ALJDEC decisions subject to certification as final

2019A-00562-CHC-ROC · Registrar of Contractors · 2020-01-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Michal Hope Owens ,

COMPLAINANT,

v.

Tesla Energy Operations, Inc.,

ROC License: ROC 243771, 245450, 277498, 278512,

RESPONDENT.

No. 2019A-00562-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: November 22, 2019

APPEARANCES: Complainant Micha Hope Owens appeared on her own behalf. Riki Lawrence, Field Service Crew Lead, represented Respondent SolarCity Corporation dba as Tesla Energy Operations, Inc.

ADMINISTRATIVE LAW JUDGE: Kay Abramsohn

_____________________________________________________________________

FINDINGS OF FACT

SolarCity Corporation dba Tesla Energy Operations, Inc. (Respondent) is the holder of active License Nos. 243771 and 245450 issued by the Arizona Registrar of Contractors (Registrar).

On or about May 31, 2017, Complainant entered into a contract with Respondent for an 11.48 kWh rooftop Solar System (System) with a 20 year warranty. The agreement provides a money-back energy performance guarantee, a warranty on all roofing work, a warranty on repairs to the System, a promise to fix or pay for any damage caused to Complainant’s property, and 24/7 web-enabled system monitoring.

On or about August 11, 2017, Complainant executed a change order for Respondent for an upgraded 12.3 kWh System. The system was green tagged on August 14, 2017 and Respondent submitted the requisite documents for Arizona Public Service (APS) for APS to give permission for the System to operate.

On or about February 4, 2019, the Registrar received a Complaint (dated January 23, 2019) against Respondent from Complainant alleging poor installation of the solar panels and mountings/hardware with some unsealed penetrations of the roof which caused water leaks (and resultant damage “to every location in my home all directly under each and every panel”). Additionally, Complainant alleged that there was “poor flashing and underlayment” visible from the inside of the attic under the panel risers. Finally, Complainant alleged that the “wrong build documents” were on file, stating that there was a change order.

The Registrar assigned the case number 2019-00562 to the Complaint and assigned the Complaint to Investigator Steve Klein.

At a jobsite inspection on April 2, 2019, Investigator Klein water tested the roof and, using a 30-minute test, was unable to recreate any leaks. Respondent was not present. The ROC issued a Closure letter on April 3, 2019 indicating that there was insufficient evidence to warrant issuing a Citation to Respondent.

Complainant contacted other roofing companies regarding testing for leaks, and when she contacted Investigator Klein, on April 3, 2019, he advised as follows:

They will need to water test, confirm and supply documentation stating where the leak is coming from, so I can verify. I will have to test at the same location they point out. That’s why an inspection company may be a better choice, they will take pictures and provide a report. The letter isn’t evidence enough. You can send it to the solar company and see what they say. I tested for 30 minutes and could not verify a leak.

In May 2019, Complainant requested that the Complaint be reopened, based on the inspection report and a video she had provided, and Investigator Klein replied that she would need to be able to identify and direct him to the location where the leaks were. Complainant noted that she had marked the leaks with coordinates.

After another jobsite inspection on June 28, 2019, Investigator Klein issued a Directive to Respondent, regarding License No. 243771, as follows:

After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a Citation, discipline of your license and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. Failure to comply with this Directive may also be treated as an aggravating factor should the Registrar pursue discipline of your license. You must notify the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on July 17, 2019.

You are hereby directed to remedy the following violations by the appropriate means:

Complaint Item 9: Poor installation of Solar Panels on my roof caused water to enter my home which then caused damage to every location in my home all directly under each. Originally #1 first inspection.

Complainant points out an area where a small penetration need to be sealed and several shingles that need to be secured.

Complaint Item 10: Solar Panel upgrade without getting permission.

Complainant supplies paperwork showing changes that were made, possibly without permission from the proper authority.

Respondent shall complete project per original contract agreement, properly executed change orders and local building codes.

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

Following the issuance of the written directive, Respondent did not fully correct the directive workmanship issue.

Investigator Klein was notified by Complainant on July 29, 2019 that corrective work had not been performed in full.

On August 7, 2019, Investigator Klein issued a Directive Compliance letter, noting that Item #9 had been addressed but not completed, as there were a few shingles that remained to be secured. He also noted that Item #10 had not been addressed at the inspection. Finally, he indicated that the failure to correct the items by the time of the compliance inspection would result in forwarding the matter to the legal department for possible issuance of a citation.

On August 8, 2019, the Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(2) and (A)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(22).

A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes ... in any material respect which is prejudicial to another ... without consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.”

A.R.S. § 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.”

A.A.C. 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.”

A.R.S. § 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.”

On or about August 23, 2018, Respondent filed its written Answer to the Citation. Regarding penetrations and shingles items on the Directive, Respondent noted that it had completed those repairs on July 17, 2019. Regarding the updated paperwork item on the Directive, Respondent noted that it had resubmitted a permit to the City of Phoenix (City) and had completed an Equipment Amendment Form with APS. As to the Citation Charge #1, Respondent acknowledged that the System installed differed in “size” from the written contract, however, the increase in size had actually given Complainant an energy production increase and an equipment value increase at no additional cost. Respondent further noted that the System had been installed according to building codes and had been inspected and approved by the authorities prior to the System being activated. Finally, Respondent believed, with the completed updated paperwork “to ensure the correct system size is on file,” that it had complied with the Directive.

The Registrar subsequently referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

The Investigator opined that the most concerning issue for Complainant appeared to be the alleged water leaks and he testified regarding both of his unsuccessful efforts to recreate the alleged water leaks.

At hearing, Complainant brought forward no witnesses.

At hearing, Complainant provided additional photographs. These included photographs she had taken of the panels on the roof, some shingles wrinkled or appearing to be separated from the shingle below, the air conditioner unit and its attachments, sealing material at various locations, the attic with nail and screw “penetrations,” all of which she opined were caused by incorrect installation of the panels and poor workmanship by Respondent.

Regarding the roof and leaks, Complainant indicated that the entire roof (underlayment and shingles) had been replaced in 2011 and that there were never any leaks until after the Respondent had installed the panels.

In October 2018, Respondent had also investigated alleged roof leaks and determined that water was entering the home “from around [the] ac unit.” Respondent recommended that Complainant contact her roofer to have them resolve that leak.

Complainant maintained that, due to the 50-year rain storm events that had occurred in 2018 which caused “roof saturation,” the leaks and water damage to her house had to have been caused by Respondent’s poor workmanship, unsealed penetrations at the panel connections to the roof, and penetrations that were not in the proper places (i.e., panel attachment that she alleged had been made through the roof shingles and that were not into the rafters).

Complainant opined that the reason the Investigator had been unable to recreate the leaks was that she had been required by the insurance company in 2018 to repair the leaks. Her concern since those repairs was that the “leaks” were now always in different areas. Complainant noted that she could not proceed with any other roof repairs without removal of the panels (and later reinstallation), which would require an agreement with Respondent as to such actions.

At hearing, Respondent’s representative indicated that there were no “extra” or additional panels that had been installed, only that the panels that were installed were of a different energy-production value and, further, that the required mounting hardware, etc. for both the originally-intended panel and the actually-installed panels were the same. Respondent noted that APS did not require any resubmission of paperwork unless the capacity of the System had increased more than 10% or one (1) kilowatt, whichever was greater, and that the City had not required a new permit for a module change.

Complainant’s concerns with the paperwork were that she had received incorrect plans at the time of the installation of the upgraded panels and, essentially, that she could not be certain that the plans on file with the authorities were the proper plans. Complainant was also concerned that the City’s further inspection (November of 2019), regarding the final City permit, had noted multiple issues with the roof. Additionally, Complainant was concerned that the energy credits she was to have received under the initial contract and agreements might be invalid with the upgrade and the possibly erroneous paperwork.

Administrative notice is taken of Respondent’s existing License record, which reflects that there is 1 open complaint, 1 resolved (closed) complaint, and the instant complaint.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

The evidence established that Respondent’s work as to the installation of the System needed to be corrected as to several areas for sealant and shingles regarding workmanship. Therefore, the evidence demonstrated that, as to the Directive items, Respondent had not initially completed the project in a workmanlike manner.

The hearing record established that Respondent subsequently completed the corrective work noted on the Directive. Therefore, Complainant failed to establish that Respondent had not taken appropriate corrective action following the written Directive.

At hearing, Complainant referenced multiple other concerns at the hearing. Complainant primarily continued to maintain that roof leaks had been the result of Respondent’s work; however, Complainant has not proven that to be the case. Additionally, while Complainant maintained concerns about the paperwork, the record demonstrated the paperwork had been updated with the appropriate authorities in compliance with the Directive.

RECOMMENDED ORDER

Based on the foregoing, the Administrative Law Judge recommends that Respondent’s active license, No. 243711 not be disciplined as a result of this Complaint, and Complainant’s Complaint should be closed.

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 40 days from the date of that certification.

Done this day, January 8, 2020.

/s/ Kay Abramsohn

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors