ALJDEC decisions subject to certification as final

2024A-01151-RFA-LS-ROC · Registrar of Contractors · 2025-08-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Craig and Debra Daniels,

COMPLAINANTS

Pleasure Spas Inc.

DBA: Pleasure Pools,

License No. ROC 166025 and 210430

RESPONDENT

No. 2024A-01151-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 17, 2025

APPEARANCES:

Complainant: Craig Daniels

Debra Daniels

Respondent: No Appearance

Registrar of Contractors: Mona Baskin, Assistant Attorney General

Madelyn Hayes

ADMINISTRATIVE LAW JUDGE: Nedra-Su Kawasaki

EXHIBITS ADMITTED INTO EVIDENCE: Administrative notice was taken of the Notice of Hearing and Hearing Packet submitted by the Registrar of Contractors. Registrar of Contractors Exhibits 1-10; Appendix A-B.

_____________________________________________________________________

FINDINGS OF FACT

Pleasure Spas Inc., doing business as Pleasure Pools, (Respondent) was the holder of License Nos. 166025 and 210430 issued by the Arizona Registrar of Contractors (Registrar).

On or about January 30, 2024, the Registrar received a Complaint against Respondent from Craig and Debra Daniels (Complainants) alleging abandonment of the project.

After an investigation, a written directive was issued to correct the work. The Directive from the Registrar specified that:

The pool equipment was not installed or on site;

The fire pit structure was built, but not complete – Respondent acknowledged the need for drainage corrections;

No turf installed or on site;

No turf, or turf border material installed or on site;

Landscape materials were not installed or onsite;

Irrigation was not complete;

Stucco had been applied/installed but was not complete/painted; and

Back-filling had been performed, but landscaping was not complete.

Respondent did not perform any corrective work.

The Registrar issued a Citation against Respondent charging possible violations of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(3), namely Arizona Administrative Code (A.A.C.) R4-9-108(a) and (b); A.R.S. § 32-1154(A)(12), namely A.R.S. §§ 32-1158, 1124(B), 1158.01; and A.R.S. § 32-1154(A)(22).

Respondent filed a timely answer to the Citation, and an administrative hearing was held. Administrative Law Judge Sondra J. Vanella considered all arguments and concluded that Complainants established Respondent had, in relevant part, violated the statutes as charged in the citation. The Administrative Law Judge recommended Respondent’s licenses be revoked.

On or about October 25, 2024, the Registrar issued its Final Decision, adopting the Administrative Law Judge’s Decision in full.

Complainants then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of completing or repairing the project. As part of the claim process, Complainants submitted two contracts from separate contractors hired to complete the project. The first contract to complete/repair the pool work totaled $33,157.70. The second contract to complete/repair landscaping work totaled $16,300.00.

The Registrar issued a Notice of Administrative Award, finding that Complainants’ compensable actual damages were $1,743.53. In reviewing Complainants’ claim, the Registrar determined the following:

Original Contract Price: $78,854.40

Less payment on contract: $62,440.23

Total unpaid balance: $16,414.17

Valid expenditures to complete/repair project: $33,157.70

Less the unpaid balance on contract: $16,414.17

Total: $16,743.53

Less monies from other sources: $15,000.00

Compensable “Actual Damages”: $1,743.53

Complainants requested a hearing, believing the payout was incorrect because the landscaping expense was not included in the calculation of the award. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing.

A hearing was held on July 17, 2025.

Madelyn Hayes testified for the Registrar that Complainants were eligible and followed all of the steps required to receive an award from the recovery fund. She further testified in support of the documents and calculation provided in the exhibits. Specifically, the landscape contractor hired by Complainants was not licensed to install low voltage landscape lights or an irrigation system; therefore, the landscaping expense was not considered in the calculation. Ms. Hayes testified in support of Complainants being entitled to the award of $1,743.53.

Complainants testified they made a mistake in hiring an unlicensed contractor to complete the landscaping, but believed the bond recovery should have been applied to the unlicensed work rather than the work performed by a licensed contractor.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Respondent was deemed to have received the Notice of Hearing by methods reasonably calculated to effect notice. The Registrar mailed copies of the Notice of Hearing on Contested Case to its address and email address of record, and the Office of Administrative Hearings sent the order setting the virtual hearing to Respondent at its email address of record.

Complainant bears the burden of proof to establish that the proposed payout from the Fund is incorrect 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.R.S. § 32-1132.01(B) provides, in pertinent part, as follows:

An award from the residential contractors’ recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor’s violation. Actual damages:

1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.

2. Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.

If the claimant has recovered a portion of the claimant’s loss from sources other than the Fund, the Registrar shall deduct the amount recovered from other sources from the amount of actual damages suffered.

In Arizona, when construing statutes, we look first to a statute’s language as the best and most reliable index of its meaning. If the statute’s language is clear and unambiguous, we give effect to that language and apply it without using other means of statutory construction, unless applying the literal language would lead to an absurd result. Words should be given “their natural, obvious, and ordinary meaning,” unless defined by the legislature.

In this case, the landscaping project was completed by a contractor not licensed to perform such work. Thus, per A.R.S. § 32-1132.01(B)(2), the landscaping expense could not be included in the actual damages calculation.

Further, nothing in the statute requires that the recovery of the bond should be applied to work performed by unlicensed contractors rather than being deducted from Complainants’ damages in determining their actual damages under the statute.

Therefore, the award provided by the Fund accurately reflected Complainants’ actual damages. Accordingly, Complainants are entitled to a payout from the Fund in the amount of $1,743.53.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainants receive a payout from the Residential Contractors’ Recovery Fund in the amount of $1,743.53.

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 forty (40) days from the date of that certification.

-54864001

001

-137160-45720000Done this day, August 8, 2025.

/s/ Nedra-Su Kawasaki

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

Registrar of Contractors

[email redacted]

Craig and Debra Daniels

[email redacted]

Pleasure Spas, Inc.

[email redacted]

By: OAH Staff