ALJDEC decisions subject to certification as final

2014A-759-ROC · Registrar of Contractors · 2014-07-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 16, 2014 APPEARANCES: Complainant Registrar of Contractors was represented by Assistant Attorney General Seth T. Hargraves. Troy Rose appeared on behalf of Respondent Bull Electric Inc. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. On April 26, 1999, Bull Electric, Inc. (Bull) applied to the Registrar of Contractors (Registrar) for L-11 and C-11 Contractors Licenses. On the applications, Troy Rose was listed as the President, Qualifying Party, and sole owner of Bull. Those applications were approved and Bull was issued License Numbers L-11.145095-C and C-11.145096-R. Exhibits 1 and 2. 2. On September 16, 2009, Calder Renewable Energy LLC (Calder) applied to the Registrar for a Contractors License. On the application, Mr. Rose was listed as a Member, Qualifying Party, and 25 percent owner of Calder. That application was approved and Calder was issued License Number C-11.259316-R. Exhibit 4. 3. On June 14, 2010, Mr. Rose filed a Notice of Disassociation with the Registrar indicating he had resigned as the Qualifying Party as well as corporate officer/member/partner. Exhibit 4. 4. On February 28, 2011, the Registrar issued a Citation and Complaint to Calder in Case No. 2010-[number redacted]. The Citation and Complaint alleged violations of A.R.S. § 32-1154(A)(1), (2), and (3) with respect to a project at Complainant’s home. Exhibit 6. 5. Following a hearing in that matter, the Administrative Law Judge determined Calder did abandon a contract without legal excuse in violation of A.R.S. § 32-1154(A)(1). The Registrar adopted the Administrative Law Judge’s Recommended Order with modifications to address typographical errors. Exhibit 6. 6. In relevant part, the Administrative Law Judge found as follows: 4. In mid-June 2010, while installation was proceeding, Respondent’s Qualifying Party/electrician walked off the job and quit the company. Work stopped at that point because an electrician was necessary to continue the work. George Calder testified that he found a replacement Qualifying Party/electrician two weeks later, but had to wait for the ROC to approve that person, which took until October 2010. 5. ROC records show that Respondent’s license was suspended for lack of Qualifying Party from August 14, 2010 to October 6, 2010.[1] This means that Respondent’s license was active during July 2010 and the first two weeks of August 2010. Respondent also had an electrician on staff at that time. . . . . 7. There is no evidence that Respondent worked on the project in October 2010 and November 2010, after the license suspension was lifted. Complainant returned to Arizona in late October 2010. 8. Calder testified that he contacted Complainant immediately after the license was reinstated, but there is no corroboration of that statement and it contradicts Complainant’s testimony; therefore, it is not found to be credible. In addition, Calder testified that reinstatement of Respondent’s liability insurance was delayed throughout October 2010 and that he could not work during that time due to lack of insurance. Again, there is no corroborating evidence supporting that statement.[2] Thus, it is not credible.[3] Also, it does not address why work was not performed in November 2010. 9. On November 22, 2010, Complainant sent a letter to Respondent stating that Calder had not responded to voice messages that she left for him on November 3, 15, and 17.[4] She informed Respondent that because Respondent had not returned calls and time was running out on her extension, she was hiring another contractor to do the work. She requested a refund on her payment and asked Respondent to collect materials that had been left on the site. 10. Complainant entered into a new contract for solar equipment with another contractor on November 22, 2010. That contractor installed a solar electrical system in time for the APS rebate. 11. Calder testified that the delay in reinstating Respondent’s license was not caused by him. He testified that he attempted to continue working on the job when he appeared at Complainant’s home on November 17, 2010, but that Complainant would not provide access. Complainant testified that the attempt to complete the job occurred on December 6, 2010, after she had already hired the new contractor. As to the date that this interaction occurred, this tribunal finds Complainant’s testimony to be more credible, as it is consistent with the two letters written by Complainant, dated November 22, 2010, and December 28, 2010,[5] respectively. Those letters were written shortly after the events occurred. The greater weight of the evidence shows that Respondent‘s attempt to complete the contract occurred on December 6, 2010. 12. The evidence supports the reasonableness of Complainant’s hiring of the other contractor. Time was running out for her rebate and Respondent had not communicated with her for some time. Because of Respondent’s lack of communication and lack of performance, Complainant’s decision to hire another contractor was reasonable and not a breach of contract that would provide a legal excuse for Respondent’s failure to perform. Respondent had already abandoned the project. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[6] Further, the standard of proof at hearing is by preponderance of the evidence.[7] 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.[8] Complainant has met that burden. 2. The issue for decision in this matter is whether Respondent has violated (A.R.S.) § 32-1154(A)(1), which prohibits abandonment of a contract without legal excuse.[9] The evidence shows that Respondent abandoned the contract by failing to complete the project in a timely manner, at the latest by November 2010. 3. There is no apparent legal reason that Respondent could not have worked on and completed the project in July 2010 while its license was active and Respondent had an electrician on staff. Furthermore, after October 6, 2010, Respondent’s new Qualifying Party was approved and the suspension lifted. There is no evidence that Respondent attempted to complete the work in October 2010, and no credible evidence that an attempt was made in November 2010. By the time Complainant hired the new contractor in late November 2010, Respondent had abandoned the contract by failing to communicate with Complainant and failing to perform. Indeed, by Calder’s own testimony, installation of the system takes only one to two weeks. Respondent’s failure to get the work done and failure to even contact Complainant in October and November is a substantial lack of performance and constitutes abandonment. 4. The appropriate remedy in this matter is for Respondent to return Complainant’s payment of $14,169.08. If Respondent does not do so, Respondent’s license should be suspended.

Exhibit 6 (emphasis added) (footnotes in original). 7. On March 19, 2012, the Registrar issued a Decision, Order, and Award in Case No. 2010-[number redacted] indicating that the complainant in that case should be issued a payment from the Residential Contractors’ Recovery Fund (Fund) in the amount of $14,169.08 based on the damages sustained as a result of Calder’s acts or omissions. Exhibit 5. 8. On March 10, 2014, the Registrar issued a Notice and Order Imposing § 32-1139(B) Suspension(s) indicating that the date of the act or omission that led to the Fund award was on April 20, 2010, and that on that date, Mr. Rose appeared on the license of Calder on the date of the acts or omissions that led to the Fund payout.[10] As a result, the Registrar indicated it was required to suspend Bull’s licenses pursuant to A.R.S. § 32-1139(B) until the amount paid from the Fund in Case No. 2010-[number redacted] was repaid to the Registrar. Exhibit 3. 9. Mr. Rose testified that the majority owner of Calder had refused to pay him for a project and had told him that he would not be paid for Complainant’s project. Mr. Rose stated that he left the company at the time, but that he had not personally done any work on Complainant’s project. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32- 1122. 2. The Registrar bears the burden of proof by a preponderance of the evidence to establish that cause exists to discipline Respondent’s licenses. See A.R.S. § 41-1092.07(G)(1); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “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. A.R.S. § 32-1139(B) provides as follows: If any amount is paid from the fund in settlement of a claim arising from the act, representation, transaction or conduct of a residential contractor, the license of the contractor shall be automatically suspended by operation of law until the amount paid from the fund is repaid in full, plus interest at the rate of ten per cent a year. Any person who is or was, at the time of the act or omission, named on a license that has been suspended because of a payment from the recovery fund is not eligible to receive a new license or retain another existing license that also shall be suspended by operation of law, nor shall any suspended license be reactivated, until the amount paid from the fund is repaid as provided in this subsection.

4. The Registrar presented an argument that the abandonment of Complainant’s project occurred when Mr. Rose left Calder and that the Notice of Disassociation was not received by the Registrar until June 14, 2010. 5. While Calder last worked on Complainant’s project in “mid-June 2010,” that does not necessitate a finding that Calder abandoned the project at that time. The Administrative Law Judge’s Recommended Order in Case No. 2010-[number redacted] specifically found that Calder could have completed the work on the project in July, August, October, and November 2010, until such time that Complainant signed a contract with a new contractor to complete the project. Exhibit 6. 6. This Administrative Law Judge finds that Calder did not abandon the contract in Case No. 2010-[number redacted] in mid-June 2010, but after its license was reinstated in October 2010 and Calder did nothing to complete Complainant’s project. 7. Because Mr. Rose had filed the Notice of Disassociation with the Registrar on June 14, 2010, and it became effective on that day, Mr. Rose was not named on Calder’s license at the time of the act or omission that led to a payment from the Fund. 8. Therefore, the Registrar did not meet its burden to establish that Bull’s licenses should be suspended. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Notice and Order Imposing § 32-1139(B) Suspension(s) be rescinded. 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, July 3, 2014.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Based on these dates, it is determined that the ROC was informed that Respondent lost its Qualifying Party on June 14, 2010. This determination is based on A.R.S. § 32-1167(B), which states that a license is automatically suspended 60 days after a Qualifying Party disassociates from the license. [2] No supporting documentation was submitted. [3] Even assuming the credibility of the statement, Calder testified that he “put [the insurance] on hold” when the license was suspended. This was not required and Calder must take responsibility for any subsequent delay in reinstating the insurance. [4] This letter is in the complaint file. [5] Exhibit C17/R5. [6] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [7] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [8] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [9] Allegations of violation of A.R.S. § 32-1154(A)(2) (failure to follow plans, specifications, or building codes) and (A)(3) by way of A.A.C. Rule R4-9-108 (failure to meet workmanship standards) are also made in the Citation and Complaint. However, Complainant’s presentation focused on the abandonment allegation and not any other. [10] At the hearing, the Registrar’s witness testified that the April 20, 2010, date was in error and the actual date of the act or omission was mid- June 2010.

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