ALJDEC decisions subject to certification as final

2013A-5566-ROC · Registrar of Contractors · 2014-04-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 21, 2014 APPEARANCES: The Registrar of Contractors was represented by Assistant Attorney General John Tellier. Perfection Handyman Services, L.L.C. was represented by Cindy Gross. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ FINDINGS OF FACT 1. The Arizona Registrar of Contractors (“Registrar”) is the authority for licensing and regulating contractors in the State of Arizona. 2. Perfection Handyman Services, L.L.C. (“Respondent”) is the holder of license nos. C-61.224367-R, a residential limited remodeling and repair contracting license, and L-61.249376-C, a commercial carpentry, remodeling, and repairs contracting license, issued by the Registrar. 3. On or about March 6, 2013, Forest A. Rose III (“Mr. Rose”) filed a written Complaint with the Registrar alleging violations by Respondent on a residential contracting project at Mr. Rose’s residence located at 10222 N. Central Avenue, Phoenix, Arizona. The Registrar designated Mr. Rose’s Complaint as Case No. 2013-5566. 4. On or about January 14, 2014, the Registrar issued a Citation and Notice of Hearing in Case No. 2013-5566 charging both of Respondent’s licenses with the following violations: (i) A.R.S. § 32-1154(A)(2); (ii) A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108; (iii) A.R.S. § 32- 1154(A)(13), namely A.R.S. § 32-1158(B); (iv) A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1124(B); (v) A.R.S. § 32-1154(A)(16); (vi) A.R.S. § 32-1154(A)(23); and (vii) A.R.S. § 32-1154(A)(21). The Registrar forwarded the matter to the Office of Administrative Hearings for an evidentiary hearing. 5. At the hearing, the Registrar presented its case through the testimonies of Jose Gill, Esq. (“Mr. Gill”), an attorney in the Registrar’s Legal Department, and Mr. Rose, and six exhibits consisting of the following: (i) The Citation and Notice of Hearing in Case No. 2013-5566; (ii) Respondent’s Application for Contracting Licensure for its residential C-61.224367-R license; (iii) Respondent’s Application for Contracting Licensure for its commercial L-61.249376-C license; (iv) Mr. Rose’s Complaint filed with the Registrar with attachments; (v) A Corrective Work Order dated April 17, 2013 issued by the Registrar’s assigned investigator, Mark Alyea (“Investigator Alyea”); and (vi) Respondent’s website advertisement. 6. Respondent presented its case through the testimonies of its authorized representative, Cindy Gross (“Ms. Gross”), and Jason Marsh (“Mr. Marsh”), Respondent’s employee involved with the subject project. 7. On or about August 14, 2012, Respondent submitted a written Estimate containing two bids: (i) A proposal for installing a 3-ton heat pump package air conditioning unit; and (ii) A proposal for installing a 4- ton split heat pump in Respondent’s garage. The total contract price for both scopes of work was $3,299.83, including tax. Mr. Rose accepted the Estimate for both scopes of work. 8. Respondent’s written Estimate constituting the written contract between the parties listed Respondent’s residential and commercial contracting license numbers preceded by the acronym “ROC.” 9. Respondent’s written Estimate constituting the parties’ contract did not contain a completion date for the project or a statement explaining Mr. Rose’s right to file a written complaint with the Registrar for any violations by Respondent of A.R.S. § 32-1154(A). 10. Respondent’s written Estimate constituting the parties’ contract contained the following language: “Owner to provide permits, utilities, and all materials in relation to this job.” 11. Respondent last performed work on the project approximately November 15, 2012. 12. Mr. Rose’s Complaint filed with the Registrar lists the following Complaint items attributable to Respondent’s workmanship on the subject project: 1) Electrical circuits were not added or completed to main panel 2) The conduit installed is undersized for code 3) Electrical circuits (115V – 30A) were not installed to 2 columns 4) Electrical circuits (230V – 30A) were not installed to 2 columns 5) Power to air handler was not installed 6) Plumbing to air handler to heat pump not complete 7) Heat pump not mounted properly 8) Power to heat pump not complete 9) Incorrect/wrong registers installed in main duct 10) No operating air conditioning is functioning in my garage

13. In response to Mr. Rose’s Complaint, the Registrar’s assigned investigator, Mark Alyea, performed a jobsite inspection at Mr. Rose’s residence to view the Complaint items. As a result of that inspection, Investigator Alyea issued a Corrective Work Order dated April 17, 2013, wherein he explained his findings as follows: Contractor to correct by appropriate means the following. 1. The contractor needs to pull a permit for the work that he contracted with the complainant. 2. The new wiring that the contractor installed in the garage is not connected to the main electrical panel. 3. When the permit is in place, the city will inspect the electrical conduit, that was installed in the garage by the contractor if it was sized right for the wire that was installed. 4. The contractor did not install electrical at the two columns in the garage. 5. The HVAC unit is not working for the garage. 6. There was not any condensation line installed for the air handler in the garage.

No action required of the contractor, the air registers for the duct work were installed.

13. The Corrective Work Order required Respondent to complete the remedial work within 15 days from the date of the letter. 14. At the hearing, Mr. Gill testified that he prepared the Citation and Notice of Hearing against Respondent. 15. Mr. Gill testified that Respondent’s website did not contain Respondent’s residential and commercial license numbers proceeded by the acronym “ROC,” in violation of A.R.S. § 32-1124(B). 16. Mr. Gill noted that Respondent’s website contains the following claim: “ONE CALL DOES IT ALL! NO JOB TOO BIG OR TOO SMALL. . .[w]e handle everything from prep to clean up.”[1] (Emphasis in the original). However, Mr. Gill stated that Respondent’s Class C-61 remodeling license is restricted to projects under $25,000.00. Therefore, Respondent’s claim that it does it all and that no job is too big is a false claim. 17. Mr. Gill testified that Respondent’s contract with Mr. Rose did not contain Mr. Rose’s rights to filed a complaint with the Registrar of any deficient workmanship by Respondent, as required by A.R.S. § 32- 1158(B)(9). 18. Mr. Gill testified that Complaint item number 6 concerning the condenser lines have not been installed as required by the Corrective Work Order. 19. Mr. Rose testified that after he filed his Complaint with the Registrar, Respondent did perform additional work on the project. However, he said that the air conditioning units have not been powered up. 20. Mr. Rose admitted that he did not obtain the required building permit prior to Respondent performing work on the project. Mr. Rose claimed that although the parties’ contract states that Mr. Rose was responsible for obtaining the permit, he did not know a building permit was required until the Registrar informed him. Mr. Rose stated that an electrical permit has been obtained for the project but not a permit for the air conditioning. 21. Mr. Rose went through the Corrective Work Order and gave the following status as to the Complaint items: (i) Item number 1 not done; (ii) Mr. Rose did not know if Item number 2 has been completed; (iii) Mr. Rose did not know if Item number 3 has been completed; (iv) Mr. Rose stated that Item number 4 has been completed; (v) Mr. Rose stated that Item number 5 is not working; and (vi) Mr. Rose testified that Item number had not been completed. 22. Ms. Gross testified that Respondent gave Mr. Rose credits for previous work on his equipment performed prior to the subject project. 23. Ms. Gross further testified that Respondent completed the new work on the air conditioner for Mr. Rose’s residence. 24. Ms. Gross explained that Respondent ran the electrical from a four-ton split air conditioning unit on top of Mr. Rose’s garage to the main panel. However, Respondent’s workers noticed that there was not enough room at the main panel for any additional electrical. At that point, Ms. Gross contacted another air conditioning contractor to look at the work Respondent had performed to determine if there was any problem with Respondent’s installation. The second air conditioning contractor inspected Respondent’s installation and also determined that there was not enough room in the main panel for the electrical connection. The air conditioning unit on the garage room was intended to service a new kitchen, a new office, and a new bathroom constructed in the garage. 25. At this point in time, Mr. Rose had submitted his Complaint to the Registrar. 26. Ms. Gross was present for the Registrar’s jobsite inspection. Ms. Gross acknowledged to Investigator Alyea that Respondent had performed the work without a permit, but that contractually it had been Mr. Rose’s responsibility to obtain the required permit. Mr. Rose stated that he would not pull the permit. Ms. Gross then decided that she would personally go to the city to obtain the permit for the air condition unit. The city would not issue Ms. Gross a permit for the air conditioning work because Mr. Rose’s garage had a new kitchen, bathroom, and office that had been constructed without being properly permitted. The city officials informed Ms. Gross that there would be an investigation. However, months later Ms. Gross still did not know the results of the city’s investigation. 27. Ms. Gross contacted Respondent’s electrician to inspect the electrical work for the garage air conditioning. The electrician pulled an electrical permit before the city had become aware of the unpermitted work in the garage. The electrician performed additional electrical work necessary to connect the garage’s air conditioning unit into the main panel. Mr. Rose paid for the electrical permit and one-half of the cost for the electrician to perform the additional electrical work. The electrician then informed Ms. Gross that Respondent needed to connect the conduit lines to the electrical main panel to power the garage’s air conditioning unit. However, Ms. Gross testified that the city inspection of her electrician’s electrical work is on hold because of Mr. Rose’s other unpermitted work on the project. 28. Ms. Gross testified that all she wanted was Mr. Rose to pay Respondent in full and to finish the connection of the air conditioner once Respondent can obtain the necessary building permit. 29. Mr. Marsh was Respondent’s technician who installed the air conditioning work on the project of Mr. Rose’s garage. 30. Mr. Marsh testified that Mr. Rose purchased the air conditioning unit but not the ductwork. After Respondent’s staff spent approximately 4 hours performing the ductwork, Mr. Rose then stated that he wanted to change the ductwork. Mr. Marsh stated that Mr. Rose agreed to pay for the additional ductwork but nothing more. 31. Mr. Marsh also testified that Respondent purchased the additional electrical materials for the project. 32. Administrative notice is taken of Respondent’s prior license record for license no. C-61.224367-R as reflected on the Registrar’s public website on April 7, 2014. Such prior license record reflects that Todd Goodman Morris (“Mr. Morris”) is Respondent’s qualifying party and member. There is only one open Complaint against that license and no disciplined, resolved/settled/withdrawn, denied access, or bankruptcy closed case is listed. 33. Administrative notice is also taken of Respondent’s prior license record for license no. L-61.249376-C as reflected on the Registrar’s public website on April 7, 2014. Such prior license record reflects that Mr. Morris is Respondent’s qualifying party and member. There are no complaints reflected against that license. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Respondent and the subject matter in this case.[2] 2. Pursuant to the provisions of A.R.S. § 41-1092.07(G)(2) and A.A.C. R2- 19-119(B), the Registrar 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). Residential License No. C-61.224367-R 3. The evidence of record established that Respondent’s residential license no. C-61.224367-R violated the provisions of A.R.S. § 32- 1154(A)(2) in this matter as charged by the Registrar in the Citation and Notice of Hearing. It is undisputed that Respondent performed work on the subject project without a proper building permit having been pulled. Although Mr. Rose had the contractual obligation to obtain the necessary building permit but had not pulled the required permit, Respondent proceeded to perform work on the subject project in disregard of the applicable building code requirements. 4. The evidence of record established that Respondent’s residential license no. C-61.224367-R violated the provisions of A.R.S. § 32- 1154(A)(13), namely A.R.S. § 32-1158(B), as charged by the Registrar in the Citation and Notice of Hearing. The parties’ contract failed to contain the required provisions concerning the completion date of the project and that Mr. Rose had the right to file a written complaint against Respondent with the Registrar for any alleged violations of A.R.S. § 32-1154(A). 5. The evidence of record established that Respondent’s residential license no. C-61.224367-R violated the provisions of A.R.S. § 32- 1154(A)(13), namely A.R.S. § 32-1124(B), as charged by the Registrar in the Citation and Notice of Hearing. Respondent failed to list its residential license number preceded by the acronym “ROC” as required by the statute. 6. The evidence of record established that Respondent’s residential license no. C-61.224367-R violated the provisions of A.R.S. § 32- 1154(A)(16), as charged by the Registrar in the Citation and Notice of Hearing. Respondent’s Class C-61 limited remodeling and contracting license permits Respondent to perform “[r]emodeling or repairs to existing structures or appurtenances, excluding swimming pools or spas, not to exceed $25,000.00.” Therefore, Respondent’s website claiming that “NO JOB TOO BIG OR TOO SMALL! . . .[w]e handle everything from prep to clean up” are false and misleading statements which could mislead the public into believing that Respondent could perform residential work in excess of $25,000.00. 7. The evidence of record established that Respondent’s residential license no. C-61.224367-R violated the provisions of A.R.S. § 32- 1154(A)(23), as charged by the Registrar in the Citation and Notice of Hearing. Respondent failed to comply with the Registrar’s Corrective Work Order by not completing the installation of the condensation line. 8. The evidence of record established that Respondent’s residential license no. C-61.224367-R violated the provisions of A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108, as charged by the Registrar in the Citation and Notice of Hearing. Respondent failed to perform its scope of work in a professional and workmanlike manner by commencing its scope of work without a required building permit being acquired. 9. Pursuant to A.R.S. § 32-1154(B), the Registrar may impose suspension or revocation of Respondent’s residential license no. C-61.224367-R for the above violations. Commercial License No. L-61.249376-C 10. The evidence of record established that Respondent’s commercial license no. L-61.249376-C did not violate the provisions of A.R.S. § 32-1154(A)(2) in this matter as charged by the Registrar in the Citation and Notice of Hearing. The subject project was a residential project and did not involve Respondent’s commercial license. 11. The evidence of record established that Respondent’s commercial license no. L-61.249376-C did not violate the provisions of A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1158(B), as charged by the Registrar in the Citation and Notice of Hearing. The contract between Mr. Rose and Respondent on the subject residential project did not involve Respondent’s commercial license. 12. The evidence of record established that Respondent’s commercial license no. L-61.249376-C violated the provisions of A.R.S. § 32- 1154(A)(16), as charged by the Registrar in the Citation and Notice of Hearing. Respondent’s Class L-61 carpentry, remodeling, and repairs license permits Respondent to perform “[a]ll rough and finish general carpentry work on new and existing structures, including installation of related hardware and accessories, without dollar limitation”[3] on commercial projects. However, Respondent’s Class L-61 commercial license is limited as follows: “A single contract for remodeling, repair, or a combination of both, shall not exceed $50,000.”[4] Therefore, Respondent’s website claiming that “NO JOB TOO BIG OR TOO SMALL! . . .[w]e handle everything from prep to clean up” are false and misleading statements which could mislead the public into believing that Respondent’s commercial license could enter into a single contract for remodeling, repair, or a combination of both, in excess of $50,000.00. 13. The evidence of record established that Respondent’s commercial license did not violate the provisions of A.R.S. § 32-1154(A)(23), as charged by the Registrar in the Citation and Notice of Hearing. The Registrar’s Corrective Work Order was issued to Respondent’s residential Class C-61 contracting license for deficient workmanship on the subject residential project. Therefore, Respondent’s commercial Class L-61 license did not violate the Corrective Work Order. 14. The evidence of record established that Respondent’s commercial license did not violate the provisions of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, as charged by the Registrar in the Citation and Notice of Hearing. Respondent performed its work on the subject residential project under its Class C-61 residential license not its Class L-61 commercial license. Therefore, Respondent’s Class L-61 commercial license did not commit the charged violation. 15. A.R.S. § 32-1154(A)(21) provides grounds for suspension or revocation of a contractor’s license for “[h]aving a person named on the license who is or was named on any other license in this state or in another state that is under suspension for any act or omission that occurs while the person is or was named on the license unless the prior revocation was based solely on a violation of this paragraph.” The Registrar stated in the Citation and Notice of Hearing, “Should the Registrar suspend or revoke any of Respondent’s licenses, such conduct and circumstances constitutes a violation of this section and all of Respondent’s other licenses shall also be disciplined.” Therefore, if the Registrar determines, as a result of this case, that a suspension or revocation of Respondent’s residential Class C-61 license is warranted in this matter, then it must also suspend or revoke Respondent’s commercial Class L-61 license. RECOMMENDED ORDERS It is recommended that Respondent’s residential license no. C- 61.224367-R and commercial license no. L-61.249376-C be suspended for seven days commencing on the effective date of the Order entered in Case No. 2013- 5566. It is further recommended that immediately following the said seven- day suspension of Respondent’s contracting licenses, Respondent’s residential license no. C-61.224367-R and commercial license no. L61.249376- C be indefinitely suspended until Respondent provides that Registrar with written proof that Respondent has become fully compliant with the requirements of A.R.S. § 32-1154(13), namely A.R.S. § 32-1158(B), A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1124(B), and A.R.S. § 32-1154(A)(16), and the Registrar approves proof of such compliance. It is further recommended, in addition to the above-provided penalties, that Respondent pay the sum of $500.00 in certified funds to the Registrar by way of a civil penalty pursuant to A.R.S. § 32-1154(D). The failure by Respondent to pay the entire amount of the aforesaid civil penalty on or before 30 days following the effective date of the Order entered in Case No. 2013-5566 shall result in the automatic revocation of Respondent’s contracting licenses, effective on such 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 tendered.

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 shall be 40 days from the date of the certification.

Done this day, April 9, 2014.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See Exhibit 6. [2] A.R.S. § 32-1154(A). [3] Arizona Registrar of Contractors, Rules June 2009 at 12. [4] Id. at 13.

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