ALJDEC decisions subject to certification as final

2015A-1666-ROC · Registrar of Contractors · 2015-07-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 8, 2015 APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General Seth T. Hargraves. Elijah Lee, Respondent’s Director of Operations, appeared on behalf of Respondent Standard Eco. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT The Arizona Registrar of Contractors (“the Registrar”) issued License No. R- 39.290548-R to Standard Eco (“Respondent”). On December 9, 2014, the Registrar received a Complaint against Respondent from Sylvia A Sprague regarding issues with a new air conditioner and furnace that was installed by Respondent at 4580 East Karsten Drive, Chandler, Arizona. After the Registrar assigned the Complaint to its investigator, Steven Nelsen, for investigation, he performed a jobsite inspection. On December 31, 2014, Investigator Nelsen issued a Directive from the Registrar in which Respondent was instructed to address 24 items in the Complaint. On January 8, 2015, Investigator Nelsen issued an Addendum to the Directive from the Registrar indicating that after further investigation, the Registrar determined that Respondent had installed a different model furnace that the model required by the contract and that the installed furnace did not correctly match the condensing unit and evaporator coil that were installed. Respondent was instructed to install correct matching units and provide the AHRI certificate to the homeowner. Following a Compliance Jobsite Inspection, Investigator Nelsen determined Respondent had failed to fully comply with the Directives from the Registrar. On April 20, 2015, the Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9- 108, A.R.S. § 32-1154(A)(12); A.R.S. § 32-1154(A)(15); and A.R.S. § 32- 1154(A)(22). Respondent filed a timely written answer to the Citation and Complaint, denying any violations. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on July 8, 2015. The Registrar presented the testimony of Darrah Dombrowski, Investigator Nelsen, and Ms. Sprague and submitted 12 exhibits. Respondent presented the testimony of Jesse Jackson, President of Respondent. Hearing Evidence In November 2014, Respondent entered into a contract with Ms. Sprague for the installation of a new air conditioner and furnace. According to the contract, Respondent was to install two EL180UH070E36B, or 70,000 BTU, furnace units. The contract was written on a blank form and did not include Respondent’s business address, the estimated date of completion, or a statement that the property owner has the right to file a written complaint with the Registrar for alleged violations of A.R.S. § 32-1154(A). The business cards Elijah Lee and Jesse Jackson provided to Ms. Sprague both indicated Respondent held Residential and Commercial licenses issued by the Registrar. Following the original Jobsite Inspection, Investigator Nelsen contacted Lennox and requested additional information regarding the furnace unit, condensing unit, and evaporator coil that were installed. Respondent installed a 90,000 BTU unit, which was not what the contract called for and did not correctly match the condensing unit and evaporator coil. Investigator Nelsen testified that at the Compliance Jobsite Inspection, he observed numerous issues that either were not addressed or attempts to repair the issue were not successful. Notably, the incorrect furnace unit had not been replaced with the correct unit. Respondent did not dispute Investigator Nelsen’s observations. Respondent argued it attempted to comply with the Directives from the Registrar, but was prevented from doing so because Ms. Sprague would not allow certain employees perform the work. Ms. Sprague allowed Bill Patterson, Respondent’s Qualifying Party, to be on the site to perform some corrective work, but Ms. Sprague did not respond to requests from Mr. Jackson to perform a last visit to finalize the job. Mr. Jackson testified that Mr. Patterson believed most of the work had been done except switching the 90,000 BTU furnace unit with the 70,000 BTU furnace unit. Mr. Jackson specifically addressed the issue of the incorrect furnace that was installed. According to Mr. Jackson, Lennox provided the incorrect unit and Respondent relied on Lennox having provided a set of equipment that was properly matched. Mr. Jackson acknowledged that when the incorrect unit was delivered, he did not think to mention the issue to Ms. Sprague and did not discuss the change with her or get a change order authorizing the change. After receiving the Directives from the Registrar, Mr. Jackson contacted Ms. Sprague and offered to replace the 90,000 BTU furnace unit with the 70,000 BTU furnace unit called for in the contract or to install a kit that would make the 90,000 BTU unit function as a 70,000 BTU unit. Mr. Jackson had an ongoing email discussion with Ms. Sprague in which he attempted to explain the different options, to get Ms. Sprague’s decision as to which option she wished to pursue, and to arrange a time to proceed with whichever option she selected. At no time did Ms. Sprague indicate which option she wished to pursue or agree to a time for a last visit to finalize the job. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32- 1101 et seq. 2. The Registrar bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A); and A.A.C. R2-19-119(B)(1); 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. The undisputed credible testimony established that the issues found by Investigator Nelsen constituted workmanship issues with the installation. Therefore, the Registrar established that Respondent did not complete perform the work in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9- 108.[1] 4. The undisputed credible testimony established that Respondent attempted to comply with the Directives from the Registrar, but that all of the work was not completed and/or was not completed properly. However, Ms. Sprague limited Respondent’s access to the jobsite and did not communicate her selected option as to the furnace to Respondent. A contractor must be afforded access and an opportunity to perform corrective work to comply with a Directive from the Registrar before the Registrar disciplines the contractor’s license for a violation of A.R.S. § 32-1154(A)(22).[2] Because Ms. Sprague limited Respondent’s access to the jobsite when she only allowed Mr. Patterson to perform corrective work and did not allow any other employees of Respondent to inspect the jobsite or finalize the job, the Registrar failed to establish that Respondent violated A.R.S. § 32- 1154(A)(22). 5. The undisputed evidence established that Respondent’s contract did not include their business address, the estimated date of completion, or a statement that the property owner has the right to file a written complaint with the Registrar for alleged violations of A.R.S. § 32- 1154(A). Therefore, the Registrar established that Respondent violated A.R.S. § 32-1154(A)(12),[3] namely A.R.S. § 32-1158(B).[4] It is noted that Respondent has since amended its form contract to include the elements of a contract required by the statute. 6. The undisputed evidence established that Mr. Lee’s and Mr. Jackson’s business cards indicated Respondent held Residential and Commercial licenses issued by the Registrar when Respondent held only a Residential license. Therefore, the Registrar established that Respondent violated A.R.S. § 32-1154(A)(15).[5] It is noted that Respondent has since amended its business cards to reflect it holds only a Residential license. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent Standard Eco’s License No. R-39.290548-R for a period of seven days. 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 28, 2015.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] 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.” [2] A.R.S. § 32-1154(A)(22) 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.” Emphasis added. [3] A.R.S. § 32-1154(A)(22) 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.” [4] A.R.S. § 32-1158(B) sets forth the required elements of the contract as follows:

From and after December 31, 2007, 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 shall contain in writing at least the following information: 1. The name of the contractor and the contractor's business address and license number. . . . . 4. The estimated date of completion of all 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 at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12-1365.

[5] A.R.S. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or 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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