ALJDEC decisions subject to certification as final

2011A-5133-ROC · Registrar of Contractors · 2012-02-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 8, 2012

APPEARANCES: Complainant appeared on his own behalf; Respondent was represented by CEO and Qualifying Party Robert Hauck.

WITNESSES: Beau Cruz, ROC Inspector Ronnie Reed Robert Hauck

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action against Respondent alleging poor workmanship and failure to comply with a Corrective Work Order. The Citation and Complaint issued by the Registrar of Contractors in this matter also alleges that Respondent performed work while its license was suspended or on inactive status. Respondent alleges that any problems were caused by a manufacturer’s defect in the equipment Respondent installed. This tribunal entered the complaint file received from the Registrar of Contractors into the record. The parties presented evidence and testimony from the witnesses above at the hearing, including Complainant’s Exhibit 1. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding violations and, most notably, that Respondent performed work while on a suspended license. This tribunal recommends that Respondent return the money received from the project or have its license revoked. FINDINGS OF FACT 1. Respondent is the holder of license C39R.133676-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 Robert Hauck. 2. In March 2011, Respondent entered into a contract with Complainant to install a new air conditioning unit on Complainant’s roof. Respondent performed the work at a price of $4,525.00. 3. According to the ROC website, Respondent’s license was on disciplinary suspension, both at the time of the contract and while the work was being performed. The suspension lasted from September 29, 2010, to July 15, 2011. 4. After the unit was installed, Complainant noticed that the house vibrated when the unit was running. The vibrations were significant; Complainant could feel the house vibrating and over time could see the effects of vibrating through cracking in the interior drywall of the home. 5. Complainant contacted Respondent. Respondent tried several unsuccessful corrections and eventually diagnosed the problem as a manufacturing defect in the unit. Respondent informed Complainant that it would contact the manufacturer to resolve the issue. Two weeks passed with no action. Complainant was concerned about his home and was having trouble sleeping at night due to the vibrating. Then, several months went by without action by Respondent, and Complainant could no longer contact Respondent. Complainant himself contacted the manufacturer and, after even more time passed and Complainant involved his attorney in the matter, the manufacturer finally fixed the problem in December 2011, without the help of Respondent. Complainant filed a complaint against Respondent in September 2011, before the problem was resolved by the manufacturer and Complainant. 6. ROC Inspector Beau Cruz inspected the jobsite and issued a Corrective Work Order (“CWO”) in September 2011, while the unit was still vibrating. The Inspector confirmed the vibrations and found evidence of drywall cracking that was caused by the vibrations. He issued a Corrective Work Order (“CWO”) ordering Respondent to correct the problem. Respondent did not do so. Complainant has incurred $500.00 in costs for another contractor to install the new unit supplied by the manufacturer[1] and will incur an unknown amount in costs to correct the drywall in his home.[2] 7. Respondent’s principal Robert Hauck testified about the difficulty he had contacting the manufacturer’s representative, as well as intervening personal problems. His position is that he did everything he could do. However, the evidence does not support that statement. It took far too long for action to be taken, and in the end, Complainant was justified in concluding that Respondent was not going to help him. In addition, Mr. Hauck testified that he “did not know anything about the license suspension” at the time the license lapsed and at the time of the work for Complainant, blaming it on a personal situation with his ex-wife’s control over his mail. He stated that he found out about it later. 8. The evidence shows that Respondent contracted for and performed work as a contractor on this project while its license was suspended. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[3] Further, the standard of proof at hearing is by preponderance of the evidence.[4] 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.[5] 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 (prohibiting poor workmanship), (A)(23) (requiring compliance with a CWO), and (18) (prohibiting contracting while a license is suspended or inactive).[6] The evidence shows violations of each of these provisions. 3. The evidence shows poor workmanship in Respondent’s failure to promptly address and resolve the defective unit it sold to Complainant and installed at Complainant’s house. After that, Respondent did not comply with the CWO. Thus, the record supports finding violations of (A)(3) and (A)(23). 4. Moreover, Respondent is responsible for knowing the status of the license. Since the license was suspended without Mr. Hauck’s being aware at the time, this shows a significant lack of diligence on Respondent’s part. The contract with Complainant should never have occurred. 5. Respondent should be required to pay restitution to Complainant in the amount of $500.00, as well as paying for drywall repair. At the hearing, Respondent agreed that Complainant could hire his own drywall repair contractor and Respondent would pay the bill. In addition, civil penalties for failure to comply with the CWO and for contracting when the license was suspended are warranted. RECOMMENDED ORDER IT IS RECOMMENDED that license C39R.133676-R, held by Dependable Heating and Air, Inc., be suspended beginning the effective date of the Registrar’s Order until the Registrar receives written proof that Respondent has paid Complainant $500.00 and has paid Complainant the amount that it costs Complainant to hire a drywall repair contractor to fix the damage done by the vibrations to the drywall, 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 2011-5133 shall be closed. IT IS FURTHER RECOMMENDED that, along with the sanction provided above, Dependable Heating and Air, Inc. pay a civil penalty of $500.00 to the Registrar of Contractors pursuant to A.R.S. §32-1154(D) for failure to comply with the Corrective Work Order. Failure to pay the entire amount of the civil penalty on or before 30 days following the effective date of the Registrar’s Order entered in this matter shall result in the automatic revocation of Respondent’s license, effective on the deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless payment of any outstanding prior civil penalty is made. IT IS FURTHER RECOMMENDED that, along with the sanction provided above, Dependable Heating and Air, Inc. pay a civil penalty of $500.00 to the Registrar of Contractors pursuant to A.R.S. §32-1154(E) for contracting while the license was suspended or inactive. Failure to pay the entire amount of the civil penalty on or before 30 days following the effective date of the Registrar’s Order entered in this matter shall result in the automatic revocation of Respondent’s license, effective on the deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless payment of any outstanding prior civil penalty is made.

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 27, 2012.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit 1. [2] Complainant has not obtained bids for that work. [3] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [4] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [5] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [6] There are also other citations that were not addressed by the evidence presented at hearing.

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