ALJDEC - Licensing

2024A-01169-CHC-ROC · Registrar of Contractors · 2024-07-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Christian Pagan Guzman,

COMPLAINANT,

v.

Pleasure Spas Inc.,

DBA: Pleasure Pools

License No. ROC 166025,

RESPONDENT.

No. 2024A-01169-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: Convened and concluded on June 10, 2024.

APPEARANCES:

For Complainant: Christian Pagan Guzman.

For Respondent: Owen Brown.

For the Registrar: Investigator John Smith.

ADMINISTRATIVE LAW JUDGE: Samuel Fox

EXHIBITS ADMITTED INTO EVIDENCE: Notice of Hearing packet provided by the Registrar. Complainant Exhibits A through D.

_____________________________________________________________________

FINDINGS OF FACT

Pleasure Spas Inc., d/b/a Pleasure Pools, (Respondent) is the holder of License No. 166025 issued by the Arizona Registrar of Contractors (the Registrar).

On September 13, 2023, Christian Pagan Guzman (Complainant) entered into a contract with Respondent for the installation of a pool.

On January 29, 2024, the Registrar received a Complaint against Respondent from Complainant alleging, among other things, abandonment of the project and damage to Complainant’s property.

The Registrar assigned the complaint to Investigator John Smith, who issued a Jobsite Inspection Notice on January 31, 2024, scheduling the inspection for March 1, 2024.

Investigator Smith conducted the inspection on March 1, 2024. Following the jobsite inspection, Investigator Smith issued a Written Directive From the Registrar to Respondent on March 6, 2024 that provided as follows:

You are directed to remedy the following violations by the appropriate means:

Complaint Item 1: “Pool hole was dug, but the pool was never completed by the contractor due to having a UCC filed against them. ;”

Investigator’s Observations: Verified.

Current conditions on site:

Excavation work has been performed.

Mechanicals have not been started

Rebar has not been started

The project is not complete

The contract includes:

Signatures of both parties dated 9/12/2023, and 9/13/2023

We expect the construction process to take between 3 to 6 months starting from the excavation phase.

As stated in the submitted complaint form:

Work began December 11, 2023

Work stopped December 11, 2023

Amount paid to date $24,338.79

As stated on the Finance Disbursement document:

First payment “Completion of Excavation” has been paid

Disbursed Amount $19,140.53

Total Disbursed Amount (to date) $24,338.78

Per contract, the next payment is not due until “Completion of rebar”.

Governing Rule: A.R.S. § 32-1154(A)(1): Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

Governing Rule: A.R.S. § 32-1154(A)(3) – R4-9-108(b): Violation of any rule adopted by the registrar; Namely R 4-9-108(b): A contractor shall perform work in accordance with any applicable building codes...

Complaint Item 2: “Landscape to include irrigation system was destroyed and never fixed.;”

Investigator’s Observations: Verified.

Landscaping, grading, and irrigation in the front yard area is damaged.

Governing Rule: A.R.S. § 32-1154 (A)(3) - R4-9-108(a): Violation of any rule adopted by the registrar;

Namely R 4-9-108(a) A contractor shall perform work in a professional and workmanlike manner.

Complaint Item 3: “Both house side fence gates were taking down and not installed.;

Brick fence was torn down on both side and never fixed.”

Investigator’s Observations: Verified.

Block fencing and gates are removed from both side of the house.

Governing Rule: A.R.S. § 32-1154 (A)(3) - R4-9-108(a): Violation of any rule adopted by the registrar;

Namely R 4-9-108(a) A contractor shall perform work in a professional and workmanlike manner.

The Written Directive required Respondent to notify Investigator Smith of Respondent’s compliance with the directive prior to 5:00 p.m. on March 22, 2024.

On March 22, 2024, Investigator Smith was notified no work had been performed on the project and no extension had been requested.

On March 27, 2024, the Registrar issued a Citation against Respondent, charging six possible violations: (1) A.R.S. § 32-1154(A)(1); (2) A.R.S. § 32-1154(A)(3), specifically A.A.C. R4-9-108(A); (3) A.R.S. § 32-1154(A)(3), specifically A.A.C. R4-9-108(B); (4) A.R.S. § 32-1154(A)(12), specifically A.R.S. § 32-1158; (5) A.R.S. § 32-1154(A)(12), specifically A.R.S. § 32-1158.01; and (6) A.R.S. § 32-1154(A)(22).

On April 9, 2024, Respondent filed an Answer, claiming that the permit had been withdrawn and that Complainant had denied Respondent access to finish the project, in addition to other claims.

The hearing was held on June 10, 2024.

Investigator Smith issued two warning letters regarding contract deficiencies. He testified that he witnessed:

Respondent’s contract did not include Respondent’s business address, license number, estimated date of completion, information about right to file a complaint, or the Registrar’s contact information.

Respondent’s contract did not include the opportunity to request standard contractor’s payment and performance bonds, notice of the purchaser’s right to receive written material that advises the purchaser of the contract requirements, and notice of the purchaser’s rights under title 44, chapter 15. Additionally, the payment schedule in the contract provided: 30% due upon completion of excavation, 25% due upon completion of rebar, 20% due upon completion of shotcrete, 10% due upon completion of deck, 10% due upon completion of pebble, and 5% final payment upon completion.

Investigator Smith testified that:

During the Jobsite inspection, Respondent stated the reason for stopping work was that he would not be paid. Under the contract Respondent’s next payment was due after completion of the rebar, which could not be completed until after plumbing was finished. Neither plumbing nor rebar were completed; accordingly, no payment was due.

During the March 1, 2024 jobsite inspection, Complainant clearly offered Respondent access to the property for the purpose of performing corrective work. There was no evidence to support denial of access during the directive period.

Complainant withdrew the permit on March 28, 2024, six days after the directive period ended, which would not have impacted corrective work being done during the directive period.

Complainant was not required to pay subcontractors directly, and the Registrar would not encourage paying subcontractors directly.

Complainant testified that prior to the complaint Respondent had a UCC lien placed upon it and was going to surrender its license after completion of the project. To circumvent the lien, Respondent asked Complainant to pay subcontractors directly. The contract did not require Complainant to pay subcontractors directly. Complainant was willing to continue paying Respondent, but he did not want to pay the subcontractors. Respondent would not continue the work unless Complainant paid the subcontractors directly; so work stopped. After Respondent stopped working on the project, Complainant filed his complaint with the registrar.

Respondent testified that on or around January 29, 2024, Complainant removed Respondent from the funding account, stopping Respondent from receiving further payment. On February 12, 2024, Complainant denied Respondent access to the property. When the lien became effective and Respondent could no longer directly receive payment, Respondent offered the option for Complainant to pay subcontractors directly instead—Complainant refused to do so. Respondent stopped moving forward with the project after being removed from the financing because Respondent would not have income from which to pay the subcontractors to do the work.

In response to questions from the Tribunal, Respondent testified that the first time he contacted Complainant during the directive period (March 6, 2024 to March 22, 2024) was on March 20, 2024. When asked about whether Complainant offered access to the property at the Jobsite Inspection on March 1, 2024, Respondent stated that Complainant denied access in writing on February 12, 2024 and that Complainant removed Respondent from the financing agreement. When asked about the payment schedule and work that needed to be completed, Respondent testified that the rebar was the next phase of work to be completed, but Respondent would not perform the work because Complainant would not pay the subcontractors directly, meaning the subcontractors would not be paid for the work.

Administrative notice is taken of Respondent’s prior License record on July 1, 2024. Such prior License record reflects that Respondent’s License No. 166025 was first issued on July 30, 2001, and was suspended for discipline. Such prior License record also reflects that there were 12 open complaints, 3 resolved/settled complaints, and 2 complaints resulting in discipline against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish Respondent’s statutory violations 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.”

The evidence does not support Respondent’s claim that Complainant prevented corrective work from being completed by withdrawing the permit. The evidence established that Complainant withdrew the permit after the corrections period.

The evidence does not support Respondent’s claim that Complainant prevented corrective work from being completed by denying access to the property. The evidence established that Complainant denied access to Respondent around February 12, 2024 but allowed access again at the Jobsite Inspection on March 1, 2024.

Respondent’s claim that a lien on the company would result in Respondent not being paid is not a defense. In essence, Respondent’s argument is that the lien would nullify payments made by Complainant to Respondent. Complainant was willing to pay Respondent but not subcontractors, which Complainant was not obligated to do.

The evidence established that Respondent entered into a contract for Complainant’s project and did not perform the work in the contract. Accordingly, Complainant established that Respondent abandoned the contract and failed to complete the project in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(1) and A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A) and (B).

The evidence established that Respondent’s contract did not contain all of the generally required information in violation of A.R.S. § 32-1154(A)(12), specifically A.R.S. § 32-1158. The evidence established that Respondent’s contract did not contain all of the swimming pool and spa required information in violation of A.R.S. § 32-1154(A)(12), specifically A.R.S. § 32-1158.01.

The evidence established that Respondent did not perform the corrective work as required in the Registrar’s Directive in violation of A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend for ten days Respondent’s License No. 166025.

It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(E).

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 final 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 A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

It is further recommended that, on or before thirty (30) days after the effective date of the final order, Respondent shall provide a sample contract to the Registrar to demonstrate that it has amended its contracts to include the terms required by A.R.S. § 32-1158 and A.R.S. § 32-1158.01. If Respondent fails to establish to the Registrar that it has brought its contracts into compliance with A.R.S. § 32-1158 and A.R.S. § 32-1158.01 within thirty days, its contractor’s license shall be suspended until it demonstrates that it has done so.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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.

Done this day, July 1, 2024.

/s/ Samuel Fox

Administrative Law Judge

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

Tom Cole

Registrar of Contractors

c/o Legal Department

1700 W. Washington Street, Suite 105

Phoenix, AZ 85007

[email redacted]

Pleasure Spas Inc

DBA: Pleasure Pools

2004 E Irvington Rd #186

Tucson, AZ 85714

[email redacted]

John Smith

[email redacted]

Christian Pagan Guzman

10318 S Moonlit Riverwalk Trl

Vail, AZ 85641

[email redacted]

By: OAH Staff