ALJDEC decisions subject to certification as final

2015A-4873-ROC · Registrar of Contractors · 2016-02-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 11, 2016, at 10:00 a.m. APPEARANCES: BDB Engineering LLC (“Complainant”) appeared through Todd Budzik (“Mr. Budzik”), its President; Ventura Pacific Development Inc. (“Respondent”) was represented by Everett S. Butler, Esq., The Butler Law Firm. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On or about October 27, 2009, the Arizona Registrar of Contractors (“the Registrar”) issued License No. KB-1.259314-D to Respondent. Mr. Budzik is a registered professional engineer (mechanical) who is licensed by the Arizona State Board of Technical Registration and performs professional services through Complainant. On or about November 23, 2015, Complainant filed a complaint with the Registrar alleging that Respondent owed Complainant $930.00 for professional services that Complainant had rendered on a commercial project located at 18610 N. Scottsdale Rd., Suites and 16, in Scottsdale, Arizona 85254 (“the project”).[1] Complainant subsequently requested a hearing on its complaint against Respondent. On or about December 10, 2015, the Registrar issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) against Respondent.[2] Respondent’s attorney filed a timely written answer to the Citation denying that it had ever contracted with Complainant for professional services, that it owed any money to Complainant, or that any cause existed to discipline its license.[3] The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on February 11, 2016. Complainant submitted six exhibits and presented the testimony of Mr. Budzik. Respondent submitted seven exhibits and presented the testimony of Dale Peery (“Mr. Peery”), its Senior Project Manager on the project. Hearing Evidence Respondent was the general contractor on the project pursuant to its contract with the owner of the property and the tenant of the spaces to be improved. Respondent contracted with Maricopa Air and Heating LLC (“Maricopa Air”) for the heating, ventilation, and air conditioning (“HVAC”) for the project. Maricopa Air hired Complainant to inspect components of the HVAC system for the project for which the City of Phoenix Planning and Development Department (“the City”) required certification. On or about February 11, 2015, Mr. Budzik on behalf of Complainant signed and sealed a letter to Maricopa Air regarding “Ventilation Outside Air (OSA) Verification Testing & Certification. Code Reference(s): IBC sections 109, 1203; IMC sections 107, 403.” Mr. Budzik concluded that “[t]he ventilation system balance and outside air intake is in compliance with code and/or the project plans.”[4] On or about February 12, 2015, Mr. Budzik on behalf of Complainant signed and sealed the City’s Special Inspection Certificate for Mechanical/Plumbing, under the following affirmation: I hereby affirm that I am familiar with the design of this project and have been designated by the Owner/owner(s) Agent as the registered design professional in responsible charge for implementing the Mechanical and/or Plumbing Special Inspections Program required by the city of Phoenix Building Construction Code Sections 110.3.9, 1704, 1705.19, and 1705.20. I have determined that the types of work checked below require Mechanical and/or Plumbing Special Inspection and that the individual(s) or firm(s) named below are qualified to perform the special inspections. I understand and agree to inform the project owner, the contractor(s), and the special inspector(s) about all of the Mechanical and/or Plumbing Special Inspection Program requirements and limitations, including that the Special Inspector(s) must be independent third-party individual(s) or firm(s) and shall not be the installing contractor(s).[5]

Mr. Budzik checked only “Duct Smoke Detectors” as the type of work that required special mechanical/plumbing inspection. Maricopa Air paid Complainant in full for Mr. Budzik’s work in February 2015, on the project. On March 10, 2015, Mr. Peery on behalf of Respondent sent an email to Mr. Budzik at Complainant, stating in relevant part as follows: Per our conversation today. Here are the notes from the design engineer. I know Maricopa Air changed the dampers today. They had by mistake installed fire dampers instead of back draft dampers. We are going to need this system to be tested to assure the owners the exhaust is working according to design. The design engineer would like to discuss with you what is required to assure everyone that Maricopa Air had followed the design.[6]

Mr. Peery testified that after the property owner and tenant complained about the HVAC system, Respondent contacted Complainant because it was the engineer of record for the HVAC system based on the City’s Special Inspection Certificate for Mechanical/Plumbing that was in the file. Mr. Peery testified that Respondent would not have hired Complainant directly unless it provided its own certificate of insurance. In March 2015, Respondent believed that Complainant was still operating under Maricopa Air’s certificate of insurance. Mr. Budzik testified that he considered Complainant’s engagement with Maricopa Air to be complete and that Respondent had requested a new scope of work because Complainant was verifying, testing, and certifying different parts of the HVAC system. Complainant did not present any evidence that the parties discussed payment terms or that Respondent ever agreed to pay Complainant any monies in addition to what it had received from Maricopa Air. Complainant did not submit any evidence that unequivocally informed Respondent that Complainant considered its engagement with Maricopa Air to have ended and that it would charge Respondent for any additional work on the project. Complainant played into the record a 27-second voicemail from Respondent’s employee Jerry Rakenberger on March 25, 2015 at 1:23 p.m. requesting to “touch base” about “the more recent tests.”[7] On or about March 26, 2015, Mr. Budzik on behalf of Complainant signed and sealed a letter to Respondent regarding “Ventilation Exhaust Air Verification Testing & Certification. Code Reference(s): IBC sections 109, 1203; IMC sections 107, 403.” Mr. Budzik concluded in relevant part as follows: 1) The exhaust ventilation system was not performing as initially balanced or as required by the project plans. Electrical and mechanical adjustments were performed to correct the deficiency.

2) The exhaust ventilation system has been tested and balanced and is in compliance with the applicable Code and/or the project plans.[8]

On or about March 26, 2015, Complainant sent an invoice to Respondent in the amount of $930.00 for its additional work on the project.[9] Because the property owner and tenant were still not satisfied with the performance of the HVAC system, Respondent scheduled an onsite meeting among Mr. Peery, Mr. Budzik, Maricopa Air’s representative, the owner, and the tenant for March 31, 2015. On March 30, 2015, at 6:13 p.m., Mr. Peery sent an email to Mr. Budzik, cancelling the meeting and stating that the owner and tenant did not like the “and/or” in Mr. Budzik’s March 26, 2015 report because “they feel [the HVAC system] didn’t meet the specifications but a lesser standard in city requirement.”[10] On March 30, 2015, at 7:58 p.m., Mr. Budzik responded to Mr. Peery’s email, stating that “the Tenant does not understand the process, ethics and legal obligations of what it takes to become a Professional Engineer” and that, “BTW I never heard the name Maricopa Air or Ventura Pacific Development before this project.”[11] Mr. Budzik testified that Complainant has performed thousands of inspections, most without a written contract with the property owner or general contractor. Mr. Budzik testified that Complainant generates invoices for its professional services on a C.O.D. basis. Mr. Budzik testified that Complainant provides one or two written estimates per month to new customers. Mr. Budzik acknowledged that Respondent was not an established customer in March 2015. On or about December 9, 2015, Nancy Gale Arbaugh, the tenant on the project, filed a complaint with the Registrar against Respondent for various alleged construction deficiencies, including the HVAC work, air balance, and consequential damages caused by repairs performed on the HVAC system by her contractor, Tri-Mega, which the Registrar designated as Case No. 2015-5053.[12] Mr. Peery testified that Ms. Arbaugh had hired her own HVAC contractor and mechanical engineer to opine on Maricopa Air’s and Complainant’s work and that the Registrar had scheduled a jobsite inspection in Case No. 2015-5053 on the afternoon of the day that the hearing in this matter had been held. CONCLUSIONS OF LAW This dispute lies within the Registrar’s jurisdiction to resolve.[13] Complainant bears the burden of proof to establish a statutory violation by a preponderance of the evidence.[14] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[15] 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.”[16] Complainant did not bear its burden to establish that it performed work pursuant to a contract with Respondent or that Respondent owes it any money under a theory of quantum meruit or any other legal theory. Therefore, Complainant did not establish cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(10). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Case No. 2015-4873 against Respondent Ventura Pacific Development, Inc.’s License No. KB-1.259314-D shall be dismissed. 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, February 17, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See Respondent’s Exhibit 1. [2] A.R.S. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay . . . .” [3] See Respondent’s Exhibit 7. [4] Respondent’s Exhibit 2 at 1. [5] Respondent’s Exhibit 6. [6] Complainant’s Exhibit B. [7] Hearing record at approximately 1 H 23 M 21 S. [8] Complainant’s Exhibit C at 2. [9] See Complainant’s Exhibit D. [10] Complainant’s Exhibit E. [11] Complainant’s Exhibit F. [12] See Respondent’s Exhibit 5. [13] See A.R.S. § 32-1101 et seq. [14] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [15] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [16] Black’s Law Dictionary at page 1220 (8th ed. 1999).

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