ALJDEC

99F-1823-ROC · Registrar of Contractors · 1999-09-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On September 30,1999, a hearing was held to determine if the Respondent had violated provisions of A.R.S. §32-1154(A). Joe and Diane Julia (the “Complainants”) appeared on their own behalf. David J. Pusateri appeared on behalf of Integrity Pools and Spas, Inc. (the “Respondent” or “Integrity Pools”). Evidence and testimony were presented. Based upon a review of the entire record, the following Findings of Fact, Conclusions of Law and Recommended Decision are made.

FINDINGS OF FACT 1. The Complainants own a home located at 29117 N. 68th Way, Cave Creek, Arizona (the “Home”). In the spring of 1998, the Complainants decided to remodel the Home’s backyard area. The Complainants required the services of a contractor to (1) landscape the backyard, and (2) install an outdoor fireplace, a barbecue, a basketball court, a patio and block seating. The Complainants consulted with their pool contractor who recommended Ground Design Landscape Contracting (“Ground Design”).

2. The Complainants contacted Ground Design and spoke to Gary Dircks. On May 15, 1998, the Complainants entered into a contract (the “Contract”) with Ground Design to perform the aforementioned landscaping and construction work. See Complainants’ Exhibit 1 (the “Contract”). Mr. Julia and Gary Dircks signed the Contract. Id. Mrs. Julia testified that she assumed that Ground Design was properly licensed to perform the work set forth in the Contract. Mrs. Julia testified that the Contract clearly stated that Ground Design was licensed and bonded. Id. Mrs. Julia further testified that Gary Dircks gave her a Ground Design business card that also showed that Ground Design was licensed and bonded. See Complainants’ Exhibit 3.

3. Ground Design started the landscaping and construction work in the middle of May, 1998. Mrs. Julia testified that Ground Design worked for a couple of weeks at her Home. Mrs. Julia testified that Mr. David Pusateri appeared at her Home at least six times to oversee the work. Mrs. Julia testified that Mr. Pusateri represented himself as Mr. Dircks’ partner at Ground Design. Mrs. Julia testified that she also received a Ground Design business card from Mr. Pusateri (with Mr. Pusateri’s name and phone number on it). See Complainants’ Exhibit 3. Mrs. Julia further testified that Mr. Pusateri told her to call him if she had any problems with Ground Design’s performance or if she could not contact Mr. Dircks.

4. Mrs. Julia testified that the Ground Design workers ultimately disappeared in late May of 1998. Mrs. Julia testified that Ground Design’s work was not finished. Mrs. Julia testified that the outdoor fireplace was missing the fireplace door, the barbecue vent was missing, and some of the plants and lights were never planted or installed. Mrs. Julia testified that she unsuccessfully attempted to contact Mr. Dircks. Mrs. Julia testified that she was ultimately able to contact Mr. Pusateri who promised to oversee the completion of the work set forth in the Contract. Unfortunately, the work was never completed.

5. Mrs. Julia testified that she ultimately contacted the Registrar of Contractors (the “ROC”). Mrs. Julia testified that she learned that Ground Design was never licensed to perform the work set forth in the Contract. On or about November 14, 1998, the Complainant filed a Complaint with the ROC. ROC Investigator J. Boyle investigated Mr. Pusateri for contracting without a license. On or about December 10, 1998, Mr. Boyle

submitted an Investigation Report to the Registrar of Contractors. See Complainants’ Exhibit 2. Mr. Boyle wrote the following: [Mr. Pusateri] has license issued 6-6-98 for residential pools. He is doing landscaping under another name and signed the contract before his license was issued. Transfer to Inspections. Id.

6. ROC Inspector Lewis King testified that pursuant to the ROC’s licensing records, Mr. Pusateri is the qualifying party for Integrity Pools and Spas, Inc. (the “Respondent”). Inspector King testified that Mr. Gary Dircks is listed as a principle for the Respondent. The Respondent’s pool contractor’s license was issued on or about June 6, 1998.

7. Inspector King testified that he concluded that Mr. Pusateri was contracting without a valid license when Ground Design entered into the Contract with the Complainants. Inspector King based this conclusion on (1) ROC Investigator Boyle’s report; (2) the Ground Design business card that Mr. Pusateri presented to the Complainants; and (3) Mr. Pusateri’s representations to the Complainants that he was a partner with Mr. Dircks at Ground Design. On or about December 30, 1998, Inspector Lewis King scheduled a jobsite inspection with the Respondent and the Complainants for February 19, 1999 at the Home. ROC Inspector King testified that the Respondent failed to appear.

8. On or about February 23, 1999, ROC Inspector King issued a Corrective Work Order ("CWO") to the Respondent requiring the following corrective action: 1. B.B.Q propane access door not installed. 2. Contracted for 8 landscaping lights only 7 installed. 3. Concrete exposed aggregate B.B.Q. patio cracked. 4. No permit pulled and no inspection done regarding B.B.Q and fireplace. See CWO, dated February 23, 1999. Inspector King required that the Respondent correct items 1 through 3 by using a properly licensed contractor. Id.

9. Mrs. Julia testified that the CWO allowed the Respondent only 15 days to perform the corrective work required by the CWO. Mrs. Julia testified that items 1 through 3 of the CWO were not corrected until March 28, 1999. Mrs. Julia testified that she does not know if a licensed contractor did the corrective work. Mrs. Julia testified that item 4 of the CWO has not been completed.

10. Mr. Pusateri testified that he began working for Ground Design as a commissioned salesperson in January of 1998. Mr. Pusateri testified that he was not present when the Contract was signed. Mr. Pusateri testified that he only got involved to help the Complainants.

11. Mr. Pusateri testified that he never identified himself to the Complainants as a partner with Gary Dircks at Ground Design. Mr. Pusateri did concede that he visited the Home 5 or 6 times to determine if the Respondent’s work was completed. Mr. Pusateri testified that he is only a partner with Gary Dircks at Integrity Pools. Mr. Pusateri testified that he is the president of Integrity Pools and Mr. Dircks is the vice-president of Integrity Pools.

12. Mr. Pusateri testified that the Respondent Integrity Pools is not licensed as a landscaper. Mr. Pusateri testified that Integrity Pools had no involvement in the work completed at the Complainants’ Home. Mr. Pusateri testified that the Respondent was not even in existence when the Complainants signed the Contract.

13. Mr. Pusateri testified that M&V Concrete, a licensed contractor, did the corrective work at the Complainants’ Home. However, Mr. Pusateri testified that he could not pull the permit for the barbecue and fireplace because the Respondent is not a licensed landscaping contractor. Mr. Pusateri testified that the Complainants are the only people who can pull the permit. Mr. Pusateri further testified that he contacted the City of Scottsdale Building Department and was informed that no permit was even required for the barbecue and outdoor fireplace.

14. ROC Inspector King testified that he also contacted the City of Scottsdale Building Department and was told that the outdoor fireplace does require a city inspection and permit. Furthermore, Inspector King testified that Mr. Pusateri can pull the permit because he worked at the Home and the Respondent does have a license.

15. The undersigned Administrative Law Judge finds the testimony of Diana Julia to be credible. The undersigned Administrative Law Judge finds that Mr. Pusateri did represent himself to the Complainants as a partner with Gary Dircks at Ground Design. Accordingly, the undersigned Administrative Law Judge finds that personnel (i.e., David Pusateri and Gary Dircks) who are now affiliated with the Respondent were involved as principals in the partnership entity (i.e., Ground Design) that performed the landscaping and construction work at the Complainants’ Home. The conduct of such personnel may provide a valid basis for disciplinary proceedings against the Respondent, since any proven misconduct would reflect adversely upon the good character requirement for licensure and/or renewal as set forth in A.R.S. §32-1122(D).

16. The undersigned Administrative Law Judge finds that the Respondent and/or Ground Design failed to perform in a professional and workmanlike manner in performing the terms of the Contract. The barbecue door was not installed, the landscaping lights were not all installed, and the barbecue patio was cracked. Furthermore, based on the testimony of ROC Inspector King, the Respondent failed to properly obtain the permit and the city inspection for the fireplace. The Respondent’s failure to perform in a workmanlike manner is a wrongful act that has substantially injured the Complainants. The Respondent also failed to take appropriate corrective action within a reasonable time after receiving the CWO.

17. In mitigation, the CWO’s items 1 through 3 have been corrected. Furthermore, Mr. Pusateri testified that item 4 of the CWO required no corrective action because a permit or inspection is not required for the fireplace. However, based on ROC Inspector King’s testimony, the undersigned Administrative Law Judge finds that the fireplace does require a permit and a proper inspection. Furthermore, Mrs. Julia argued that she still does not know if any of the CWO’s items 1 through 3 require a permit or inspection. Mrs. Julia testified that she does not even know if these items were corrected by a properly licensed contractor. However, in the absence of evidence to the contrary, the undersigned Administrative Law Judge finds that the CWO’s items 1 through 3 were properly corrected.

CONCLUSIONS OF LAW

1. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). 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). It "is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not." Black's Law Dictionary, 1182 (6th ed. 1990).

2. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that the Respondent has violated A.R.S. §32-1154(A)(3) and R4-9-108 as set forth in Findings of Fact #16.

3. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that the Respondent has violated A.R.S. §32-1154(A)(7) as set forth in Findings of Fact #16.

4. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that the Respondent has not violated A.R.S. §32-1154(A)(12). No evidence was presented on this alleged violation.

5. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that the Respondent has not violated A.R.S. §32-1154(A)(15). At the time of contracting with the Complainants, the Respondent was not contracting under a license issued under a name other than as set forth upon the license. Integrity Pools did not obtain a license until after Ground Design had contracted (and performed under the Contract) with the Complainants. Furthermore, Ground Design never had a license. No other evidence was presented on this alleged violation.

6. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that the Respondent has not violated A.R.S. §32-1154(A)(17). Ground Design or the Respondent was not licensed at the time that the Contract was signed and when the work was performed. Furthermore, no evidence was presented showing that the Respondent performed the corrective work.

7. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that disciplinary action against the Respondent is appropriate and fully warranted pursuant to A.R.S. §32- 1154(A)(20) as set forth in Findings of Fact ##15 & 16. The Registrar undoubtedly would not have issued a license to the Respondent if the Registrar had known about the poor workmanship performed at the Complainants’ Home.

8. The undersigned Administrative Law Judge concludes that the preponderance of the evidence shows that the Respondent has violated A.R.S. §32-1154(A)(23) as set forth in Findings of Fact #16. The Respondent failed to timely correct items 1 through 3 of the CWO. The Respondent still has not successfully performed item 4 of the CWO.

9. The undersigned Administrative Law Judge concludes that grounds exist to revoke or suspend the Respondent’s Class B-05 license pursuant to A.R.S. §32-1154. The undersigned Administrative Law Judge further finds that grounds exist to impose a civil penalty against the Respondent and to increase the Respondent’s surety bond or cash deposit pursuant to A.R.S. §32-1154(B) & (D).

RECOMMENDED DECISION

Based upon the foregoing, the undersigned Administrative Law Judge recommends that commencing on the effective date of this Order (thirty-five [35] days after the date of mailing by the Registrar) that the Respondent’s Class B-05 license be suspended until the Registrar receives proof that the Respondent has performed the following: 1. Obtain a permit (and a proper inspection) from the City of Scottsdale Building Department for the Complainants’ fireplace; OR 2. Obtain a properly certified affidavit from the City of Scottsdale Building Department showing that no permit or inspection is required for the Complainants’ fireplace.

It is further recommended that if the Respondent completes the aforesaid corrective action in a proper manner on or before this Order’s effective date, or if the Respondent is unable to comply with the corrective action because of the Complainants’ unwillingness to grant Respondent’s representatives reasonable and timely access to the Home for an inspection, then no license suspension shall be imposed and the entire Citation and Complaint in Case Number 99-1823 shall be closed.

The undersigned Administrative Law Judge further recommends that the Respondent pay a $50.00 civil penalty to the ROC pursuant to A.R.S. §32- 1154(D). If the Respondent fails to pay the civil penalty on or before 30 days after this Order’s effective date, then the Registrar shall automatically revoke the Respondent’s license on that date. This penalty should be paid even if the Respondent performs the aforementioned corrective action.

Done this day, October 19, 1999.

______________________________________ Casey J. Newcomb Administrative Law Judge

Original transmitted by mail this ____ day of October, 1999, to:

Mr. Michael P. Goldwater Registrar of Contractors ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826