ALJDEC decisions subject to certification as final

2010A-308472750-ROC · Registrar of Contractors · 2011-02-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 2, 2011, at 8:00 a.m. APPEARANCES: Complainant William Mattson appeared on his own behalf; Respondent Jerry Wayne Walker dba Jerry’s Air Conditioning and Heating appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In March 1990, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC085743, Class C-39 for residential air conditioning and refrigeration, including solar, to Jerry Wayne Walker, Sr., doing business as (“dba”) Jerry’s Air Conditioning and Heating (“Respondent”). On April 30, 2010, the Registrar received a complaint from William Mattson (“Complainant”) against Respondent. Complainant attached a one-page, single-spaced statement to this complaint, alleging that Respondent had serviced the air conditioner on a rental property that Complainant owned at 6900 E. Golddust in Scottsdale, Arizona on April 24, 2009, and again on December 12, 2009, and that Respondent had failed to provide satisfactory answers to Complainant’s questions about the air conditioner and services described on Respondent’s invoices. Complainant also attached to his complaint a letter to Respondent dated February 12, 2010, that contained ten questions about the two service calls specifically and about air conditioner parts generally. Complainant concluded his statement as follows: On March 25, 26 and 29 I called Jerry Walker and left messages to call me back. He no longer answers my calls or returns my messages. At this time, with a little more than a year left on my warranty, I need very specific answers to my letter of February 12 so that I can determine if the manufacturer is at fault and needs to replace a defective air conditioner or there is [sic] some other reason for all the problems I am having. His refusal to answer my calls, return my messages and answer the questions in my letter lead me to believe the problem is more likely with his company than the manufacturer.

The Registrar referred the complaint to Respondent for his immediate attention. Respondent filed a preliminary response, denying that he had committed any misconduct but stating that he had offered to refund to Complainant the cost of the two service calls. On June 2, 2010, the Registrar received a letter from Complainant, to which he attached a letter that he had written to Respondent on that same date in response to the preliminary response to the complaint. Complainant’s letter to Respondent contained 18 questions about the two service calls specifically and about air conditioner parts generally and demanded that Respondent provide detailed answers to Complainant’s questions in writing. Complainant stated that, “[u]nless [Respondent’s] answers are logical and can be verified as credible by technicians at York, Inc. and/or another air conditioning company, I wish to persue [sic] whatever the next steps are toward a hearing on this matter.” On September 29, 2010, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(7) and (13) (namely A.R.S. § 32-1124(B)). Respondent timely answered the Citation and Complaint, denying any statutory violations. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A hearing was held on February 2, 2011. Complainant appeared and testified on his own behalf and submitted nine exhibits. Respondent testified on his own behalf, and presented the testimony of two witnesses: (1) John Miller, the branch manager of U.S. Air Conditioning Distributors in Deer Valley, Arizona, a wholesaler distributor for York International Group (“York”), the manufacturer of the air conditioner at Complainant’s rental property; and (2) Jerry Wayne Walker, Jr., Respondent’s son and employee, who performed the December 12, 2009 service call at Complainant’s rental property. Respondent submitted four exhibits. Additional Evidence Complainant lives in Washington state and Arizona. He purchased the condominium at 6900 E. Golddust in Scottsdale in 2002 for a rental. On or about June 28, 2006, Complainant hired Thomas Gottsacker, Inc. dba A C Guys, License No. ROC134609, Class C-39R (“A C Guys”) to provide and install a new York air conditioner at his rental property. Complainant did not hire Respondent or any other contractor to inspect or service the air conditioner until April 25, 2009, when Complainant hired Respondent to perform an annual checkup on the air conditioner. York recommends, but does not mandate, that its air conditioners be inspected and maintained at least once a year. Complainant testified that he hired Respondent to perform the checkup because he did not remember that Respondent had not installed the air conditioner. Complainant was in Washington at the time of the April 25, 2009 service call. Respondent performed the April 25, 2009 service call. Respondent testified that he performed a leak test on the air conditioner and discovered that one of the Schrader valves in the unit was leaking and that the Freon in the unit was 2 pounds low. Respondent testified that he did not remember whether Complainant told him that the air conditioner was still under warranty, or whether he contacted York with the serial number of the unit and York had informed him of its age and warranty status. In any event, Respondent charged Complainant only for the service call and Freon, not for the Schrader valves, which were still under warranty, for a total charge of $149.00. Respondent’s invoice for the April 25, 2009 service call did not show its license number, preceded by the acronym “ROC.” In December 2009, Complainant’s tenant told him that the heat would not turn on in the condominium. Complainant was in Washington at the time and called Respondent. Respondent’s son and employee, Jerry Wayne Walker, Jr. (“Mr. Walker”) responded to Complainant’s call on December 12, 2009. Mr. Walker testified that the tenant was not home at the time and there was no one to give him access to the interior of the condominium. Mr. Walker testified that he climbed on the roof of the condominium to inspect the air conditioner, and found that it was not running, but that he was able to start the air conditioner with a “jumper.” Mr. Walker testified that he checked the air conditioner for leaks, using soap and an electrical leak detector, and found a leak in the Schrader valve and that the Freon in the unit was 2.5 pounds low. Mr. Walker testified that Complainant did not tell him that the unit was still under warranty and that he did not know until later, when he and his father compared notes, about Respondent’s April 25, 2009 service call. Respondent charged Complainant for the service call, Freon, and Schrader valves on its December 12, 2009 invoice, for total charges of $220.00. Respondent’s invoice for the December 12, 2009 service call did not show its license number, preceded by the acronym “ROC.” Respondent submitted his business card with Respondent’s license number, preceded by the acronym “ROC.” Respondent credibly testified that since Complainant filed the complaint, he has modified all the documents that he uses in his contracting business to show his license number, preceded by the acronym “ROC.” Mr. Miller testified that Schrader valves hold the refrigerant in air conditioners until the ball in the center of the valve is depressed, like the valve on a tire tube. Mr. Miller testified that the seals on Schrader valves are rubber, and that the seal may fail at any time or “go on forever.” Mr. Miller testified that Schrader valves may be fine for a while, and then go bad with a change in the ambient temperature. Mr. Miller testified that Schrader valves have become more prone to failure since they started to be manufactured in China. Mr. Walker testified that one month after the December 12, 2009 service call, Complainant called him with a number of questions. Mr. Walker testified that many of the questions did not relate to Respondent’s service calls, such as the amperage that the air conditioner was drawing. Mr. Walker testified that Respondent provides a service called a “Diagnostic” to render a comprehensive opinion on the age and general condition of an air conditioner for people who are considering purchasing a property with an existing air conditioner. Mr. Walker testified that the Diagnostic service is different from a service call and costs more, and that Complainant did not request or pay for a Diagnostic service. Mr. Walker testified that he did the best he could to answer Complainant’s questions, although he did not have all the information that Complainant wanted. Mr. Walker testified that Complainant “just kept asking the same questions over and over again” and “divided” every answer that Mr. Walker provided. Mr. Walker testified that he had never had a customer who acted like Complainant. Eventually, Mr. Walker and Respondent compared notes about Complainant’s numerous questions and telephone calls. Respondent testified that they decided that Complainant might be trying to get a new air conditioner from York with evidence that he obtained from Respondent. Respondent testified that he referred Complainant to York’s tech support, Alex Mendoza, and Mr. Miller, and that Mr. Mendoza stated that he was “well aware” of Complainant, but could not comment due to liability issues. Complainant testified that in January 2010, his tenant complained that the air conditioner would not blow cool air. On January 18, 2010, Complainant hired A C Guys to inspect and repair the air conditioner on the condominium. An unnamed A C Guys’ technician inspected the air conditioner and issued an invoice that contained the following Description of Work Performed: Found orange terminal on T-stat not hooked up. Connected orange circuit for reversing valve in cooling. Also disconnected in unit. Checked for leaks. Added new caps. Added 3 lbs Freon.

The amount of A C Guys’ January 18, 2010 invoice was $167.16. Complainant argued that the fact that A C Guys found low Freon and additional problems with the air conditioner a month after Respondent had serviced and added Freon to the unit, together with Respondent’s failure to answer his questions to his satisfaction, established that Respondent had sabotaged the unit on December 12, 2009, to ensure another service call. Complainant argued that A C Guys’ invoice supported an inference that Respondent’s invoices for the April 25, 2009, and December 12, 2009 service calls were fraudulent. Complainant requested that the Registrar require Respondent to disgorge all the cost of all its service calls and reimburse its customers for the higher electric bills that Respondent’s allegedly fraudulent business practices caused them to incur. Respondent denied damaging the air conditioner at Complainant’s rental property or on any of his customers’ properties. Respondent testified that the EPA requires an HVAC contractor to identify leaks before adding Freon to a unit, which A C Guys’ technician apparently failed to do. Mr. Walker testified that he could not have gotten the air conditioner to start if the thermostat inside the condominium was not hooked up on December 12, 2009. Mr. Walker testified that he did not know what the A C Guys’ technician found, because the technician inspected the air conditioner more than a month after Respondent serviced it. According to the Registrar’s record, Respondent’s license is current and in good standing. This is the only complaint that is pending against the license.

CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] Complainant bears the burden of proof and must establish Respondent’s statutory violations by a preponderance of the evidence.[2] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[5] Air conditioners frequently malfunction in the Arizona heat and the useful life of air conditioners is not unlimited. A contractor’s incompetence or fraud cannot be inferred from repeated repairs to air conditioners, even if the units are relatively new and still under warranty. The unnamed A C Guys’ technician’s comments on the January 18, 2010 invoice are hearsay.[6] Although hearsay may be admitted in an administrative hearing,[7] it should not be relied upon if it is not the kind of evidence that reasonable persons would rely upon in serious matters.[8] The A C Guys’ technician’s statements to Complainant and on its invoice are not the kind of evidence that reasonable persons would rely upon to penalize a contractor’s license and jeopardize his livelihood. Moreover, the A C Guys’ technician did not inspect the unit immediately after Respondent or Mr. Walker, on Respondent’s behalf, serviced it. Respondent’s, Mr. Walker’s, and Mr. Miller’s testimony about the incidence of leaks in Schrader valves in air conditioners was credible and consistent. No contracting statute requires a contractor to answer a customer’s questions in writing to the customer’s satisfaction as a condition of keeping the contractor’s license in good standing. Therefore, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(7).[9] Complainant established that Respondent violated A.R.S. § 32-1154(A)(13) (namely A.R.S. § 32-1124(B)).[10] Respondent established that he has taken steps to remedy this violation. RECOMMENDED ORDER In view of the foregoing, it is recommended that on the effective date of the Registrar’s final order, the Registrar suspend Respondent Jerry Wayne Walker dba Jerry’s Air Conditioning and Heating’s License No. ROC085743, Class C-39 until Respondent has modified all the forms and other documents that he uses in his contracting business to comply with A.R.S. § 32-1124(B). It is further recommended that if, on or before the effective date of the Registrar’s final order, Respondent presents satisfactory written proof to the Registrar that Respondent has revised his invoice form, proposal form, business cards, letterhead, advertising, and any other documents used in his contracting business to show his license number, preceded by the acronym “ROC,” the Registrar not suspend Respondent’s license and, instead, close Complainant William Mattson’s complaint in Case No. 2010-[number redacted]. 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, February 22, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See 32-1101 et seq. [2] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] See A.A.C. R2-19-119(B)(2). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] Black’s Law Dictionary at page 1220 (8th ed. 1999). [6] See Ariz. R. Evid. 801(c) (“‘Hearsay’ is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”). [7] See A.R.S. § 41-1092.07(F)(1). [8] See Plowman v. Arizona State Liquor Board, 152 Ariz. 331, 337, 732 P.2d 222, 228 (App. 1986) (citing Begay v. Arizona Department of Economic Security, 128 Ariz. 407, 626 P.2d 137 (App. 1981)). [9] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[t]he doing of a fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” [10] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” The specific statute charged was A.R.S. § 32-1124(B), which requires that licensed contractors include their license number, which “shall be preceded by the acronym ‘ROC,’” on “all written bids submitted by the license and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.”

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