ALJDEC decisions subject to certification as final

2015A-3017-ROC-rf · Registrar of Contractors · 2017-01-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Richard W. Turkiewicz and Marcia H. Turkiewicz,

COMPLAINANTS,

-v-

License No. B.224034-R of

3 Star Homes and Remodeling Inc.,

RESPONDENT.

No. 2015A-3017-ROC-rf

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 28, 2016, at 1:00 p.m.

APPEARANCES: 3 Star Homes and Remodeling Inc. (“Respondent”) appeared through Dan Clifford Starwalt, is qualifying party/officer; the Arizona Registrar of Contractors (“the Registrar”) was represented by Thomas Raine, Assistant Attorney General; Richard W. Turkiewicz and Marcia H. Turkiewicz (“Complainants”) appeared through Mr. Turkiewicz.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

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FINDINGS OF FACT

Background: The Underlying Workmanship Complaint

On September 10, 2006, the Arizona Registrar of Contractors (“the Registrar”) issued License No. B.224034-R for residential general contracting to Respondent.

On July 14, 2015, Complainants filed a complaint with the Registrar against Respondent, alleging that they had purchased a solar system from Stealth Solar for their residence at 259 W. Walhalla Ln., Phoenix, Arizona 85027, that the solar panels had stopped working four times after installation, and that the first two times, Stealth Solar had repaired the system, but that the third time they had had to pay additional monies to Stealth Solar to have the system repaired. Complainant testified that the fourth time the system quit working, Stealth Solar had refused to perform any repairs.

The complaint was assigned to the Registrar’s Investigator Steve Klein (“Investigator Klein”) for investigation. Investigator Klein performed a jobsite inspection and on October 16, 2015, sent a letter to Complainant stating that because the Registrar had determined that there were no remaining workmanship issues, the complaint was dismissed.

Complainant subsequently asked to amend the complaint, stating in relevant part as follows:

1 week prior to the meeting with the ROC, Mike Drews came unannounced and repaired the wiring. . . .

We were not able to determine if the system was working properly. Mike Drews stated that the wiring was the problem. He stated he rewired the system due to shorts caused by wind blowing wiring across the roof tile. I asked if the wiring should be secure to prevent this? Mike Drews replied yes. At that time I informed him there is more than a dozen wires laying on the tile. . . .

Investigator Klein performed a second jobsite inspection and issued a Directive, requiring that Respondent perform the following corrective work:

Solar panel connection wires should be secured per 2012 IRC Table E38021.1 General Installation and support requirements or per local building department.

The Registrar subsequently issued a Citation against Respondent’s contractor’s license, charging cause to discipline the licenses under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(22).

The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent state agency, for an evidentiary hearing. A hearing was held on May 5, 2016.

Based on the evidence that was presented, the Administrative Law Judge (“ALJ”) found that Complainants established that the wires on the system needed to be secured and that, therefore, Respondent’s poor work provided cause to revoke or suspend Respondent’s contractor’s licenses under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. With respect to the charged violation of A.R.S. § 32-1154(A)(22), the ALJ concluded as follows:

Complainant insisted on payment of $2,500.00 to remove the panel, however, even though the system was operating properly. Complainant did not establish that this extensive repair was necessary to secure the wires. Because a revoked license does not justify extortion, Complainant did not establish additional cause to discipline Respondent’s licenses under A.R.S. § 32-1154(A)(22).

The Registrar substantially accepted the ALJ’s decision and suspended Respondent’s licenses for three business days. According to the Registrar’s public website, on December 8, 2015, the Registrar revoked Respondent’s License No. B.224034-R because it had allowed the license to be used by an unlicensed contractor, Stealth Solar, without exercising appropriate oversight over Stealth Solar’s operations.

Complainants’ Claim to the Fund

Complainants submitted a claim to the Registrar’s Residential Contractors’ Recovery Fund (“the Fund”) to recover the damages for Respondent’s poor work on their project.

Complainants submitted two bids to repair Respondent’s tile work, including a low bid in the amount of $1,500.00 from PEP Solar for the following scope of work:

The system consist[s] of 220 watt approximately 16 panels from 3.90KW to 4.5KW with a 450 watt sunny boy SMA inverter. . . . The system was originally installed by Stealth Solar who did not properly secure the wires or complete the system within code. Wires are laying on the roof and system has been on and off for one reason or the other. . . . The system was installed two years ago.

With a team of 4-6 people the system modules will be removed and the PV wire reviewed (maybe rerun if there are any issues with the outside sheathing), PEP Solar will make sure the system wires are color coded as required for NEC 690, check for an engineering is within specs, and address all wiring for the system. This does not include removal of solar system points or re-sealing any points on the roof but they will all be inspected.

Complete system wire review and replacement will be completed if needed. Please note SMA invertors usually have fuses that blow regardless of the wiring every few years or so. PEP Solar will replace any fuses for the first year with no change. PEP Solar will provide a 6 month warranty and replace any item under warranty free of any labor as long as the originating MFG sends the product for free. . . .

Complainant also submitted a bid from G & S Electric Inc. for the same scope of work in the amount of $1,829.00.

The Registrar’s Recovery Fund Department prepared an excel spreadsheet and based on the information that Complainants had submitted, calculated their compensable damages to be $1,500.00, based on Pep Solar’s bid and the fact that Complainants had paid Respondent the full contract price and had not received money from any other source for their damages.

On October 11, 2016, the Registrar issued a Notice of Claim for Administrative Payout, informing the parties that “[a]fter a review of the claim and all supporting documentation, the Fund has determined that Complainants are to be awarded $1,500.00 in the form of a payment issued by the Fund.” Respondent timely requested a hearing on the amount of the intended payout.

The Registrar referred Complainants’ claim to the Fund the OAH for an evidentiary hearing on the issue of Complainants’ compensable damages.

A hearing was held on December 28, 2016. Respondent presented Mr. Starwalt’s testimony. The Registrar submitted eight exhibits and presented the testimony of Douglas Ulmer, the Registrar’s Recovery Fund Department’s claims reviewer who was assigned to analyze Complainants’ claim to the Fund. Complainants presented the testimony of Mr. Turkiewicz.

Mr. Ulmer testified that Complainants were eligible to recover from the Fund. Mr. Ulmer testified that although the Fund prefers that injured homeowners obtain three bids, Complainants had been unable to submit a third bid. The Registrar had determined that Complainants should be awarded the amount of the low bid.

Mr. Starwalt testified that all that was needed for the wires to be attached to the solar system with zip ties and that $1,500.00 was excessive. Mr. Starwalt acknowledged that he is not an electrical contractor and does not have any expertise in installing solar systems.

Mr. Turkiewicz acknowledged that the solar system had not shorted out since Mr. Drews had repaired it. Mr. Turkiewicz testified that the contractors from whom Complainants had obtained bids informed him that because the wires had been laying loose on the roof, there was a danger of future shorts unless the wires and connections were evaluated. The contractors would not provide a warranty for their repairs unless they were able to evaluate the wires and connections.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

After the Registrar has determined the amount of the payout from the Fund to which Complainants are entitled, Respondent bears the burden of proof to establish that the Registrar’s calculations were erroneous or not supported by a preponderance of the evidence.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”

The Registrar’s final decision in the underlying workmanship case established that the installation of the system did not comply with the Registrar’s workmanship standards and that Complainants potentially were persons who had been injured by Respondent’s violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. The only issue in the hearing on Complainants’ claim to the Fund is the measure of their damages.

A.R.S. § 32-1132(A) describes the measure of damages that an eligible homeowner is entitled to recover from the Fund in relevant part as follows:

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. . . .

(Emphasis added.)

PEP Solar’s $1,500.00 bid is substantially less than the $2,500.00 bid that Complainants submitted in the underlying workmanship complaint. PEP Solar’s bid described the work that was required for it to provide a warranty for its repairs. Mr. Starwalt acknowledged that he is not competent to perform electrical work on solar systems. Therefore, Respondent did not establish that the Registrar’s evaluation of Complainants’ claim to the Fund was not supported by the evidence or applicable law.

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RECOMMENDED ORDER

In view of the foregoing, it is recommended that on the effective date of the final order in this matter, the Residential Contractors’ Recovery Fund shall pay $1,500.00 to Complainants Richard W. Turkiewicz and Marcia H. Turkiewicz.

It is further recommended that under A.R.S. § 32-1139(B), the Registrar shall charge $1,500.00, plus interest at a rate of ten percent a year, to Respondent 3 Star Homes and Remodeling Inc.’s License No. B.224034-R.

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, January 5, 2017.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors