ALJDEC decisions subject to certification as final

2010A-308477090-ROC · Registrar of Contractors · 2011-05-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 4, 2011

APPEARANCES: Complainant appeared on her own behalf; Respondent was represented by Lesette Reardon, Respondent’s General Manager and corporate Secretary.

WITNESSES: Irene Taplin Lesette Reardon

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant Irene Taplin brings this action claiming unprofessional and unworkmanlike conduct by Respondent AL Tech Energy Management, Inc. The claims against Respondent concern the sale of an air conditioning system. Respondent denies the allegations. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with Complainant’s Exhibits A through L. The parties presented evidence and testimony at the hearing. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding a violation of Arizona contracting law and recommending restitution be paid to Complainant.

FINDINGS OF FACT 1. Respondent is the holder of license C-39R.103060-R issued by the Registrar of Contractors (“ROC”). It authorizes Respondent to install and repair air conditioning systems (excluding solar) for residential properties. The Qualifying Party on the license is Lance Dobbins. 2. In July 2010, Complainant, who is in her eighties, hired Respondent, based on a cold call from Respondent to Complainant, to perform a routine maintenance and check-up of her air conditioning system. Respondent performed that service on July 16, 2010. At that time, Complainant had been a widow for six months and had had major hip surgery on July 1, 2010. She had been out of the hospital about two weeks and was still on prescription pain medications, including a narcotic analgesic.[1] Based on her credible testimony at the hearing, Complainant was not in full control of her mental faculties during the events that followed; she was vulnerable. 3. Respondent’s technician performed work cleaning, checking, and tightening parts of the system, which had two condenser units. He recommended two sensors that Complainant purchased and that he installed. Respondent charged Complainant $375.45 for the work done at that visit.[2] The technician informed Complainant that there was a bent fan blade and that he would get back to her with a price for replacing it. 4. A few days later, on July 21, 2010, Tony Saupino, Respondent’s “Senior Sales/Service Rep,” met with Complainant at her house. He removed the sensors, telling her that she did not need them and that they did not work with her units. According to Complainant’s testimony, he pressured her to buy a new system. He told her that she could finance $10,000.00 of the cost through Respondent. When Complainant agreed to buy a new system, she informed Saupino that, due to her medical condition, she could not drive to the bank to withdraw the $8,720.00 cash down payment that he was requesting. Therefore, she allowed Saupino to drive her, in her car, to the bank, and to accompany her while she withdrew the funds from her account. Saupino did so. 5. Exhibit F is a contract signed by Complainant and Saupino on behalf of Respondent on July 21, 2010. The terms are for removal of the old system and replacement with two new complete electrical heat pump units. It included accessories (such as thermostats) and a one year service contract with Respondent, as well as warranties. The total cost was $18,720.00, with $8,720.00 down and $10,000.00 financed. There is no breakdown of parts and labor. 6. Evidence submitted at hearing shows that Complainant brings in less than $2,000.00 per month on her fixed, retirement and Social Security income.[3] In addition, the evidence shows that at the time she entered into these two contracts (July 16 maintenance contract and July 21, 2010 purchase contract) Complainant had a Home Warranty Contract with American Home Shield (“AHS”) that covered repair or replacement of the air conditioning system through AHS.[4] Both of these facts (low income and home warranty), coupled with Complainant’s lucid and focused demeanor during the hearing, lead this tribunal to conclude that Complainant’s actions on July 21, 2010, were not normal for her. Complainant did not reveal herself at the hearing to be a woman who would get in a car with a person who was unknown to her and have him accompany her to the bank while she withdrew $8,720.00 in cash, unless other strong influences were at work and causing her to be unable to think clearly. 7. The $10,000.00 balance of the contract price was financed through a credit card issued to Complainant.[5] The card is issued in Complainant’s name and Respondent’s name and requires Complainant to make payments of $200.00 per month. Complainant does not recall signing the credit application, but it appears to the untrained eye to be her signature. 8. Saupino took advantage of Complainant. 9. Respondent installed the new units on July 22, 2010. 10. Complainant filed a complaint with the ROC on November 9, 2010, claiming that she had been “taken advantage of” by Respondent and requesting that the entire contract amount be returned to her. Respondent denies any wrongdoing, relying on the signed contracts and denying any unworkmanlike conduct. Only Lesette Reardon testified for Respondent at the hearing. She did not have any personal contact or involvement with Complainant or her purchase at the time of the events just described. 11. This tribunal finds Complainant to be a credible witness. She is the only witness at the hearing that was a participant in the events that occurred in July 2010. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[6] Further, the standard of proof at hearing is by preponderance of the evidence.[7] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[8] Complainant has met that burden. 2. The Citation and Complaint alleges violations of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(3) by way of ROC Rule R4-9-108 (prohibits poor workmanship), and (A)(2) (requires compliance with plans, specifications, and building codes). 3. Arizona Administrative Code (A.A.C.) R4-9-108 states that “[a] contractor shall perform all work in a professional and workmanlike manner.” The evidence shows that Respondent, through its employee Saupino, was unprofessional in its interactions with Complainant, most notably when Saupino drove Complainant to the bank to withdraw the down payment. That conduct was patently unprofessional and should not have occurred. Respondent has violated A.R.S. § 32-1154(A)(3) by way of ROC Rule R4-9-108 by engaging in unprofessional conduct. Respondent took advantage of Complainant. 4. The ROC is empowered by statute to award restitution upon the finding of a violation of the statutes governing the conduct of licensed contractors.[9] Restitution is not defined in the ROC statutes, but commonly means restoring a victim to his or her original position.[10] In this case, restitution is appropriate to disgorge Respondent of its gain based on its unprofessional conduct and return Complainant’s money to her. 5. This tribunal finds that the appropriate remedy is for Respondent to pay Complainant $18,720.00 or have its license suspended. RECOMMENDED ORDER IT IS RECOMMENDED that license C39R.103060-R, held by AL Tech Energy Management, Inc., be suspended beginning the effective date of the Registrar’s Order until the Registrar receives written proof that Respondent has paid Complainant $18,720.00 and the Registrar of Contractors accepts such written proof. IT IS FURTHER RECOMMENDED that if Respondent provides such written proof on or before the effective date of the Registrar’s Order, the license suspension shall not take place and case 2010-[number redacted] shall be closed.

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, May 24, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit A. [2] Exhibit B. [3] Exhibit E. [4] Exhibit D. [5] Exhibit J. [6] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [7] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [8] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [9] A.R.S. § 32-1156.01. [10] Black's Law Dictionary 1339 (8th ed. 2004); accord Merriam-Webster's Collegiate Dictionary 1062 (11th ed. 2003) (defining restitution in part as "a restoration of something to its rightful owner"). See also Hughey v. United States, 495 U.S. 411, 416 (1990) (recognizing that "the ordinary meaning of 'restitution' is restoring someone to a position he occupied before a particular event" (citations omitted)).

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