ALJDEC decisions subject to certification as final

2011A-4067-ROC · Registrar of Contractors · 2012-02-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 26, 2012, at 8:15 a.m. APPEARANCES: Complainants George and Cindy Seff appeared on their own behalf; Respondent Forsythe Mechanical Services, Inc. did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In August 1990, the Arizona Registrar of Contractors (“the Registrar”) issued License No. C39R.087475-R for residential air conditioning and refrigeration to Forsythe Mechanical Services, Inc. (“Respondent”). Respondent’s address of record is 862 West Pine Knoll Drive, Prescott, Arizona 86303-5229. On July 15, 2011, the Registrar’s office in Kingman, Arizona received a complaint from George and Cindy Seff (“Complainants”) against Respondent about its installation of a furnace, cooler, and duct work in their new home at 47300 North Lion Canyon Drive in Seligman, Arizona. On October 28, 2011, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(1), (10), and (15). The Registrar sent a copy of the Citation and Complaint to Respondent at its address of record. On November 7, 2011, the Registrar received a written answer to the Citation and Complaint from Respondent’s qualifying party and member, Larry Forsythe, denying any statutory violations. Mr. Forsythe stated that Respondent had subcontracted work to Mike Collins while Mr. Forsythe was undergoing a knee replacement, but that Respondent did not know about and had not received any monies from Mr. Collins’ contract with Complainants. Mr. Forsythe also stated that Respondent was no longer in business because he had been determined to be disabled. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent state agency, for an evidentiary hearing. On December 12, 2011, the Registrar issued a Notice of Hearing, setting a videoconference hearing on January 26, 2012, at 8:15 a.m. in the Registrar’s Kingman office. The Registrar sent a copy of the Notice of Hearing to Respondent at its address of record. On December 27, 2011, the OAH received Respondent’s request for change of venue to the Registrar’s office in Prescott, Arizona because Mr. Forsythe did not have transportation to Kingman. On December 30, 2011, the Administrative Law Judge in the OAH denied Respondent’s request to change venue because the Registrar’s office in Prescott did not have videoconference capability. The December 30, 2011 order informed Mr. Forsythe that he could file a request to appear telephonically at the videoconference hearing pursuant to A.A.C. R2-19-114. A videoconference hearing was held in the Registrar’s Kingman office on January 26, 2012. Complainants submitted 31 pages of documents and testified on their own behalf. Mr. Forsythe did not request to appear telephonically on Respondent’s behalf at the hearing and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed fifteen minutes to allow Respondent additional travel time, Respondent did not appear through an authorized officer, employee, or attorney, and did not contact the OAH or the Registrar to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend its license. According to the Registrar’s website, Respondent’s license was suspended on September 1, 2011, for non-renewal and on October 6, 2011, for lack of bond. The license remained administratively suspended on the date of the hearing. Complainants’ complaint appeared to be the only complaint pending against the license. Hearing Evidence On or about October 10, 2008, Mr. Collins submitted a proposal to Complainants to install a furnace, an evaporative cooler, duct work, an air filter grill, thermostat, and registers in the new house that Complainants were constructing in Seligman for a total price of $6,300.00. The proposal showed Respondent’s license number and address of record, but showed Respondent’s name as “Forsythe Heating & Air Conditioning.” On or about October 23, 2008, Mr. Collins reduced the price of the proposal to $6,000.00. Respondent’s October 23, 2008 proposal showed Respondent’s address of record, license number, and Mr. Forsythe as “owner,” but showed Respondent’s name as “Forsythe Heating & Air Conditioning.” Complainant Mrs. Seff signed the October 23, 2008 proposal to accept it, paid Mr. Collins $3,000.00 in cash, and Mr. Collins signed the proposal to acknowledge the cash payment. Complainants paid the remaining balance of $3,000.00 in cash to Mr. Collins on January 11, 2009. Mr. Collins generated and signed Invoice No. 738343 to acknowledge the cash payment. Invoice 738343 showed Respondent’s address of record and Respondent’s name as “Forsythe Heating.” Mrs. Seff testified that after Respondent installed the furnace, Mr. Collins said that he could not “fire up” the furnace until the drywall was complete because drywall dust would compromise the operation and safety of the furnace. Mrs. Seff testified that Mr. Collins said that if anyone but Respondent started the furnace, it would void the manufacturer’s warranty. Mrs. Seff testified that neither Mr. Collins nor anyone else employed by Respondent ever returned to “fire up” the furnace or to complete the installation of the air conditioning system, even though the drywall was complete in the house. Mrs. Seff testified that the work that remained to be performed under the contract included the following: (1) Installation of a propane converter; (2) Installation of a condensate line; (3) Hooking up the thermostat to the air conditioning system; (4) Installation of an outside air supply; and (5) Installation of missing registers. Mrs. Seff testified that most of the necessary equipment was on site and that she estimated that it would take a contractor only “a couple of hours” to complete installation of the system. Mrs. Seff also testified that the work on the heating system needed to be operational for Complainants to complete plumbing and turn on the water to the house because in Seligman, the temperature frequently drops below freezing in the winter. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] The Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable, and it appears that Respondent received actual notice of the hearing.[2] The administratively suspended status of Respondent’s license does not preclude Complainants from pursuing their administrative remedy nor preclude the Registrar from conducting this disciplinary proceeding.[3] Complainants bear the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] Complainants established that Mr. Collins was contracting under Respondent’s license when he contracted to install the air conditioning system in Complainants’ new house in Seligman. Therefore, Complainants established that Respondent violated A.R.S. § 32-1154(A)(1)[6] by failing to complete the work outlined on the October 23, 2008 contract. Mr. Forsythe did not supervise Mr. Collins’ performance of Respondent’s contract with Complainants. Therefore, Complainants established that Respondent violated A.R.S. § 32-1154(A)(10)[7] by aiding and abetting Mr. Collins to evade statutory requirements for licensed contractors. Complainants also established that Respondent violated A.R.S. § 32- 1154(A)(15)[8] by doing business under the names of “Forsythe Heating & Air Conditioning” or “Forsythe Heating,” rather than the name listed on its license. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, Respondent Forsythe Mechanical Services, Inc.’s License No. C39R.087475-R be revoked. It is further recommended that if on or before the effective date of the final order, Respondent provides written proof that is satisfactory to the Registrar that Respondent has paid Complainants George and Cindy Seff an amount of money that is sufficient to allow them to hire an appropriately licensed contractor of their choice to complete installation of the air conditioning system at their house, and Complainants have accepted such payment, the Registrar not revoke Respondent’s license but, instead, close the complaint in Case No. 2011-4067. 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 14, 2012.

/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. §§ 41-1092.04; 41-1092.05(D). [3] See A.R.S. § 32-1154(C), which provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [4] 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). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] A.R.S. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” [7] A.R.S. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]iding or abetting a licensed or unlicensed person to evade this chapter, knowingly combining or conspiring with a licensed or unlicensed person, allowing one’s license to be used by a licensed or unlicensed person with intent to evade this chapter.” [8] A.R.S. § 32-1154(A)(15) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]cting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth upon the license.”

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