PDF copy: ALJDEC decisions subject to certification as final

2016A-686-ROC · Registrar of Contractors · 2017-01-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Thomas R Cooper, No. 2016A-686-ROC COMPLAINANT,

v. ADMINISTRATIVE LAW JUDGE

DECISION Quick Refrigeration Company Inc, License No: 202641 RESPONDENT.

HEARING: Thursday, September 14, 2016, at 10:00 a.m. APPEARANCES: Thomas Cooper (“Complainant”); Jimmy Gilmore for Quick Refrigeration Company, Inc. (“Respondent”); and Stephen Lawton (“Investigator” for Registrar of Contractors) ADMINISTRATIVE LAW JUDGE: Linda Mare Brown _____________________________________________________________________ This matter was set by the Registrar of Contractors as a hearing to determine whether Respondent has violated Arizona Revised Statutes (“A.R.S.”) § 32- 1154(A)(A)1 Departure from or disregard of plans or specifications; Rule 4-9-108, Minimum Construction Standards in the Arizona Administrative Code (“A.A.C.”) and thereby of A.R.S. § 32-1154 (A)(3); A.R.S.; § 32-1154 (A)(9)2 aiding or abetting; and A.R.S.; § 32-1154(A)(22) 3 Failure to take appropriate corrective action without valid justification. A.R.S. § 32-1154(A)(2) “Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect that is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” 2 A.R.S. § 32-1154(A)(9) “aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one’s license to be used by a license or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.” A.R.S. § 32-1154(A)(22) includes Failure to take appropriate corrective action to comply with the 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. The written directive shall set forth the time within

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826 FINDINGS OF FACT 1. The Arizona Registrar of Contractors (“Registrar” or “ROC”) issued License No. R39R-202641-R to Respondent, Quick Refrigeration Company Inc. Respondent’s address of record is P.O. Box 5595, Yuma, Arizona 85366-2478. 2. Complainant, Thomas R. Cooper, is a residential homeowner. On or about February 22, 2016, Complainant filed a complaint with the Registrar alleging “air handler is installed in wash room instead of a free air zone in house. Air handler was sucking hyd sulfred [sic] gas into the house causing my wife and I to get vany [illegible] sick. This is a voltal [sic] gas and poisonous gas. Some corrections has be made by Margo Hernandez but still need a lured door. He said he doesn’t do doors.” Complainant noted the corrective work has been complete with the exception of “but still needs vented door.” The contract amount was not specified because the home was purchased new. The name of the construction site owner listed is John Gountanis. Close of Escrow was April 17, 2015. Complainant moved in on April 10, 2015. 3. Complainant provided an address of 27250 Sage Avenue, Wellton, Arizona 85356. 4. On March 9, 2016, Notice of Complaint and a copy of the Complaint were sent to the Respondent at its address of record. 5. A jobsite inspection was conducted on April 4, 2016. Both parties were present. General notes were made by the investigator as follows: Jobsite General Notes A jobsite inspection was performed on this day with both parties present. Complainant was informed by the Town of Welton that his residence does not have a C of O for the occupation of his residence. Complainant also has workmanship issues with his residence. It has been determined that the Respondent did indeed construct the residence but is not contractor of record with the Town of Wellton. The builder is John G. Gountanis as owner builder. Mr. Gountanis has built numerous homes under the guies [sic] as owner builder with the town of Welton. This Respondent will have to submit for a final inspection of the residence if and when a permit can be pulled.

which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive.” Complaint Item 1: Lacks final inspection for C of O. Investigator’s Observation: It was determined that the C of O had been pulled by the Town of Welton. Governing Rule: A.R.S. § 32-1154(A)(2). 6. The Registrar issued a Directive on May 2, 2016, directing Respondent to remedy the following violations by the appropriate means: (1) Plans do not show any Air conditioner detail per Town of Welton inspection report for C of O after residence was denied final inspection. See attached inspection report and Correct by Appropriate Means. Respondent was provided a date of May 16, 2016, at 5:00 p.m. to remedy and provide written proof of satisfactory compliance with the Directive. The Directive stated “the Registrar has determined that any workmanship violations alleged to the complaint but not listed above are unsubstantiated and do not require corrective action.” 7. The Directive further provided Respondent to remedy the following violations, “Plans do not show any Air conditioning detail per Town of Welton inspection report for C of O after residence was denied final inspection.” 8. On June 16, 2016, the Registrar issued a Citation against Respondent listing four (4) alleged violations as follows: Charge 1:: A.R.S. § 32-1154(A)(2) Depature from or disregard of plans or specifications . . ; Charge 2: Rule 4-9-108 Minimum Construction Standards, thereby A.R.S. § 32-154(A)(3); Charge 3: A.R.S. § 32-1154(A)(9) aiding and abetting a licensed or unlicensed person to evade this chapter . . .; and Charge 4: A.R.S. § 32-154(A)(22) failure to take appropriate corrective to comply without valid justification. The Citation shows that if the Administrative Law Judge determines the validity of any of the charges listed above, then Respondent’s license may be subject to suspension or revocation, or may be subject to other penalties provided by law. 9. Respondent submitted a Written Answer to the Citation and Complaint stamped received by Legal ROC on June 30, 2016, stating its intent to remedy the issues with the air conditioner and insure proper performance of the unit because it is under manufacturer warranty. Respondent set forth its defenses to all four (4) of the charges.4

See ProLaw 10. There seemed to be oversight in receipt of Respondent’s answer as an Order to Quash Final Administrative Decision and Order for failure to respond was entered by the Registrar on August 2, 2016.5 11. Respondent’s response further stated in response to Charge 1 that all building codes were followed and work was discussed and approved by home owner/builder before and during construction. All ductwork was designed following original plan design guidelines and location. Ductwork sizes were verified with a Manual J Heat load. Our plans do not show an enclosed patio. See original attached plans. See attached email Ashley Espino, Town of Wellton Permit Clerk. See attached letter from C. Alex Gallardo, Town of Wellton, Plans Examiner/Building Inspector.6 12. Respondent’s Written Answer to the Citation and Complaint denies Charge 2 on the grounds that “at the time of the install of the system we met all of the standards according to the referenced statue [sic]. In regards to Charge 3, Respondent stated, “we have earned an integral reputation in the industry for the past 60 years and we would never take part in any situation to evade any of the laws governing our industry. Mr. Gountanis informed us that he was an owner/builder of the home at the time we installed the system.” 7 13. Respondent replied to Charge 4 as follows: “Ever since we learned about this incident, we responded promptly to resolve it. Mr. Cooper did not complain to us after we added a pass though vent above the closet door, as a show of good faith. When we called back to find out how the system was working, he stated everything was fine and in good working order. We later received a directive from the Registrar dated May 2, 2016. Even then, we acted in good faith and set out to fulfill the directive. Even though the directive stated, “ . . . above are unsubstantiated and do not require corrective action.” Mr. Lawton and the Town of Wellton were contacted to make sure of our responsibilities and insure compliance. The stated that we were in fact in compliance and required no further action from us. See attached letter from the town of Wellton.”

5 See ProLaw 511211.pdf (08/04/2016). See ProLaw 511211.pdf (08/04/2016) See ProLaw 511.211.pdf (08/04/2016) 14. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. On August 8, 2016, the Registrar issued a Notice of Hearing, setting the hearing on September 14, 2016, at 10:00 a.m. at the OAH. The Registrar mailed a copy of the Notice of Hearing to Complainant at the address on its complaint and to Respondent at its address of record. HEARING EVIDENCE. 15. ROC Investigator testified that John Gountanis (“Gountanis”) is the builder of the residential home located in the Town of Wellton (“Town”) that Complainant purchased on April 17, 2015. Gountanis is not a General Contractor. Also there was no plans, no approval and no duct design submitted. He stated that Gountanis was acting under the guise of owner/builder on several home builds in the Town, and since the home inspection on April 4, 2016, Complainant homeowner has had its certificate of occupancy pulled from the Town. 16. ROC Investigator testified the air condition was installed in 2012. Thereafter, the house sat empty for two (2) years. Following the pass though vents installation by Respondent in 2016, no air flow test was performed. 17. When questioned by Respondent regarding Charge 3 of the Citation, the ROC Investigator replied that Respondent was paid for work and did the work for Gountanis. 18. Complainant testified that there is no air flow and the air handler is a safety hazard because it is sucking noxious gas from the wash room into the house, and that this is unhealthy and causing nausea in his wife and illness.. 19. Respondent testified that Quick Refrigerator Company, Inc. is family owned and has been operating for three (3) generations and this is their first complaint. 20. Respondent stated that the air handler was tested and it was operating at 95% efficiency with 5% loss due to door opening/closing. During its inspection, they noticed two (2) rooms had closed vents which would attribute to lack of air flow. 21. Respondent testified that door installation is beyond the scope of their work and they did respond promptly to Complainant’s concerns as noted in their Written

Answer to the Citation and Complaint by adding a pass though vent above the closed door.8 22. In review of the Written Answer submitted to the Registrar by Respondent on June 30, 2016, several of the referenced documents obtained were missing from the file. The Administrative Law Judge provided the record remain open until the close of business on September 21, 2016, to allow Respondent time to track down these referenced documents and resubmit. 23. Respondent testified he contacted the Town to inquire what was needed for the air conditioning detail since a letter sent to Complainant from the Town outlined several comments to plans submitted to Town by Complainant. Specifically, Item No. 7 stated, “Plan does not show any air conditioning detail (IRC 2009 303.8).9 The Town then clarified in an email dated May 11, 2016, that “Item #7 under the “Plans” section was NOT referring to the Mechanical plans for the residence (living room), it was in reference to the patio.. However, if Mr. Cooper wishes to convert the patio into a room addition he will need to submit Mechanical plans for review and approval.” 10 At this time, the Registrar was copied on this communication. 24. Additional documents attached to the Written Answer to Citation and Complaint were original plans labeled “duct design sketch given to owner/builder 2720 Sage Ave.”11 25. Respondent testified that Complainant added an enclosed patio after purchasing the residential home which apparently does not include ducts. Respondent is not responsible for the patio construction project. 26. Complainant also submitted additional information in a written letter asserting that the air handler is clearly wrong for the house because it is causing hydrogen sulfied gas (sewer gas) to flow into the house, and that this air is unhealthy causing nausea and illness. Complainant restated from his testimony that Respondent’s representative discussed with Gountanis and another named person, Jose, surrounding

see ProLaw (518702.pdf) 09/15/2016). See ProLaw (518702.pdf) 09/15/2016). See ProLaw (518702.pdf) 09/15/2016). See ProLaw the door concern. Complainant also emphasized that the Mechanical Plans were never approved by the Town.12 27. In review of Complainant’s complaint filed on or about February 22, 2016, Complainant noted that work has been corrected but still needs vented door.

CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.13 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.14 Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.15 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”16 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.”17 4. Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. A.A.C. § R2-19-119. 5. The term “knowingly” requires “[o]nly a knowledge that the facts exist that bring the act or omission within the provisions of the statute using such a word” and “[d]oes not require any knowledge of the unlawfulness of the act or omission.” A.R.S. § 1-215(17). In this instance, Complainant and Registrar failed to met its burden that Respondent “knowingly” aided and abetted an unlicensed contractor. The evidence provided that

12 See ProLaw 09/21/2016 See A.R.S. § 32-1154(A). 14 See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). See A.A.C. R2-19-119(B)(2). Morris K. Udall, Arizona Law of Evidence § 5 (1960). Black’s Law Dictionary at p. 1220 (8th ed. 1999). Respondent was responsible for only one (1) installation to a residential property of which Respondent testified Gountanis stated he was the owner/builder. 6. Statutes should be interpreted to provide a fair and sensible result.18. 7. “Statutes shall be liberally construed to effect their objects and to promote justice.”19 8. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.20 9. A.R.S. § 32-1154(A) provides that The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

2. Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code. 3. Violation of any rule adopted by the registrar. ***** 22. Failure 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. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. 10. A.A.C. § R4-9-108(A) provides that “A contractor shall perform all work in a professional manner.” 11. Complainant has not met its burden by a preponderance of the evidence that Respondent violated A.R.S. 32-1154(A)(2) by departing from or acted in disregard

18 Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.") A.R.S. § 1-211(B). See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). of plans because it presented the Town’s reply that the Mechanical Plans referenced in its letter of April 13, 2016, to Complainant, was referring to the patio project, and not the residence (living room). Respondent provided duct design sketches obtained from the Town that were part of the initial build. 12. The preponderance of the evidence does not show that Respondent violated A.R.S. § 32-1154(A)(3) by failing to complete the work in a professional manner that it was contracted to do. Respondent testified that the unit is warranted and that upon notice of the complaint, they inspected the unit to ensure the airflow was operating correctly at which time they found two (2) ducts closed off. In addition, they installed a pass though vent above the closet. Testimony was received that no air flow test was conducted so without more, toxic gas entering into the home is speculative at best. 13. Complainant is requesting a louver door as noted in his Complaint form but fails to met its burden by showing that the door is within the scope of the work to be performed by the air conditioner installer. 14. The preponderance of the evidence does not show Respondent violated A.R.S. § 32-1154(A)(9) which, if violated, would be grounds for suspension, revocation, and other disciplinary action against a contractor’s license, “[a]iding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one’s license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.” Under A.R.S. § 32- 1154(A)(9), while Respondent was paid for installation of an air conditioner system, he did so under the guise that Gountanis was the owner/builder. The statute requires knowingly or recklessly combining or conspiring with a licensed or unlicensed. Neither Complainant or the Registrar meet its burden that the Respondent was aware that a whole subdivision was being built since Respondent worked solely on this residential build, and Gountanis represented to Respondent that he was the owner/builder of the single residential build. 15. A.R.S. § 32-1121(5) allows for persons not required to be licensed to “build or improve structures or appurtenances on such property and who do the work themselves, with their own employees or with duly licensed contractors . . .are intended for occupancy solely by the owner and are not intended for occupancy by members of the public . . . “. In this instance, Respondent stated in his Written Answer that Gountanis informed it that he was an owner/builder. No evidence was presented to that contrary that Respondent would have known otherwise. 16. Complainant fails to meet its burden that a violation of A.R.S.; § 32- 1154(A)(22) Failure to take appropriate corrective action without valid justification occurred. Respondent provided correspondence obtained from the Town dated May 11, 2016, which is prior to the May 16, 2016 deadline set forth in the directive The Town stated in writing that Item No. 7 no Mechanical Plan referenced in its letter of April 13, 2016 to Complainant is not referring to the residence (living room) but rather the patio. The Registrar was copied on this email communication on that date. 17. Considering that Complainant failed to met its burden on all four (4) charges, this matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the order in this matter, Thomas R. Cooper’s complaint in Case No. 2016-686-ROC against Quick Refrigeration Company, Inc., License No. R39R-202641-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, October 4, 2016. /s/ Linda Marie Brown Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors