ALJDEC - Licensing

2024A-02802-CHC-ROC · Registrar of Contractors · 2024-06-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Kevin Blanchat,

COMPLAINANT,

v.

Phoenix Pro Pool, LLC

ROC License No. 330826,

RESPONDENT.

No. 2024A-02802-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 18, 2024 at 1:00 PM.

APPEARANCES: Kevin Blanchat (“Complainant”) appeared on his own behalf. Jason Estereicher appeared on behalf of Phoenix Pro Pool, LLC (“Respondent”). Daniel Edwards appeared on behalf of the Arizona Registrar of Contractors (“Registrar”).

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the attached agency file, and Hearing Order dated May 31, 2024, were admitted into the record.

_____________________________________________________________________

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 Arizona Administrative Code (“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 September 30, 2020, the Registrar issued License No. 330826 Specialty Dual CR-6 Swimming Pool Service and Repair contracting license to Respondent. The license has been renewed through September 30, 2024. Jason Michael Estereicher is listed as the Qualifying Party and Manager on the license. Respondent’s address of record for the license is 4428 N. 156th Dr. Goodyear, Arizona 85395. Respondent has a $6,750.00 surety bond on the license from Platte River Insurance Company, effective July 23, 2020. The license has no prior disciplinary record. Currently, there is one (1) open complaint against the license which is presumed to be related to this matter.

On or about March 07, 2024, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 330826 alleging poor work of a residential pool project. The Registrar designated it Complaint No. 2024-02802 and assigned to Daniel Edwards (“Investigator Edwards”) for investigation.

On March 07, 2024, Investigator Edwards issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on March 15, 2024, at 8:30 a.m. Correspondence was not returned as undeliverable to Respondent.

On March 15, 2024, Investigator Edwards inspected the work that had been performed on the project to date. Respondent was not present. Investigator Edwards also reviewed the contract-related correspondence between the parties, and took 6 photographs of the project site. When he was finished, Investigator Edwards drafted his Inspection Notes. Ultimately, Investigator Edwards derived a total of seven (7) separate and distinct complaint items, one (1) of which he substantiated based on his firsthand observations. Specifically, Investigator Edwards determined that Respondent had begun construction prior to the issuance of a building permit by the local building authority, which failed to meet the Registrar’s minimum workmanship standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.

On March 15, 2024, Investigator Edwards issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated one of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on April 02, 2024, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

On March 15, 2024, Investigator Edwards issued a Warning Letter to Respondent to advise that building permit(s) were not obtained for the project in violation of the International Residential Code and the International Building Code. Respondent was further advised that failure to comply with the building codes was a violation of Ariz. Rev. Stat. § 32-1154(A)(2), which could result in discipline against Respondent’s license including suspension or revocation.

On April 03, 2024, Investigator Edwards forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On April 04, 2024, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(b) and 32-1154(A)(22). Respondent was given until April 19, 2024, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. Correspondence was not returned as undeliverable to Respondent.

On April 19, 2024, the Registrar received Respondent’s timely Answer whereby Mr. Estereicher offered, in part, Complainant failed to secure a permit prior to commencing construction, and that Respondent had a difficult time obtaining a permit due to scheduling issues with an electrical engineer. Per Respondent, it had future plans, despite poor communication with Complainant, to obtain the missing permit.

On April 19, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on June 18, 2024. Per the May 15, 2024, 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)(2)(b)

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on his own behalf and called Investigator Edwards as a witness. Mr. Estereicher testified on behalf of Respondent. The substantive evidence of record is as follows:

Complainant owns residential property located at 8941 W. Topeka Dr. Peoria, Arizona 85382.

On or about October 26, 2023, the parties entered into a construction agreement whereby Complainant agreed to pay Respondent $7,900.00 for the installation of a Nirvana heat pump in Complainant’s pool, including a 50 AMP upgrade to Complainant’s electrical panel.

Work on the project took place between November 07, 2022, and November 13, 2022.

Complainant paid Respondent in full for the project.

At no point in time did Respondent allege a denial of access to the project site to the Registrar during the Directive’s compliance period, or request an extension thereof to the agency.

Additional Evidence

Complainant testified that he was unaware his project with Respondent required a permit, and that Respondent had not advised him of such when the project was quoted.

Investigator Edwards testified that a homeowner is required to obtain a permit for construction on their property, unless a contractor agrees to do so per the parties’ signed construction agreement. Investigator Edwards further testified that if a contractor commences construction prior to a permit being secured for a project, said contractor adopts or otherwise inherits the responsibility and/or liability of obtaining a permit.

Complainant testified that he had solar panels installed on the roof of his home February 01, 2024. During an inspection by the local building authority of that project, the inspector noticed Complainant’s electric panel and mentioned that there was no record of the upgrade with the city, which would have been a permitted job. Complainant’s solar project was paused in an effort to afford him time to secure a permit for the electric panel.

Complainant testified that on February 09, 2024, he submitted a permit application to the local building authority that was denied a week later.

Complainant testified that on April 03, 2024, Respondent’s electrical subcontractor contacted him regarding the submission of plans to the local building authority, but he refused to sign them and asked for Respondent’s permit application to be pulled.

Mr. Estereicher testified that he assumed the Directive’s compliance deadline had a “grace period.”

Closing Arguments

In closing, Mr. Estereicher argued that Complainant had been liable to obtain a permit for the underlying project, and that he had done what he could to help him secure one after the project started, to no avail.

In closing, Complainant argued that he had sustained his burden of proof regarding Ariz. Rev. Stat. §§ 32-1154(A)(2) and (A)(22), and opined that License No. 330826 should be disciplined by the Registrar as a result.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.

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 for the Registrar 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)(2)(b) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of a building code of this state or any political subdivision of this state in any material respect that is prejudicial to another.”

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.”

Statutes shall be liberally construed to affect their objects and to promote justice. In interpreting a statute, “[w]e first consider the language of the statute and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter, historical background, effects, consequences, spirit, and purpose.”

Statutes should be interpreted to provide a fair and sensible result. “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”

The Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.

The material facts in the case at bar are clear.

It is clear from the record that the parties had a pool-related construction contract that Complainant paid in full to Respondent. It is also clear from the record that Respondent failed to ensure that a permit had been issued for the project prior to commencing construction, and that Respondent did not fully comply with the Registrar’s Directive to correct the deficiency, or request an extension of the corrective work order’s compliance period.

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 remediate Complainant’s project as required by statute. 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 inaction and/or lack of performance on this project. Here, Mr. Estereicher admitted that he started the project without a permit, failed to obtain a permit prior to the expiration of the Directive’s compliance period, and did not request an extension of the Directive’s compliance period in an effort to complete the underlying project. Additionally, Mr. Estereicher’s belief in there being a “grace period” to comply with the Directive is not credible, given that he was provided with explicitly detailed information regarding adherence and consequences by the Registrar. The evidentiary record in this matter reflects that Respondent no affirmative defense(s) for failing to comply with Ariz. Rev. Stat. §§ 32-1154(A)(2)(b) and 32-1154(A)(22).

Because Complainant has established Respondent’s statutory violation(s) by a preponderance of the evidence, Complainant has also established cause for the Registrar to discipline Respondent’s ROC License No. 330826.

Complainant may petition the Registrar’s Recovery Fund for financial recompense in 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 Phoenix Pro Pool, LLC, ROC License No. 330826, be suspended for four (4) business days.

It is further recommended that the Registrar require Respondent to pay the sum total of $100.00 as a civil penalty pursuant to Ariz. Rev. Stat. § 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 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)(5), unless Respondent tenders payment of any outstanding prior civil penalty.

NOTICE

Pursuant to Ariz. Rev. Stat. § 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, June 24, 2024.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

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

Tom Cole, Director

c/o Legal Department

Registrar of Contractors

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Kevin Blanchat, Complainant

8941 W. Topeka Dr.

Peoria, AZ 85382

[email redacted]

Phoenix Pro Pool, LLC

4428 N. 156th Dr.

Goodyear, AZ 85395

[email redacted]

By: OAH Staff