ALJDEC - Licensing

2024A-03095-CHC-ROC · Registrar of Contractors · 2024-08-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Karen Vinikoor,

COMPLAINANT,

v.

Pleasure Spas Inc.

ROC License No. 166025,

RESPONDENT.

No. 2024A-03095-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 20, 2024 at 1:00 PM.

APPEARANCES: Karen Vinikoor (“Complainant”) appeared on her own behalf. Gregory Johndrow appeared on behalf of the Arizona Registrar of Contractors (”Registrar”). No appearance(s) by or on behalf of Pleasure Spas Inc. (“Respondent”). Nicole Fox observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the Registrar’s attached agency file, was admitted into the record with the July 24, 2024, Hearing Order.

_____________________________________________________________________

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 July 30, 2001, the Registrar issued License No. 166025 General Residential B-5 Swimming Pool contracting license to Respondent. The license had been renewed through July 31, 2025. Owen David Wendell Brown is listed as the President on the license. Respondent’s address of record for the license is 2004 E. Irvington Rd., #186 Tucson, Arizona 85714. Respondent has an active $15,000.00 surety bond on the license, effective March 11, 2024. The license has been disciplined on two (2) prior occasions, and has had three (3) prior complaints settled or otherwise resolved against it. Currently, the license has twelve (12) open complaint against it; one of which is presumed to be related to this matter.

On March 14, 2024, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 166025 alleging abandonment of a residential pool construction project. The Registrar designated it Complaint No. 2024-03095 and assigned to Gregory Johndrow (“Investigator Johndrow”) for investigation.

On March 18, 2024, Investigator Johndrow issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on June 10, 2024, at 9:30 a.m. Correspondence was not returned as undeliverable to Respondent.

On April 05, 2024, per the request of Complainant’s daughter, Ms. Fox, Investigator Johndrow issued a Jobsite Inspection Rescheduled Notification Letter to the parties, advising that the onsite project inspection would occur on May 09, 2024, at 9:30 a.m. Correspondence was not returned as undeliverable to Respondent.

On May 09, 2024, Investigator Johndrow inspected the work that had been performed on the project to date. Respondent was not present. Investigator Johndrow also reviewed the contract-related correspondence between the parties, and took 10 photographs of the project site. When he was finished, Investigator Johndrow drafted his Inspection Notes. Ultimately, Investigator Johndrow derived six (6) separate and distinct complaint items from Complaint No. 2024-03095, three (3) of which he was able substantiated based on his firsthand observations. Specifically, Investigator Johndrow determined Respondent had started excavation and trenching, but that Respondent had abandoned the project and left a hazardous condition for the home’s occupants.

On May 09, 2024, Investigator Johndrow issued a Warning Letter to Respondent to advise that Respondent’s contract with Complainant was missing at least one element in violation of Arizona Revised Statutes (“Ariz. Rev. Stat.”) § 32-1158.01. Respondent was further advised that failure to comply with Ariz. Rev. Stat. § 32-1158.01 was a violation of Ariz. Rev. Stat. § 32-1154(A)(12), which could result in discipline against Respondent’s license including suspension or revocation.

On May 09, 2024, Investigator Johndrow issued another Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(14) for operating under an unregistered name.

On May 09, 2024, Investigator Johndrow issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on May 27, 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 May 31, 2024, Investigator Johndrow forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On June 12, 2024, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(12); 32-1158.01, 32-1154(A)(14), and 32-1154(A)(22). Respondent was given until June 27, 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 June 26, 2024, the Registrar received a timely Answer on behalf Respondent of not file from Carly Brown. Ms. Brown offered the following, in pertinent parts:

[We] have tried to correspond with [Complainant] to make arrangements to either move forward or cancel and she has been unresponsive.

Pleasure Pools has had financial difficulties in the past year that has hindered us from moving this project forward

In regard to the charge of operating under a name without a license, Fiberglass Pools of Arizona is a legal DBA of Pleasure Spas Inc. We were under the understanding that our lawyer had registered this with AROC as well but clearly he did not. We will no longer be operating under this company name and so have not taken steps to register it at this time.

On or about July 01, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 20, 2024. Per the July 15, 2024, Notice of Hearing on Contested Case (“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)(1)

Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)

Charge 3: A.R.S. § 32-1154(A)(12) – A.R.S. § 32-1158.01

Charge 4: A.R.S. § 32-1154(A)(14)

Charge 5: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Johndrow as a witness. Although afforded a ten (10) minute grace period, Respondent failed to appear or submit a Motion to Continue. The substantive evidence of record is as follows:

Complainant owns residential property located at 3850 N. Bear Canyon Rd. Tucson, Arizona 85749. Ms. Fox resides with Complainant.

On or about August 31, 2023, the parties entered into a $49,932.80 residential pool contract. Respondent entered the contract under the name Fiberglass Pools Arizona, which is not a DBA set forth on the license.

Work on the project commenced September 06, 2023, and stopped on January 26, 2024. The project was not finished.

Complainant tendered three (3) payments to Respondent for the project totaling $31,959.68.

On January 26, 2024, Shine Capitol Group contacted Complainant to advise her not to tender further monies to Respondent regarding her project. When Complainant inquired with Mr. Brown, he advised her “not to worry about it,” and asked for $13,479.00.

On March 14, 2024, Mr. Brown reported to the project site and informed Complainant that he would need to sell all of his worldly possessions in order to obtain the capital needed to complete Complainant’s project. Mr. Brown was unable to account for the whereabouts of the monies Complainant tendered for the project. When Complainant advised that she planned to file a complaint with the Registrar against Respondent, Mr. Brown advised that he would “just go back to Canada.”

On March 18, 2024, Mr. Brown broached the subject of issuing a possible refund in an email to Complainant, but never followed-up with her regarding specifics. Complainant had no further communication with Respondent after that date.

On April 10, 2024, Ms. Brown provided a reply to Complaint No. 2024-03095 to the Registrar on behalf of Respondent. Respondent did not ask to inspect the project site or request rescheduling of the scheduled jobsite inspection.

Although License No. 166025 was in active status and in good standing with the Registrar between May 09, 2024, and May 27, 2024, Respondent did not perform any corrective work on the project. Respondent did not coordinate completion of the project with an appropriately licensed subcontractor or enter into a settlement agreement with Complainant during this time.

At no point during the Directive’s compliance period, or anytime thereafter, did Respondent allege a denial of access to the project site to the Registrar, allege intentional blockade of communication on the part of Complainant, or request an extension of the Directive’s compliance period.

Respondent did not provide any financial records to the Registrar to establish bankruptcy or insolvency.

Closing Argument

In closing, Complainant opined that Respondent had taken advantage of her because she was advanced in age. Complainant argued that Respondent should be held responsible for leaving her backyard in an unsafe state for an extended period of time.

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.

The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from the Registrar as well.

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)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[A]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”

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] contractor shall perform all work in a professional and workmanlike manner.”

Ariz. Rev. Stat. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Failure in any material respect to comply with this chapter.”

Ariz. Rev. Stat. § 32-1158.01 provides that in addition to the nine (9) contract-related requirements of section 32-1158, a contractor who enters into a contract for the construction or installation of a residential in-ground swimming pool must also include the following provisions:

A down payment payable on the execution of the contract of not more than fifteen percent of the original contract price.

After the completion of the excavation work on the swimming pool or spa, a payment of not more than twenty-five percent of the amount of the original contract price plus any written change orders approved by the purchaser.

After the installation of steel, plumbing and pneumatically applied concrete materials or the installation of a prefabricated swimming pool or spa, a payment of not more than twenty-five percent of the amount of the original contract price plus any written change orders approved by the purchaser.

After the installation of decking materials, a payment of not more than twenty-five percent of the amount of the original contract price plus any written change orders approved by the purchaser.

Before the application of the finishing interior materials or completion of all work on a prefabricated pool or spa, payment of all remaining sums due on the original contract plus any written change orders approved by the purchaser.

Ariz. Rev. Stat. § 32-1154(A)(14) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Acting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth on the license.”

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.

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 an in-ground pool construction contract that Complainant substantially paid Respondent for. It is also clear from the record that Respondent failed to substantially perform on the project, and that Respondent did not attempt comply with the Registrar’s Directive to correct the deficiency, or request an extension thereof. Additionally, Respondent never provided the Registrar with updated pool contract templates to show its compliance with Ariz. Rev. Stat. §§ 32-1154(A)(12); Ariz. Rev. Stat. § 32-1158.01, or 32-1154(A)(14).

Therefore, the only remaining issue to address is whether Respondent raised sufficient justification or excuse for failing to complete Complainant’s project in accordance with the Registrar’s Directive, or enter into a settlement agreement with Complainant prior to the expiration of the Directive’s compliance period. These are an affirmative defenses that Respondent bears the burden to establish. The Tribunal is not at liberty to make presumptions in favor of Respondent or accept facts in mitigation on behalf of Respondent that are not supported by the evidence. Here, the record reflects that Respondent failed to act in any degree and had no affirmative defense(s) for doing so. Notably, Respondent’s absence from this administrative proceeding is also a factor in aggravation, as it evinces the licensee’s unwillingness to be regulated by the Registrar.

Because Complainant has established Respondent’s statutory violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(1), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), 32-1154(A)(12); 32-1158.01, 32-1154(A)(14), and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established cause for the Registrar to discipline Respondent’s ROC License No. 166025.

Complainant may petition the Registrar’s Recovery Fund for financial recompense in this matter.

RECOMMENDED ORDER

Based on the foregoing egregious conduct,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Pleasure Spas Inc., ROC License No. 166025, be revoked by the Registrar.

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, August 21, 2024.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Pleasure Spas Inc., Respondent

dba Pleasure Pools

2004 E. Irvington Rd. #186

Tucson, AZ 85714

[email redacted]

[email redacted]

Karen Vinikoor, Complainant

3850 N. Bear Canyon Rd.

Tucson, AZ 85749

[email redacted]

By: OAH Staff