ALJDEC decisions subject to certification as final

2016A-3319-ROC · Registrar of Contractors · 2016-12-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

R E Michel Company,

COMPLAINANT,

v.

Palace Cooling and Heating LLC,

License Nos. R39R.226109-R,

RESPONDENT.

No. 2016A-3319-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 21, 2016, at 10:00 a.m.

APPEARANCES: R.E. Michel Company (“Complainant”) was represented by Edward J. Marko, Esq., Marko Law, PLC; Palace Cooling and Heating LLC (“Respondent”) appeared through John Anthony Norris, its qualifying party/member.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

On or about January 3, 1997, the Arizona Registrar of Contractors (“the Registrar”) issued License No. R39R.226109-R for residential air conditioning and refrigeration to Respondent.

John Anthony Norris (“Mr. Norris”) is Respondent’s qualifying party/member and the only person listed on its license.

According to the Registrar’s public website, between January 13, 2011 and October 2, 2013, Respondent’s license was placed on inactive status. Respondent’s current address of record is 1505 W. Saint Mary’s Rd., #206, Tucson, Arizona 85745-3107.

Complainant is a large wholesale distributor of heating and refrigeration equipment and supplies with offices in many cities, including Tucson, Scottsdale, and Phoenix.

On August 29, 2016, Complainant filed a complaint with the Registrar alleging that Respondent owed Complainant $4,303.94 for equipment and supplies purchased between June 19, 2015, and September 24, 2015.

On October 3, 2016, the Registrar issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) against Respondent.

Mr. Norris on Respondent’s behalf filed a timely written answer to the Citation, stating that Respondent had never opened a credit account at Complainant’s business and had never authorized anyone to charge materials and equipment purchased from Complainant to Respondent, and that unknown persons were making unauthorized charges to Respondent at other businesses. Mr. Norris signed the written answer.

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

A hearing was held on December 21, 2016. Complainant submitted 27 exhibits and presented the testimony of Vincent Rodriguez, the manager of Complainant’s store in Tucson. Respondent submitted two exhibits and presented the testimony of Mr. Norris and Caroline York Norris, Respondent’s accountant/bookkeeper.

Additional Hearing Evidence

Mr. Rodriquez testified that Respondent has purchased equipment and supplies from Complainant on credit for several years and kept its account current until 2015. Complainant did not submit any documentary evidence of these alleged prior transactions.

Mr. Norris denied that Respondent had ever purchased equipment or supplies from Complainant. He had never filled out or signed an application for credit at Complainant’s business. Mr. Norris testified that Respondent is a Lennox dealer and obtains all of the equipment and related supplies that it uses in its contracting business from Lennox. Mr. Norris testified that to maintain his Lennox dealership, he has to sell a certain amount of Lennox equipment and supplies.

Complainant did not submit a signed credit application completed on Respondent’s behalf. Complainant submitted a letter dated October 5, 2011, from its general offices and distribution center in Maryland to Respondent at “1505 W ST MARRS RD SUITE 209” in Tucson, stating that Complainant had opened a store in Tucson and that to secure Respondent’s business, Complainant had established a temporary credit limit of $5,005.00.

Mr. Norris denied having received the October 5, 2011 letter and pointed out that Respondent’s license was inactive on that date. Mr. Norris testified that he placed Respondent’s license on inactive status because he was working in Las Vegas.

Mr. Norris testified that when he activated Respondent’s license on October 2013, the Registrar required Respondent to have a physical address. Mr. Norris testified that the address that he provided, 1505 W. Saint Mary’s Rd. #209, Tucson, Arizona 85745-3107, was only a P.O. Box created to reactive Respondent’s license that did not exist in October 2011.

Mr. Rodriguez testified that because Complainant sells only to contractors, not to the general public, he is familiar with most of Complainant’s customers.

Mr. Rodriguez testified that knows Mr. Norris and that he personally made sales to him of equipment and supplies from Complainant for Respondent’s business. Mr. Rodriguez testified that he remembers the sales because one involved a warranty item that needed to be shipped from Phoenix, which upset Mr. Norris. Mr. Rodriguez testified that he remembers talking to Mr. Norris about another order because, although it did not involve a warranty issue, Mr. Rodriguez had supplied a 5-ton unit, rather than the 4-ton unit that Mr. Norris had requested.

Mr. Norris testified that does not know Mr. Rodriguez, although he has seen him around, and reiterated that he has never purchased anything from Mr. Rodriguez or Complainant. Mr. Norris testified that he spoke on the telephone to Complainant, but that he did not follow up because he was not getting anywhere.

Mr. Norris and Ms. York Norris both testified that others have fraudulently used Respondent’s name and credit in the past. Respondent submitted an email dated November 28, 2016, from Amy Swanbeck at Lennox regarding fraudulent charges made by one John Dillon, which resulted in Lennox closing the account and an email dated August 17, 2015, from Yvonne Gonzalez at Air Cold Supply/Ferguson Enterprises Inc. stating that Mr. Norris was the only authorized buyer on the account, and that the company should not sell to John Dillon.

Mr. Rodriguez testified that Complainant’s sales personnel ask persons who pick up equipment or material to sign the invoice and to supply their names, which is then typed on the invoice. Mr. Rodriguez testified that for most purchases, he had already spoken to Mr. Norris about Respondent’s needs.

Complainant submitted five invoices signed by “John Morris,” “John Norris,” or “John Anthony.” Two of the invoices reflected purchases at Complainant’s Scottsdale or Phoenix stores. Although the signatures on the invoices were similar to each other, they were dissimilar to Mr. Norris’ signature on Respondent’s written answer.

Complainant also submitted invoices that were charged to Respondent’s account from “Dave Gossett” and “Pedro M.”

Mr. Norris testified that he did not know and that Respondent did not employ or authorize anyone having those names to make purchases on Respondent’s account.

Complainant also submitted two invoices that showed purchases by Brandon Reichle nearly a year later on Respondent’s account, which were not charged to the account because Mr. Reichle paid for the small purchases on his personal credit card.

Mr. Norris testified that he knew Mr. Reichle but that Respondent had never employed him. Mr. Norris testified that Mr. Reichle had started his own business.

CONCLUSIONS OF LAW

This dispute lies within the Registrar’s jurisdiction to resolve.

Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence. Respondent bears the burden of proof to establish affirmative defenses by the same evidentiary standard.

“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.”

Based on all the evidence, the Administrative Law Judge finds that Mr. Rodriguez’s testimony that he personally sold at least some equipment and supplies to Mr. Norris was not any more credible than Mr. Norris’ testimony that Respondent did not have a line of credit at Complainant’s stores and did not purchase any equipment or supplies from Complainant. Therefore, Complainant did not establish that Respondent violated 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, R.E. Michel Company LLC’s complaint in Case No. 2016-3319 against Respondent Palace Cooling & Heating LLC’s License No. R394.226109-R 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, December 30, 2016.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors