ALJDEC decisions subject to certification as final
2017A-3613-CHC-ROC-RHG · Registrar of Contractors · 2018-03-19
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Mark John Wellenstein,
COMPLAINANT,
v.
Silverado Air Conditioning LLC,
License No: 306496
RESPONDENT.
No. 2017A-3613-CHC-ROC-RHG
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: February 27, 2018, 1:00 P.M.
APPEARANCES: Mark Wellenstein, Complainant, appeared on his own behalf; Steve Adams, member and qualifying party of Respondent, appeared on behalf of Respondent. Cliff Corlett appeared by telephone on behalf of the Registrar of Contractors
ADMINISTRATIVE LAW JUDGE: Roger A. Geddes
_____________________________________________________________________
FINDINGS OF FACT
Background and Procedure
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 in Bullhead City, Arizona.
3. After an inspection of the job site on August 1, 2017, the Registrar issued a Directive dated August 4, 2017 (“Directive”), requiring Respondent to remedy various alleged violations by August 23, 2017, as follows:
Complaint Item 1: Return duct too small.
Investigator’s Observation: This was not a "like for like" HVAC replacement. This project was adding a new HVAC system to a residence that previously had window A/C units and an evaporitive 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 HeatPump 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.
Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.
Complaint Item 2: Used existing evaporitive cooler ceiling ductwork. That ducting is too small and under or un-insulated.
Investigator’s Observation: SEE DIRCTIVE # 1.
Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.
Complaint Item 3: Vents should have been in floor.
Investigator’s Observation: SEE DIRECTIVE # 1.
Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.
Complaint Item 4: Registers have no dampeners.
Investigator’s Observation: SEE DIRECTIVE # 1.
Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.
Complaint Item 5: Thermostat is defective.
Investigator’s Observation: NO DEFECT DEMONSTRATED AT ONSITE INSPECTION.
Governing Rule: No violation could be substantiated.
Complaint Item 6: New heat pump is defective.
Investigator’s Observation: NO DEFECT DEMONSTRATED AT ONSITE INSPECTION
Governing Rule: No violation could be substantiated.
Complaint Item 7: No breaker or shut-off switch for new HVAC unit.
Investigator’s Observation: City permit/review/inspection of the power pole/electric panel should have been performed prior to any new HVAC installation. As it is, the Complainant has had the necessary switches installed by others.
Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.
Complaint Item 8: Vents not insulated.
Investigator’s Observation: SEE DIRECTIVE #1.
Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.
Complaint Item 9: Charged for new installation when he used the old/existing ductwork.
Investigator’s Observation: SEE DIRECTIVE #1.
Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.
Complaint Item 10: Never credited for the advertised 15% off advertisement.
Investigator’s Observation: Possible violation of A.R.S.§ 32-1154-A (15) “False, misleading or deceptive advertising whereby any member of the public may be misled and injured.” Respondents advertisement states “15% OFF Unit Installs”, “When you mention this ad”. There does not appear to be any time frame limitation.
Governing Rule: A.R.S.§ 32-1154-A (15)
Complaint Item 11: The whole job is a disaster & poor workmanship.
Investigator’s Observation: SEE DIRECTIVE #1.
Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.
Complaint Item 12: Was promised savings on utilities. Electric bill increased.
Investigator’s Observation: This Investigator believes the overall quality of workmanship and installation methods severely limits the efficiency of this "new" HVAC installation.
SEE DIRECTIVE #1.
Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.
4. When the Registrar was informed that no corrective action had be undertaken, 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 without valid justification).
5. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on 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 for the unit 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. He further testified that various contractors have verbally told him that the HVAC system is deficient in various respects, and have recommended total replacement of the system Respondent installed.
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 Exhibit 1), for the installation of the new air conditioning unit at Complainant’s residence. According to Mr. Adams, the bid was accepted by AZCO on February 28, 2017. (Respondent’s Exhibit 2). Mr. Adams further testified that he did not apply for a building permit for the installation of the HVAC system because he assumed that the general contractor, AZCO, applied for and received a permit for the entire project including the new windows and new siding. 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 caused 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 Exhibit 9). As to failure to perform corrective work, Mr. Adams claimed he did not receive the Directive until well after the Directive deadline had passed.
11. On November 29, 2017, an Administrative Law Judge Decision was rendered that included a finding as to violations of A.R.S. § 32-1154(A)(2) and A.R.S. § 32-1154(A)(22) on the part of Respondent, but did not make a specific finding as to violations of A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108 for failure to meet minimum workmanship standards).
12. On December 18, 2017, the Registrar issued a Final Administrative Decision and Order in which it rejected the November 29, 2017, Decision due to the absence of findings of fact and law regarding the full scope of poor workmanship that was cited by Registrar. The Registrar further remanded the matter back to the Office of Administrative Hearings to hear and determine whether Respondent performed poor work with respect to the installation of the heat pump as specified in the Directive, specifically Complaint items 1, 2, 3, 4, 7, 8, 9, 11, and 12.
13. The Registrar issued a Notice of Hearing setting a rehearing for February 27, 2018, at 8:30 A.M. At the rehearing, Complainant testified on his own behalf; Steve Adams, member and qualifying party, testified on behalf of Respondent. The Investigator testified by telephone on behalf of the Registrar.
14. At the February 27, 2018, rehearing, testimony as to the Directive items was as follows:
Complaint item 1: With regard to the size of the return duct, the Investigator testified that he in large part deferred to the local jurisdiction’s inspector to determine whether the system conformed to specifications. He testified that he could not confirm whether the duct was too small and that he had never looked at the manufacturer’s specifications. Steve Adams on behalf of Respondent testified that regarding the allegation that the return duct was too small, he installed a 14 inch return duct which conformed to manufacturer’s specifications. (Respondent’s Exhibit 5). With regard to the reference under Directive item number 1 to the proper placement of the HVAC unit on a pad, Mr. Adams also testified that he mounted the unit on a synthetic slab, but that it has been covered by soil so it is not readily apparent.
Complaint item 2: With respect to Respondent using the existing ductwork that was allegedly too small or uninsulated, Investigator testified that that he could not confirm whether the existing ceiling duct work was too small or uninsulated. He stated that it was his belief that the existing ductwork would not conform to today’s energy standards. Steve Adams testified that the project always contemplated use of existing vents and that his bid did not include any work on the existing vents.
Complaint item 3: As to the placement of vents, the Investigator testified that he did not know if the vents should have been placed in the floor rather than in the ceiling. He stated he has seen it both ways in mobile homes, and that he does not believe there is anything intrinsically wrong with ducts in the ceiling.
Complaint item 4: Regarding the alleged lack of dampeners in the system, the Investigator stated that this is not a violation in and of itself. Steve Adams testified that diffusers were ordered and installed in the project. (Respondent’s Exhibit 3, Invoice 2108236).
Complaint item 7: With respect to the alleged lack of a breaker or shutoff switch, the Investigator testified that Complainant informed him that he had engaged another contractor to install a shutoff switch before the inspection took place. The Investigator therefore could not verify that Respondent had not installed a switch. Steve Adams testified that he had in fact installed a switch so he does not know what Complainant’s contractor installed or replaced.
Complaint item 8: With regard to the allegation of uninsulated vents, the Investigator could not confirm that the duct work in the ceiling was not insulated. Steve Adams testified that the ducts he installed, the supply and return ducts, came pre-insulated. (Respondent’s Exhibit 3, Invoice 2103794).
Complaint item 9: With respect to the allegation that Complainant was overcharged, the Investigator testified that the Registrar generally does not involve itself with money issues. However, Respondent was cited for charging for a new installation even though Respondent used existing ductwork. Steve Adams testified that the project always contemplated use of existing vents and his bid and proposal states “run duct work to existing venting system with new supply vents and return air grille.” (Respondent’s Exhibit 1). He stated he installed new supply vents and a return grille.
Complaint item 11: As to whether the job was a disaster and included poor workmanship, the Investigator testified that he was unsure whether the system is or is not energy efficient. He testified he never tested the system and that the local jurisdiction inspector would be better suited to test it during inspections in connection with the application for a building permit. Complainant testified that he has been required to run the system continuously for any cooling effect. Respondent submitted evidence that on March 10, 2017, Complainant attested that the job was completed to Complainant’s complete satisfaction. (Respondent’s Exhibit 9). Respondent further submitted evidence that the high temperature in Bullhead City on that day was 86 degrees, presumably to demonstrate that the weather was not too cool to operate and test the system. (Respondent’s Exhibit 11).
Complaint item 12: With regard the allegation of energy savings, the Investigator again testified that the Registrar generally does not involve itself with money issues even though the Registrar nevertheless cited Respondent for promising savings on utilities and for the increase in Complainant’s electric bill. The Investigator testified that he never saw any written promises nor did he see any of Complainant’s utility bills. Steve Adams testified that he did not nor would he ever promise a savings on utility bills, especially considering the fact that he was replacing a completely different HVAC system and that he had no knowledge as to Complainant’s previous bills.
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 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:
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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.
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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.
5. As it relates to A.R.S. § 32-1154(A)(3) concerning a violation of any rule adopted by the Registrar, Arizona Administrative Code Rule 4-9-108(A), provides that “A contractor shall perform all work in a professional and workmanlike manner.”
6. Complainant has presented sufficient evidence to demonstrate a violation of A.R.S. § 32-1154(A)(2) for Respondent’s departure from or disregard of building code standards by proceeding with the project without a building permit. At the initial 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.
7. It is undisputed that there was no building permit issued for the HVAC system before Respondent commenced the work. Respondent further did not dispute that a building permit was required for the work it performed. 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 as Respondent suggested. 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 as to which party 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.
8. Complainant has failed to present sufficient evidence to establish that Respondent’s work was not performed in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(3). Complainant has simply testified that the new HVAC system Respondent installed has not cooled his residence satisfactorily and that he has not experienced any savings in his utility bills. He has alleged he believes this is due to, among other things, the return duct being too small, Respondent using the existing duct work in his ceiling, the placement of the vents in the floor, the registers not having dampeners, and the vents not being insulated. However, Complainant has failed to present sufficient evidence that either these alleged defects exist, that they are in fact defects, or that they individually or collectively have caused a system deficiency.
9. Moreover, the Investigator did not confirm that the Directive items were actual defects in the system or otherwise constituted work that failed to meet minimum workmanship standards. Rather, the Investigator deferred to the local jurisdiction inspector to determine whether the Directive items were defects upon the local jurisdiction’s review of energy calculations and a system diagram through the permitting process. Indeed, under “Investigator’s Observation” for most Complaint items, the Investigator merely stated “SEE DIRECTIVE #1,” which refers to the obligation of Respondent to obtain a permit and pass any inspections in that regard. Therefore, Complainant has not met his burden to establish that Respondent failed to perform all work in a professional and workmanlike manner
10. Complainant has presented sufficient evidence to demonstrate a violation of A.R.S. § 32-1154(A)(22) for the failure on the part of Respondent to take appropriate corrective action. Respondent’s claim that it never received a copy of the Directive when the evidence reflects that it was sent to its address of record is not a valid justification for failure to undertake corrective action.
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).
12. Despite the Tribunal’s finding of the foregoing violations, the Tribunal believes Respondent presented legitimate and credible reasons for proceeding with the work without a building permit even though such reasons are not recognized as a legal defense for a violation in that regard. For that reason, the Tribunal is inclined to permit Respondent another opportunity to perform corrective action before imposing disciplinary action.
13. Allowing Respondent an opportunity to obtain a building permit for the HVAC system should result in the local jurisdiction’s review as to whether the system was built to specifications and whether the system is or is not operating efficiently. Moreover, inspections by the local jurisdiction in connection with the application for a building permit should result in a determination as to whether any of the listed items in the Directive were in fact defects in the system or otherwise constituted work that failed to meet minimum workmanship standards. Should any defects in the system be discovered by the local jurisdiction that require correction as a condition of the issuance of a building permit, it would be incumbent upon Respondent to timely correct those defects in order to obtain a building permit to avoid disciplinary action.
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 two 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, with respect to the HVAC system.
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, March 19, 2018.
/s/ Roger A. Geddes_____
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
Registrar of Contractors