ALJDEC decisions subject to certification as final

2013A-150-ROC-rf · Registrar of Contractors · 2015-10-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 24, 2015, and September 21, 2015. APPEARANCES: On July 24, 2015, Complainant Shu-Fen Wung was represented by Gerald F. Giordano, Esq. On September 21, 2015, Complainant Shu-Fen Wung appeared on her own behalf. Respondent Salt River Solar & Wind LLC did not appear. The Arizona Registrar of Contractors was represented by Seth T. Hargraves, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

FINDINGS OF FACT The Registrar of Contractors (hereinafter “Registrar”) issued License No. CR11.254115-D to Salt River Solar & Wind (hereinafter “Salt River”). Salt River’s License No. 254115 was revoked by the Registrar on January 16, 2013.[1] On or about January 12, 2015, the Registrar issued a Notice and Order of Denial of Recovery Fund Claim in Case No. 2013-150.[2] Complainant filed a timely request for hearing on the Registrar’s Notice and Order of Denial of Recovery Fund Claim, the Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. The Registrar issued Notice of Recovery Fund Eligibility/Payout Hearing, setting an evidentiary hearing in the OAH. The Registrar sent a copy of the notice of hearing to Salt River at its address of record. A hearing was held on July 24, 2015, and September 21, 2015. James L. Barbour (hereinafter “Mr. Barbour”) testified on behalf of the Registrar. Complainant Shu-Fen Wung (hereinafter “Ms. Wung” or “Complainant”) testified on her own behalf. Salt River did not request to appear telephonically at the hearing and did not request that the hearing be continued. Salt River did not appear, through an attorney or other authorized representative. On or about March 23, 2011, Complainant entered into to a contract with Salt River for the installation of solar panels on Ms. Wung’s residence at 5371 N. Buckhorn Drive, Tucson, Arizona 85750-9636. Complainant indicated that she paid Salt River $5,980.00 for the installation of the solar panels. On or about January 10, 2013, Complainant filed a complaint with the Registrar against Salt River alleging poor workmanship and abandonment. On August 20, 2013, the Registrar issued a Citation and Complaint against Salt River.[3] On November 8, 2013, the Registrar issued a Default Decision and Order revoking Salt River’s license as a result of its failure to file a written answer to the Citation and Complaint that was issued for Complainant’s complaint. On or about April 14, 2014, Complainant filed a claim with the Residential Contractors’ Recovery Fund (hereinafter “the Fund”) alleging damages of $14,395.00 to correct damages to her roof allegedly caused by Salt River’s solar panel installation at her residence. After review, Investigator Frank Grochocki determined that a jobsite inspection was necessary to determine Complainant’s actual damages. On July 9, 2014, Investigator Grochocki conducted jobsite inspection. Following the jobsite inspection, the Registrar issued a Document Request Letter.[4] The Document Request Letter provided, in relevant part, as follows: A jobsite inspection conducted on or about July 9, 2014 by Investigator Grochocki found that the roof at the rear of your home contains 23 solar panels on brackets and legs through cuts made in the roof tile. Mr. Grochocki observed that no flashing was at base of the legs on top of the tile, and states that such method is common in many tile roof installations, assuming a completely sealed roof underneath. Additionally, Mr. Grochocki stated that the only way to view the condition of the roof would be to remove 11 panels and mounting bars and the section(s) of tile around the solar panels. This would be an area approx. 30’ X 30’ (9 squares of roof tile) that would need to be removed on the left side, lower slope of the roof at the rear of your residence. This is the section of the roof that the patio is attached to in which you stated the patio ceiling is water damaged. At that point the roof could be viewed for proper sealing, with possibility of legs and bases needing to be removed and re-sealed. Unfortunately, the Registrar of Contractors does not practice such inspections that require removal of the constructed structure(s).

Currently, you have failed to submit any evidence to the Recovery Fund that establishes that your roof actually leaks due to poor workmanship of the Respondent. As section 32-1131 et seq. sets forth it is the applicant’s burden to prove that “actual damages” exist that may be compensable from the Recovery Fund….

In response to the Document Request Letter Complainant filed a letter and attached report from M & S Roofing Consultant.[5] The letter provided, in relevant part, as follows: In response to your document request letter on Oct. 6, 2014, I have located a consultant to provide such information requested by you. Attached please find the report on inspection performed by the M & S Roofing Consultant on October 17, 2014. By providing this information, I believe I have met all the eligibility requirements for the Recovery Fund specified in your letter….

After reviewing Complainant’s claim and the supporting documentation, the Registrar issued a Notice and Order of Denial of Recovery Fund Claim.[6] Testimony Ms. Fung testified that Salt River ruined her roof by installing solar panels on her roof without properly flashing penetrations in her roof. Ms. Fung said that the City of Tucson now requires such penetrations to be “double flashed.” Ms. Fung acknowledged that the City of Tucson did not require double flashing when Salt River installed solar panels on her roof.

Ms. Fung testified that her roof did not leak until Salt River installed solar panels on her roof. Ms. Fung acknowledged that Salt River did not install any solar panels on the patio roof that is leaking. Ms. Fung asserted that the water intrusion on the patio roof was caused by the Respondent’s work on the main roof of her residence. Ms. Fung acknowledged that there was no interior damage under the solar panels installed on the main roof of her residence. Ms. Fung acknowledged that she had no evidence that the single flashing performed by Salt River failed to comply with the code requirements that applied when Salt River installed the solar panels on her roof. Mr. Barbour testified that he is a Claims Adjuster/Claims Reviewer for the Registrar. Mr. Barbour acknowledged that Ms. Fung would be eligible for a payout from the Fund if she were able to provide sufficient proof of any actual damages. Mr. Barbour testified that he had reviewed the entire file in this matter, including the report prepared by M & S Roofing Consultant. Mr. Barbour stated that Complainant failed to provide any proof that the installation of solar panels on her main roof caused any water intrusion in her patio roof. Mr. Barbour said that applicable code did not require double flashing when Respondent installed the solar panels on Complainant’s roof. Mr. Barbour said that Complainant failed to provide the Registrar with proof that there is a causal relationship between the work performed by the Salt River and the leaks in Complainant’s patio roof. Mr. Barbour said that Complainant failed to provide any evidence to support her position that the installation of solar panels on her residence by Salt River was the cause of water intrusion at her back patio. Mr. Barbour’s testimony is found to be credible. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[7] 2. The Notice of Hearing mailed to Respondent at its address of record was reasonable. Respondent is deemed to have received notice of Recovery Fund Eligibility/Payout Hearing.[8] 3. Complainant bears the burden of proof to establish her eligibility to recover a payout from the Fund by a preponderance of the evidence.[9] Mr. Barbour acknowledged that Complainant would be eligible for a payout from the Contractors’ Recovery Fund if she were able to provide proof of any actual damages. 4. Complainant bears the burden of proof, by a preponderance of the evidence, to establish her actual damages caused by Respondent’s installation of solar panels on her roof.[10] 5. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[11] 6. The preponderance of the evidence presented failed to establish a causal connection between Respondent’s work in installing solar panels on Complainant’s main roof and the water intrusion that Complainant is experiencing in her patio roof. Complainant failed to prove, by a preponderance of the evidence, that she has suffered any actual damages as a result of Respondent’s work on her roof. Pursuant to A.R.S. § 32-1132(A), an award from the Contractors Recovery Fund is limited to the actual damages suffered by the claimant as a direct result of the contractor’s violation.[12] RECOMMENDED ORDER Based on the foregoing, it is recommended that Complainant Shu-Fen Wung’s claim to the Residential Contractors’ Recovery Fund shall be denied because Complainant failed to establish, by a preponderance of the evidence, that she had suffered any actual damages 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 five days from the date of that certification. Done this day, October 8, 2015. /s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] See Exhibit 3 (Notice of License Revocation). [2] See Exhibit 1 (Notice and Order of Denial of Recovery Fund Claim). [3] See Exhibit 5 (Citation and Complaint 2013-1988). [4] See Exhibit 12 (Document Request Letter). [5] See Exhibit D (11/1/14 Letter). [6] See Exhibit 1 (Notice and Order of Denial of Recovery Fund Claim). [7] See A.R.S. §§ 32-1101 to 32-1169. [8] See A.R.S. § 32-1154(G) which provides as follows:

Notwithstanding any other provisions in this chapter, if a contractor's license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter, the registrar may order payment from the residential contractors' recovery fund to remedy the violation. The registrar shall serve the contractor with a notice setting forth the amount claimed or to be awarded. If the contractor contests the amount or propriety of the payment, the contractor shall respond within ten days of the date of service by requesting a hearing to determine the amount or propriety of the payment. Failure by the contractor to respond in writing within ten days of the date of service shall be deemed a waiver by the contractor of the right to contest the amount claimed or to be awarded. Service may be made by personal service to the contractor or by mailing a copy of the notice by registered mail with postage prepaid to the contractor's latest address of record on file in the registrar's office. If service is made by registered mail, it is effective five days after the notice is mailed. Except as provided in section 41-1092.08, subsection H, the contractor or injured person may seek judicial review of the registrar's final award pursuant to title 12, chapter 7, article 6. An applicant to the residential contractors' recovery fund pursuant to this subsection must show that the applicant has proceeded against any existing bond covering the residential contractor and has not collected on the bond in an amount of thirty thousand dollars or more.

[9] 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). [10] See A.R.S. § 32-1132(A). [11] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [12] A.R.S. § 32-1132 provides, in relevant part, as follows:

A. The residential contractors' recovery fund is established, to be administered by the registrar, from which any person injured by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter may be awarded in the county where the violation occurred an amount of not more than thirty thousand dollars for damages sustained by the act, representation, transaction or conduct. An award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. Actual damages shall not be established by bids supplied by or the value of work performed by a person or entity that is not licensed pursuant to this chapter and that is required to be licensed pursuant to this chapter. . . .

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826