ALJDEC decisions subject to certification as final

2012A-2375-ROC · Registrar of Contractors · 2013-03-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 21, 2013, at 8:00 a.m. APPEARANCES: Richard Glabman (hereinafter “Complainant”) appeared on his own behalf. Signal Gates Inc of Arizona (hereinafter “Signal”) appeared through its attorney, Eric Hawkins, Esq., Durazzo, Eckel & Hawkins P.C. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. Signal is the holder of License No. C-5.125828-R issued by the Registrar of Contractors. 2. This is a residential matter where Signal supplied and constructed an electronic gate entry system for Complainant’s residence at 7500 Camino Sin Vacas, Tucson, Arizona 85718, for the sum of $8,963.27. 3. Complainant was dissatisfied with the fact that the new electronic gate entry system was not an internetwork capable system and filed a formal Complaint against Signal with the Registrar of Contractors. 4. Pursuant to the filing of the formal Complaint, an assigned Agency Inspector, Richard Allen (hereinafter “Inspector Allen”), conducted an onsite inspection. Inspector Allen issued a written Corrective Work Order on July 11, 2012, directing Signal to perform designated corrective work on Complainant’s electronic entry gate. 5. The Corrective Work Order in Complainant’s Complaint provided, in pertinent part, as follows: The jobsite inspection found an “out dated” dial up system installed. Correct/replace by appropriate means according to all written and verbal agreements, and according to manufacturer’s instructions, and per industry standards, and according to good workmanship practices, and per all codes, etc.

From a scheduling point of view and in order that the contractor may take corrective measures in an orderly and prompt manner, cooperation between the contractor and complainant is necessary.

6. Inspector Allen testified that he had not performed a prehearing inspection because Signal had not performed any corrective action in response to the Corrective Work Order and Complainant had replaced the dial-up electronic gate opening system installed by Signal with a new gate opening system that was internetwork capable. Inspector Allen stated that he observed that Signal had installed an outdated dial-up system at Complainant’s residence that failed to comply with the terms of the parties’ contract and oral agreements as disclosed by the parties at the onsite inspection. Inspector Allen stated that the “dial-up” electronic gate operating system installed by Signal was unable to fulfill its intended function as specified in the parties’ written and oral agreements. Inspector Allen testified that both parties agreed that there were oral agreements in addition to the written proposal provided by Signal.[1] 7. There was no dispute that Complainant had removed the electronic gate entry system installed by Signal and replaced it with a new internetwork capable system before Inspector Allen could perform a pre-hearing inspection to determine if Signal had complied with the Corrective Work Order. 8. Inspector Allen testified that the written contract provided that the electronic gate opener was specified to be “cutting-edge technology.” Inspector Allen stated that the term “standard web technology” indicated that the system would be accessible through a standard web browser.[2] 9. Inspector Allen’s testimony is found to be credible. 10. Inspector Allen also testified that Signal’s written proposal failed to comply with the applicable provisions of A.R.S. § 32-1158. 11. The Proposal and Contract[3] prepared by Signal did not specify that the new electronic gate entry system was a “dial-up” type of electronic system, did not specify that the gate operating system was not a internetwork capable system, and did not inform the property owner that he had a right to file a written complaint against Signal with the Registrar of Contractors for an alleged violation of A.R.S. § 32-1154(A).

12. The written product information that was incorporated into the parties’ written agreement provided that the electronic gate entry system installed by Signal was “the cutting edge of access technology to residential entry applications” and that “Providers can use a standard web browser to program the unit, thus eliminating the need for special software.”[4] 13. Wayne Louis McCoy (hereinafter “Mr. McCoy”) testified that he is the owner of Audio Video Technologies.[5] Mr. McCoy stated that he was retained by Complainant to evaluate the electronic gate entry system that was going to be installed for Complainant’s residence. Mr. McCoy testified that he personally discussed the requirement that the electronic gate entry system had to be accessible by a standard internet web browser via computer from Complainant’s primary residence in Chicago and that Complainant had to be able to view the log record of anyone who gained access to Complainant’s Tucson residence via the internet. Mr. McCoy stated that the requirement that the new electronic gate entry system be internetwork capable was clear and acknowledged by Signal.[6] 14. Mr. McCoy testified that Signal assured him that the electronic gate entry system installed by Signal would be internetwork accessible from multiple locations and fulfill all of Complainant’s requirements. Mr. McCoy stated that the “dial-up” modem system installed by Signal was not cutting-edge technology and that it did not provide Complainant with the ability access the electronic gate entry system through the internet from multiple locations. Mr. McCoy stated that the dial-up modem system installed by Signal was “antiquated.” Mr. McCoy testified that he had reviewed Signal’s written proposal. Mr. McCoy stated that Complainant was responsible for providing the conduit for the cables for the electronic gate entry system installed by Signal. Mr. McCoy testified that the term “web browser” indicated an internet connection, not a telephone connection.[7] 15. Mr. McCoy testified that he was not onsite when Signal installed the dial-up modem system. Mr. McCoy stated that his company installed the Wi- Fi system in Complainant’s residence. Mr. McCoy testified that attempting to utilize the electronic gate entry system installed by Signal via the internet caused the entire electronic gate system to freeze. Mr. McCoy stated that he agreed with the terms of the Corrective Work Order.[8] 16. Mr. McCoy’s testimony is found to be credible. 17. Chad Erick Wilcox (hereinafter “Mr. Wilcox”) testified that he is an employee of Audio Video Technologies. Mr. Wilcox stated that when the electronic gate entry system installed by Signal failed to function, he examined the new system and determined that it could not be made to be fully functional via an internet connection. Mr. Wilcox testified that dial-up modem technology was not cutting-edge technology and that the dial-up system would freeze the entire gate system when an internet connection was attempted. Mr. Wilcox acknowledged that he was present at Complainant’s residence when Signal installed the system. Mr. Wilcox stated that he did not observe that Signal installed phone lines rather than Cat-5 lines for the new electronic gate entry system installed by Signal. Mr. Wilcox testified that the installation of Cat-5 cable would have been a requisite for the operation of the electronic gate entry system via the internet.[9] 18. Mr. Wilcox’s testimony is found to be credible. 19. Complainant testified that dial-up technology was not current technology and that it was inappropriate for the operation of his electronic gate entry system via an internet connection. Complainant acknowledged that he had replaced the electronic gate entry system installed by Signal prior to the hearing. Complainant stated that he was seeking compensation for his cost of removing and replacing the electronic gate entry system.[10] 20. Signal’s vice-president, Paul Allen Turner (hereinafter “Mr. Turner), testified that Mr. McCoy called him and asked if Signal wanted to submit a proposal to Complainant for the installation of the electronic gate entry system. Mr. Turner testified that he engaged in lengthy contract negotiations with Complainant over a three-month period of time. Mr. Turner stated that he was aware that Complainant’s primary residence was in Chicago and that Complainant required the ability to access the gate opening system remotely. Mr. Turner testified that the electronic gate entry installed by Signal could be accessed by Complainant via a telephone line. Mr. Turner denied telling anyone that the new electronic gate opening system would be installed with Cat-5 cable.[11] 21. Mr. Turner testified that the telephone modem gate opening system installed by Signal was an industry standard system. Mr. Turner stated that Complainant had an elaborate electronic system. Mr. Turner testified that Complainant had a 100% understanding that the new electronic gate opening system would be operating through the telephone line. Mr. Turner stated that he was never given an internetwork point to tie into. Mr. Turner testified that an internetwork capable system was never discussed with Complainant. Mr. Turner denied ever making a representation that the electronic gate entry system installed by Signal would be capable of being operated via the internet. Mr. Turner stated that from “day one” the new electronic gate entry system was represented to be a dial-up modem system.[12] 22. Mr. Turner testified that he routinely was able to access Complainant’s gate entry system through the telephone line. Mr. Turner stated he replaced the electronic circuit board under warranty. Mr. Turner testified that the electronic gate entry system was operating properly. Mr. Turner stated that he believed that the problem was that Mr. McCoy and Audio Video Technologies did not want to use a dial-up modem.[13] 23. Mr. Turner testified that he is a partner in Signal and that dial-up modem technology was the current industry standard for residential electronic gates. Mr. Turner stated the majority of his lengthy discussions with Complainant involved the overall design of the new electronic gate entry system. Mr. Turner acknowledged that Signal’s written proposal for the installation of the electronic gate entry system does not specify that it was to be installed with a telephone modem system.[14] 24. Mr. Turner denied that he had informed Complainant that the new electronic gate entry system could be operated via the internet. Mr. Turner acknowledged that the dial-up modem installed by Signal was not capable of an internet connection. Mr. Turner testified that he never informed Complainant that the new electronic gate entry system installed by Signal would be “cutting-edge” technology. Mr. Turner stated that he thought it was very clear from the onset that remote viewing of the electronic gate log would have to be performed through the dial-up modem utilizing a telephone line.[15] 25. Signal’s Qualifying Party, Kim Lee Kreinbrink (hereinafter “Mr. Kreinbrink”), testified that is the CEO and co-founder of Signal. Mr. Kreinbrink stated that the system installed at Complainant’s residence was the system identified in Signal’s written proposal. Mr. Kreinbrink testified that dial-up modems are the industry standard for residential electronic gate operating systems. Mr. Kreinbrink acknowledged that Signal received an email from Complainant stating that if Signal failed to comply with the Corrective Work Order, Complainant would replace the dial-up system with a system that could be accessed over the internet from Complainant’s computer at Complainant’s Chicago residence.[16] 26. Jason E. Krenke (hereinafter “Mr. Krenke”) testified that he is the southwest regional control manager for Control Products. Mr. Krenke stated that Signal is one of his customers. Mr. Krenke testified that dial-up modem systems were the most common systems sold when Signal installed the dial-up modem system at Complainant’s Tucson residence.[17] 27. Administrative notice is taken of Signal’s prior license record as reflected on the Registrar of Contractors’ public website on March 6, 2012. Such prior license record reflects that License No. C-5.125828-R of Signal is current. License No. C-5.125828-R of Signal was suspended from July 12, 2008, through July 22, 2008 for lack of bond. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. Complainant failed to present any credible evidence of a health or safety issue that would justify replacing the electronic gate entry system installed by Signal prior to the hearing. Complainant may pursue his claim for financial damages in a civil court of competent jurisdiction. Because construction is not a perfect art, generally contractors must be allowed to correct their work before their licenses are disciplined as a result of poor workmanship. Therefore, this Tribunal concludes that Complainant failed to meet his burden to prove that Signal violated the charged provisions of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[18] and A.R.S. § 32-1154(A)(23).[19] 4. The written proposal and contract prepared by Signal did not specify that the new electronic gate operating system was a “dial-up” type of electronic system, did not specify that the gate operating system was not a internetwork capable system, and did not inform the property owner that he had a right to file a written complaint against Signal with the Registrar of Contractors for an alleged violation of A.R.S. § 32-1154(A). This Tribunal concludes that Signal violated the charge provision of A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1158.[20] 5. Signal’s written product information represented that the dial-up electronic gate operating system installed by Signal was “the cutting edge of access technology to residential entry applications” and that “Providers can use a standard web browser to program the unit, thus eliminating the need for special software.” Credible testimony and evidence established that dial-up electronic gate operating system installed by Signal was not cutting-edge technology and that it was not accessible through the internet. This Tribunal concludes that Signal violated the charged provision of A.R.S. § 32-1154(A)(16).[21] RECOMMENDed order In view of the foregoing, it is recommended that, commencing on the effective date of the Registrar’s Order that License No. C-5.125828-R of Signal shall be suspended for a period of seven (7) days. It is further recommended that any lifting the license suspension shall not take place until the Registrar of Contractors receives and accepts written proof that Signal has brought its written contracts into full compliance with the applicable provisions of A.R.S. § 32-1158. It is further recommended that if Signal provides acceptable proof to the Registrar of Contractors that it has brought its written contacts within full compliance with the provisions of A.R.S. § 32-1158, then the above provided License suspension shall lifted at the end of the seven (7) day license suspension.

In the event of certification of this 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 the certification.

Done this day, March 11, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] 2/21/13 Hearing Record (hereinafter “H.R.”) at 23:04-33:40. [2] H.R. at 33:41-38:47. [3] See Exhibit No. R-1 (Proposal and Contract). [4] See Exhibit No. C-1 (Proposal and Contract with Attachments). [5] Audio Video Technologies AVT (ROC License No. C-12.187869-R). [6] H.R. 38:48-43:51. [7] H.R. 43:52-57:45. [8] H.R. at 57:46-1:05:52. [9] H.R. at 1:06:50-1:13:43.. [10] H.R. at 1:14:36-1:19:45. [11] H.R. at 1:20:00-1:24:41. [12] H.R. at 1:24:41-1:27:39. [13] H.R. at 1:27:40-1:31:07. [14] H.R. at 1:31:08-1:35:50. [15] H.R. at 1:35:51-1:54:06. [16] H.R. at 1:54:27-2:07:49. [17] H.R. at 2:08:03-2:10:58. [18] 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.” [19] 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.” [20] 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.” 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 must include the certain minimum terms, including the following:

5. A description of the 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. . . [21] A.R.S. § 32-1154(A)(16) includes among the grounds for suspension, revocation, and other disciplinary action against a contractor’s license, “[f]alse, misleading or deceptive advertising whereby any member of the public may be misled and injured.”

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