ALJDEC - Licensing
2024A-13719-CHC-ROC · Registrar of Contractors · 2026-02-03
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Pete A. Lackner
COMPLAINANT,
v.
ELITE POOLS AND DECKING, LLC
License Nos. ROC 326994 and 332838,
RESPONDENT.
No. 2024A-13719-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: January 14, 2026
APPEARANCES: Pete A. Lackner appeared on behalf of himself via videoconference. George Warren appeared on behalf of Elite POOLS AND DECKING, LLC hearing via videoconference.
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
EXHIBITS: Exhibit A: The packet of the Arizona Registrar of Contractors (Registrar). Elite’s Exhibit 1.
FINDINGS OF FACT
Mr. Warren is the owner of ELITE POOLS AND DECKING, LLC
(Elite).
Elite holds license numbers 326994 and 332838, issued by the Registrar.
On or about December 7, 2022, Elite agreed to repair Mr. Lackner’s pool
deck by applying an acrylic coating, for $9,198.00. See Exhibit A, pgs. 12-14.
On or about December 9, 2022, Elite started work.
Elite repaired the deck by using a product made by Xcel Surfaces.
On or about December 11, 2022, Elite completed the job.
Elite last worked on the deck in or around February of 2024.
On December 16, 2024, the Registrar received a complaint from
Mr. Lackner alleging poor workmanship on the part of Elite.
The Registrar assigned the complaint to one of its investigators, Patricia Schuette, (Investigator Schuette).
On January 24, 2025, Investigator Schuette conducted a job-site inspection. During the job-site inspection, Investigator Schuette observed, “[s] everal areas on the outer section of decking that have the finish popping/chipping away from the concrete.” See Exhibit A, pg. 39.
On August 8, 2025, the Registrar issued a Directive to Elite that provided, 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 August 29, 2025.
RESTRICTIONS
You may not perform or hire other contractors to perform work that is outside the scope of your license.
If your license is currently suspended for administrative reasons1, or is inactive, expired, or cancelled, you may not perform any corrective work nor contract in any manner, which includes hiring other contractors to perform work, until the suspension of your license(s) has been lifted or your license(s) has been reactivated.
DIRECTIVE REQUIREMENTS
You are directed to remedy the following violations by the appropriate means:
Complaint Item: 1 - November 3, 2024, I contacted George to let him know
that the decking is chipping after less than 2 years and what his plan was to
resolve this issue. He asked we send a picture of the issue and we did by
sending him one photo showing what we are talking about. He said he would
send out a crew the week of the 18th in November. Circled back on the 4th of
December – 2024 with no resolve.
Investigator’s Observation: Verified. Several areas on the outer section of
decking that have the finish popping/chipping away from the concrete
substrate below. Elite accepted the surface when applying the acrylic
decking. Elite to correct within appropriate means.
Governing Rule: ARS §32-1154 (A) (3) namely R4-9-108, Poor work
not performed in accordance with professional industry standards
..........................
[Errors in original].
Elite made repairs to Mr. Lackner’s deck after the Directive was issued.
On September 25, 2024, Investigator Schuette conducted a compliance job-site inspection.
During the compliance job-site inspection, Investigator Schuette discovered that the following items were not corrected:
........................................
Complaint Item: 1 - November 3, 2024, I contacted George to let him know that the decking is chipping after less than 2 years and what his plan was to resolve this issue. He asked we send a picture of the issue and we did by sending him one photo showing what we are talking about.
He said he would send out a crew the week of the 18th in November. Circled back on the 4th of December – 2024 with no resolve.
........................................
Compliance Observation: The area that was chipped during the second inspection was repaired however, there is a spot approximately 6” away that has now also popped. There are also a few other locations that are showing signs of delaminating. In addition to the spots, the previous repairs do not blend adequately.
Governing Rule: ARS §32-1154 (A) (3) namely R4-9-108, Poor work not performed in accordance with professional industry standards
........................................
On September 29, 2025, the Registrar issued a Citation against the licenses of Elite alleging that it had violated Ariz. Rev. Stat. § 32-1154 (A)(3); Namely A.A.C. R4-9-108(A), and Ariz. Rev. Stat. § 32-1154 (A)(22).
Elite filed a timely answer to the Citation.
The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.
A hearing was held on January 14, 2026.
At hearing, Mr. Lackner testified on behalf of himself. Investigator Schuette testified consistently with her job-site and compliance inspection notes.
Mr. Warren testified on behalf of himself.
Mr. Lackner explained that his pool deck began peeling before the two year warranty expired. Although Elite made repairs, the deck continued to peel.
Mr. Warren stated at hearing that moisture and effervescence were not a problem when he accepted the surface. Mr. Warren contended during the hearing that there was no cool decking on the section of the deck that Elite remodeled. Mr. Lackner contended that there was beige cool decking on the section of the deck where Elite performed work. Mr. Lackner stated that he wanted that section painted because it did not match the gray color on his home.
When Elite repaired the deck in early 2024, Mr. Warren advised
Mr. Lackner that he noticed excessive moisture and effervescence coming up through the new coating on the back section of the concrete deck. Elite sent paint to Mr. Lackner because the top coat could not be applied immediately. Mr. Lackner received the paint and painted the deck.
Mr. Warren opined during the hearing that the excessive moisture and effervescence was caused by a change in Mr. Lackner’s sprinkling or watering process that was not a problem at the time that Elite accepted the surface. All of the areas that were substantiated by Investigator Schuette popped in a straight perfect line running along that section of concrete. As a result, Mr. Warren and Gerardo Pedregon, a Product Trainer and Sales Representative for Xcel Surfaces, concluded that there is an irrigation underneath as there were only 3 or 4 circles in the deck that were popping.
Mr. Warren sent photographs of the defective area of the deck to
Mr. Pedregon. After reviewing the photos, Mr. Pedregon opined that the damage was caused by moisture in the concrete. Mr. Pedregon sent his opinion to Mr. Warren in an email on November 13, 2025 that provided, in relevant part, as follows:
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After looking at the pictures. It is clear to see that there is moisture present in the concrete. The moisture is causing the concrete to deteriorate which is why the texture that is coming off has concrete attached to it. You can also see the ring of moisture on the areas where the coating has come off. Until the moisture issue is resolved, no coating will stick to the concrete. The concrete will continue to deteriorate and pop off the coating. I do not believe this to be a material issue or an installation issue. The rest of the coating is in great condition.
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[Elite’s Exhibit 1].
Mr. Warren explained that he has performed work on thousands of decks. Mr. Warren has held two contractor’s licenses and has never had a compliant or a builder's competence inspection filed against him.
Mr. Warren contended the problem with Mr. Lackner’s deck was a substrate issue that was beyond his control. Warren stated at hearing that Elite is a pool remodeling company that remodels 140 homes per year. Elite has never had a complaint filed against its license.
The defective portion of the deck was only 160 feet out of 1,500 square feet.
Mr. Warren testified to the effect that the complaint should not have been reopened, because it involved a separate area within the1,500 square foot deck that was not required to be repaired.
Elite did not accept responsibility for the peeling paint because it believed
that the substrate was inadequate. However, Elite did not obtain an explicit warranty disclaimer signed by Mr. Lackner.
Administrative notice is taken of the Registrar’s public website. According to
the information available on the website on February 3, 2026, license number 326994
held by Elite was first issued on November 27, 2019, and was been voluntarily cancelled. Such prior License record also shows that there is only one open complaint against license 326994 and that the Registrar has not disciplined license 3326994.
The Registrar’s public website also showed on February 3,2026 that license 332838 was issued to Elite on March 31, 2021, and is active. Such prior License record further shows that the Registrar has not disciplined license 332838. The lack of prior discipline taken is considered a mitigating factor in imposing discipline.
CONCLUSIONS OF LAW
This matter lies within the Registrar’s jurisdiction.
Elite’s decision to voluntarily cancel license number 332838
not deprive Mr. Lackner of his right to prosecute the Complaint or prevent the Registrar from determining the merits of Mr. Lackner’s complaint. This matter lies within the Registrar’s jurisdiction.
Mr. Lackner bears the burden of proof to establish cause to suspend or revoke Elite’s license by a preponderance of the evidence. Elite bears the burden to establish affirmative defenses and factors in mitigation of the penalty 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.”
Elite established that the cause of the chipping in the deck was not the quality of the Xcel Surfaces coating that it used or its workmanship in applying the coating.
Elite suggested that the chipping was caused by moisture in the concrete. Although Elite bears the burden to establish affirmative defenses, the Administrative Law Judge concludes that Elite failed to meet its burden to establish, by a preponderance of the evidence, that the chipping was caused by moisture in the concrete or that it could not have addressed the cause for the subsequent failing of the coating before it performed the work.
As a general principle in construction, a contractor who performs work on top of a surface prepared by another contractor accepts the surface. The second contractor should have inspected the surface for any flaws or defects that would affect the work he proposes before performing the work. If he found the surface to be unacceptable, he could have called any defects to the owner’s attention so that the owner can choose whether to pay for the defective surface to be corrected or, if the owner is not willing to pay to correct the surface, the subsequent contractor may obtain an explicit warranty disclaimer. Moreover, after a second contractor has covered the original contractor’s work, fault cannot be apportioned between contractors because the second contractor’s work may have exacerbated or even caused the observed deficiency.
Although the causes of the failure of the Xcel Surfaces coating to adhere to the substrate has not been established, Elite did not present any evidence that
Mr. Lackner hid the true state of previous work on his deck from Elite or that Elite could not have performed additional investigation to ensure that the surface would be adequate before Elite began work on the deck. Consumers rely upon licensed contractors to take whatever measures are necessary to perform work that complies with the Registrar’s and industry standards at least as long as the statutory two-year warranty period.
Because Elite accepted the surface of Mr. Lackner’s deck by applying an acrylic surface, and it did not obtain any explicit warranty disclaimer signed by
Mr. Lackner, Mr. Lackner established cause to suspend or revoke Elite’s contractor’s License No. ROC 326994 and License No. ROC 332838, under Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. § 32-1154(A)(22), by applying an acrylic coating that failed to adhere to the substrate and by failing to correct the coating.
RECOMMENDED ORDER
Based on the foregoing, it is ordered that, on the effective date of the final order in this matter, License No. ROC 326994 and License No. ROC 332838, held by ELITE POOLS AND DECKING, LLC, shall be suspended for a period of three (3) business days.
It is further ordered that the ELITE POOLS AND DECKING, LLC shall pay the sum of $250.00 as a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E).
If ELITE POOLS AND DECKING, LLC fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the final order, the Registrar shall revoke ELITE POOLS AND DECKING, LLC’s licenses, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with ELITE POOLS AND DECKING, LLC, as defined in Ariz. Rev. Stat. § 32-1101(A)(7), unless ELITE tenders payment of any outstanding prior civil penalty.
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, February 3, 2026.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
Pete A. Lackner
[email redacted]
ELITE POOLS AND DECKING, LLC
[email redacted]
By: OAH Staff