ALJDEC decisions subject to certification as final

2017A-4897-CHC-ROC · Registrar of Contractors · 2018-02-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Steven Lee,

COMPLAINANT,

v.

A+ Air and Aeroseal LLC,

License No:

293397

RESPONDENT.

No. 2017A-4897-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 8, 2018, 8:30 A.M.

APPEARANCES: Complainants Steven Lee and Linda appeared on their own behalf; Mike Aspinwall and Brandon Mintz appeared on behalf of Respondent A+ Air and Aeroseal, LLC; Steve Klein, appeared on behalf of the Registrar of Contractors

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

FINDINGS OF FACT

1. A+ Air and Aeroseal LLC (Respondent), is the holder of License Number 293397 issued by the Registrar of Contractors (Registrar).

2. On or about September 25, 2017, Steven Lee and Linda Lee (Complainants) filed a Complaint against Respondent with the Registrar alleging abandonment and poor work in connection with air conditioning and duct work by Respondent at their residence in Phoenix, Arizona.

3. After an inspection of the job site on October 30, 2017, the Registrar issued a Directive, dated October 30, 2017, requiring Respondent to correct various alleged deficiencies in Respondent’s work by November 15, 2017, as follows:

Complaint Item 1: Damage done to couch and rug caused by leaking plastic tubing; Verified sticky substance on couch and rawhide rug.

Complaint Item 4: Failure to file for APS rebate; Respondent shall complete project per contract agreement, properly executed

change orders, verbal agreements

4. When some or all of the foregoing items were not corrected by the deadline, the Registrar then issued a Citation to Respondent on November 17, 2017, for the alleged violation of the following:

a. A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108 for failure to meet minimum workmanship standards);

b. 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 of Hearing setting a hearing for February 8, 2018, at 8:30 A.M. At the hearing, Complainants testified on their own behalf; Brandon MIntz, managing member and qualifying party, and Mike Aspinwall, member, testified on behalf of Respondent. Steve Klein, 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, the Investigator testified that he verified there was a sticky substance left on some of Complainants’ furnishings, a couch and the rawhide rug, at the residence. He also testified that according to Complainants, APS rebates were not submitted by Respondent on behalf of Complainants.

7. Damage to couch and rug. As it relates specifically to the items in the Directive, Complainant Steven Lee testified that Respondent’s failure to cover furnishings in the home required general house cleaning and resulted to damage to a couch and rug. First, according to Mr. Lee, the installation of the insulation caused debris to disperse throughout the home. Second, Mr. Lee testified that a leak in Respondent’s equipment in applying Aeroseal sealant into the ducts also resulted in a sticky substance that settled on their couch and rug. He further testified that while Respondent made efforts to clean the couch and rug, their condition has never returned to an acceptable level. He indicated he hired Classic Chem Dry on July 25, 2017, to clean them for which he paid $255.00, (Complainants’ Exhibit 5), but the condition is still not acceptable.

8. Respondent does not dispute that Respondent’s Aeroseal sealant equipment leaked resulting in a sticky substance settling on Complainants’ couch and rug. Brandon Mintz on behalf of Respondent testified that he did everything he could to attempt to clean the couch and rug. He disclosed at the hearing that he also recently purchased matching upholstery for the couch but had yet to inform Complainants. (Respondent’s Exhibit 1).

9. Respondent contends that Respondent has fully compensated Complainant for the damage to the couch and rug and any inconvenience caused by Respondent through a $1,262.68 reduction to the original invoice amount.

10. Complainants counter by contending that the $1,262.68 invoice reduction did not include compensation for the damage to the couch and rug. Rather, Mr. Lee testified that $500.00 of that amount compensated Complainants for lack of general cleaning on the part of Respondent and the remaining balance was compensation for Complainant’s “aggravation” caused by Respondent’s work.

11. The parties submitted a series of documents into evidence relating to bidding and invoicing the work. Complainant Steven Lee testified that there was no written contract between the parties, but that the work performed by Respondent was evidenced by an estimate and a series of invoices. The first in order according to the parties is entitled “Estimate 1072,” dated June 9, 2017, which reflects a bid/estimate price of $9,887.57 and includes a signature of Complainant Linda Lee. (Complainants’ Exhibit 1).

12. Thereafter, the foregoing bid/estimate form was apparently converted into an invoice with some modifications after the work was completed in large part. According to Complainant Steven Lee, the parties agreed that two line items in the bid/estimate, the copper line set and the motor totaling $1,874.89, were not required on the job and therefore were deducted from the estimate amount. This deduction is reflected in an invoice entitled “Invoice 1032,” dated June 9, 2017. This invoice also reflects an additional $500.00 deduction labelled as a “Discount applied for lack of cleaning.” (Complainants’ Exhibit 1). Mr. Lee testified that this discount given by Respondent the day of the work resulted from Respondent not covering furnishings for the work. These deductions for the two items from Estimate 1032 and the cleaning discount brought the invoice total to $7,512.68.

13. On June 16, 2017, Jason Clayton, formerly a partner of Respondent according to Mike Aspinwall, sent an email to Mr. Lee acknowledging Aeroseal spray on the couch and rug and the $500.00 discount he had given Complainants. He further requested payment from Complainants because Complainants had yet to pay any amount of the invoice. (Complainants’ Exhibit 2).

14. On June 29, 2017, Mr. Clayton sent an email on behalf of Respondent to Complainant Steven Lee with an invoice balance of $7,012.68, indicating it was his “final offer of discounts.” (Complainants’ Exhibit 4).

15. Later that day, Mr. Lee responded by email stating the parties are “getting closer to working it out” and offered to pay $6,500.00 as long as the “resolution” includes other issues such as pending rebates, a plumbing issue, and warranties. In the same email, Mr. Lee admonishes Respondent to take responsibility for the Aeroseal leaks. (Complainants’ Exhibit 4).

16. On July 1, 2017, Mr. Clayton responded by email that he was willing to offer Mr. Lee the current invoice total and submit the rebates “to offset your costs of cleaning.” (Complainant’s Exhibit 4).

17. Later that day, Mr. Lee by email counteroffered at $6,750.00 and stated that if Respondent brought a new hose, “we have a deal.” (Complainant’s Exhibit 4).

18. On July 3, 2017, Mr. Clayton responded by email that he could be there that day to pick up the check. Later that day, Mr. Lee confirmed by email the final agreed total of $6,750.00 and clarified that Respondent was agreeing to other matters regarding rebates, warranties, and a hose. (Complainant’s Exhibit 4).

19. On July 5, 2017, Mr. Clayton by email agreed to Complainants’ terms and Mr. Clayton listed the eight items to which he agreed, including the final balance of $6,750.00. A check in the amount of $6,750.00 from Complainants to Respondent reflects that it was issued that day. (Complainant’s Exhibit 4).

20. Apparently as a result of these communications, a document in the nature of a final invoice/statement was generated by Respondent, although still entitled “Invoice 1032” and still dated June 9, 2017 (but also containing a handwritten date of July 5, 2017. (Complainant’s Exhibit 1). It reflects a $0 balance due, a payment of $6,750.00 from Complainant, and a line item amount of $1,268.68 reflecting a deduction for cleaning and a “final attempt at settlement of customer demands.”

21. Complainant Steven Lee testified that the language in the invoice/statement regarding the deduction for cleaning and a settlement of customer demands was included by Respondent after Complainants had reached a verbal agreement and that he objected to such language.

22. Rebates. Complainant Steven Lee testified that Respondent agreed to submit APS rebates on behalf of Complainant but failed to do so. As a result, according to Complainants, Complainants are no longer eligible for the rebates because the rebate submission period has since expired. The Investigator testified that he believed the failure to submit rebates was included in the Directive because it may have been part of the contract between the parties.

23. Complainant testified that there were two potential rebates related to the work performed by Respondent - $245.00 for the air conditioning unit and $400.00 in total for the duct sealing. He testified he discussed these rebates at the beginning of the job with Mr. Clayton.

24. Respondent argues that Respondent could not have agreed to submit the rebates on behalf of Complainants. Brandon Mintz on behalf of Respondent testified that Respondent did not have the ability to submit the APS rebate for the air conditioning unit because such a rebate can only be issued by an APS approved qualified contractor. Mr. Mintz testified that Respondent is not an APS approved qualified contractor but had planned to become one. He stated that classes to become an APS qualified contractor are only offered in October and March each year but that the classes for October 2017 were already booked and taking the classes in March 2018 would have been too late to submit the rebates.

25. Mike Aspinwall on behalf of Respondent testified that Attic Experts, his company, is an APS qualified contractor for duct sealing but that since Attic Experts did not do the duct sealing work for Complainants, Attic Experts could not submit the rebate to APS for the duct sealing. He stated that APS permits only the contractor that did the actual work to submit a rebate for that work. Further, he stated that even if Attic Experts had performed the work, the rebate for the duct sealing would not have been available because the limited scope of work for the duct sealing performed for Complainants would not have qualified for the rebate.

26. In the July 5, 2017, email referenced above, Mr. Clayton on behalf of Respondent memorialized the following terms of the parties’ agreement:

4. Rebate filed with APS under Attic Experts for Aeroseals when payment clears.

5. Rebate for equipment filed when Master Heat Pump Council completed and APS approved as qualifying contractor.

(Complainants’ Exhibit 4).

27. Further, Respondent’s final invoice/statement reflects the following regarding submission of the rebates:

Rebates will be submitted to APS for Aeroseal and Equipment. A+Air is not an active participant with APS yet. Aeroseal will be submitted through AtticExperts and Equipment Rebate will be .....(copy cut-off).

(Complainants’ Exhibit 1).

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,

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.

5. Arizona Administrative Code Rule 4-9-108(A) provides that “A contractor shall perform all work in a professional and workmanlike manner.”

6. Under A.R.S. § 32-1156.01, “an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.”

7. Damage to couch and rug. There is no dispute between the parties that Respondent’s work to some extent damaged Complainants’ couch and rug, and that cleanings performed by both Respondent and Complainants did not return the couch and rug to an acceptable condition. However, at issue is not whether there is damage, but rather whether the damage has been corrected in effect by compensation from the Respondent to Complainants.

8. The evidence clearly demonstrates that the parties were attempting to negotiate some sort of resolution of the differences between the parties and did in fact reach an agreement. However, the parties differ on whether the final resolution, an invoice reduction of $1,268.68, was intended to also compensate Complainants for the damage to the couch and rug

9. It is the Tribunal’s finding that the parties’ agreement, whether characterized as a modification of the original agreement between the parties or as an agreement of resolution between the parties, was intended by the parties to be a final resolution of the issues between the parties. The language of the communications between the parties reflects that the parties reached a resolution which included compensation for the damage to the couch and rug.

10. After the work was complete, Jason Clayton on behalf of Respondent reduced the invoice balance to $7,012.68, indicating it was his “final offer of discounts.” There was no limitation included that this final offer applied to everything except the Aerosol leak that damaged the couch and rug. Complainant Steven Lee counteroffered at $6,500.00 as long as Respondent also addressed some other issues such as pending rebates, a plumbing issue, and warranties. In the same communication, Mr. Lee raised the topic of the Aeroseal leaks and asked Respondent to take responsibility for the damage it caused. (Complainants’ Exhibit 4). Thus, the communications reflect that the Aeroseal leak and damage it caused to the couch and rug were not being segregated from other issues between the parties.

11. During the negotiations, Mr. Clayton by email stated he was willing to offer Mr. Lee a reduction in the invoice total “to offset your costs of cleaning.”

Later that day, Mr. Lee by email counteroffered at $6,750.00 and stated that if Respondent brings a hose, “we have a deal.” (Complainants’ Exhibit 4).

12. Nowhere in the communications is there any segregation or exclusion of the damage to the couch and rug. There was no written evidence presented suggesting that the final resolution agreed to by Complainants included a resolution of all issues between the parties, except the damage to the couch and rug.

13. Accordingly, Complainants have failed to establish cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(3) for the Directive item relating to damage to the couch and rug. Similarly, because the Tribunal has found that Respondent in essence took corrective action by compensating Complainants for the damage, there can be no violation of A.R.S. § 32-1154(A)(22) for failure to take corrective action in this regard.

14. Rebates. There is similarly no dispute between the parties that the APS rebates totaling the amount of $645.00 were not submitted by Respondent. At issue is whether Respondent in fact had the obligation to submit them.

15. Jason Clayton on behalf of Respondent in both an email (Complainants’ Exhibit 4) and in the final invoice/statement (Complainants’ Exhibit 1) undertook the obligation to submit the rebates on behalf of Complainants. Respondent’s argument that Respondent is not responsible for the duct cleaning rebate because Attic Experts never undertook this obligation nor did it do the work is unpersuasive. It is acknowledged that Attic Experts is not the subject of this disciplinary proceeding. However, it is evident that Mike Aspinwall, who testified he was the owner of Attic Experts, was copied on some of the emails sent by Mr. Clayton regarding submission of the rebates. There was no evidence presented that Mr. Aspinwall or anyone else indicated before the parties reached their final resolution that Attic Experts could not or would not submit the rebates. Further, it may very well be the case that Attic Experts was not permitted under APS guidelines to submit the rebate to APS. Nevertheless, Respondent included its obligation to submit the duct cleaning rebate to APS in the final resolution between the parties and failed to fulfill that obligation.

16. Respondents argument that Respondent should not be responsible for submitting the air conditioning unit rebate because Respondent was not a qualified participating APS contractor is also unpersuasive. Respondent did in fact disclose to Complainants that Respondent would first have to take the appropriate course to become qualified as an APS approved contractor in order to submit the rebate. However, that the course may not have been available as Respondent suggests does not excuse Respondent from fulfilling its obligation in that regard. Respondent had to duty to ensure it would be qualified to submit the rebate timely before it made the representation to Complainants that it would submit the rebate The fact that Respondent subsequently discovered the course was not available is not a risk that Complainants should have to assume.

17. While Respondent raised the issue that all of the representations regarding the rebates were made by Mr. Clayton who is no longer affiliated with Respondent, there was no evidence presented to support a finding that Mr. Clayton did not have the authority to speak on behalf of or otherwise legally bind Respondent.

18. Accordingly, Complainants have established cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(3) for the Directive item relating to submission of the rebates to APS. However, because the rebates had expired and submission of the rebates was no longer possible after the Directive was issued, there is no violation of A.R.S. § 32-1154(A)(22) for failure to take corrective action in this regard.

19. Based on the foregoing, with respect to Respondent’s violation of A.R.S. § 32-1154(A)(3) for failure to submit the rebates, the Tribunal would have been inclined to recommend imposition of a suspension or conditional suspension of Respondent’s license requiring Respondent’s submission of the rebates. However, because the expiration date has expired on the submission of the rebates, the Tribunal recommends a restitution award under A.R.S. § 32-1156.01, in the amount of $645.00 (the total value of the rebates) for injury to Complainants caused by the Respondent’s failure to fulfill its obligation to submit the APS rebates.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that seven (7) days from the effective date of this Order, A+ Air and Aeroseal, LLC’s, License Number 293397 shall be suspended for two (2) days unless the Registrar receives and accepts written verification that A+ Air and Aeroseal, LLC, has paid $645.00 to Complainants in certified funds.

It is further recommended that if and when the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $645.00 in certified funds, the Registrar may close the Complaint in Case No. 2017A-4897-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, February 26, 2018.

/s/ Roger A. Geddes_____

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors