custom Pools LLC

ROC License No. 325790,

RESPONDENT,

No. 2022A-04845-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 24, 2022 at 1:00 PM.

APPEARANCES: Lakeisha Warren (“Complainant”) appeared on her own behalf. Mark Molique, Esq. appeared on behalf of Saguaro Custom Pools LLC (“Respondent”) with Rex Cobb as a witness. Juan Garcia observed.

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 prior license record as reflected on the Registrar’s public website. On August 12, 2019, the Registrar issued License No. 325790 General Dual KA-5 Swimming Pool contracting license to Respondent. The license is renewed through August 31, 2023. Rex Clayton Cobb is the Qualifying Party/Member on this license. Respondent’s address of record for the license is 515 E. Carefree Hwy. #902 Phoenix, AZ 85085. Respondent has an active $14,000.00 surety bond on the license issued by American Contractors Indemnity Company, effective August 07, 2019. There is no prior discipline noted for the license, save one open complaint which is presumably related to this matter.

On June 16, 202, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 325790 alleging poor workmanship of a pool and spa shotcrete project. The Registrar designated it Complaint No. 2022-04845 and assigned to John Peru (“Investigator Peru”) for investigation.

On June 16 2022, Investigator Peru issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on June 29, 2022, at 9:30 a.m.

On June 29, 2022, Investigator Peru conducted a review of the contract, payment, correspondence executed between the parties, and inspected the work that had been performed on the project to date. He also took 22 photographs of the project site. When he was finished, Investigator Peru drafted his Inspection Notes. Ultimately, Investigator Peru determined that Complainant’s narrative constituted 2 complaint items, both of which he substantiated as failing to meet the Registrar’s minimum workmanship standards, as he deemed the overall condition of the shotcrete finish to be “substandard.” Investigator Peru determined that Respondent’s workmanship required corrective work to remediate identified deficiencies likely resulting from shooting the shotcrete too hot.

On July 08, 2022, Investigator Peru issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on July 27, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22), and 32-1154(E).

On July 29, 2022, Investigator Peru issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on August 10, 2022, at 11:30 a.m.

On August 10, 2022, Investigator Peru inspected Respondent’s corrective work on the project and took 16 photographs. When he was finished, Investigator Peru drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Peru determined that Respondent had not performed corrective work necessary to remediate complaint items 1 or 2.

On August 10, 2022, Investigator Peru forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On August 12, 2022, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(12); 32-1158, and 32-1154(A)(22). Respondent was given until August 27, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On August 24, 2022, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted the following:

I do not agree with either one of these items In question. Since this job was shot, there has been no disagreement in the fact that things needed fixed. Once the site meeting was held, a few days later we returned to the job and make repairs to the 3 exterior walls of the spa and a couple of other small details. I will attach proof of the pictures with us holding the straight edge along the spa to show that the walls are fixed. For us to have a charge against us saying we didn’t follow a directive is incorrect. We had the issues fixed before the directive was even issued. I have also not received any communication from anyone asking or telling us about other issues. If I don’t receive any communication I have no idea that something needs done.

(All errors in original.)

On August 24, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on October 24, 2022. Per the September 13, 2022, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violations:

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

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Peru as a witness. Respondent called Rex Cobb as a witness and submitted Exhibit 1. The Registrar’s agency file, including the Notice of Hearing, was admitted into the record as its own exhibit. The substantive evidence of record is as follows:

Complainant owns residential property located at 17790 W. Granite View Dr. Goodyear, AZ 85338.

On or about June 06, 2022, Complainant and Respondent entered into a $10,850.00 contract to shoot shotcrete in Complainant’s newly constructed in-ground pool and spa.

Complainant oversaw construction of the project and hired all trades to perform the work.

Complainant paid Respondent in full for the project.

By the date of the jobsite inspection, Respondent had made 2 attempts to correct the complaint items under its warranty.

During his jobsite inspection, Investigator Peru observed and opined that the “[s]hotcrete throughout the Main Pool and Spa is poor work. The Shotcrete is not uniform in its finished state. There are excessively rough patches, crumbling areas, and several cracks running through the project.”

Although Respondent made attempts to correct the work during the Directive’s compliance period, Investigator Peru nonetheless concluded that “the Shotcrete throughout the Main Pool and Spa is poor work” and was “not uniform in its finished state” at the time of the compliance jobsite inspection. Investigator Peru also determined that there were “[excessive] rough patches, crumbling areas, and several cracks running through the project.”

At no point during the investigation of Complaint No. 2022-04845 did Respondent escalate concerns regarding Investigator Peru’s qualifications or findings with the Registrar. Nor did Respondent submit a request to the Registrar to formally “drill and lab test” Respondent’s shotcrete.

Respondent did not provide any drill and lab testing results for the shotcrete used in Complainant’s project as evidence.

Neither party requested an extension of the Registrar’s Directive’s compliance deadline.

Additional Evidence

The Workmanship Standards for License Contractors, Swimming Pools section, provides as follows:

Swimming pool construction and design should meet or exceed the suggested minimum standards for swimming pools of the National Spa and Pool Institute, applicable building code requirements, as well as these standards. Spa construction and design is incorporated in these standards.

The Workmanship Standards for License Contractors, Swimming Pools - Structure section, provides, in pertinent part, as follows:

Shotcrete or gunite shrinks, as there is a drying out of the original moisture content. Shrinkage cracks occur because the surface of the gunite dries out faster than the underlying layers. These cracks are not structural cracks; they penetrate only the surface area (per ASTM C-42-61 specifications). Proper care and curing can keep this problem minimal. To minimize the shrinkage cracks the gunite must be kept moist. Gunite is porous and has the ability to absorb a large volume of water, much like a sponge. The gunite should be saturated with water until it is no longer absorbed. This process should be repeated every two hours during the day for five days after installation. The structure along with the interior lining should form a single waterproof unit.

At the time of substantial completion of the work, the pool/spa should be within +/- (plus or minus) 1/4" (1/2" of level - from high to low) when measured at the waterline tile. In the absence of such tile or when a vinyl lined interior is used or the unit is a one-piece fiberglass pool, water level should be +/- 1/2" (1" of level from high to low) when measured at the uppermost surface of the structure.

Complainant testified that she watered the pool and spa shotcrete 4 times daily, for 45 minutes each time, for 5 weeks after Respondent completed the work. Complainant denied walking on the shotcrete during that time period.

Closing Arguments

In closing, Complainant argued that discipline was warranted in the matter, and that “fairness” demanded Respondent be held accountable for its actions on her project.

In closing, Respondent argued that the Registrar was precluded from disciplining Respondent’s contracting license because Investigator Peru lacked qualifications to determine that minimum workmanship standards had not been met. Respondent opined that Mr. Cobb was the only expert to testify, and that his testimony alone established that Respondent’s work on the project was “totally fine.”

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(a) requires that “[a]ll work shall be performed in a professional and workmanlike manner.”

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.”

The material facts in this matter clear.

It is clear from the record that the parties had a pool and spa shotcrete contract, for which Complainant paid the price in full. It is also clear that both of the complaint items in Complaint No. 2022-04845 were substantiated as failing to meet the Registrar’s minimum workmanship standards, and that Respondent failed to perform corrective work sufficient to remediate the project per the Registrar’s Directive in violation of Ariz. Rev. Stat. §§ 32-1154(A)(3) and (A)(22).

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 Complainant’s project per contract. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain its burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s deficient and/or substandard performance on this project. Mr. Cobb’s belief that Investigator Peru was not qualified to find Respondent in violation of Ariz. Rev. Stat. § 32-1154(A)(3) is without merit. Furthermore, Respondent’s contention that Mr. Cobb’s decades long experience in the pool construction industry makes him an ”expert” whose opinion that Respondent’s work on the underlying project was “totally fine” should be given more weight that Investigator Peru’s testimony, is self-serving and in error.

Thusly, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22) by a preponderance of the evidence, 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 days after the effective date of the Final Order in this matter, Respondent Saguaro Custom Pools LLC, ROC License No. 325790, be suspended for two (2) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

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, November 01, 2022.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

Saguaro Custom Pools LLC, Respondent

515 E. Carefree Hwy #902

Phoenix, AZ 85085

[email redacted]

Lakeisha Warren, Complainant

17790 W. Granite View Dr.

Goodyear, AZ 85338

[email redacted]

Mark Molique

11111 N. Scottsdale Rd. Ste. 205R

Scottsdale, AZ 85254

[email redacted]

By Miranda Alvarez

Legal Secretary