ALJDEC - Licensing

2024A-04225-CHC-ROC · Registrar of Contractors · 2024-08-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Geoffrey Spalt,

COMPLAINANT,

v.

Pleasure Spas Inc.

DBA: Pleasure Pools,

License No. ROC 166025,

and

Pleasure Spas Inc.

DBA: Pleasure Homes,

License No. ROC 201430,

RESPONDENT.

No. 2024A-04225-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 25, 2024

APPEARANCES: Complainant Geoffrey Spalt appeared on his own behalf via Google Meet. Owen Brown appeared telephonically on behalf of Respondent Pleasure Spas Inc. Registrar of Contractors Investigator John Smith appeared via Google Meet.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

EXHIBITS ADMITTED INTO EVIDENCE:

_____________________________________________________________________

FINDINGS OF FACT

Pleasure Spas Inc, (Respondent) is the holder of License Nos. 166025 and 201430 issued by the Arizona Registrar of Contractors (Registrar).

On or about February 27, 2023, Larry Aimo Green (Complainant) agreed to have Respondent install a fiberglass spa in his backyard at his home in Tucson, Arizona. The total cost was to be $14,992.07, and Complainant paid $14,000.00.

On or about April 11, 2024, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to project.

The Registrar assigned the complaint to Investigator John Smith. The jobsite inspection was performed on April 17, 2024. Respondent failed to appear at the jobsite inspection.

Investigator Smith then issued a Written Directive on or about April 17, 2024, which provided in pertinent part as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on Friday, May 3, 2024.

. . .

DIRECTIVE REQUIREMENTS

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

Complaint Item 1: “The project has already exceeded 13 months in duration and I received an email on 04/07/24 that the work has halted due to the contractor receiving a UCC lien against their bank accounts due to lack of cash flow.”

Investigator’s Observations: Verified.

Contract date

• 2/26/2023

Total price specified in the contract:

• $14,992.07

As stated in an email from the respondent to the complainant:

• Total amount paid to date is $14,000

As stated in the submitted complaint:

• Work stopped on 3/11/2024

As stated in the contract, the next payment is not due until completion of the project.

Current conditions on site:

• The project is not complete

• Equipment is not installed or on site

Emails from the respondent to the complainant (submitted with the complaint):

• Acknowledge the project is not complete

• Acknowledge the respondent is not currently capable of completing the project.

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.

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 and professional industry standards. For work to be performed in accordance with professional industry standards, a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.

Complaint Item 2: “Work has been slow to progress and has now been halted due to contractor insufficient funds.”

Investigator’s Observations: Verified.

Contract date

• 2/26/2023

Total price specified in the contract:

• $14,992.07

As stated in an email from the respondent to the complainant:

• Total amount paid to date is $14,000

As stated in the submitted complaint:

• Work stopped on 3/11/2024

As stated in the contract, the next payment is not due until completion of the project.

Current conditions on site:

• The project is not complete

• Equipment is not installed or on site

Emails from the respondent to the complainant (submitted with the complaint):

• Acknowledge the project is not complete

• Acknowledge the respondent is not currently capable of completing the project.

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.

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 and professional industry standards. For work to be performed in accordance with professional industry standards, a contractor shall use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.

ADDITIONAL VIOLATIONS

In addition to the allegations in the complaint, the following violations were verified:

Elements of a Contract

Investigator’s Observations: The respondent’s contract is missing the following information:

• The correct name of the contractor

o The respondent’s registered business name is “Pleasure Spas Inc DBA Pleasure Pools”

o The respondent Contract is displaying their company name as “Fiberglass Pools of Arizona”

• An estimated date of completion

• Information about the customer’s right to file a complaint with the registrar

• Contact information for the registrar

Governing Rule: A.R.S. § 32-1154(A)(12), Namely A.R.S. § 32-1158(A) Minimum Elements of a Contract.

Any contract in an amount of more than one thousand dollars entered into between a contractor andthe owner of a property to be improved shall contain in writing at least the following information:

1: The name of the contractor and the contractor's business address and license number.

2: The name and mailing address of the owner and the jobsite address or legal description.

3: The date the parties entered into the contract.

4: The estimated date of completion of all work to be performed under the contract.

5: A description of the work to be performed under the contract.

6: The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.

7: The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.

8: The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.

9a: That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A.

9b: The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1162, subsection A.

9c: The information in this paragraph must be prominently displayed in the contract in at least tenpoint bold type...

9d: ...and the contract shall be signed by the property owner and the contractor or the contractor’s designated representative.

This paragraph does not apply to a person who is subject to and complies with section 12-1365.

REQUIRED CORRECTIVE ACTION: The respondent is to submit a copy of a current contract form that complies with A.R.S. § 32-1158

Pool Contract

Investigator’s Observations:

The contract does not include Provisions 1, 3, and 4 of A.R.S. § 32-1158.01.

The payment schedule is not in compliance with Provision 2 of A.R.S. § 32-1158.01.

• Payments as per provision 2:

o 15% maximum down payment

o 25% maximum payment after completion of excavation

o 25% maximum payment after completion of steel, plumbing, and concrete

o 25% maximum payment after completion of decking

o Payment of remaining funds before finishing interior materials or completion

• Payments as stated in the respondent’s contract:

o $5,000.00 when excavation is performed (equal to 33.35%)

o 8,000.00 upon completion of spa plumbing rough in (equal to 53.36%)

o Balance due upon completion

Governing Rule: A.R.S. § 32-1154(A)(12) Namely A.R.S. § 32-1158.01 Swimming pool; spa; construction contracts

REQUIRED CORRECTIVE ACTION: The respondent is to submit a contract form that complies with A.R.S. § 32-1158 and § 32-1158.01

Display of License

Investigator’s Observations: The respondent’s Estimate does not include the respondent’s ROC number.

Governing Rule: A.R.S. § 32-1154(A)(12) Namely A.R.S. § 32-1124(B) Display of License

REQUIRED CORRECTIVE ACTION: The respondent is to submit documented compliance with A.R.S. § 32-1124

Wrong name

Investigator’s Observations:

The respondent’s registered business name is “Pleasure Spas Inc DBA Pleasure Pools”

The respondent Estimate and Contract are displaying their company name as “Fiberglass Pools of Arizona”

One of the respondent’s Payment Receipt is displaying the name as “Pleasure Pools Spas & Landscaping”

One of the respondent’s Payment Receipt is displaying the name as “Pleasure Pools”

Governing Rule: A.R.S. § 32-1154(A)(14): 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.

REQUIRED CORRECTIVE ACTION: The respondent is to submit documented compliance...

(All errors contained in the original).

On May 11, 2024, the Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a); A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(b); A.R.S, § 32-1154(A)(12) namely A.R.S. § 32-1124(B); A.R.S, § 32-1154(A)(12) namely A.R.S. § 32-1158; A.R.S, § 32-1154(A)(12) namely A.R.S. § 32-1158.01; A.R.S, § 32-1154(A)(14); and A.R.S. § 32-1154(A)(22).

On or about May 25, 2024, Respondent submitted an Answer to the Registrar.

On or about June 10, 2024, a Notice of Hearing was issued setting a hearing on July 8, 2024, at the Office of Administrative Hearings, an independent state agency.

At hearing, Investigator Smith testified as to the Registrar’s involvement and the above timeline and findings from his inspections.

Investigator Smith testified that there was no corrective work performed, and at least as to this case, Respondent had not complied with the contract violations.

Further, Investigator Smith testified that while he was aware that Respondent was suffering from financial hardship, it did not mean he could not complete with the other violations in the Directive.

Finally, Investigator Smith testified that there were no deficiencies found with the quality of Respondent’s work, just that the work had not been completed.

Complainant testified on his own behalf and confirmed that to date, no corrective work had been performed, nor had the project been finished, since the project started on February 27, 2023.

Further, Complainant testified that while he was generally very happy with Respondent, he has paid nearly the entire contract price and the project was not finished.

Mr. Brown testified on behalf of Respondent. Mr. Brown too testified that Complainant was a great customer.

Further, Mr. Brown testified that he was suffering financial problems because he had partners who took money from the business accounts, and he had co-signed on loans, which led to the lien on his bank account.

Mr. Brown also testified that he no longer carries the product as the manufacturer did not provide correct training as to how to install the same.

Finally, Mr. Brown testified that “come hell or high water”, he will get the project done, he just did not have a timeline.

Administrative notice was taken of Respondent’s prior License record on August 9, 2024. Such prior License record reflected that Respondent’s License No. 166025 was first issued on July 30, 2001, and reflected that there were 12 open cases, one of which was the present case, 2 “Disciplined Cases” and 3 “Resolved/Settled Cases”. As to License No. 201430 was first issued on February 3, 2005 and was currently suspended as of July 1, 2024, for a lack of bond.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazzano v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

There was no dispute over Investigator Smith’s findings. The preponderance of the evidence established that Respondent’s work was not completed. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A), and (B)

The preponderance of the evidence demonstrated that Respondent’s license number was not on the parties contract in violation of A.R.S. § 32-1154(A)(12) - A.R.S. § 32-1124(B).

The preponderance of the evidence demonstrated that the parties contract was in violation of § 32-1154(A)(12) namely A.R.S. § 32-1158, and A.R.S. § 32-1158.01.

The preponderance of the evidence established Respondent violated A.R.S. § 32-1154(A)(14), as its registered business name was “Pleasure Spas Inc DBA Pleasure Pools”, yet it used “Fiberglass Pools of Arizona” on the contract, “Pleasure Pools Spas & Landscaping” and “Pleasure Pools” on separate receipts.

The preponderance of the evidence established Respondent failed to complete the corrective work following the Directive being issued. Further, Respondent did not dispute the same. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar 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 Respondent’s License No. 166025 and 201430 for a period of five days.

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)(7), unless Respondent tenders payment of any outstanding prior civil penalty.

It is further recommended that that Respondent provide a sample contract which complies with statute to the Registrar within 30 days. Should Respondent fail to do so, it will result in a prolonged suspension until compliance is achieved.

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, August 9, 2024.

/s/ Adam D. Stone

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Geoffrey Spalt

[email redacted]

Pleasure Spas Inc.

[email redacted]

By: OAH Staff