FINACT2018A-2704-CHC-ROC.pdf

2018A-2704-CHC-ROC · Registrar of Contractors · 2018-11-14

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Phyllis Jean Watson, Case No. 2018-2704 COMPLAINANT, Docket No. 2018A-2704-CHC-ROC v. FINAL ADMINISTRATIVE DECISION Service Masters Air Conditioning- Heating Inc., AND ORDER License No. ROC 216319, 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. REGISTRAR’S ACCEPTANCE In this case, a hearing was held, and the administrative law judge issued a written decision. See Administrative Law Judge Decision, attached. The Registrar reviewed that decision and hereby accepts it. CONCLUSION Because the Registrar has accepted the administrative law judge’s decision, that decision is the final administrative decision in this case and becomes effective on December 18, 2018. FINAL NOTE On page 2, lines 19 and 26, the Registrar replaces, “March 13, 2018” and “June 15, 2018” with “June 14, 2018” as the date the Complainant filed its complaint with the Registrar. On page 3, line 20, and page 5, line 28, the Registrar replaces, “July 30, 2018” with “July 23, 2018.”

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Dated November 8, 2018.

Registrar of Contractors /s/ Nicole Sornsin Nicole Sornsin Assistant Director, Legal and Recovery Fund Copy mailed via USPS First Class mail November 8, 2018 to: Respondent Service Masters Air Conditioning- Heating Inc. HC 70 Box 3567 Sahuarita, AZ 85629 Complainant Phyllis Jean Watson 3331 S Calle Del Acle Green Valley, AZ 85622 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar

Office of Administrative Hearings Jenna Clark, Administrative Law Judge Case No. 2018-2704 / AN

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 10.18.2018 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

No. 2018A-2704-CHC-ROC Phyllis Jean Watson, COMPLAINANT, ADMINISTRATIVE LAW JUDGE DECISION v.

Service Masters Air Conditioning-Heating Inc. License No: 216319 RESPONDENT. HEARING: September 27, 2018 at 1:00 PM. APPEARANCES: Phyllis Watson (“Complainant”) appeared on her own behalf, with Gregory Johndrow as a witness. Steve Fredrick appeared on behalf of Service Masters Air Conditioning-Heating Inc. (“Respondent”) with MaryAnn Frederick as a witness. 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 Order to the Director of the Registrar of Contractors (“the Registrar”).

FINDINGS OF FACT

BACKGROUND AND PROCEDURE

1. According to the Registrar’s public website, on or about April 23, 2006,

the Registrar issued License No. 216319 specialty dual CR-39 air conditioning,

refrigeration, and heating license contracting to Respondent. 1 The license is currently active and renewed through April 30, 2019. Steve Frederick (“Mr. Frederick”) is the

See https://roc.az.gov/contractor-search?Id=a0Yt000000ACZGoEAP. Further, Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on September 27, 2018. Such prior License record reflects that Respondent’s License No. 216319 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 Complainant’s. Respondent has a $6,750.00 surety bond effective May 14, 2018. Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 10.18.2018 ROC LEGAL

qualifying party/officer on this license. Respondent’s address of record on the license is HC 70 Box 3567 Sahuarita, AZ 85629-5848. 2 2. Complainant owns property located at 3331 S Calle del Acle Green

Valley, AZ 85622. The property is covered by whole home warranty insurance issued

by Landmark Warranty. In late-Spring of 2018 the air-conditioning unit at the property

started to fail. Complainant contacted Landmark Warranty, who in turn referred her to

Respondent. After consult, Landmark Warranty determined that Complainant’s air-

conditioning unit needed to be replaced. Respondent was contracted for the

replacement.

3. Although neither party signed the project invoice, the invoice provided a

partial description of the scope of work that Respondent would perform regarding the

removal of Complainant’s old air-conditioning unit and the installation of her new air-

conditioning unit. No start or completion dates were noted. Respondent’s license

number did not appear on the invoice, and no language appeared to apprise

Complainant of her right to file a complaint with the Registrar for Respondent’s alleged

violation of ARIZ. REV. STAT. § 32-1154(A) with the time allowed by ARIZ. REV. STAT. § 32-1155(A), nor did it provide the Registrar’s public website address and telephone number. 3 4. On March 13, 2018, Complainant filed a complaint with the Registrar alleging that Mr. Frederick had performed poor work on Complainant’s project, located at 3331 S Calle del Acle Green Valley, AZ 85622. 4 According to the complaint, Respondent was paid $1,218.00, plus an $85.00 service charge, via debit card on May 07, 2018, for charges that were not covered by Landmark Warranty. 5 Attached to the complaint was a copy of Complainant’s personal bank statement to show proof of payment to Respondent. 5. The Registrar received the complaint on June 15, 2018, and it was assigned to Gregory Johndrow (“Investigator Johndrow”) for investigation. See https://roc.az.gov/contractor-search?Id=a0Yt000000ACZGoEAP. Id. See the Registrar’s electronic file at Intake Complaint Submittal1.pdf. 5 Id. RECEIVED 10.18.2018 ROC LEGAL

6. On June 14, 2018, Investigator Johndrow mailed a job inspection letter to the parties, notifying them that a jobsite inspection was to take place at Complainant’s property on July 05, 2018. 6

7. The inspection was conducted on July 05, 2018. Complainant attended

but Respondent did not.

8. Of the ten allegations of poor workmanship originally levied against

Respondent by Complainant, Investigator Johndrow substantiated the first nine

complaints: (a) wrong size unit installed, 3.5 ton unit for 587 square foot condo, (b) gas

line installation is “stretched” and does not meet code (no sediment trap), (c)

condensation line does not meet code (drains into stack not gutter), (d) Unit is out of

level by 4 Inches, (e) no dampening pads were put between the unit and the wooden

frame holding it, (f) there is no “eyebrow” protecting the connection between the unit

and ductwork, (g) the thermostat wire is not in carflex, (h) the unit “leans” in the wrong

direction for condensation line to work, and (i) the roof was not sealed under it. 7

9. On July 06, 2018, Investigator Johndrow issued a DIRECTIVE FROM THE

REGISTRAR, requiring Respondent to remedy the aforementioned violations by

appropriate means, and “ensure that any and all required building permits are obtained from the Local Building Authorities prior to making corrections listed in this Directive.” 8 (Emphasis in original). The deadline for Respondent to comply with the DIRECTIVE was on or before 5:00 p.m. on July 30, 2018. 9 Respondent did not comply. 10. After Respondent failed to comply, Investigator Johndrow escalated the complaint to the Registrar’s legal department. 11. On July 25, 2018, the Registrar issued a formal CITATION to Respondent that charged cause to suspend or revoke Respondent’s license under ARIZ. REV. STAT.

See the Registrar’s electronic file at Rcc012 Formal Inspection Jobsite 1.rtf. See the Registrar’s electronic file at Rcc014 Corrective Work Order1.rtf. Id. 9 Id. RECEIVED 10.18.2018 ROC LEGAL

§§ 32-1154(A)(2), 32-1154(A)(3), 32-1154(A)(22), and ARIZ. ADMIN. CODE R4-9-108. 10 The CITATION reads, in pertinent parts, as follows: The Registrar hereby notifies Service Masters Air Conditioning- Heating Inc., that if the act or acts charged in the written complaint are proved at an administrative hearing, then Service Masters Air Conditioning- Heating Inc., may be found to have violated the following statutory provisions and rules: Charge 1: A violation of 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.”). 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) and 32-1154(A)(22). Charge 3: A violation of A.R.S. § 32-1154(A)(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.”).

The Citation further warned that Respondent’s failure to timely submit his ANSWER by

August 09, 2018, would be deemed an admission to charges under ARIZ. REV. STAT. §

32-1155(B), and could result in the suspension or revocation of his license.

12. Mr. Frederick’s written ANSWER was received by the Registrar on August 07, 2018. In his ANSWER Mr. Frederick stated that Complainant’s work order was processed through Landmark Warranty and assigned to his company. Mr. Frederick agreed that Complainant incurred $1,200.00 for non-covered charges. Per Mr. Frederick, Respondent removed Complainant’s old air-conditioner and installed a new unit prior to obtaining a building permit or taking a requisite “Manual J” measurement because Complainant demanded an immediate install, as the residence was to be leased to a tenant with an undisclosed medical condition that required air-conditioning. See the Registrar’s electronic file at Rch424 Citation Multiple Charges Workmanship W221.rtf. RECEIVED 10.18.2018 ROC LEGAL

Mr. Frederick further alleged that after determining that Landmark Warranty had ordered the incorrect replacement unit for Complainant, Respondent made multiple attempts to reach Complainant and schedule a correction, to no avail. Mr. Frederick

stated that he received the Registrar’s DIRECTIVE on July 16, 2018, and asked

Complainant for an extension which she denied.

13. The Registrar referred the complaint to the Office of Administrative

Hearings, an independent state agency, for an evidentiary hearing.

HEARING EVIDENCE

14. An evidentiary hearing was held on September 27, 2018. Complainant appeared and testified on her own behalf, and called Investigator Johndrow as a witness. Complainant also submitted three exhibits. Respondent also appeared and testified on his own behalf, and called MaryAnn Frederick as a witness. Respondent also submitted two exhibits. The Registrar’s electronic file and NOTICE OF HEARING were also admitted into the record. 15. At the hearing, Investigator Johndrow testified that he received Complainant’s complaint on June 14, 2018, and scheduled a job site inspection for July 05, 2018, at 2:00 p.m. Investigator Johndrow testified that he notified the parties about the job site inspection via written letter mailed on June 14, 2018. 11 Per Investigator Johndrow, Respondent did not attend the job site inspection. After the job site

inspection was complete Investigator Johndrow checked the Pima County Building

Permit website and confirmed that Respondent never obtained the required permits for

Complainant’s project, which, Investigator Johndrow opined, should have been done

prior to the commencement of any physical work on the project. Investigator Johndrow testified that he issued a DIRECTIVE on July 06, 2018, substantiating the first nine of Complainant’s ten action items against Respondent. Respondent was ordered to obtain the proper building permits and take all actions necessary to satisfactorily complete Complainant’s work order by 5:00 p.m. on July 30, 2018. Investigator Johndrow Investigator Johndrow testified that neither notice he mailed was returned as undeliverable by the United States Post Office. RECEIVED 10.18.2018 ROC LEGAL

testified that he received several voicemail and email messages from Respondent in the days just prior to the compliance deadline date, but that Respondent failed to perform any corrective work during the corrective period. As a result, per Investigator Johndrow, he escalated the matter to the Registrar’s legal department for review. Investigator Johndrow testified that he conducted a prehearing inspection on September 25, 2018, and that there had been no change on the project. 16. Mr. Frederick testified that although he does not have issues receiving mail at his address of record, the only correspondence he received from the Registrar was the DIRECTIVE regarding Complainant’s case and the related CITATION. Mr. Frederick admitted that he never once attempted to obtain the required building permits for Complainant’s project, and offered no evidence to substantiate his claim that Complainant’s signed invoice was a prerequisite for its issuance. Mr. Frederick also admitted that his prior assertion that Respondent had informed Complainant that a

technician would return to finish the necessary post-install items to complete the work

order, was in fact incorrect, as he did not personally inform Complainant of such and

was not a witness to any such advisement, nor could he provide the name of the

individual alleged to have made such a statement to Complainant. Mr. Frederick further admitted that at no time did he contact the Registrar and allege that he had been prohibited by Complainant from accessing the job site to address the violations outlined in the Registrar’s DIRECTIVE. 17. Mrs. Frederick testified that Respondent made multiple attempts to reach Complainant via telephone to no avail, and any such assertion of the same by Complainant was disingenuous as none of her call records reflected a missed call from Complainant’s telephone number. 18. Complainant testified that she was never told that the project was going to take more than one day or that it had to be split up amongst two or more days. Complainant testified that she never refused Respondent access to the job site. CONCLUSIONS OF LAW RECEIVED 10.18.2018 ROC LEGAL

1. The NOTICE OF HEARING the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. 12 Because the Registrar mailed all correspondence to Respondent in the

same manner and failed to receive any mail returned as undeliverable, Respondent is

deemed to have received all correspondence regarding this matter from the Registrar

as well.

2. The Registrar has jurisdiction over this matter pursuant to ARIZ. REV. STAT.

§§ 32-1101 et seq. and 32-1154(A).

3. The Registrar may resolve contractual disputes if such resolution in

ancillary to its regulatory mission and may penalize a contractor’s license by ordering

payment of restitution if a proven statutory violation was not remedied by corrective

action. 13

4. Complainant bears the burden of proof to establish Respondent’s

statutory violations by a preponderance of the evidence. 14 “A preponderance of the

evidence is such proof as convinces the trier of fact that the contention is more

probably true than not.” 15 Respondent bears the burden to establish factors in

mitigation of the penalty and affirmative defenses by the same evidentiary standard. 16 5. ARIZ. ADMIN. CODE R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” 6. ARIZ. REV. STAT. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license,

12 See ARIZ. REV. STAT. §§ 41-1092.04 and 41-1061(A). See ARIZ. REV. STAT. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990). See ARIZ. REV. STAT. § 41-1092.07(G)(2); ARIZ. ADMIN. CODE R2-19-119(A); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). See also BLACK’S LAW DICTIONARY 1373 (10th ed. 2014) which states that 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.” 16 See ARIZ. ADMIN. CODE R2-19-119(B)(2). RECEIVED 10.18.2018 ROC LEGAL

“[d]eparture from or disregard of plans or specifications or any building code standards without consent of the owner 7. ARIZ. REV. STAT. § 32-1154(A)(3) includes among the grounds for

suspension, revocation, or other disciplinary action against a contractor’s license,

“[v]iolation of any rule adopted by the registrar.”

8. ARIZ. REV. STAT. § 32-1154(A)(22) includes among the grounds for

suspension, revocation, or other disciplinary action against a contractor’s license,

“[f]ailure 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.”

9. Complainant has sustained her burden of proof in this matter.

10. Here, Complainant has established by a preponderance of the evidence

that she paid Respondent $1,218.00 for the removal of an inoperable air-conditioning

unit and for the subsequent installation of a replacement air-conditioning unit, as

provided by her home warranty company, and that Respondent failed to properly

complete the job as the replacement unit was installed incorrectly and inadequately in

violation of ARIZ. REV. STAT. § 32-1154(A)(2) and ARIZ. ADMIN. CODE R4-9-108. 11. Furthermore, the record reflects that Respondent did not attempt to compete the corrective work following the issuance of the Registrar’s DIRECTIVE, and Respondent’s failure to secure proper permits for the project evinces his lack of intent to adhere to the Registrar’s DIRECTIVE. Therefore, Complainant established by a preponderance of the evidence that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of ARIZ. REV. STAT. § 32-1154(A)(22). 12. Complainant also established by a preponderance of the evidence that she was never refunded the amount she paid, in part or in full, by Respondent. 13. The tribunal is not convinced that Complainant prohibited Respondent from completing the job, or that Respondent informed Complainant that the job would take more than one day to complete, as alleged by Mr. Frederick because the evidence of record does not support either contention. RECEIVED 10.18.2018 ROC LEGAL

14. Therefore, Complainant established cause for the Registrar to discipline Respondent’s contractor’s license under ARIZ. REV. STAT. §§ 32-1154(A)(2), 32- 1154(A)(3), 32-1154(A)(22), and ARIZ. ADMIN. CODE R4-9-108.

RECOMMENDED ORDER Based on the foregoing findings of facts and conclusions of law, IT IS RECOMMENDED that five days after the effective date of the FINAL ORDER in this matter, Service Masters Air Conditioning-Heating Inc. License No: 216319 be suspended for two calendar days based on its violations of ARIZ. REV. STAT. §§ 32- 1154(A)(2), 32-1154(A)(3), 32-1154(A)(22), and ARIZ. ADMIN. CODE R4-9-108. Respondent can avoid suspension if the Registrar receives credible proof that Respondent has fully complied with one of the following conditions: (1) Respondent has remedied by appropriate means each of the nine violations outlined in the Registrar’s Directive, OR (2) Respondent has entered into a mutually acceptable arrangement with Complainant. If the Registrar receives credible written proof that Respondent has complied with all of the foregoing conditions on or before the deadline identified above, then the above provided license suspension shall not take place. 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 is forty days after the date of that certification. Done this day, October 17, 2018.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors