ALJDEC decisions subject to certification as final

2011A-406-ROC · Registrar of Contractors · 2011-08-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 12, 2011 APPEARANCES: Greg Taylor appeared personally. Inhouse Home Warranty, Inc., doing business as Inhouse Home Services, was represented by its authorized representative, Brock Kuchynka. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ 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. Inhouse Home Warranty, Inc., doing business as Inhouse Home Services (“Respondent”), is the holder of License No. 248325, a Class K-39 contracting license issued by the Registrar of Contractors (“Registrar”). 2. On January 21, 2011, Greg Taylor, also known as Greg Moore and Gregory Lee Moore Taylor (“Complainant”), filed a written Complaint with the Registrar pertaining to Complainant’s air conditioning unit located at 721 S. Sierra, Mesa, Arizona. The Registrar designated Complainant’s Complaint as Case No. 2011-406. 3. The Registrar issued a Citation and Complaint in Case No. 2011-406 charging Respondent with violating the provisions of A.R.S. § 32- 1154(A) (7). 4. The Registrar forwarded Case No. 2011-406 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 5. In late 2010, Complainant obtained bids to replace his air conditioning unit in order to qualify for a tax credit. 6. On October 5, 2010, a storm hit the Mesa community. The storm included rain, high winds, and hail. 7. On October 12, 2010, Brandon Milton from Complainant’s insurance carrier, State Farm Fire and Casualty Company (“State Farm”), performed an inspection of Complainant’s residence for storm damage. 8. According to Complainant’s Complaint, Complainant and others performed roof repairs to his roof from October 20, 2010, to November 20, 2010. 9. Complainant’s air conditioning unit was located on a metal stand on his pitched roof. 10. During this period of time, Complainant’s mother, Terry Moore, was having her air conditioning unit replaced by Respondent. 11. Complainant and Ms. Moore made arrangements for Respondent’s technician on Ms. Moore’s air conditioning project to inspect Complainant’s unit for hail damage. 12. In early December 2010, Respondent’s technician inspected Complainant’s air conditioning unit. Upon completing his inspection, the technician opined that the unit did not sustain hail damage. However, the technician recommended replacement of the unit due to the unavailability of replacement parts. 13. Complainant decided to replace his existing air conditioning unit regardless of whether or not his insurance carrier paid for the replacement. 14. Complainant entered into a written contract with Respondent for the replacement of his existing air conditioning unit. Complainant received a 3% discount by paying the full contract price before the installation. 15. Complainant gave Respondent’s staff a check in the amount of $5,817.53. However, that check was not honored by Complainant’s bank due to insufficient funds in his checking account. Complainant’s bank charged Complainant a fee of $35.00 for insufficient funds. Respondent subsequently re-deposited the check, and it cleared. 16. The installation of the Complainant’s new air conditioning unit was scheduled to be performed by Respondent on December 28, 2010. 17. On December 23, 2010, Complainant called Respondent’s staff and stated that he was cancelling the parties’ contract because he was being investigated by State Farm. Complainant also stated that his bank had charged him a fee of $35.00 for the insufficient funds when Respondent attempted to cash the check. Respondent’s staff informed Complainant that Respondent would reimburse him the $35.00 fee. 18. The parties agreed to wait until State Farm completed its investigation before installing the new air conditioning unit. 19. At State Farm’s request, Knott Laboratory, L.L.C. (“Knott”) performed an investigation “to determine the cause and the origin of damage to the air conditioning unit” at Complainant’s residence. 20. Knott inspected Complainant’s air conditioning unit on January 13, 2011. 21. On February 8, 2011, Knott issued a written report to State Farm. In that report, Knott concluded, among other things, the following: • The air conditioner cooling fins were damaged by impact with an object larger than the recorded 1-inch in diameter [sic] • The damage to the air conditioner fins can be repaired with no adverse affect on the performance of the air conditioner.

22. By letter dated August 10, 2011, State Farm provided Complainant with additional information about his insurance claim. 23. Complainant filed the Complaint to the Registrar because he believed that Respondent’s technician who inspected his air conditioning unit damaged the unit. However, Complainant did not observe the technician while he was inspecting the unit. The technician denied to his employer that he damaged the unit. There were other individuals on Complainant’s roof after the storm that also had access to the air conditioning unit. 24. In the Complaint, Complainant stated that he seeks payment of the contract price, the $35.00 insufficient funds fee assessed by his bank, and the $1,500.00 tax credit he would have received if the contract had been fulfilled. 25. Respondent presented credible evidence that Complainant could have received the $1,500.00 tax credit for the installation of a new air conditioning unit, even if the unit were installed in 2011, because he contracted with Respondent and paid for the unit in 2010. 26. Respondent was initially willing to return the contract price and pay the bank fee to Complainant, and to waive Respondent’s expense for fabricating the metal stand for the new air conditioning unit that was originally scheduled to be installed on December 28, 2010. Respondent withheld such payments pending the outcome in these proceedings. However, Respondent now wants to be paid by Complainant for the fabricated roof stand, but Respondent remains willing to refund the remainder of the contract price if Complainant no longer wants Respondent to perform the parties’ contract. 27. Complainant failed to present credible evidence establishing that Respondent committed fraud resulting in substantial injury to Complainant, as charged in the Citation and Complaint issued by the Registrar. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19-119(A). 3. Complainant failed to sustain his burden of proving that Respondent violated the provisions of A.R.S. § 32-1154(A) (7), as charged in the Citation and Complaint issued by the Registrar. Complainant failed to establish that Respondent committed fraud in this matter.

RECOMMENDED ORDER The Citation and Complaint in Case No. 2011-406 shall be dismissed on the effective date of the Order entered in this matter. 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, August 31, 2011.

/s/ Brian Brendan Tully 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