ALJDEC decisions subject to certification as final

07F-F0027-ROC · Registrar of Contractors · 2007-02-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 13, 2007. APPEARANCES: Complainant’s General Manager Mr. Patrick McCabe appeared for Complainant; Respondent was represented by attorney Mr. C. Benson Hufford; Respondent’s President Mr. Ron Boyer also appeared. ADMINISTRATIVE LAW JUDGE: Thomas Shedden _____________________________________________________________________ The issue presented is whether C.O. Boyer Metal Co., Inc. is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154. Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order: FINDINGS OF FACT C.O. Boyer Metal Co., Inc. (“Respondent”) is the holder of a Class L-39 License (No. 070612) issued by the Registrar of Contractors (“ROC”). Mr. Ron Boyer and his brother, Mr. Brian Boyer, are Respondent’s owners. Quality Inn (“Complainant”) is a hotel located at 2000 South Milton Road, Flagstaff, Arizona. Mr. Patrick McCabe is Complainant’s General Manager; Ms. Nina Townsdin is Complainant’s Assistant Manager.

On April 12, 2006 Respondent received a service call from Complainant because Complainant’s chiller unit was not operating. Respondent dispatched John Holder to investigate. Mr. Holder determined that the problem was more serious than could be resolved that afternoon and planned to return the next afternoon. Because Mr. Holder’s previously scheduled project for April 13th took longer than expected he did not return to the Quality Inn until the morning of April 14th. Shortly after Mr. Holder arrived on April14th, Mr. Grant Burge of Master Mechanical also arrived at the Quality Inn. Mr. Burge was formerly employed by Respondent. Mr. Holder and Mr. Burge each completed an initial diagnosis of the problem. See Exhibit R3 (Respondent’s work-order) and Exhibit R7, page 1 (April 14, 2007 Master Mechanical work-order). Each reported significant problems including leaking oil and refrigerant. Mr. Burge wrote that the unit was in “serious need of service and repair.” Exhibit R7. Complainant agreed to have Respondent begin repair work, and over the next two weeks Respondent replaced a number of parts and recharged the refrigerant system. Respondent restarted the system, but shut it back down after compressor 1 started to knock. Respondent then disconnected the control wiring for compressor 1. Respondent then determined that both compressors were grounded and needed to be replaced. Respondent had replaced compressor 1 in 2004, and it was under warranty. Respondent estimated that it would cost about $1,000.00 in labor to replace compressor 1, and about $12,000.00 for all costs to replace compressor 2. Complainant told Respondent that Complainant would consult with management and get back with Respondent. After a few days Respondent contacted Complainant and Complainant told Respondent that Complainant was pursuing a different option. Complainant then hired Grant Refrigeration, for whom Mr. Burge was then working, to replace both compressors at a cost of $26,320.47. See Exhibit R8. Respondent billed Complainant $10,671.44 for the work completed in April. See Exhibit R3. Complainant has not paid that bill and Respondent has referred it to collections.

On August 9, 2006 Complainant filed a Complaint alleging that Respondent had ruined the compressors and failed to return to correct the problems. See Complaint, in administrative record. On November 22, 2006 ROC issued Citation and Complaint No. F07-0027 against Respondent, charging that Respondent may have violated A.R.S. § 32- 1154(A)(1); (A)(7); and (A)(13). ROC issued a Notice of Hearing on January 5, 2007 setting the instant matter for 9:00 a.m. on February 13, 2007. The hearing was convened shortly after that time. Complainant presented the testimony of Mr. McCabe and Ms. Townsdin; Respondent presented the testimony of Mr. Ron Boyer; Ms. Christine Fagan; and Mr. Dave Chapple. Complainant had 50 exhibits admitted into evidence (many of these exhibits are multi-page documents with each page separately numbered), and Respondent had 9 exhibits entered into evidence (some of which are duplicates of Complainant’s exhibits). The hearing was held by video-conference with parties and witnesses appearing in Flagstaff and the Administrative Law Judge in Phoenix. Mr. McCabe’s Testimony Mr. McCabe is Complainant’s General Manager, and provided the following testimony: a. The statutes that Respondent is alleged to have violated were not chosen by Complainant and these may not be fully applicable, but Complainant was substantially injured by Respondent’s poor work in that Complainant incurred $26,000.00 in expenses. b. Complainant has had a relationship with Respondent for about 4 years during which time Respondent has done Complainant’s service work. Complainant chose to have Respondent perform the repair work at issue based on that relationship. c. Over the course of about 2 weeks, beginning April 14th, Respondent’s employees came to try to make repairs. An employee identified as John Holder did much of the work, and he was often assisted by Sherwin Dick. Mr. McCabe believes that Mr. Dick was an apprentice.

d. Mr. Holder frequently complained that he did not have the required schematics for the system, but Mr. Burge showed Mr. McCabe that these schematics were on the unit itself. Mr. Holder also complained about how long it was taking to get the parts required. e. Respondent twice replaced a sight-glass, and the second time used a straight length of copper pipe. f. After Respondent told Complainant the compressors needed to be replaced, Complainant hired Grant Refrigeration to do that work because Complainant did not have confidence that Respondent could properly do the work. Respondent had offered to continue to work on the system. g. According to Mr. McCabe, Mr. Holder told him that the compressors burned out due to a power bump. Respondent’s service manager, Ms. Fagan told him that there was no way to guarantee against such an occurrence, but Mr. Burge told Mr. McCabe that Copeland compressors do have such protection. h. Mr. McCabe has no formal training in mechanical engineering or HVAC systems, but when a service is being performed on site he tries to learn from the contractor. i. Mr. McCabe believes that Respondent was responsible for the compressors’ failures because Mr. Holder and Mr. Dick gave him the impression that they did not know what they were doing and because Mr. Burge told Mr. McCabe that the system had been mis-wired. Ms. Townsdin’s Testimony Ms. Townsdin is Complainant’s Assistant Manager, and provided the following testimony: a. Ms. Townsdin was present when Mr. Burge took photographs of the compressors and controls. See Exhibits C30 – C41. Mr. Burge provided the written descriptions that accompany some of these photographs. b. Mr. Burge told Ms. Townsdin that the compressors had been mis-wired and that this mis-wiring led to the failure. See Exhibit C38 (showing wiring taped off and not connected to control).

c. Ms. Townsdin has no training in HVAC work and her responsibilities do not include work on mechanical systems. Mr. Boyer’s Testimony Mr. Boyer is Respondent’s president and testified as follows: a. Mr. Boyer has 41 years experience in HVAC, and achieved journeyman status when he was 21; he has a degree in mechanical engineering; his father started the firm in 1951 and he began working there as a child; his duties include oversight of operations and he has a general manager that reports to him. He became aware of the instant matter after the Complaint was filed with the ROC. b. Mr. Boyer reviewed the files and other records and cannot find any information that leads him to conclude that the compressors failed due to mis-wiring. If the units had been mis-wired these units would not have started. c. Mr. Boyer’s review of old work orders shows that Respondent had recommended that leaks in the lines for compressor 2 be repaired, but saw no entries that this had been done. There is no information that shows that compressor 2 was ever functioning as of April 2006. That compressor would only switch on if the load on compressor 1 was too great. d. The diagnosis prepared by Mr. Holder shows that there were oil and refrigerant leaks, which would cause the unit not to run properly. The sight glass was opaque, which indicates that the compressor had failed. There were electrical problems that needed to be addressed before attempting to restart the units. e. Compressor 1 may have failed because of the refrigerant leaks or because of the oil leaks. The knocking that Mr. Holder heard was likely a bearing and due to a lack of lubricant. f. The work order prepared by Mr. Burge confirms that these problems existed prior to Respondent beginning repair work. Mr. Burge also noted that the sight glass was contaminated, which is a sign of compressor failure. g. Mr. Holder and Mr. Dick were both qualified, and would not have been hired were they not. See also Exhibit R9 (Mr. Holder’s resume).

h. Grant Burge had been hired by Respondent as residential service manager; after about two months he was re-assigned as a service technician and a few months after that Mr. Burge left Respondent, as both he and Respondent were disillusioned by their relationship. i. Mr. Boyer was not able to say whether or not Mr. Burge was qualified to determine that the cause of failure was mis-wiring, but the Complainant’s photographs do not show mis-wiring. Mr. Boyer does not agree that the written statements accompanying these photographs are accurate, at least in part, because these do not show enough detail. Further, compressor 1 would not have started with the controls wired as shown in Exhibit C38. Ms. Fagan’s Testimony Ms. Fagan is Respondent’s service manager and testified as follows: a. Ms. Fagan’s duties include overseeing employees’ work and reviewing work orders. She only occasionally goes in the field. She did go to Quality Inn on April 14, 2006, because she was concerned about Mr. Burge’s presence at the site. b. Mr. Holder is qualified and Ms. Fagan has confidence in his abilities. Mr. Holder no longer works for Respondent because he moved to Virginia for personal reasons. c. Mr. Dick is a technician, who has graduated from HVAC school and is qualified. Mr. Dick took another job and is no longer employed by Respondent. d. Ms. Fagan reviewed both Mr. Holder’s and Mr. Burge’s diagnoses of Complainant’s problems and found these to be similar. See also Exhibit and Exhibit 7. e. After Mr. Burge left the site, Mr. Holder discussed with Mr. McCabe the list of work that would be needed to repair the system, provided an estimate of about $10,000.00 for those repairs, and potentially replacing the system. Mr. McCabe decided to have the repairs completed. Ms. Fagan and Mr. Holder returned to the shop and began to order parts, which required dealing with several vendors.

f. On the following Monday (April 17) Mr. Holder returned to Quality Inn and began to repair leaks in the system and clean the coils. Respondent also used its crane to re-position the chiller on its pad. g. The set of schematics that Mr. Burge located is not complete. Respondent has previously tried to get a complete set of schematics for Complainant’s chiller unit, but because that unit is over 30 years old has been unable to do so. Of course Mr. Holder would want the complete set of schematics, but presumably he did his work “wire by wire,” so the complete set is not essential. h. As of April 14th there was no way to know if the compressors were damaged because these were covered, and because Respondent was there to repair the chillers there was no reason to uncover the compressors. i. On Friday April 21, 2006, Mr. Holder tried to re-start the system to feed in more Freon. The system started but then began to knock, so Mr. Holder shut it down. The following Monday Mr. Holder and Mr. Chapple went to the site and determined that both compressors were bad. At that time Respondent proposed replacing both compressors at an estimated cost of $1,000.00 for the one under warranty and $12,000.00 for the second. Mr. McCabe stated that he would check with the corporate offices and get back to Respondent. At some point Mr. McCabe did call back and discussed technical issues with Mr. Holder and Mr. Chapple. A few days later Mr. McCabe told Ms. Fagan that Quality Inn had chosen to go another route. j. In late June 2006 Ms. McCabe was told by Respondent’s accounting department that Complainant had not paid its bill for the work in April. That bill was referred to a collections agency. Mr. Chapple’s Testimony Mr. Chapple is one of Respondent’s service technicians; he testified as follows: a. Mr. Chapple has worked for Respondent for over 11 years and has almost years HVAC experience. b. He assisted Mr. Holder with trouble-shooting on at least two days. Mr. Chapple’s opinion is that Mr. Holder was competent and did not require oversight.

c. Mr. Chapple was at the Quality Inn to assist with the controls, which can be confusing. The schematics in the unit’s control panel are helpful but not complete. d. Mr. Chapple saw evidence of oil and Freon leaks. e. Mr. Chapple had suggested that the sight glass be replaced with a straight length of pipe as a temporary measure until a new sight glass was obtained. The sight glass in question had been damaged due to over- heating during soldering. f. Mr. Chapple was present when the system was tested for leaks; there being none, it was charged with Freon and started, but soon started knocking. g. It is hard to say what would have caused the knocking, but it could have been a connecting rod or bearing damaged due to running the system with low oil. h. Mr. Chapple saw no evidence that the system had been mis-wired; the system would not have started if it was mis-wired. The disconnected wires, shown in Exhibit C38, were disconnected to allow compressor 2 to run without compressor 1 running. Mr. Chapple never saw compressor 2 running. CONCLUSIONS OF LAW Complainant bears the burden of proof, and the standard of proof on all issues in this matter is by a preponderance of the evidence. See A.A.C. R2- 19-119. A preponderance of the evidence is “[e]vidence 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). Under A.R.S. § 32-1154(A)(1), a contractor is subject to discipline for “abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” The preponderance of evidence does not show that Respondent abandoned the contract or otherwise refused to perform, and in fact the evidence shows that Complainant terminated the relationship when it chose to hire Grant Refrigeration. Therefore, the Administrative Law Judge concludes that Respondent has not violated A.R.S. § 32-1154(A)(1). Under A.R.S. §32-1154(A)(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act…resulting in another person being substantially injured.”

The preponderance of evidence does not show that Respondent committed a wrongful or fraudulent act. Master Mechanical and Respondent each prepared a diagnosis that showed that Complainant’s system was in very poor condition, including leaking oil and coolant, when Respondent began the work at issue. The only evidence adduced to show that Respondent was responsible for the compressor failures is the hearsay testimony from Mr. Burge. This testimony can be given very little weight because there was credible testimony in rebuttal that casts serious doubt on Mr. Burge’s assertion that the unit was mis-wired, and because Mr. Burge was not present for cross-examination. Complainant has not met the burden to prove by a preponderance of the evidence that Respondent committed a wrongful or fraudulent act. Therefore, the Administrative Law Judge concludes that Respondent has not violated A.R.S. § 32-1154(A)(7). Under A.R.S. § 32-1154(A)(13) a contractor is subject to discipline for “Failure in any material respect to comply with [Title 32, Chapter 10].” Complainant presented no evidence to show that Respondent has violated A.R.S. § 32-1154(A)(13). Because the preponderance of evidence does not show that Respondent violated A.R.S. § 32-1154(A)(1); (A)(7); or (A)(13), the Complaint in this matter should be dismissed. RECOMMENDED ORDER The Administrative Law Judge recommends that no discipline be imposed on Respondent’s Class L-39 License (No. 070612), and that Citation No. F07- 0027 and the Complaint upon which it is based should be dismissed. In the event of certification of the Administrative Law Judge’s Decision and Order by the Director of the Office of Administrative Hearings, then the effective date of the order shall be 40 days from the date of that certification.

Done this day, February 21, 2007

______________________________________ Thomas Shedden Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

Fidelis V. Garcia, Acting Director Registrar of Contractors Legal Department 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