ALJDEC

01F-A0225-ROC · Registrar of Contractors · 2001-09-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 21, 2001 in Prescott, Arizona. APPEARANCES: Complainant George Timmons appeared, representing himself. Dale E. Mercer, an employee [Acting Branch Manager], appeared, representing Respondent Phoenix Alarm Acquisition LLC, dba Phoenix Alarm. Qualifying Party Carlton Aspin was also present at the hearing. ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn _____________________________________________________________________ The hearing in this above captioned matter was held for the purpose of determining whether Respondent was in violation of statute as alleged by the Complainant and as Cited by the Registrar of Contractors. Evidence and testimony were presented, and based upon review of the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. Respondent is the holder of a Class K-67 license issued by the Registrar of Contractors (Registrar). This license is for low voltage communications systems: alarm systems are included in this category. 2. Respondent was the alarm service provider for Complainant’s home located at 775 Northwood Loop in Prescott, Arizona. Respondent became the Complainant’s alarm monitoring provider by virtue of having acquired the monitoring services of J.F. LaVoie Company services. Testimony and record.

3. Complainant’s new home was in the process of being built at 124 Valley Ranch North in Prescott, Arizona. Testimony and record. 4. In preparation for alarm service at the new home, Complainant contacted Respondent’s Prescott office regarding installation of alarm wiring and future alarm monitoring services. Testimony and record. 5. According to Complainant, Respondent’s employee Steve Simpson met with Complainant in February 2000 and advised Complainant that Respondent could wire the new home and, if they did, Complainant would have to sign a three year monitoring contract with Respondent. According to Complainant, Respondent’s employee Steve Simpson also advised that someone else could wire the new home and, when Complainant moved in, Complainant could transfer the monitoring agreement with Respondent to the new home. Testimony and record. 6. According to Complainant, Complainant chose not to sign a three year contract, and Steve Simpson then introduced Complainant to Kenneth Carroll, indicating that Mr. Carroll would do a fine wiring job for them. Testimony and record. 7. According to Complainant and Mr. Carroll, after the new home wiring was completed by Mr. Carroll and Mr. Simpson, Mr. Carroll brought a bill to Complainant. Testimony and record. 8. The bill was for $1,905.00, but it had been Complainant’s understanding that the amount was to have been $1,436.00. Complainant indicated that Mr. Carroll had crossed off the higher amount and written in the lower amount. However, Mr. Carroll indicated that Mr. Simpson had made that change. Testimony and record. 9. Complainant wrote a check to Mr. Carroll for $1,436.00 in February 2000. Testimony and record. 10. Mr. Carroll indicated that he then cashed the check and gave half the money to Steve Simpson. Testimony. 11. Mr. Simpson did not appear to give any testimony in this matter.

12. Complainant moved into the new home in March 2000. Complainant indicated that the telephone/alarm connection was connected in April 2000 by Mr. Simpson. Complainant indicated that they had asked for the manual and warranty, but Mr. Simpson had not provided them but told Complainant these had been left at the construction site. Testimony and record. 13. Complainant had multiple problems with the alarm system; the alarm would ring and they would not get a call(s) from the monitoring center. Complainant would check in with Mr. Simpson to verify that the system was working and Mr. Simpson would assure Complainant that it was working and the system was being monitored at Phoenix Alarm. In October 2000, Complainant and a new employee from Respondent were testing the system, and no alarm came into the Phoenix central monitoring station. Testimony and record. 14. On December 7, 2000, Complainant filed a formal complaint with the Registrar alleging the scenario of believing that his home was being monitored, when, in fact, it was not and the system was not working at the new home. Complainant stated that he had paid the $16.00 monitoring fee for the nine months without any coverage. Complainant stated that another alarm company had repaired all the mistakes in the wiring, and had installed a new security system. Complainant stated this was at a total cost of $2,435.00. 15. As a result of receiving the complaint, Registrar’s Inspector (Inspector) Cliff Frandsen advised Respondent of the complaint and the possibility of Respondent aiding and abetting an unlicensed contractor, Kenneth Carroll. 16. Respondent replied to the Registrar that it had not done the wiring work and that Complainant had not signed a monitoring agreement with Respondent for the new home. 17. In December 2000, Complainant wrote to the Registrar’s Inspector requesting that the matter proceed to hearing. 18. On January 18, 2001, the Registrar issued its Citation and Complaint against Respondent alleging violations of Arizona Revised Statutes (A.R.S.) §§32-1154.A.7 and 32-1154.A.14. 19. On January 22, 2001, the President of Respondent filed its written answer, indicating it did not perform any of the disputed work because Complainant would not sign the contract, and that it had not recommended the work of Kenneth Carroll, who was a sales representative for Respondent at the time of a “bid” for the work. 20. The matter remained unresolved, and was forwarded for formal administrative hearing. 21. At the hearing, Complainant reiterated his story as previously related in paperwork to the Registrar, and further explained why he believed the monitoring agreement had been transferred to the new home. Complainant testified that the monitoring fee had been taken out of their credit card for the many months, and that when they tried to cancel the agreement, Respondent had literally invoiced them for several months. Complainant requested a refund and Respondent refused apparently saying the monitoring agreement was never transferred to the new home. 22. Complainant and the new alarm company installer, Rick Carver, testified regarding the repair of wiring and installation of a new security system for the new home. Complainant’s new alarm company installer testified that it had taken twenty -eight hours to find and correct all the multiple problems with the wiring that Mr. Carroll and Mr. Simpson had installed, and that a usual installation might take five hours. The installer testified that the system that Mr. Simpson and Mr. Carroll had installed was old and discontinued, and could only have been monitored by a specific digital monitoring system. 23. Complainant’s contractor for the new home, Keith Diehl, testified that Kenneth Carroll had done wiring and had broken two windows in the process. The contractor testified that he had seen both Mr. Carroll and Mr. Simpson working on the wiring, and that he had assumed they both worked for Respondent, otherwise they would not have been allowed to work on the job as unlicensed contractors. The contractor testified that he saw all the wiring after it was done, that Mr. Carroll had taken the wiring to the panel, and that Mr. Simpson came in and hooked the wiring up to the panel.

24. Complainant argued that Respondent had employed Steve Simpson, and that Steve Simpson knowingly furnished an outdated and faulty system. Complainant argued that Steve Simpson called the company and had changed the address for the monitoring services. Complainant argued that Steve Simpson continued to assure him that the system was in place and working, and that Respondent should be responsible for Steve Simpson’s actions and the entire loss. At hearing, Complainant indicated that the loss was the installation charges ($1,436.00), half the broken glass replacement ($181.55) and the monitoring fee for nonconnected months ($144.00), for a total of $1,761.55. 25. At the hearing, Respondent presented testimony that its original bid for the work was $1,905.00 as originally indicated on the invoice for the job [See Hearing Exhibit B]. Respondent also argued that this was not on Phoenix Alarm forms, but that a copy was in its files, along with a December 2000 letter written by Steve Simpson, apparently on request of the President of Respondent to explain the situation when Respondent got the complaint from the Registrar. See Hearing Exhibit 5. Respondent referred to this invoice as a $1,905.00 “quote” for the job at Complainants, but insisted that it did not do the job because it had no contract for the job when Complainant refused to sign a contract for a three year monitoring term. Respondent argued that Kenneth Carroll was not an employee of Respondent at the time of the work at Complainant’s home. Respondent argued that Mr. Carroll was acting for himself. 26. Respondent argued that, had Complainant accepted the contract, Respondent would have done an installation survey and assured that the system was working. Respondent argued that it continued to bill the monthly charges for the service at the old address because Complainant never notified it to discontinue the service at that address. Respondent argued that it never monitored the new home, and that the system at the new home was never connected to the Respondent’s monitoring station. Respondent argued that it did not know Steve Simpson’s intentions when he was at Complainant’s home hooking up the phone system because he was acting inappropriately and without a contract. Respondent argues that Respondent is not responsible because there was no contract. 27. Respondent’s qualifying party, Carlton Aspin, testified that the monitoring report [Hearing Exhibit D] received by Complainant from Respondent was not at the new home, but was the alarm service at the old address. Mr. Aspin testified that the phone had been disconnected, and that any service at the two addresses could not have been monitored, hence all the “not received” reports. Mr. Aspin testified that he was Steve Simpson’s supervisor and that it was up to their employees how an employee used their own free time, but that Respondent’s policy was that no employee was to enter a person’s home to do work for Respondent unless Respondent has a contract with the person. Mr. Aspin testified that Mr. Simpson had left the state the first part of the year (2001) due to a serious personal happening, and that it was no one’s business why he was gone. APPLICABLE LAW A.R.S. §32-1154.A. provides that a holder of a license or a person listed on a license shall not commit the following: … 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. … 14. Knowingly entering into a contract with a contractor for work to be performed for which a license is required with a person not duly licensed in the required classification. CONCLUSIONS OF LAW 1. In this case, it is determined that the actions of Steve Simpson, while an employee and agent of Respondent, were actions to secure a bid on behalf of Respondent, to secure an unlicensed contractor to do this low- voltage communications work and to transfer the security monitoring agreement, held by Respondent, in existence at Complainant’s old home to Complainant’s new home. The actions were calculated to secure and continue Complainant’s business for Respondent. Respondent is responsible for the actions of its employees. Respondent agreed that the original price on the invoice for the work was its original bid and was its “quote” for the job.

2. The administrative hearing process cannot mediate the solution. However, this process will essentially direct that the responsible contractor remain responsible for bad, inferior, fraudulent and unlicensed work on its watch. Based on the foregoing, the evidence and testimony at the hearing established violations, by Respondent, of A.R.S. §§32-1154.A.7 and 32-1154.A.14. RECOMMENDED ORDER In view of the foregoing, 1. IT IS RECOMMENDED commencing on the effective date of this ORDER, that the Respondent’s Class K-67 license be temporarily suspended unless the Registrar receives proof that Respondent has made restitution to Complainant for the $1,761.55 shown to have been expended in this matter on faulty and incomplete alarm system and incomplete monitoring system; 2. IT IS FURTHER RECOMMENDED that if Respondent appropriately accomplishes the condition set forth above, or the parties otherwise jointly settle the matter and jointly notify the Registrar, on or before the effective date of that ORDER, then the above recommended temporary license suspension shall not take place and Citation No. A01-0225 shall be closed. RECOMMENDED this day, September 11, 2001.

______________________________________ Kay A. Abramsohn Administrative Law Judge

Transmitted by FAX this 11th day of September, 2001 to:

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

By ___________________________ -----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 PH(602) 542-9826/ FAX 542-9827