ALJDEC decisions subject to certification as final

2018A-04748-ROMC-ROC · Registrar of Contractors · 2018-10-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 18, 2018 at 1:00 PM. APPEARANCES: Assistant Attorney General John Tellier, Esq., appeared on behalf of the Arizona Registrar of Contractors (“Complainant” and “Registrar”), with Bin Nguyen, Leslee Presmuk, George Heady, Lisa Melton, Jim Diamond, and Bonny Allen as witnesses. No appearance(s) on behalf of Solar Energy Resources LLC, doing business as Blazing Sky Energy Group (“Respondent”). ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar. FINDINGS OF FACT Background and Procedure 1. On April 14, 2012, the Registrar also issued License No. 278219 for General Dual KB-1 building contracting to Respondent.[1] On January 28, 2015, the Registrar issued License No. 296164 for Specialty Residential R-11 Electrical contracting to Respondent.[2] Respondent’s address of record for both licenses is 1097 E Gurley Street, Prescott, Arizona 86301-3307. Both licenses are current. 2. Regarding License No. 278219, administrative notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website on October 18, 2018. Such prior License record reflects that Respondent’s license has not previously been issued formal discipline by the Registrar. Although, the record does reflect that there are three open complaints against Respondent’s license, which are presumed to be related to this matter. Respondent has a $14,000.00 surety bond through Western Surety Company effective April 27, 2018. 3. Regarding License No. 296164, administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on October 18, 2018. Such prior license record reflects that Respondent’s license has not previously been issued formal discipline by the Registrar. Although, the record does reflect that there is one open complaint against Respondent’s license, which is presumed to be related to this matter. Respondent has a $4,250.00 surety bond through Platte River Insurance Company effective December 17, 2014. 4. On October 11, 2018, an Order of Summary Suspension & Case Consolidation and Notice of Promptly Instituted Proceeding against Respondent after the Registrar received five complaints against Respondent’s licenses between August and October of 2018 alleging poor work and/or abandonment of contract. Complaints were submitted by the following homeowners: Binh Nguyen (Case No. 2018-3997), Jeffrey Groh (Case No. 2018-04291), Leslee Premyk (Case No. 2018-04318), Doug Koch (Case No. 2018-04659), and Romala Heady (Case No. 2018-04667). 5. Upon investigation, the Registrar substantiated all five complaints regarding abandonment of contract, as well as one additional complaint of poor workmanship. Under the circumstances, the Registrar found that the public health, safety or welfare imperatively required emergency action under Ariz. Rev. Stat. § 41-1092.11(B). 6. On October 11, 2018, the Registrar issued an Order setting an expedited evidentiary hearing for October 18, 2018, at 1:00 p.m. before the Office of Administrative Hearings (“OAH”), an independent state agency. The Registrar sent the Order of Summary Suspension and Notice of Hearing to Respondent’s address of record via certified mail that same day.[3] The correspondence was not returned by the United States Postal Service as refused or undeliverable. 7. On October 11, 2018, the Registrar issued a Supplemental Notice that set forth additional facts that supported the summary suspension.[4] 8. An evidentiary hearing was held per Order of Summary Suspension and Supplemental Notice issued on October 18, 2018, to determine whether cause exists to revoke Respondent’s licenses based on the following alleged violations: Charge 1: Abandonment of a Contract Without Legal Excuse (Ariz. Rev. Stat. § 32-1154(A)(1)) – Five Counts Charge 2: Minimum Workmanship Standards (Ariz. Rev. Stat. § 32- 1154(A)(3) and Ariz. Admin. Code R4-9-108) – Once Count

The Registrar was represented by Assistant Attorney General Jon Tellier, Esq., who submitted twenty three exhibits and presented the testimonies of Bonny Allan, Bin Nguyen, Leslee Presmuk, George Heady, Lisa Melton, and Jim Diamond. Respondent failed to appear. 9. Although the start of the duly noticed hearing was delayed eight minutes to allow Respondent additional travel time, Respondent did not appear on his own behalf, through an authorized officer, employee, or attorney, and did not contact OAH to request that the start of the hearing be further delayed. Respondent did not request to appear telephonically, nor did Respondent request that the hearing be continued a second time. Consequently, Respondent did not present any evidence to defend either license. Hearing Evidence Homeowner Complaints Binh Nguyen’s Complaint (Case No. 2018-3997) 10. On June 19, 2018, Mr. Nguyen filed a complaint with the Registrar against Respondent, whereby he accused Respondent of abandonment of their February 06, 2018 contract to install a residential solar system for $35,724.00.[5] According to the evidence and Mr. Nguyen’s testimony, although Mr. Nguyen paid Respondent a $23,200.60 deposit, only racks were placed on Mr. Nguyen’s roof.[6] No additional work was completed. 11. Lisa Melton was assigned by the Registrar to investigate Mr. Nguyen’s complaint. Investigator Melton testified that she conducted a jobsite inspection on October 11, 2018, at 9:00 a.m.[7] Respondent was not present. Investigator Melton testified that she observed installed racks and an electrical box on Mr. Nguyen’s roof, but no solar panels were present or installed. On October 12, 2018, a citation for Ariz. Rev. Stat §§ 32-1154(A)(1) and 32-1154(A)(3) and Ariz. Admin. Code R4- 9-108 were recommended by Investigator Melton.[8] 12. Respondent did not complete the Nguyen project per contract or refund monies paid to Mr. Nguyen. Jeffrey Groh’s Complaint (Case No. 2018-04291) 13. On September 13, 2018, Mr. Groh filed a complaint with the Registrar against Respondent, whereby he accused Respondent of abandonment of their April 23, 2018 contract to install a residential solar system for $33,211.51.[9] According to the evidence, although Mr. Groh paid Respondent an $8,000.00 deposit no work was ever done on the project.[10] Per Mr. Koch’s complaint, Respondent stopped returning email correspondence on August 10, 2018, and as of September 07, 2018, Respondent’s telephone numbers were disconnected.[11] 14. John Smith was assigned by the Registrar to investigate Mr. Groh’s complaint. Investigator Smith testified that he conducted a jobsite inspection on October 09, 2018 at 9:00 a.m.[12] Respondent was not present. Investigator Smith testified that he observed no evidence of work being started, let alone completed, on the project. On October 12, 2018, a citation for Ariz. Rev. Stat §§ 32-1154(A)(1), 32- 1154(A)(12), and 32-1158 were recommended by Investigator Smith.[13] 15. Respondent did not complete the Groh project per contract or refund monies paid to Mr. Groh. Leslee Premyk’s Complaint (Case No. 2018-04318) 16. On September 11, 2018, Ms. Premyk filed a complaint with the Registrar against Respondent, whereby she accused Respondent of abandonment of their May 08, 2018 contract to install a residential solar system for $31,830.00.[14] According to the evidence and Ms. Premyk’s testimony, although Ms. Premyk paid Respondent a $20,689.50 deposit no work was ever done on the project.[15] Ms. Premyk testified that she contact Respondent on August 01, 2018, to inquire about the completion date of her project, and was told that her solar panels would be ordered “soon.” Per Ms. Premyk, on August 10, 2018, she received an email from Respondent informing her that the company’s Chief Executive Officer had passed away and the company needed additional time to reorganize and fulfill her project. Ms. Premyk agreed to afford Respondent one additional month to complete her project, but when she called to inquire at that time Respondent’s telephone number was disconnected. Ms. Premyk further testified that after the aforementioned incident occurred, she had an acquaintance email Respondent under the guise of purchasing residential solar panel installation and Respondent returned the call almost immediately. 17. Jim Diamond was assigned by the Registrar to investigate Ms. Premyk’s complaint. Investigator Diamond testified that he conducted a jobsite inspection on October 10, 2018 at 3:00 p.m.[16] Respondent was not present. Investigator Diamond testified that he observed no evidence of work being started, let alone completed, on the project. Investigator Diamond testified that he located an obituary for Darron Baker in a local paper. Mr. Baker was noted as being the CEO of Blazing Sky. Upon further investigation Investigator Diamond learned that Mr. Baker was not named on the Respondent’s license with the Registrar. Investigator Diamond also testified that he went to Respondent’s office, but that it was vacant. 18. Respondent did not complete the Premyk project per contract or refund monies paid to Ms. Premyk. Doug Koch’s Complaint (Case No. 218-04659) 19. On September 13, 2018, Mr. Koch filed a complaint with the Registrar against Respondent, whereby he accused Respondent of abandonment of their November 22, 2017 contract to install a residential solar system for $63,548.00.[17] According to the evidence, although Mr. Koch paid Respondent a $41,306.20 deposit no work was ever done on the project.[18] Per Mr. Koch’s complaint, he requested a refund on June 23, 2018, which was approved by Darren Baker, Respondent’s Chief Executive Officer, on June 27, 2018. On August 10, 2018, Mr. Koch was notified of Mr. Baker’s passing via email. Mr. Koch alleged that he inquired about his refund multiple times afterward, to no avail. 20. Investigator Melton was also assigned by the Registrar to investigate Mr. Koch’s complaint. Investigator Melton testified that she conducted a jobsite inspection on October 11, 2018, at 12:00 p.m.[19] Respondent was not present. Investigator Melton testified that she observed no evidence of work being started, let alone completed, on the project. On October 12, 2018, a citation for Ariz. Rev. Stat §§ 32-1154(A)(1) and 32-1154(A)(3) and Ariz. Admin. Code R4-9-108 were recommended by Investigator Melton.[20] 21. Respondent did not complete the Koch project per contract or refund monies paid to Mr. Koch. The Heady’s Complaint (Case No. 2018-04667) 22. On September 28, 2018, Mrs. Heady filed a complaint with the Registrar against Respondent, whereby she accused Respondent of abandonment of their August 02, 2018 contract to install a residential solar system for $47,345.00.[21] According to the evidence and Mr. Heady’s testimony, although the Heady’s paid Respondent a $20,000.00 deposit, no work was ever done on the project. Per Mrs. Heady’s complaint, she was notified of Respondent’s CEO’s passing in August of 2018, but was assured her project would commence on September 17, 2018, per contract. Mrs. Heady attempted to phone Respondent on September 27, 2018, to inquire about the delay in her project, but the Respondent’s telephone line was disconnected. Mr. Heady testified that neither he nor his wife was ever able to reach Respondent after August 2018. 23. Steven Klein was assigned by the Registrar to investigate the Heady’s complaint. Per the record, Investigator Klein issued a citation recommendation for for Ariz. Rev. Stat §§ 32-1154(A)(1) and 32- 1154(A)(3) and Ariz. Admin. Code R4-9-108 against Respondent on October 12, 2018.[22] 24. Respondent did not complete the Heady project per contract or refund monies paid to the Heady’s.

CONCLUSIONS OF LAW 1. These matters lie within the Registrar’s jurisdiction.[23] 2. The summarily suspended status of Respondent’s licenses does not deprive the Registrar of its ability to prosecute these complaints or prevent the Registrar from determining the merits of these complaints.[24] 3. The Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable. Neither the Notice of Hearing nor Supplemental Notice sent to Respondent were returned as undeliverable. Thus, Respondent is deemed to have received notice of the scheduled proceedings.[25] 4. The Registrar bears the burden of proof to establish grounds for suspension or revocation of Respondent’s contractor’s license by a preponderance of the evidence.[26] 5. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[27] 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.”[28] 6. Ariz. Rev. Stat. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” 7. Ariz. Rev. Stat. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” 8. Ariz. Admin. Code R4-9-108(A) states that “[a] contractor shall perform all work in a professional and workmanlike manner.” 9. Ariz. Admin. Code R4-9-108(B) states, in pertinent part, that “[a] contractor shall perform all work in accordance with any applicable building codes and professional industry standards.” 10. The evidence in this matter is undisputed. 11. The record reflects that Respondent abandoned the Nguyen, Groh, Premyk, Koch, and Heady projects without legal excuse. Therefore, the Registrar established five violations of Ariz. Rev. Stat. § 32- 1154(A)(1). 12. The record further reflects that Respondent did not meet minimum workmanship standards as required by Ariz. Admin. Code R4-9-108 on the Nguyen project. Therefore, the Registrar established one violation of Ariz. Rev. Stat. § 32-1154(A)(3). 13. The fact that Respondent has shown a pattern of taking deposits on new contracts while previously failing to fulfill existing contracts shows that, at this time, Respondent cannot be regulated. Notably, the tribunal is particularly troubled by the fact that Respondent accepted over $113,000.00 in deposits from victimized homeowners during this apparent grift. Because Respondent failed to appear, no evidence was offered to establish an affirmative defense to the above-captioned conduct. 14. Therefore, under the circumstances, the Registrar has established more than ample cause to summarily suspend Respondent’s licenses. 15. The tribunal holds that revocation of Respondent’s electrical and dual building contracting licenses are appropriate and in the best interest of the public. RECOMMENDED ORDER In light of the foregoing facts and conclusions of law, IT IS RECOMMENDED that the Registrar’s Order of Summary Suspension of Respondent’s License Nos. 296164 and 278219, as issued on October 11, 2018, be affirmed. IT IS FURTHER RECOMMENDED that on the effective date of the final order in this matter, Respondent’s License Nos. 296164 and 278219 shall be revoked. 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 22, 2018.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] See Registrar Exhibit 3. See also https://roc.az.gov/contractor- search?Id=a0Yt000000ACNCqEAP. [2] See Registrar Exhibit 4. See also https://roc.az.gov/contractor- search?Id=a0Yt000000ACMyKEAX. [3] See Registrar Exhibit 1. [4] See Registrar Exhibit 2. [5] See Registrar Exhibits 5 and 7. [6] See Registrar Exhibit 8. [7] See Registrar Exhibit 6. [8] Id. [9] See Registrar Exhibits 9 and 11. [10] See Registrar Exhibit 12. [11] See Registrar Exhibit 9. [12] See Registrar Exhibit 10. [13] Id. [14] See Registrar Exhibits 13, 15, and 16. [15] See Registrar Exhibit 13. [16] See Registrar Exhibit 14. [17] See Registrar Exhibits 17 and 19. [18] See Registrar Exhibit 20. [19] See Registrar Exhibit 6. [20] Id. [21] See Registrar Exhibits 21 and 23. [22] See Registrar Exhibit 22. [23] See Ariz. Rev. Stat. § 32-1154(A). [24] See Ariz. Rev. Stat. § 32-1154(D). That statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such licensee, or to render a decision suspending or revoking such a license . . . .” [25] See Ariz. Rev. Stat. §§ 41-1092.04 and 41-1092.05(D). [26] See Ariz. Rev. Stat. § 41-1092.07(G)(2); Ariz. Admin. Code R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [27] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [28] Black’s Law Dictionary at 1220 (8th ed. 1999).

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826