ALJDEC decisions subject to certification as final

2010A-308476349-ROC · Registrar of Contractors · 2012-07-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

REHEARING: June 15, 2012, at 8:00 a.m. APPEARANCES: Complainant Patty L. Robinson appeared on her own behalf; Respondent Aalan Company, L.L.C. dba I C E appeared through Mark Alan Miku, a member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. According to the public website of the Arizona Registrar of Contractors (“the Registrar”), on or about June 6, 2002, License No. K- 39.175691-D for dual air conditioning, refrigeration, and heating was issued to Aalan Company, L.L.C. doing business as (“dba”) I C E (“Respondent”). Paul Miku and Mark Alan Miku are listed as members on Respondent’s license. 2. According to the Registrar’s public website, on or about July 10, 2008, Respondent voluntarily cancelled License No. K-39.175691-D. 3. According to the Registrar’s public website, on or about July 10, 2008, the Registrar issued License No. K-39.247242-D to Indoor Comfort Experts, L.L.C. (“Indoor Comfort Experts”). Messrs. Miku are listed as members on Indoor Comfort Experts’ license. 4. On or about August 2, 2010, the Registrar received a complaint against “I.C.E. Indoor Comfort Experts” from Patty Robinson (“Complainant”) regarding the installation of a new condenser and air handler on May 27, 2008, at her house at 26243 South Lakeside Drive, Sun Lakes, Arizona. According to the complaint, the contractor last performed work on the project on March 3, 2009. 5. The Registrar opened complaints against both Respondent’s and Indoor Comfort Experts’ licenses. The Registrar denominated the complaint against Respondent’s license as Case No. 2010-[number redacted] and the complaint against Indoor Comfort Experts’ license as Case No. 2010- [number redacted]. 6. The complaints against Respondent and Indoor Comfort Experts were assigned to the Registrar’s inspector, Beau Cruz, for investigation. During his jobsite inspection, Inspector Cruz measured the temperature inside Complainant’s residence using a digital probe thermometer five feet from the floor in the living room and determined that the temperature was 81.3° Fahrenheit. 7. The Registrar’s workmanship standards require air conditioning units to cool structures to at least 78° F. when measured five feet from the floor in the middle of a room. Inspector Cruz issued Corrective Work Orders (“CWOs) that required Respondent and Indoor Comfort Experts to take appropriate corrective action to cause the air conditioner to cool Complainant’s house to the Registrar’s standards. 8. The Registrar issued a Citation and Complaint against Respondent in Case No. 2010-[number redacted] charging violations of A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, A.R.S. § 32- 1154(A)(13), namely A.R.S. §§ 32-1124(B) and 32-1158, and A.R.S. § 32- 1154(A)(23). 9. The Registrar issued a Citation and Complaint against Indoor Comfort Experts in Case No. 2010-[number redacted] charging violations of A.R.S. § 32- 1154(A)(2), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, A.R.S. § 32-1154(A)(13), namely A.R.S. §§ 32-1124(B) and 32-1158, and A.R.S. § 32-1154(A)(23), the same statutes that were charged against Respondent. / / / / / / / / The Dismissal of Case No. 2010-[number redacted] against Indoor Comfort Experts 10. The Registrar referred Complainant’s complaint against Indoor Comfort Experts in Case No. 2010-[number redacted] to the Office of Administrative Hearings (“the OAH”), an independent state agency, for an evidentiary hearing. 11. A hearing was held in Case No. 2010-[number redacted] on March 16, 2011, before Administrative Law Judge (“ALJ”) Eric A. Bryant of the OAH. Inspector Cruz, Complainant, and Mark Alan Miku (“Mr. Miku”) testified. 12. On or about April 5, 2011, ALJ Bryant issued a decision in Case No. 2010-[number redacted], finding that shortly after Inspector Cruz issued the CWOs, a newer and larger condenser had been installed and that more work had been done to seal the air handler.[1] 13. ALJ Bryant made the following Findings of Fact in Case No. 2010- [number redacted] concerning the difficulty of replacing the air filter in the air handler at Complainant’s house: 9. Inspector Cruz performed a pre-hearing inspection focused on the issue concerning the sealing of the air handler. He found that the handler had been sealed as best it could be without screwing shut the access panel—a condition that would make it difficult for Complainant to then change the filter in the air handler because she would have to unscrew and re-screw the panel every time she changed a filter. In addition, he discovered that the filter was difficult to change in the unit because there is a protrusion that partially blocks the filter when it is being slid into place. All three witnesses testified that the filter can be put in place with a little effort, but there is a possibility of damaging the filter if it is not done properly. The inspector testified that this issue relates to workmanship because equipment must be useful for its intended purpose.

10. Mark Miku testified for [Indoor Comfort Experts] that the air handler was designed for use of cloth filters that are more flexible than paper filters. Complainant has been using paper filters. Paper filters can be used in the unit but must be carefully placed and removed because they are stiffer than cloth filters.

11. Inspector Cruz testified at the hearing that the air handler is installed properly and meets code. He does not believe the unit can be sealed any better that [sic] it is currently, without screwing down the access panel. His only concern at the hearing was the difficulty in changing the filter. But, he did acknowledge that the filter can be changed without damaging it.

12. Complainant testified at hearing that the system was cooling the home properly the last time she used it, but she has not had the system cooling the home for months because of the cooler temperatures during the winter. She also testified that she could not take the filters out to replace them without damaging them.

14. Despite Inspector Cruz’s and Complainant’s testimony that the air filters were difficult to change, ALJ Bryant concluded in Case No. 2010-[number redacted] that the evidence at hearing did not establish that Indoor Comfort Experts violated A.R.S. § 32-1154(A)(2), A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108, or A.R.S. § 32-1154(A)(23).[2] Therefore, ALJ Bryant recommended that the Registrar dismiss the Citation and Complaint against Indoor Comfort Experts in Case No. 2010- [number redacted]. 15. ALJ Bryant did not address the charged violations of A.R.S. § 32- 1154(A)(13), namely A.R.S. §§ 32-1124(B) and 32-1158. Nonetheless, on May 10, 2011, the Registrar substantially adopted ALJ Bryant’s decision in Case No. 2010-[number redacted] and on the effective date of the order, dismissed Complainant’s complaint against Indoor Comfort Experts. The Default Order in Case No. 2010-[number redacted] against Respondent 16. On August 3, 2011, the Registrar issued a Decision and Order (“Default Order”) against Respondent in Case No. 2010-[number redacted], deeming Respondent’s failure to file a timely written answer to the Citation and Complaint to be an admission of the charges contained therein pursuant to A.R.S. § 32-1155(B). The Default Order suspended Respondent’s license on its effective date if Respondent did not submit proof that it had appropriately rectified the corrective work involved and detailed in Complainant’s complaint and in the CWO. 17. Respondent subsequently filed a motion to dismiss or, in the alternative, motion for rehearing of the Registrar’s Default Order in Case No. 2010-[number redacted] based on the inconsistent result reached in Case No. 2010-[number redacted] against Indoor Comfort Experts. 18. On March 21, 2012, the Registrar issued an Order Denying Request to Dismiss/Order Granting Request for Rehearing, in relevant part as follows: On or about September 7, 2011, Respondent submitted its timely Request for Rehearing in this matter with the Registrar maintaining among other things that “this [C]omplaint has been heard and dismissed under Case No. 2010-[number redacted]” and “request[s] that this Case No. 2010-[number redacted] also be dismissed.”

On October 13, 2011, the Registrar sent a copy of Respondent’s Request for Rehearing to Complainant, providing Complainant with an opportunity to file a Response thereto. As of this date, no Response has been filed.

Upon review and consideration of the foregoing Request as well as the entire record in this matter, and with good cause appearing, IT IS ORDERED that Respondent’s Request to Dismiss be DENIED. The Respondent named in Case No. 2010-[number redacted] is not the same entity as the Respondent named in this case. Thus, the dismissal of that matter does not necessarily have automatic preclusive effect and warrant the dismissal of this matter.

Upon review and consideration of Respondent’s Request for Rehearing, as well as the entire file, and with good cause appearing, IT IS ORDERED that Respondent’s Request for Rehearing be GRANTED in accordance with A.A.C. R4-9-120(C)(3). IT IS FURTHER ORDERED that a Rehearing be scheduled in the expedited course of docketing in the Phoenix area. The issues underlying the Citation and Complaint are best suited to be presented before an administrative tribunal. Nothing in this Order is meant to preclude the parties from presenting evidence and testimony in support of the contentions set forth in the submissions discussed above before an administrative tribunal should this matter proceed to an administrative hearing.

19. The Registrar referred Complainant’s complaint in Case No. 2010- [number redacted] to the OAH for a rehearing. A rehearing was held on June 15, 2012. Inspector Cruz testified. Complainant testified, presented the testimony of Thomas Sowell, a retired home inspector, and submitted four exhibits, including one exhibit that included eight photographs of the air handlers at Complainant’s house and at Mr. Sowell’s house. Mr. Miku testified on Respondent’s behalf and submitted one exhibit. Rehearing Evidence 20. Inspector Cruz testified that based on his prehearing inspection and ALJ Bryant’s decision in Case No. 2010-[number redacted], he believed that all workmanship deficiencies has been appropriately remedied and that neither Indoor Comfort Experts nor Respondent had violated A.R.S. § 32- 1154(A)(2), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, or A.R.S. § 32-1154(A)(23) in the installation or repair of the new air conditioning system at Complainant’s house. 21. Respondent submitted the parties’ contract dated May 24, 2008,[3] that required Respondent to install a new split air conditioning system at Complainant’s house for a total contract price of $3,950.00. [4] 22. Respondent’s contract form showed its license number preceded by the acronym “ROC.” Respondent’s contract form did not apprise Complainant of her right to make a complaint to the Registrar or include an estimated date of completion, the Registrar’s telephone number, or the Registrar’s website address. 23. Mr. Sowell testified about how difficult it was for anyone to change the air filter on Complainant’s air handler. Mr. Sowell testified that it was impossible for a petite woman like Complainant to change the filter. Mr. Sowell showed photographs of a wooden block that he had installed to hold the filter under Complainant’s air handler and opined that Respondent should be required to install a filter box to allow Complainant to change the air filter. 24. Mr. Sowell acknowledged that he is not an HVAC contractor and that he is not familiar with the Registrar’s requirements for such contractors. Mr. Sowell acknowledged that he is not familiar with the manufacturer’s engineering specifications for the air filter and that he did not know whether Complainant was using the kind of filter recommended for the unit. 25. Mr. Miku testified that the manufacturer specified a flexible cloth filter, rather than the paper filter that Complainant was trying to use, for Complainant’s air handler. 26. Complainant submitted Respondent’s work order that was generated on September 30, 2010, when Respondent performed work to comply with the CWO. The work order included the notations, “measure for filter box” and “sealed air handler around sides to eliminate air cracks.” The work order showed Respondent’s license number, preceded by the acronym, “ROC.” 27. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on July 2, 2012. Such prior License record reflects that Respondent’s license remained cancelled and that one complaint was pending against the license. CONCLUSIONS OF LAW A.R.S. § 32-1155(A) allows the Registrar to investigate a written complaint concerning any act by a licensed contractor that was committed within two years prior to the date that the complaint was filed. For violations of A.R.S. § 32-1154(A)(13), namely A.R.S. §§ 32-1124(B) and 32-1158, the two- year period commences when the contractor prepared the document that gives rise to the violation. The timely filing of a complaint is a jurisdictional prerequisite.[5] The parties’ contract was made on May 24 or 27, 2008, more than two years before Complainant filed her complaint to the Registrar on August 2, 2010. Although Respondent’s contract form does not contain all of the terms that A.R.S. § 32-1158(B) requires,[6] because contract was prepared and entered more than two years before Complainant filed her complaint, the Registrar lacks jurisdiction to discipline Respondent’s license as a result of its violation of A.R.S. § 32-1154(A)(13) in May 2008,[7] consisting of its failure to comply with A.R.S. § 32-1158’s requirements.[8] The record in this matter does not contain any evidence that Respondent violated A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1124(B),[9] at any time. For complaints involving workmanship, the two-year limitations period commences when the contractor last worked on the project.[10] Because work was done on March 3, 2009, less than two years before Complainant filed the complaint, the Registrar has jurisdiction over the charged violations of A.R.S. § 32-1154(A)(2),[11] A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9- 108,[12] and A.R.S. § 32-1154(A)(23).[13] Complainant bears the burden of proof to establish Respondent’s statutory violations involving workmanship by a preponderance of the evidence.[14] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[15] Although Respondent and Indoor Comfort Experts are different entities with different licenses, this matter and Case No. 2010-[number redacted] involve the same contract, the same Complainant, and the same project. In Arizona, a party defending a claim may assert a previous judgment to which it was not a party against an opponent who was a party to preclude relitigation of a claim.[16] Arizona courts allow the defensive use of collateral estoppel because “once a party has had his day in court and lost, he does not get a second chance against a different party on the same claim.”[17] Complainant had her chance to litigate at the hearing in Case No. 2010- [number redacted] the issues of whether A.R.S. § 32-1154(A)(2), A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108, or A.R.S. § 32-1154(A)(23) had been violated in the initial installation of the air conditioning system or replacement of the air condenser and sealing of the air handler at her house. Therefore, the Registrar’s decision in Case No. 2010-[number redacted] that Indoor Comfort Experts did not violate the charged statutes precludes a conclusion that Respondent violated those statutes in this matter. With respect to the failure by Indoor Comfort Experts or Respondent to install a filter box, this is not a new workmanship issue but rather concerns whether the sealing of the air handler complied with the CWO, even though it made the air filter more difficult to change. ALJ Bryant was aware of the potential issue involving the filter box, but nonetheless concluded that Complainant did not establish that Indoor Comfort Experts violated A.R.S. § 32-1154(A)(23) in its repairs. The Registrar’s decision in Case No. 2010-[number redacted] precludes a finding in this matter that Respondent violated A.R.S. § 32-1154(A)(23) by failing to install a filter box. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s order in this matter, the Registrar dismiss Complainant Patty Robinson’s complaint in Case No. 2010-[number redacted] against Respondent Aalan Company, L.L.C. dba I C E’s License No. K-39.175691-D. 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, July 5, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See ALJ Decision in Case No. 2010A-[number redacted]-ROC at 3, Finding of Fact No. 8. [2] See ALJ Decision in Case No. 2010A-[number redacted]-ROC at 5, Conclusion of Law Nos. 2-3. [3] The date on the written contract is May 24, 2008. See Respondent’s Ex. A.. The record does not reflect why Complainant on her complaint to the Registrar stated that the contract date was May 27, 2008. See Finding of Fact No. 4 above. [4] Complainant’s complaint in the Registrar’s electronic record in Case No. 2010-[number redacted] stated the contract amount was $4,754.00. The record in this matter does not explain the different amount on the written contract that was submitted into evidence. For purposes of the charged violation of A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1158, there is no dispute that the contract amount exceeded $1,000.00. [5] See Harrelson v. Industrial Commission of Arizona, 144 Ariz. 369, 371, 697 P.2d 1119, 1121 (App. 1985) (untimely filed administrative claim deprived agency of jurisdiction to consider merits of claim); Attorney General Opinion I79-088 (Registrar must act on and issue citation in complaints that meet “jurisdictional requirements” of A.R.S. § 32-1155(A)). [6] A.R.S. § 32-1158(B) provides that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 must be in writing and include the following minimum terms: 4. The estimated date of completion of all work to be performed under the contract. . . . . 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . . [7] A.R.S. § 32-1154(A)(13) 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.” [8] The Registrar’s decision in this rehearing puts Mr. Miku on notice of A.R.S. § 32-1158(B)’s requirements. If Indoor Comfort Experts is ever again charged with violating A.R.S. § 32-1154(A)(13), namely A.R.S. § 32- 1158, the Registrar’s notice to Mr. Miku in this matter may be considered as a factor in aggravation of any discipline that is imposed as a result of the violation. [9] A.R.S. § 32-1124(B) requires that licensed contractors include their license number “preceded by the acronym ‘ROC’“ on “all written bids submitted by the licensee 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.” [10] See Attorney General Opinion I79-088 (March 28, 1979) (citing Lyon v. Great American Ins. Co., 4 Ariz. App. 596, 599, 422 P.2d 724, 727 (App. 1967)). [11] A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of any state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s 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.” [12] A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [13] A.R.S. § 32-1154(A)(23) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.” [14] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [15] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [16] See Standage Ventures, Inc. v. State, 114 Ariz. 480, 484, 562 P.2d 360, 364 (1977); Di Orio v. City of Scottsdale, 2 Ariz. App. 329, 332, 408 P.2d 849, 852 (1965). [17] Food for Health Co. v. 3839 Joint Venture, 129 Ariz. 103, 107, 628 P.2d 986, 990 (App. 1981).

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