ALJDEC

98F-2049-ROC · Registrar of Contractors · 1998-08-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 12, 1998. APPEARANCES: Complainants appeared through their authorized employee, David E. Parke. Respondent appeared through its owner and qualifying party, Thomas James Colosimo. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

1. The original complaint in this matter was filed by ASK Arizona Solar King Inc. doing business as H2O Technologies and Consulting. 2. A review of the official records of the Registrar of Contractors reveals that ASK Arizona Solar King Inc. doing business as H2O Technologies and Consulting was issued License No. 107961, a Class C-37R water conditioning equipment license, by the Registrar of Contractors on June 28, 1995. That license was cancelled by the licensee on May 21, 1998. 3. The official records of the Registrar of Contractors further reveal that ASK H2O Technologies and Consulting Inc., composed of the same principals and officers of ASK Arizona Solar King Inc., was issued License No. 135329, a Class C-37R water conditioning equipment license, by the Registrar of Contractors on May 21, 1998. 4. At the commencement of the hearing the Citation and Complaint was amended, over Respondent’s objection, to reflect ASK Arizona Solar King Inc., doing business as H2O Technologies and Consulting, and ASK H2O Technologies and Consulting Inc. as complainants. 5. The Registrar’s records indicate that Respondent is a sole proprietorship of Thomas James Colosimo doing business as Sigma Pool Service (“Sigma Pool Service”). Respondent was issued License No. 091540, a Class C-06 swimming pool service and repair license, by the Registrar on November 11, 1991. 6. The Registrar’s records further reveal that Sigma Pool Systems Inc., a corporation doing business as Sigma Water Systems (“Sigma Water Systems”) was issued License No. 134064, a Class C-37R water conditioning equipment license, on April 13, 1998. Thomas James Colosimo appears on that license as president and qualifying party. Steven Frank appears on the license as corporate secretary. 7. The Respondent is a separate legal entity from Sigma Pool Systems Inc., a corporation doing business as Sigma Water Systems. 8. The Complainants and the Respondent in this matter are business competitors. 9. Respondent is found to have failed to do business in the name appearing on its license, which is Sigma Pool Service. Respondent has advertised its services using its Class C-06 License No. 091540 under the names “SIGMA” and “SIGMA Water Treatment Systems”. 10. Respondent’s failure to advertise in the name appearing on its license and using the names “SIGMA” and “SIGMA Water Treatment Systems” is found to be false, misleading and deceptive advertising that does not inform the public as to the proper name of the licensee appearing on the identified license. 11. It is determined that Respondent utilized the contracting license of Christopher Lee Yonsetto, doing business as C Y Quality Water and Services, in advertising for water conditioning equipment contracting. Respondent subcontracted water conditioning equipment work to C Y Quality Water and Services. Respondent utilized that subcontractor’s License No. 117072 in various print advertisements along side its own License No. 091540. The use of C Y Quality Water Services’ Class C-37R license in Respondent’s advertisements is found to be false, misleading and deceptive advertising whereby any member of the public may have been misled or injured by believing that Respondent was a properly licensed water conditioning equipment contractor when it was not. 12. Respondent is deemed to have contracted beyond the scope of its Class C- license by performing water conditioning equipment contracting without possessing a requisite Class C-37R license. 13. Respondent’s position that it mitigated its violation of the State’s contracting laws in wrongful utilizing C Y Quality Water Services’ Class C-37 R license by subsequently applying for, and receiving, a Class C-37R license is deemed flawed although made in good faith. Sigma Pool Systems Inc., a corporation, doing business as Sigma Water Systems was issued License No. 134064, a Class C-37R water conditioning equipment license by the Registrar on April 13, 1998. That corporation’s president and qualifying party is listed as Thomas James Colosimo, who is also Respondent’s owner and qualifying party. Respondent, a sole proprietorship, has not been issued a Class C-37R license. Respondent has improperly utilized License No. 134064 in its advertisements. Respondent should immediately cease any and all use of License No. 134064. Respondent should also cease any water conditioning equipment contracting unless and until it properly acquires a Class C-37R license. 14. It is determined that Respondent’s use of the label “Since 1982” in its advertising may be misleading to the general public. The use of such labeling gives the impression that the Respondent has been in business for that duration of time. However, Respondent has only been licensed as a swimming pool service and repair contractor since November 1, 1991, and is not properly licensed as a water conditioning equipment contractor. Respondent should cease the use of such labeling. However, a reference in Respondent’s advertising to the length of experience of its owner and qualifying party would be appropriate if accurate. 15. The evidence of record contains radio and internet advertisements which contain references to “Sigma”, “Sigma Water Treatment Systems” and “Sigma Water Systems”. There is insufficient evidence to establish that those advertisements are directed at soliciting work within the scope of a Class C-37R license. Rather, those advertisements appear to solicit the sale of a product by a manufacturer. 16. Respondent’s failure to do business in the name appearing on its license, its failure to advertise in the name appearing on its license, its improper uses of the Class C-37R water conditioning equipment licenses of C Y Quality Water and Services and Sigma Water Systems, its performance of water conditioning equipment contracting without being issued a proper Class C-37R license and the improper use of the verbiage “Since 1982” in its advertising as described in Finding No. 14 above are deemed wrongful acts. However, Complainants failed to show that they sustained any injury as a result of those wrongful acts by Respondent. 17. There is insufficient evidence of record to establish that Respondent maliciously and intentionally violated the State’s contracting laws as described in the above Findings. On the contrary, there is credible evidence that Respondent has attempted in good faith to comply with directives from the Registrar to correct identified deficiencies in its contracting, albeit not always successfully.

CONCLUSIONS OF LAW

1. The evidence of record is adequate to establish that Respondent has violated the provisions of A.R.S. § 32-1154 (A) (15), (16), (17) and (3); namely Rule R4-9-109. 2. The evidence of record is insufficient to establish that Respondent violated the provisions of A.R.S. § 32-1154 (A) (7). 3. The State’s contracting laws and Registrar of Contractors’ agency rules are applicable to advertisements by a licensed contractor on the internet computer service. However, there is insufficient evidence of record to establish that Respondent has improperly advertised on the internet. 4. Under all the circumstances, it would be appropriate for the Registrar of Contractors to admonish Respondent to properly bring all aspects of its advertising into compliance with the State’s contracting laws and the Registrar’s rules and regulations, especially as to the proper use of its licensed name, the improper use of License No. 134064, a Class C-37R license, issued to Sigma Pool Systems Inc. doing business as Sigma Water Systems and its references to being in business since 1982 in advertisements.

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RECOMMENDED ORDER

In view of the foregoing, it is recommended that the Respondent be admonished by the Registrar of Contractors as set forth in Conclusion of Law No. 4 and that the Citation and Complaint in this matter be closed. Done this day, August 25, 1998.

_________________________________ BRIAN BRENDAN TULLY Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1998, to:

Michael P. Goldwater, Director Registrar of Contractors 800 West Washington, 6th Floor Phoenix, AZ 85007

ATTN: Joyce Armijo

By _______________________________

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Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826