FINACT2019A-01023-ROC.pdf

2019A-01023-ROC · Registrar of Contractors · 2019-04-08

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Arizona Registrar of Contractors, Case No. 2019-01023 COMPLAINANT, Docket No. 2019A-01023-ROC v. AEOS Energy Inc., FINAL ADMINISTRATIVE DECISION License No. ROC 317617, AND ORDER 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 May 13, 2019. FINAL NOTE On page 2, line 23 replace “March 5, 2019” with “March 4, 2019”. On page 3, line 17 replace “$10,085” with “$10,875”. On page 4, line 19 replace “December 12, 2018” with “October 15, 2018”.

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Dated April 3, 2019.

Registrar of Contractors /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund

Copy mailed via USPS First Class mail April 3, 2019 to: Respondent AEOS Energy Inc 1645 W Arcadia Ln Yuma, AZ 85364 Respondent’s Attorney Russell B. Richelsoph Esq. E Rio Salado Parkway, Ste 425 Tempe, AZ 85281

Witnesses Lester N Pearce 821 N Country Plaza East Gilbert, AZ 85234 Ray Radford 20184 N Toledo Ave Maricopa, AZ 85138 Randolph Modrell 18447 E Swan Dr Queen Creek, AZ 85142 James Przeborowski 44225 S Adobe Circle Maricopa, AZ 85139 Michelle Lee Garcia 45123 W Sagebrush Dr Maricopa, AZ 85139 James Paul Feeser 4419 W Kimberly Way Maricopa, AZ 85139

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of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Respondent’s Attorney at email address of record with Registrar Witnesses at email address on record with the Registrar Office of Administrative Hearings Velva Moses-Thompson, Administrative Law Judge Office of the Attorney General John R. Tellier, Assistant Attorney General

Case No. 2019-01023 / mm

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 3.28.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors, No. 2019A-01023-ROC

COMPLAINANT, ADMINISTRATIVE LAW JUDGE v. DECISION AEOS Energy, Inc., Registrar License: ROC 317617

RESPONDENT.

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.

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 3.28.2019 ROC LEGAL

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 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. RECEIVED 3.28.2019 ROC LEGAL

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. RECEIVED 3.28.2019 ROC LEGAL

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 RECEIVED 3.28.2019 ROC LEGAL

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. RECEIVED 3.28.2019 ROC LEGAL

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 RECEIVED 3.28.2019 ROC LEGAL

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 RECEIVED 3.28.2019 ROC LEGAL

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