ALJDEC decisions subject to certification as final

10F-T0124-ROC · Registrar of Contractors · 2010-03-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 22, 2010 APPEARANCES: Complainant Duane Hansen appeared on his own behalf. Tom Hall, Esq. represented Respondent A R S American Residential Services, L.L.C. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The question presented by this matter is whether Respondent A R S American Residential Services, L.L.C. (“ARS”) is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154(A). Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order. FINDINGS OF FACT 1. ARS is the holder of a Class K-37 license (No. 185121) issued by the Registrar of Contractors (“ROC”). 2. On May 18, 2009, Complainant Duane Hansen contacted ARS because Mr. Hansen had discovered a leak at the side of his home. ARS had previously performed work for Mr. Hansen at his home. ARS performed a leak detection service and advised Mr. Hansen that the leak was emanating from the slab at the laundry area of the home. ARS offered Mr. Hansen several options for the re-piping of the home. See Exhibit B. The options varied in terms of warranty and price. Id. Mr. Hansen chose the most expense option that included a lifetime warranty for as long as he owns the home, and a ten year warranty for any subsequent homeowner. The contract price was $18,607.53. Mr. Hansen paid ARS in full. 3. ARS performed its work at Mr. Hansen’s home from May 18, 2009 through May 21, 2009. 4. On August 27, 2009, Mr. Hansen filed a complaint against ARS with the ROC generally alleging that ARS overcharged him and that he overpaid for the work that was performed. 5. Mr. Hansen testified that after ARS had completed its work, he contacted his insurer and the insurer was “flabbergasted” at how much ARS charged Mr. Hansen for the re-piping of his home. Mr. Hansen’s insurer paid him $5,328.97 for the work performed by ARS. Mr. Hansen acknowledged at hearing that he did not contact his insurer prior to contracting with ARS, nor did Mr. Hansen obtain any other bids for the work. Mr. Hansen testified that he believes he was vulnerable because he is a retiree and that ARS took advantage of him due to his age. 6. Caroline Thompson, Mr. Hansen’s daughter and a realtor, testified that she has had re-plumbing performed at her house and at clients’ houses due to the class action lawsuit regarding defective polybutylene piping. Ms. Thompson testified that she has also consulted with other real estate agents and plumbing companies regarding the cost of the re- piping performed by ARS at her parents’ house. Ms. Thompson testified that the estimates she obtained ranged from $4,500.00 to $6,000.00. Ms. Thompson acknowledged that she was not present when Mr. Hansen contracted with ARS. 7. Gene Thiel, also a realtor in the Tucson area, testified as to his experience with the re-piping of homes in the Tucson area. Mr. Thiel testified that the highest price he has seen for this type of work is $5,500.00. 8. ARS contended at hearing that it presented a diagnosis and estimate for repairs to Mr. Hansen, Mr. Hansen agreed to the scope of work and the warranty, signed the proposal, and paid for the work. Mr. Hansen has made no claims of defective workmanship. 9. Robert Martinez, ARS’s Plumbing Operations Manager, testified that Mr. Hansen’s initial call was a routine call for a leak outside of the home. ARS dispatched a technician, Erik Tagalog, who determined with the assistance of leak detection equipment, that the Hansens had two leaks under their slab. Mr. Martinez and Mr. Tagalog spoke with the Hansens regarding their options. The least expensive option would have resulted in damage to the interior of the home because it would have been necessary to use a jack hammer on the interior slab of the home. Mr. Hansen did not want to pursue a “spot repair” given the age of the home and the condition of the pipes. Mr. Hansen requested an estimate for the re-piping of the entire house. Mr. Martinez testified that Mr. Hansen chose the most expensive option because it included the largest scope of work, including replacing 125’ of the water service line from the outside of the home to the inside of the home, installing a water softener, and replacing all fixtures and faucets. Mr. Martinez testified that ARS never claimed to be the least expensive company, and that because ARS is large and nationwide, all of their pricing is “upfront pricing”. ARS has corporate guidelines for its pricing and its warranties are expensive. 10. The Administrative Law Judge finds, based upon the credible evidence of record, that ARS properly performed its work at Mr. Hansen’s home, and that Mr. Hansen agreed to the scope and price of such work. The fact that Mr. Hansen subsequently discovered that the work performed by ARS could have been performed by others at a lesser cost, is irrelevant to this proceeding and has no bearing on ARS. CONCLUSIONS OF LAW In this proceeding, Mr. Hansen bears the burden to prove, by a preponderance of the evidence, that ARS is subject to discipline for violations of A.R.S. § 32-1154(A)(2), (A)(3), and/or (A)(13) as charged by the ROC in its November 5, 2009 Citation and Complaint. See Arizona Administrative Code (“A.A.C.”) R2-19-119. 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). The Administrative Law Judge concludes that Mr. Hansen has failed to meet his burden of proof as to all three of the ROC’s charges. Under A.R.S. § 32-1154(A)(2), a contractor is subject to discipline for “departure from or disregard of plans or specifications or any building codes . . .” The Administrative Law Judge concludes that the credible evidence of record failed to establish that ARS departed from or disregarded plans, specifications, or building codes. Therefore, the Administrative Law Judge concludes that ARS is not in violation of A.R.S. § 32-1154(A)(2). Under A.R.S. § 32-1154(A)(3), a contractor is subject to discipline for “violation of any rule adopted by the registrar.” In this case, the ROC charged ARS with a violation of A.A.C. R4-9-108, which, among other things, requires contractors to perform work in a professional and workmanlike manner and in accordance with any applicable building codes and professional industry standards. The Administrative Law Judge concludes that the credible evidence of record failed to establish that ARS failed to perform its work at Mr. Hansen’s home in a professional and workmanlike manner and in accordance with any applicable building codes and professional industry standards. Therefore, the Administrative Law Judge concludes that ARS is not in violation of A.R.S. § 32-1154(A)(3). Under A.R.S. § 32-1154(A)(13), specifically, A.R.S. § 32-1158(B), a contractor is required to include the minimum elements of a contract in writing when contracting. Those elements include the name, license number, and business address of the contractor, as well as the fact that the property owner has the right to file a written complaint with the ROC. Mr. Hansen did not address this alleged violation. In view of the foregoing, the Administrative Law Judge concludes that ARS is not in violation of A.R.S. § 32-1154(A)(13), specifically, A.R.S. § 32-1158. The Administrative Law Judge concludes, based upon the weight of the credible evidence of record, that no grounds exist to impose discipline against ARS’s license. The ROC’s Citation in Case Number T10-0124, and the Complaint upon which it is based, should be dismissed. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: It is recommended that no discipline be imposed against ARS’s license, and that the Citation issued in Case Number T10-0124, together with the Complaint upon which it is based, be dismissed. 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 will be 40 days from the date of that certification. Done this day, March 31, 2010.

/s/ Sondra J. Vanella Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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