ALJDEC decisions subject to certification as final

2019A-00918-ROC · Registrar of Contractors · 2019-03-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 22, 2019 APPEARANCES: Assistant Attorney General Thomas Raine appeared on behalf of the Arizona Registrar of Contractors. No representative appeared on behalf of Respondent AEOS Energy, Inc. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson _____________________________________________________________________ FINDINGS OF FACT 1. On March 4, 2019, the Registrar of Contractors (“Registrar”) issued an Order of Summary Suspension, Order Consolidating Cases, and Notice of Promptly Instituted Proceeding (“Order”) setting the above-captioned matter for hearing at 9:00 a.m. on March 22, 2019 at the Office of Administrative Hearings. 2. No representative appeared for Respondent AEOS Energy, Inc. (“AEOS”) at the scheduled time and the hearing was convened in its absence at about 9:05 a.m.[1] 3. In the Order, the Registrar presented its determination that the public welfare imperatively required emergency action and it summarily suspended AEOS’ license. Citing Ariz. Rev. Stat. § 41-1092.11(B). 4. AEOS holds license number 317617 issued by Registrar. 5. On March 8, 2019, the Registrar also issued a Supplemental Notice to clarify and detail the specific charges against AEOS. 6. The Supplemental Notice provided a Statement of Facts and a Formal Statement of Alleged Violations in which Registrar alleged that AEOS had committed six violations of Ariz. Rev. Stat. sections 32-1154(A)(1). 7. The Registrar is requesting that AEOS’s license be revoked. 8. In February of 2019, the Registrar received six complaints against AEOS, all of which alleged abandonment. These six matters were consolidated into this single proceeding. 9. Because of this public safety issue and to protect the public welfare by eliminating the risk that other consumers would enter contracts with AEOS, the Registrar issued its Order summarily suspending AEOS’s license. The preponderance of the evidence shows that Registrar was justified in issuing the summary suspension. 10. A hearing was held on March 22, 2019. 11. The Registrar presented the testimony of its Assistant Chief Counsel and Staff Attorney Chance Peterson, its Assistant Chief of Investigations Mike Crow, and its Investigator Philip Jaegge. The Registrar submitted exhibits 1 through 22. 12. On or about July 27, 2018, James Przeborowski entered into a contract with AEOS, wherein AEOS would install solar panels on Mr. Przeborowski’s home for $10,085. AEOS deposited Mr. Przeborowski’s check into its bank account. Mr. Przeborowski paid AEOS $10,085 for the installation the same day. 13. AEOS never began work on Mr. Przeborowski’s home. 14. On or about February 25, 2019, the Registrar received a complaint from Mr. Przeborowski alleging poor workmanship and abandonment on the part of AEOS. 15. On or about March 5, 2019, Investigator Philip Jaegge conducted a jobsite inspection regarding Mr. Przeborowski’s complaint. Investigator Jaegge observed that AEOS had not installed solar panels on Mr. Przeborowski’s home. Moreover, AEOS had not performed any work at Mr. Przeborowski’s home. Investigator Jaegge attempted to contacted two employees from AEOS. One employee answered the phone and told Investigator Jaegge that he no longer worked for AEOS. However, the individual would not provide his name to Investigator Jaegee. Investigator Jaegee left a message with the second employee, but the individual did not return Investigator Jaegee’s phone call. Investigator Jaegee sent an electronic mail message (“email”) to AEOS regarding the jobsite inspection, but he did not receive a response from AEOS. 16. Investigator Jaegee reviewed the July 27, 2018 contract between Mr. Przeborowski and AEOS. Investigator Jaegee determined that the contract did not have an estimated date of completion, the address of the contractor, nor language which advised Mr. Przeborowski of his right to file a Complaint with the Arizona Registrar of Contractors (“Registrar”) against AEROS for an alleged violation of Ariz. Rev. Stat. section 32-1154(A), within the time allowed by Ariz. Rev. Stat. section 32-1155(B) (hereinafter “complaint advisement”). The contract did not obtain the advisements required for agreements that govern the sale of distributed energy generation systems under Ariz. Rev. Stat. section 32-1154(A)(24) and Ariz. Rev. Stat. section 44-1763. 17. On or about August 29, 2018, Michelle Garcia entered into a contract with AEOS, wherein AEOS would install solar panels on Ms. Garcia’s home for $10,875. Ms. Garcia paid AEOS $10,085 for the installation the same day in the form of a cashier’s check. AEOS never began work on Ms. Garcia’s home. 18. On or about February 25, 2019, the Registrar received a complaint from Ms. Garcia alleging poor workmanship and abandonment on the part of AEOS. 19. On or about March 4, 2019, Investigator Philip Jaegge conducted a jobsite inspection regarding Ms. Garcia’s complaint. Investigator Jaegge observed that AEOS had not installed solar panels on Ms. Garcia’s home. Moreover, AEOS had not performed any work at Ms. Garcia’s home. Investigator Jaegge attempted to contact an employee from AEOS. One employee answered the phone and told Investigator Jaegge that he no longer worked for AEOS. However, the person would not provide his name to Investigator Jaegee. 20. Investigator Jaegee reviewed Ms. Garcia’s August 2018 contract with AEOS and determined that the contract did not have an estimated date of completion, the address of the contractor, nor a complaint advisement. 21. On or about December 12, 2018, Jason Feeser entered into a contract with AEOS, wherein AEOS would install solar panels on Mr. Feeser’s home for $23,925. Ms. Feeser paid AEOS $23,925 for the installation. AEOS deposited the check from Mr. Feeser check into its bank account. AEOS did not install the solar panels on Mr. Feeser’s home. 22. On or about February 25, 2019, the Registrar received a complaint from Mr. Feeser alleging poor workmanship and abandonment on the part of AEOS. 23. On or about March 4, 2019, Investigator Philip Jaegge conducted a jobsite inspection regarding Mr. Feeser’s complaint. Investigator Jaegge observed that AEOS had not installed solar panels on Mr. Feeser’s home. Moreover, AEOS had not performed any work at Mr. Feeser’s home. Investigator Jaegge attempted to contact an employee from AEOS. One employee answered the phone and told Investigator Jaegge that he no longer worked for AEOS. However, the person would not provide his name to Investigator Jaegee. 24. AEOS did not provide Mr. Feeser with a contract that contained a complaint advisement. The contract did not obtain the advisements required for agreements that govern the sale of distributed energy generation systems under Ariz. Rev. Stat. section 32-1154(A)(24) and Ariz. Rev. Stat. section 44-1763. 25. On or about December 12, 2018, Caron Ray Rayford entered into a contract with AEOS, wherein AEOS would install solar panels on his home for $10,875. Caron Ray and Pam Rayford (“the Rayfords”) paid AEOS $5,437.50. AEOS deposited the check from the Rayfords into its bank account. AEOS did not install the solar panels on the Rayfords’ home. 26. On or about February 27, 2019, the Registrar received a complaint from the Rayfords alleging poor workmanship and abandonment on the part of AEOS. 27. On or about March 4, 2019, Investigator Philip Jaegge conducted a jobsite inspection regarding the Rayfords’ complaint. Investigator Jaegge observed that AEOS had not installed solar panels on Mr. Rayford’s home. Moreover, AEOS had not performed any work at the Rayfords’ home. Investigator Jaegge attempted to contact an employee from AEOS. One employee answered the phone and told Investigator Jaegge that he no longer worked for AEOS. However, the person would not provide his name to Investigator Jaegee. Investigator Jaegee sent an email to AEOS regarding the jobsite inspection. Investigator Jaegee did not receive a response from AEOS. 28. AEOS did not provide the Mr. Rayford with a contract that contained a complaint advisement. The contract did not obtain the advisements required for agreements that govern the sale of distributed energy generation systems under Ariz. Rev. Stat. section 32-1154(A)(24) and Ariz. Rev. Stat. section 44-1763. 29. In 2018, Randolph Modrell (“Mr. Modrell”) entered into a contract with AEOS, wherein AEOS would install solar panels on Mr. Modrell’s home for $21,000. Mr. and Mrs. Modrell paid AEOS $21,000 for the installation. AEOS deposited the check from Mr. and Mrs. Modrell into its bank account. 30. On or about February 25, 2019, the Registrar received a complaint from Mr. Modrell alleging poor workmanship and abandonment on the part of AEOS. 31. On or about March 4, 2019, Investigator Mike Crow conducted a jobsite inspection regarding Mr. Modrell’s complaint. On December 31, 2018, AEOS installed electrical service panels on the side of Mr. Modrell’s home. A representative from AEOS informed Mr. Modrell that he would qualify for a tax credit because the electrical service panels had been installed. However, there were no wires connected to the panels. 32. AEOS did not install solar panels on Mr. Modrell’s home. 33. Investigator Crow called an AEOS employee and left a voicemail message. Investigator Crow did not receive a returned phone call from the employee. Investigator Crow believed that he sent email to AEOS. Investigator Crow did not receive a response from AEOS. 34. AEOS did not provide Mr. Modrell with a contract that stated the estimated date of completion, the address of the contractor, nor a complaint advisement. The contract did not obtain the advisements required for agreements that govern the sale of distributed energy generation systems under Ariz. Rev. Stat. section 32-1154(A)(24) and Ariz. Rev. Stat. section 44-1763. 35. In 2018, Lester N. Pearce entered into a contract with AEOS wherein AEOS would install solar panels on Mr. Pearce’s home for home for $112,013. Mr. Pearce paid AEOS $112,013 for the installation in the form of a cashier’s check. 36. On or about February 25, 2019, the Registrar received a complaint from Mr. Pearce alleging poor workmanship and abandonment on the part of AEOS. 37. On or about March 4, 2019, Investigator Mike Crow conducted a jobsite inspection regarding Mr. Pearce’s complaint. During mid to late December of 2018, AEOS installed electrical service panels on the side of Mr. Pearce’s home.

A representative from AEOS informed Mr. Pearce that he would qualify for a tax credit because the electrical service panels had been installed. However, there were no wires connected to the panels. 38. AEOS did not install solar panels on Mr. Pearce’s home. 39. Investigator Crow called an AEOS employee and left a voicemail message. Investigator Crow did not receive a returned phone call from the employee. Investigator Crow believed that he sent email to AEOS. Investigator Crow did not receive a response from AEOS. 40. AEOS did not provide Mr. Pearce with a contract which stated the estimated date of completion, the address of the contractor, nor a complaint advisement. The contract did not obtain the advisements required for agreements that govern the sale of distributed energy generation systems under Ariz. Rev. Stat. section 32-1154(A)(24) and Ariz. Rev. Stat. section 44-1763. CONCLUSIONS OF LAW 1. “At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2). 2. Respondent’s suspended license does not deprive Complainant their right to prosecute the complaints or prevent the Registrar from determining the merits of the complaints. See A.R.S. § 32-1154(D). 3. Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119. 4. A preponderance of the evidence is: The 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.

Black’s Law Dictionary 1373 (10th ed. 2014). 5. Ariz. Rev. Stat. section 32-1154(A) provides that The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: ***** 1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

6. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). 7. “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B). 8. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 9. The undisputed evidence in this matter established that Respondent violated A.R.S. § 32-1154(A)(1) and abandoned its six residential construction contracts. Respondent failed to install any solar panels and in some cases, failed to do any work in connection with the contract, despite being paid in full on five out of the six contracts. Respondent left the job uncompleted and failed to make arrangements with a properly licensed contractor to complete the work. 10. Similarly, a review of the six contracts with Respondent shows that Respondent violated A.R.S. § 32-1154(A)(12) by failing to include required elements in its contracts pursuant to A.R.S. § 32-1158(B), A.R.S. §§ 32-1154(A)(24) and 44-1763. 11. AEOS’s license should be revoked.

ORDER IT IS ORDERED that on the effective date of the final Order in this matter, AEOS Inc.’s license number 317617 is 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 is forty days after the date of that certification. Done this day, March 27, 2019.

/s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] Assistant Attorney General Thomas Raine informed the tribunal that Respondent’s counsel of record informed him that he and Respondent would not attend the hearing. See Administrative Record.

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