FINACT2017A-3613-CHC-ROC.pdf

2017A-3613-CHC-ROC · Registrar of Contractors · 2017-12-19

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Mark John Wellenstein, Case No. 2017-3613 COMPLAINANT, Docket No. 2017A-3613-CHC-ROC v.

Silverado Air Conditioning LLC, FINAL ADMINISTRATIVE DECISION AND License No. 306496, ORDER RESPONDENT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the Registrar must provide written justification setting forth the reasons for the modification or rejection. REJECTION AND WRITTEN JUSTIFICATION In this case, a hearing was held on November 9, 2017, and the Administrative Law Judge issued a written decision dated November 29, 2017. See Administrative Law Judge Decision attached. In that November 29, 2017 Decision, the Administrative Law Judge made a finding as to violations of A.R.S. § 32-1154(A)(2) and (A)(22), but did not make a finding regarding A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108 for failure to meet minimum workmanship standards), specifically “failure to meet minimum workmanship standards.” ALJ Dec. 6:27-7:17. The Administrative Law Judge erroneously stated that the “Respondent was not cited for the failure to meet minimum workmanship standards specifically with respect to the operation of the [HVAC] unit”. ALJ Dec. 7:12-15. However, the August 25, 2017 Citation includes as Charge 2, a “violation of Rule 4-9-108, titled ‘Minimum Construction Standards,’ in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3).” The Registrar rejects the November 29, 2017 Decision for the failure to make findings of the fact and law regarding the full scope of poor workmanship that was cited by the Registrar.

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 CONCLUSION AND ORDER

The Registrar hereby rejects the November 29, 2017 Decision and remands this matter back to the

Office of Administrative Hearings for a hearing and findings on each of the three asserted Charges in the

Citation, which includes A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108

for failure to meet minimum workmanship standards). The Administrative Law Judge should hear and

determine whether Respondent performed poor work respecting the installation of the heat pump as

specified within the August 4, 2017 Directive, specifically Complaint items 1, 2, 3, 4, 7, 8, 9, 11, and 12.

A rehearing will be scheduled in the normal course of docketing and further notice will be issued.

Dated this 18th day of December 2017. Registrar of Contractors /s/ Nicole Sornsin ----------------------------------------------------------- Nicole Sornsin Assistant Director, Legal and Recovery Fund Copy mailed via USPS First Class mail and this 18th day of December 2017 to: Respondent Silverado Air Conditioning LLC PO Box 22781 Bullhead City, AZ 86439-2781 Silverado Air Conditioning LLC 2021 E Warwick Rd Mohave Valley, AZ 86440-9450 Respondent’s Attorney Mark A. Hanson, Esq. Schern Richardson Finter Decker, PLC 1640 S Stapley Dr Ste 132 Mesa, AZ 85204-6673 Complainant Mark John Wellenstein 946 Sea Spray Dr Bullhead City, AZ 86442-4900 Copy electronically sent this same date to:

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Office of Administrative Hearings Roger A. Geddes, Administrative Law Judge Copy sent electronically this same date to: Respondent at email address on record with the Registrar Respondent’s counsel at email address on record with the Registrar Complainant at email address on record with the Registrar Case No. 2017-3613/mm

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Received IN THE OFFICE OF ADMINISTRATIVE HEARINGS 11/29/2017 ROC Legal

Mark John Wellenstein, No. 2017A-3613-CHC-ROC

COMPLAINANT, ADMINISTRATIVE LAW JUDGE v. DECISION

Silverado Air Conditioning LLC, License No: 306496 RESPONDENT.

HEARING: November 9, 2017, 8:30 A.M. APPEARANCES: Complainant telephonically on behalf of himself; Mark A. Hanson, Esq., on behalf of Respondent ADMINISTRATIVE LAW JUDGE: Roger A. Geddes _____________________________________________________________________

FINDINGS OF FACT 1. Silverado Air Conditioning LLC (Respondent), is the holder of License Number 306496 issued by the Registrar of Contractors (Registrar). 2. On or about July 17, 2017, Mark John Wellenstein (Complainant) filed a Complaint against Respondent with the Registrar alleging abandonment and poor work in connection with the installation by Respondent of a new heat pump air conditioning unit for Complainant’s doublewide mobile home residence. 3. After an inspection of the job site on August 1, 2017, the Registrar issued

a Directive dated August 4, 2017, requiring Respondent to remedy various alleged

violations based on the following:

This was not a "like for like" HVAC replacement. This project was adding a new HVAC system to a residence that previously

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826 Received 11/29/2017 ROC Legal had window A/C units and an evaporitive (sic) cooler system. Per the Building Official (B.O.) for Bullhead City a permit would have been required for even a like for like system replacement. Here, because this would be a new system a permit application was required along energy calcs and a system diagram. Also the electrical service would have required inspection to confirm it was adequate for the power demands of this new Heat Pump system. RESPONDENT SHOULD PROVIDE ALL NECESSARY DOCUMENTATION AND OBTAIN ANY REQUIRED CITY PERMITS. RESPONDENT SHALL PROPERLY REWORK THE ENTIRE HVAC INSTALLATION INCLUDING ANY/ALL DUCTWORK TO CONFORM TO ANY/ALL CITY AND CODE REQUIREMENTS.

RESPONDENT SHALL OBTAIN AND PASS ANY/ALL

REQUIRED INSPECTIONS. RESPONDENT SHALL

PROPERLY PLACE THE HVAC UNIT ON AN APPROVED

CONCRETE OR SYNTHETIC MECHANICAL PAD. 4. The Registrar then issued a Citation to Respondent on August 25, 2017, for the alleged violation of the following: a. A.R.S. § 32-1154(A)(2) (departure from or disregard of plans or specifications or any building code standards); b. A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108 for failure to meet minimum workmanship standards); c. A.R.S. § 32-1154(A)(22) (failure to perform corrective action). 5. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. The Registrar issued a Notice

Received 11/29/2017 ROC Legal of Hearing setting a hearing for November 9, 2017, at 8:30 A.M. At the hearing, Complainant testified on his own behalf; Steve Adams, member and qualifying party, testified on behalf of Respondent. Cliff Corlett, the Registrar Investigator (Investigator), testified on behalf of the Registrar. 6. The Investigator on behalf of the Registrar testified as to his communications with Complainant and Respondent, his inspection of the job site, and the Directive issued by the Registrar as a result of his observations from his inspection. Specifically, he testified that the primary deficiency in the work, if not the only deficiency he observed, was Respondent proceeding with the work without obtaining a building permit, and the failure to undergo inspections by the local jurisdiction in connection therewith. Investigator testified he did no testing, nor could he attest to any specific deficiency in the air conditioning unit itself. 7. Complainant testified that he entered into a written contract dated

February 12, 2017, with Derrick Windows and Doors, LLC (“Derrick Windows”), for new

siding, new windows, and a new air conditioning unit for his doublewide mobile home for

the contract price of $22,000.00. He testified that Respondent was tasked with

installing the new air conditioning unit but that his payments were made to Derrick Windows. According to Complainant, he had no direct contract with Respondent. 8. Complainant further testified that he has had continuous problems with the air conditioning unit in terms of cooling capacity and that he has experienced no savings on his electric bill. He attributes this to the return duct being too small, the existing evaporative cooler duct work that was used by respondent as being undersized or under-insulated, the air vents improperly being located in the ceiling, the registers having no dampeners, and the vents not being insulated. 9. Steve Adams on behalf of Respondent testified that he was not familiar with Derrick Windows with which Complainant dealt. Rather, he testified that Respondent submitted a bid to AZCO Construction Services, Inc. (AZCO), dated February 16, 2017 (Respondent’s Ex. 1), for the installation of the new air conditioning

Received 11/29/2017 ROC Legal unit at Complainant’s residence. According to Mr. Adams, the bid was accepted by AZCO on February 28, 2017. (Respondent’s Ex. 2). Mr. Adams further testified that he did not apply for a building permit for his portion of the project because he assumed that the general contractor, AZCO, applied for and received a permit for the entire project. According to Mr. Adams, it is his experience that the property owner or general contractor on the job would typically apply for a building permit, as opposed to a subcontractor. 10. Mr. Adams further testified that the air conditioning unit was installed correctly pursuant to manufacturer’s specifications, that it was Complainant’s blocking of vents that would cause operational issues, if any, and that Complainant signed a “Completion Certificate,” dated March 10. 2017, attesting that the work performed by Respondent was completed to Complainant’s satisfaction. (Respondent’s Ex. 9).

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-

1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against

licenses for violations of A.R.S. § 32-1154. 2. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by preponderance of the evidence. See Arizona Administrative Code Rule 2- 19-119. 3. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994); see also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which

Received 11/29/2017 ROC Legal as a whole shows that the fact sought to be proved is more probable than not.” BLACK’S LAW DICTIONARY 1182 (Rev. 6th ed. 1990). 4. A.R.S. § 32-1154(A) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license,

*** 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.

Received 11/29/2017 ROC Legal 5. Arizona Administrative Code Rule 4-9-108(B) provides that “A contractor shall perform all work in accordance with any applicable building codes and professional industry standards.” 6. Complainant has presented sufficient evidence to establish cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(2) and A.R.S. § 32-1154(A)(22). Respondent has departed from or disregarded building code standards by proceeding with the work without a building permit and failing to undertake any corrective action in that regard without valid justification. 7. At the hearing, the Investigator was questioned as to whether it was a policy of the Registrar to impose disciplinary action for commencement of work without a building permit when a building permit is required. Even though the Investigator believed there was a policy but could not identify the source of such a policy, whether there is or is not such a policy is of no consequence. If a building permit is required, it is

a departure from or disregard of a building code standard to commence work without it.

Section 15.04.030 of the Bullhead City Municipal Code provides in pertinent part:

A. Prior to commencing any construction for which a building permit is required under this code, a building permit shall be obtained from the building official…. B. Depending on the type of construction, the building official may also require proof of compliance with any inspections, testing, or reviews by other governmental agencies as a condition of permit issuance. Failure by the applicant to comply with any codes or conditions will void the permit.

8. It is undisputed that there was no building permit obtained before

Respondent commenced the work. Respondent further did not dispute that a building

permit was required for the work it performed.

Received 11/29/2017 ROC Legal 9. It may be typical that a property owner or general contractor is primarily responsible for securing a building permit before work is commenced on a project. Further, it may be customary and more practical for a general contractor rather than the various subcontractors to apply for a building permit before work commences. However, Respondent’s reliance upon what is usual and customary in the building industry does not excuse its lack of compliance with the Bullhead City Municipal Code. Regardless who was responsible for obtaining a building permit, a building permit was required before Respondent commenced work on this project. Respondent proceeded to work without one, and has failed to take any corrective action in that regard. 10. In addition to the dispute between the parties regarding the responsibility for a work permit, there was a fair amount of conflicting evidence that the air conditioning unit was operationally deficient. As Respondent was not cited for the failure to meet minimum workmanship standards specifically with respect to the

operation of the unit, the Tribunal makes no findings in that regard.

11. Accordingly, Complainant has established that Respondent’s license

should be disciplined for a violation of A.R.S. § 32-1154(A)(2) and (A)(22).1

RECOMMENDED ORDER Based on the foregoing, it is recommended that 30 days from the effective date of this Order, Silverado Air Conditioning LLC’s License Number 306496 shall be suspended for 2 days unless the Registrar receives and accepts written verification that Silverado Air Conditioning LLC has obtained a building permit for the subject work performed by Silverado Air Conditioning LLC.

1 Respondent was also cited under A.R.S. § 32-1154(A)(3) for proceeding with the subject work without a building permit. While commencing such work without a permit in itself may also constitute a failure to perform all work in accordance with any applicable building codes and professional industry standards. (Arizona Administrative Code Rule 4-9-108(B)), the Tribunal believes it is more appropriately cited as a violation of A.R.S. § 32-1154(A)(2). Received 11/29/2017 ROC Legal It is further recommended that if and when the Registrar receives and accepts Respondent’s evidence that it has obtained the subject building permit, the Registrar may close the Complaint in Case No. 2017A-3613-CHC-ROC. . In the event of certification of this 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 the certification.

Done this day, November 29, 2017.

/s/ Roger A. Geddes_____ Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors