ALJDEC

01F-2251-ROC · Registrar of Contractors · 2001-10-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 15, 2001

APPEARANCES: Complainant appeared through its President, John Fischer; Respondent Simplex appeared through its attorney pro hac vice Joseph G. McGuinness; Respondent Frazee appeared through its attorney Mel Cohen.

WITNESSES: For Complainant: John Fischer, President of Scottsdale Mechanical Services, Inc. dba Scottsdale Electrical and Mechanical; Dick Glinski, Vice President of Scottsdale Mechanical Services, Inc. dba Scottsdale Electrical and Mechanical.

For Respondent Simplex: Todd Wilson, General Manager, Doubletree Guest Suites Phoenix; Mike Justice, Operations Manager, Simplex Time Recorder Co.; Laurence Bennett, Vice President and Project Manager, Frazee Enterprises, Inc.; Charlie Heron, Project Manager, Simplex Time Recorder Co.; and Mike Dillon, Dillon Consulting Engineers, Inc.

For Respondent Frazee: Respondent Frazee Enterprises, Inc. called no witnesses.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

These consolidated cases concern the Guest Room Renovation Project begun in May 2000 at the Doubletree Guest Suites in Phoenix, Arizona. The cases were consolidated because the facts for both complaints involve the Renovation Project. During the Renovation Project, Respondent Frazee was the general contractor, Complainant was the electrical subcontractor hired to install a new smoke detector/fire alarm system, and Respondent Simplex was the supplier of the fire alarm system. The allegations against Respondent Simplex in case 01F-2114-ROC are that Respondent Simplex deviated from the plans and specifications and supplied an inferior product for the sensor devices. The allegation against Respondent Frazee in case 01F-2251-ROC is that Respondent Frazee failed to pay Complainant the full amounts on two other contracts related to the Renovation Project. The parties presented evidence and testimony at the hearing, including documentary evidence marked and admitted as Complainant’s Exhibits 1 and 2, Respondent Simplex’s Exhibits marked and admitted as Simplex-A through Simplex-C and Simplex-M through Simplex-P, and Respondent Frazee’s Exhibits marked and admitted as Frazee-M through Frazee-EE. Exhibits Simplex-D through Simplex-L and Frazee-A through Frazee-L consist of 20 photographs of the fire alarm system wiring and installation taken in March , April, and May 2001. At the hearing on October 15, 2001, Complainant presented two witnesses as noted above, Glinski and Fischer. In his opening statement, Fischer noted that the no-pay complaint against Respondent Frazee (01F-2251- ROC) was based on two contracts other than the fire alarm system contract. However, both witnesses focused their testimony on the fire alarm system installation; neither witness testified about the two contracts underlying the no-pay complaint against Respondent Frazee. Furthermore, the ROC complaint file in case 01F-2251-ROC does not contain a copy of any written contracts that Complainant is relying on for its no-pay claim. In essence, there was neither testimony nor documentation showing the existence and terms of the two contracts referenced in complaint 01-2251 and Complainant’s opening statement. Therefore, upon motion by Respondent Frazee after Complainant had rested its case-in-chief, and after giving Complainant an opportunity to respond to the motion, this tribunal ruled that case 01F-2251-ROC should be dismissed because Complainant had not made a prima facie case. This tribunal concluded that there was no evidence offered that could form the basis for a no-pay complaint. That ruling released Respondent Frazee from further participation at the hearing. In accordance with that ruling, dismissal of 01F-2251-ROC for failure to present a prima facie case is recommended below. Respondent Simplex made a similar motion regarding case 01F-2114-ROC, which this tribunal denied in general, but noted that no plans and specifications had been submitted to support one of the allegations. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding no violation in case 01F-2114-ROC. FINDINGS OF FACT 1. Complainant Scottsdale Mechanical Services, Inc. dba Scottsdale Electrical and Mechanical was the holder of a class L-11 specialty license (No. 126734) issued by the Registrar of Contractors (“ROC”). That specialty license authorized Complainant, as a commercial contractor, to install or repair “any wiring, related electrical material and equipment used in the generating, transmitting, or utilization of electrical energy less than 600 volts. . . .” (See, Arizona Administrative Code (A.A.C.) R4- 9-102.) The license was revoked on September 10, 2001, in an unrelated matter, Case No. 01-2065. The business is a corporation whose President is John Fischer. Hereinafter, “Complainant” will refer to both Fischer and the corporation unless context requires otherwise. 2. Respondent Frazee Enterprises, Inc. is the holder of a class B-01 license (No. 098326) issued by the ROC. That license authorizes Respondent Frazee to engage in general commercial construction. (See, id.) 3. Respondent Simplex Time Recorder Co. is the holder of a class L- commercial specialty license (No. 071958) issued by the ROC. That specialty license authorizes Respondent Simplex to install and repair low voltage communication systems, including alarm systems. (See, id.) Respondent Simplex also designs fire alarm systems and manufactures smoke and fire alarm detectors and sensors. 4. Early in the year 2000, Respondent Frazee was hired as the general contractor on a project at the Doubletree Guest Suites in Phoenix, Arizona known as the Guest Room Renovation Project (hereinafter “the Renovation Project”). The Renovation Project was to start in mid-May and, because the hotel was open for business, the work was to be done in phases, with banks of rooms taken out of service for a period of time and then put back into service when the work was completed. This made scheduling a crucial aspect of the work. 5. In April 2000, Respondent Frazee hired Complainant as a subcontractor, based on a March 2000 proposal from Complainant, to furnish and install a smoke detector/fire alarm system (upgrading the existing system) as part of the Renovation Project. (Exhibit Frazee-R.) Again, timing was important and a schedule for the work phases was attached to the subcontract and agreed upon by Complainant. (Id. at “A.”) 6. Complainant purchased the smoke detector/fire alarm system (hereinafter “fire alarm system”) components for the job from Respondent Simplex. (Complainant’s Exhibit 2.) At issue in this case are the sensors that are installed in individual rooms and hallways. Respondent Simplex makes several different sensor models, two of which are applicable here. Model 4098-9714 (hereinafter “the 9714 device”) is a two-part device with a “sensor base” and a detachable sensor. (Exhibit Simplex-O.) The sensor base is a plastic base that mounts to the electrical box and projects out about ½ to 1 inch from the surface. The wires are connected to the back of the base. The sensor is then inserted into the base and twisted slightly to achieve a connection. (Id.) Model 4098-9713 (hereinafter “the 9713 device”) is a similar device, but without a “sensor base.” (Exhibit Simplex-P.) Instead, it has a “mounting plate” for installation. The mounting plate is a thin metal plate that connects to the electrical box but does not project out any significant amount. The wires must be pulled through a beveled hole in the plate and attached to the single-unit 9713 device, which is then attached to the mounting plate by twisting. The 9713 device is called a “Quick Connect” device because it takes less time to install than a two-part device like the 9714. Detailed diagrams, schematics, specifications, and instructions, such as Simplex-O and Simplex- P, are provided with each unit. Both Exhibits caution installers to follow national and local codes as well as the installation instructions and both warn that failure to do so may result in “failure of the sensor. . . .” 7. The work schedule for the Renovation Project began on May 17, 2000, and required completion of about 4 rooms per day. (Exhibit Frazee- S.) By May 30, 2000, Respondent Frazee was markedly concerned that the schedule could not be maintained because Complainant was already behind schedule. (Exhibit Frazee-T.) Testimonial evidence from Laurence Bennett, Respondent Frazee’s Project Manager and superintendent for the Renovation Project, from Michael Justice, Respondent Simplex’s Operations Manager and a contractor with 13 years in the fire alarm business, from Charlie Heron, one of Respondent Simplex’s project managers, and from Michael Dillon, P.E., C. Eng., of Dillon Consulting Engineers, Inc., a qualified expert in fire alarm and smoke detection systems, shows that Complainant was doing a very poor job wiring the system, likely from lack of expertise in fire alarm systems. Complainant’s lack of experience was causing delay. 8. At the same time, Respondent Simplex had botched the shipment of 9714 units: the sensors had been shipped to Complainant, but not the bases. To make matters worse, Respondent Simplex could not make the bases available for six more weeks. (Exhibit Frazee-O.) This put Complainant, who was already having problems installing the wiring, in a dilemma. Respondent Simplex suggested that the 9713 devices be substituted, as they were similar units that were compatible with the main system board and were immediately available. Given the circumstances, Complainant approved of this substitution in late June 2000. (Testimony of Dick Glinski; Exhibit Frazee-O.) The 9713 devices were shipped. As it turned out, because of its slow progress Complainant was not ready to install the devices until July 24, 2000, anyway (Exhibit Frazee-Q), which would probably have been enough time to deliver bases for the 9714 devices. 9. Complainant began installing the 9713 devices, but continued to delay the Renovation Project. Respondent Frazee documented its displeasure with these delays on July 17, 2000, and September 14, 2000. (Exhibits Frazee-U and Frazee-V.) By September 28, 2000, Respondent Frazee had lost patience and informed Complainant that “any extra expenses” caused by the delay would be charged to Complainant. (Exhibits Frazee-W and Frazee-X.) 10. At that point, Complainant began to blame its troubles on Respondent Simplex. Complainant alleged that the 9713 product was not what had been purchased and was inferior in both quality and value to the 9714 device. (Exhibit Frazee-P.) Complainant alleged a significant difference in price between the two models, suggesting that the 9713 was substituted because it costs less and that Respondent Simplex was pocketing the difference. The evidence does not support Complainant’s allegation that the 9713 is significantly less in value or price per unit. (See, Exhibits Frazee-O and Frazee-Q.) In November 2000, the owner of the Doubletree accepted the substitution, and Respondent Frazee informed Complainant that Respondent Simplex would be held responsible for any failure of the 9713 devices, not Complainant. (Exhibit Frazee-Y.) Respondent Simplex agreed to extend the manufacturer’s warranty on the 9713 devices by one year. (Exhibit 1.) Respondent Frazee then demanded that Complainant complete the Renovation Project. (Id.) Complainant notified Respondent Frazee that the Renovation Project would be completed by December 15, 2000. (Exhibit Frazee-Z.) 11. Although there is some conflict in the evidence, it is found that the 9714 device was the device proposed and accepted for use in the Renovation Project. This finding is based on the testimony of various witnesses and documents entitled “Bill of Material” and “Scope of Work . . . Fire Alarm System Replacement,” which are not marked as exhibits but are attached to the February 21, 2001, ROC complaint filed by Complainant. Respondent Simplex did not dispute that the 9714 device was intended to be used for the Renovation Project. Indeed, Respondent Simplex shipped partial 9714 devices to the jobsite. The circumstances that caused 9713 devices to be used are described above. The crucial requirement for the sensor component of the system was that the sensors be “addressable,” a requirement which both models met. 12. Several credible witnesses testified that there was no appreciable difference in function of the devices for use on the Renovation Project. Michael Justice testified that the only differences between the two devices were the installation process and the option of changing the 9714 sensor to a more sensitive setting for use in a clean-room type of environment. Michael Dillon, P.E., C. Eng., of Dillon Consulting Engineers, Inc., confirmed Justice’s testimony. He also testified that both devices are of good quality and standard in the industry. 13. By mid-January 2001, Complainant had not completed the fire alarm system, and the work that had been done was severely incomplete and inadequate. (Exhibit Frazee-AA.) The parties tried to work out a settlement, but it fell through. (Exhibits Frazee-BB, Frazee-CC, Frazee- DD, and Frazee-EE.) Respondent Frazee then hired Respondent Simplex to finish the job, which was finally completed in September 2001. (Exhibit Simplex-B.) Charlie Heron testified about the considerable effort and expense that was necessary to correct the poor work done by Complainant. (See also the photographic exhibits.) He estimated a substantial cost for the corrective work. 14. Although Complainant’s witnesses testified that one of the problems with the 9713 devices were that they were improperly designed so that they cut or damaged the wires when twisted into position, there is no probative and credible evidence to support the allegation. There is no evidence that such a complaint was documented by Complainant during the year 2000; all its complaints addressed quality and pricing between the two models. Nor did any of the witnesses that are familiar with the installation process for the 9713 device testify that there is a “design problem.” Moreover, the evidence shows that many of the problems with the wiring were occurring at other locations as well as at the mounting points. And finally, even if wires were being cut at the mounting points, the evidence shows that this was caused by Complainant’s lack of experience and care with the installation rather than a product defect. The evidence simply does not show a design defect. 15. Mike Dillon testified as an expert in fire and smoke detection systems. He is well qualified and extensively experienced in the field. (Exhibit Simplex-N.) He reviewed the system design documents and went to the Doubletree the day before the hearing to look at the work. He testified that Complainant’s work showed numerous deviations from the National Electric Code, the most prominent of which was over-packed conduit and junction boxes. He opined that the installation performed by Complainant was not standard in the industry. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949); Arizona Administrative Code (A.A.C.), OAH Rule R2-19-119(B). Further, the standard of proof at hearing is by preponderance of the evidence. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19- 119(A). Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent Simplex has violated the statutes cited in the Citation and Complaint. Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). Complainant has not met that burden. 2. Complainant’s main argument is that it was prevented from completing the job because the 9713 devices were defective. Complainant repeatedly stated that it could not “get the system up and running” because of shorts and ground faults in the system. Complainant blamed those problems on the 9713 devices. However, as described above, the evidence does not support Complainant’s argument that the devices are defective. Rather, the evidence shows that Complainant’s work was defective and inadequate. 3. The evidence also does not support Complainant’s other claim that the 9713 device is inferior and was improperly or wrongfully substituted for the 9714 device. All of the knowledgeable witnesses testified otherwise. 4. The evidence does not show any violation of A.R.S. § 32- 1154(A)(2), (A)(7), or (A)(3), namely, A.A.C. R4-9-108.

. . .

RECOMMENDED ORDER Based on the above findings and conclusions, it is hereby recommended that the Citation and Complaint in Case No. 01-2114 be dismissed. IT IS FURTHER RECOMMENDED that the Citation and Complaint in Case No. 01-2251 be dismissed.

Done this 1st day of November 2001.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of November 2001, to:

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