ALJDEC decisions subject to certification as final

08F-4726-ROC · Registrar of Contractors · 2009-08-12

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 29 and July 23, 2009 APPEARANCES: Complainant: Robert Kizere appeared, pro per. Respondent: James Danie Postlethwait, corporate officer and qualifying party, appeared, pro per. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. This matter first convened for hearing at the time, date and place set forth in the Notice of Hearing issued by the Registrar of Contractors (“ROC/Registrar”) on March 10, 2009. The parties did not conclude the presentation of evidence in the time allotted and the matter was set for further hearing on July 23, 2009. 2. Complainant Robert Kizere (“Complainant”) is the owner of a residence located at 1962 E. Orion St., Tempe, Arizona (“premises/project”). 3. Respondent Assured Air, Inc. (“Respondent”) is a corporation which holds Arizona Contractor’s License No. 202552, Class C-39R (Residential Air Conditioning and Refrigeration) issued by the ROC on December 22, 2004. James Danie Postlethwait (“Postlethwait”) is a corporate officer and the qualifying party for the license. A review of the licensing database maintained by the Registrar indicates that this license was suspended February 10 – 21, 2008, for lack of bond. 4. Complainant filed a Complaint with the ROC on June 9, 2008, wherein he alleged that Respondent had sold him “a 15 Seer Heat Pump to replace the old unit on [his] roof. [Respondent] actually substituted a 14 Seer unit and did not inform [him] of the substitution. A 14 Seer unit utilizes more electric to operate and does not attain the same energy savings as that of a 15 Seer unit.” 5. Complainant filed a request for hearing on September 18, 2008. 6. On December 19, 2008, the Registrar issued a Citation and Complaint in Case No. 08-4726 charging Respondent with possible violations of A.R.S. § 32-1154 (A) (2), (7) and (18). 7. Respondent filed an Answer on December 29, 2008, wherein it asserted, inter alia, that it “did in fact install a APH1560MY1 Amana Package Heat Pump for [Complainant]. The 15 in this model number represents that the 15 seer is indeed a 15 seer class unit. The larger unit being 5 ton, operates at a little less than a smaller unit, in the same class.” (Emphasis in original.) 8. At the hearing, Complainant testified and submitted Exhibits 3 through 13 and 15 through 18 which were marked, admitted and considered. Steve Stewart (“Stewart”) also testified on behalf of Complainant. 9. Postlethwait testified on behalf of Respondent and submitted Exhibits A, B and C which were marked, admitted and considered. 10. On February 2, 2008, Respondent presented to Complainant a Proposal Contract to install an Amana APH15060M41 heat pump (“unit”) in the premises. (Exhibit 4) 11. On February 25, 2008, Respondent installed the unit and provided Complainant with an invoice for such work. (Exhibit 3) 12. After installation of the unit, Complainant attempted to secure a rebate from his electricity provider, Salt River Project (“SRP”), pursuant to the SRP Powerwise Cool Cash Rebate Program. (Exhibit 7) Complainant testified that he made numerous unsuccessful attempts to contact Respondent to obtain the required documentation for the rebate program. 13. Complainant testified that his application for the above- referenced rebate was rejected by SRP due to the unit being rated as a SEER 14, not 15, by the Air-Conditioning and Refrigeration Institute (“ARI”). (Exhibit 7) 14. Subsequent to the initial hearing in this matter, Complainant obtained a second report from Arizona Public Service (“APS”) regarding the SEER rating of the unit. Based on information from the Air-Conditioning, Hearing and Refrigeration Institute (“AHRI”), the APS report set forth the same information as the ARI report, i.e., that the subject unit is a 14 SEER. (Exhibit 18) 15. Complainant further testified that he contacted Amana which related that it makes five units with a 15 SEER rating and that the subject unit is its only 14 SEER. However, no documentation to that effect was presented by Complainant. Conversely, Postlethwait testified that the units to which Complainant refers are two piece or “split” set ups and not the one piece system purchased and are, by their “nature and make up,” more effective. 16. Postlethwait testified that the unit installed is a 15 SEER as represented in the manufacturer’s literature and specifications provided by Amana. (Exhibits B and C)[1] 17. Postlethwait further testified that the mere fact that the unit did not quite produce 15 SEER numbers as reflected in the ARI and AHRI reports does not mean it is not a 15 SEER unit.[2]

APPLICABLE LAW The Citation and Complaint issued by the Registrar in Case No. 08- 4726 charged Respondent with possible violations of A.R.S. §32-1154A (2), (7) and (18). Those statutory sections require that the holder of a license or person listed on the license shall not commit the following:

2. Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or his duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code. …

7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

…

18. Contracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.

CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter pursuant to A.R.S. § 32-1101, et. seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated any one, or more, of the statutory sections cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also, Culpepper v. State of Arizona, 187 Ariz. 43, 930 P.2d 508 (App. 1996). 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 (Rev. 6th ed. 1990). 3. The purpose of licensing Arizona contractors is to regulate the conduct of contracting and protect the public from unscrupulous acts. Beazer Homes Ariz., Inc. v. Goldwater, 196 Ariz. 98, 101, 993 P.2d 1062, 1065 (App. 1999); Better Homes Constr. v. Goldwater, 203 Ariz. 295, 300, 53 P.3d 1139 (App. 2002). The statutory purpose is to prevent unscrupulous or financially irresponsible contractors from deceiving and taking advantage of those who engage them to build. Sobel v. Jones, 96 Ariz. 297, 394 P.2d 415 (1964). 4. It is determined and concluded that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154 (A) (2). A good faith factual dispute exists between the parties and the evidence presented as to the actual SEER rating of the subject unit. 5. It is further determined and concluded that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154 (A) (7). Although Complainant contends he was substantially injured by not being provided the 15 SEER unit he contracted for and, as a result, not qualifying for the referenced rebate, insufficient evidence was presented to establish that Respondent engaged in a wrongful or fraudulent act. Respondent’s reliance on Amana’s literature and specifications that the subject unit was a 15 SEER was justified. Moreover, the contract between the parties specifically indicates that an Amana APH15060M41 was to be installed and that is what Complainant received. 6. This tribunal further determines and concludes that Complainant failed to establish that Respondent violated A.R.S. § 32-1154 (A) (18). Respondent submitted its contract/proposal to Complainant on February 5, 2008, and installed the unit on February 25, 2008. Though its license was suspended February 10 – 21, 2008, no evidence was presented that Respondent performed and/or bid on any contracting work during the course of this suspension.

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that the entire Citation and Complaint in Case No. 08-4726 be dismissed.[3] Done this day, July 23, 2009.

_______________________ Brian E. Smith Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2009, to:

William A. Mundell, Director Registrar of Contractors c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________ ----------------------- [1] Exhibit B pertains to a model APH15M. Exhibit C provides information on, inter alia, a model APG156014041A. No reference is made to a model APH15M in that catalog. [2] It should be noted that both parties presented evidence regarding additional work performed at the premises by Respondent. However, such work does not pertain to and is outside the scope of the subject matter of the instant Complaint, i.e., whether the unit is a 15 SEER. [3] In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order in this matter will be forty (40) days from the date of that certification.

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