FINACT2019A-04147-CHC-ROC.pdf

2019A-04147-CHC-ROC · Registrar of Contractors · 2020-04-03

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Michael Marvin Curtiss, Case No. 2019-04147 COMPLAINANT, Docket No. 2019A-04147-CHC-ROC v. Extreme Services HVAC Corp, FINAL ADMINISTRATIVE License No. ROC 318123, DECISION 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 of each finding of fact or conclusion of law. 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 accepts it. CONCLUSION AND ORDER 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 6, 2020. IT IS FURTHER ORDERED that Respondent pay a civil penalty in the amount of $200.00 payable to the Registrar on or before 30 days from the effective date of this Order.

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 Payment may be hand-delivered to the Registrar’s physical address or mailed to:

Registrar of Contractors P.O. Box 6748 Phoenix, Arizona 85505-6748 FINAL NOTE On page 2, lines 8 and 9, after “August 16” add a comma.

On page 10, line 6, “(5)” should be “(7)”. Dated March 27, 2020. By: /s/ Joseph Citelli Joseph Citelli, Chief Council Legal Department Arizona Registrar of Contractors

Copy mailed via USPS First Class mail March 27, 2020 to: Respondent Extreme Services HVAC Corp 1962 E Apache Blvd Ste 7071 Tempe, AZ 85281 Complainant Michael Marvin Curtiss 6213 W Ivanhoe St Chandler, AZ 85226

Copy sent electronically this same date to:

Office of Administrative Hearings Jenna Clark, Administrative Law Judge

Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar

Case No. 2019-04147

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 RECEIVED 2.25.2020 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Michael Marvin Curtiss, No. 2019A-04147-CHC-ROC COMPLAINANT,

v. ADMINISTRATIVE LAW JUDGE DECISION Extreme Services HVAC Corp, ROC License: ROC 318123, RESPONDENT.

HEARING: February 14, 2020 at 8:30 AM. APPEARANCES: Michael Marvin Curtiss (“Complainant”) appeared on his own behalf with Dennis Bierma as a witness. Francesco Perfetti appeared on behalf of Extreme Services HVAC Corp (“Respondent”). ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following RECOMMENDED ORDER to the Director of the Arizona Registrar of Contractors (“Registrar”). FINDINGS OF FACT BACKGROUND AND PROCEDURE 1. On February 22, 2018, the Registrar issued License No. 318123 for specialty dual CR-39 air conditioning and refrigeration contracting to Respondent.1 Respondent’s address of record for the license is 3336 E. Clifton Ave. Gilbert, AZ 85295-6383.2 Francesco Perfetti is listed on the license as the Qualifying Party/Officer. Robert Javier Amarillas is also listed on the license as an Officer.

1 See https://roc.az.gov/contractor-search?Id=a0ot0000000Nq1P. Id. RECEIVED 2.25.2020 ROC LEGAL

2. Pursuant to ARIZ. ADMIN. CODE R4-9-117 Administrative Notice is taken of Respondent’s prior license record, for ROC License No. 318123, as reflected on the Registrar’s public website on February 14, 2020. Such prior license record reflects that Respondent’s license is active and currently renewed through February 29, 2020.3 The license has not been previously disciplined.4 The record reflects that there is one open complaint against Respondent’s license, which is presumed to be related to this matter.5 Respondent has a $6,750.00 surety bond for the license issued through RLI Insurance Company, effective February 01, 2018.6 3. On August 16 2019, the Registrar received a complaint filed by Complainant alleging poor work performance on an air-conditioning (“a/c”) installation project.7 Attached to the complaint was a copy of the service order and invoice for the project.8 4. On August 28, 2019, the Registrar issued a JOBSITE INSPECTION NOTIFICATION letter to the parties, advising that an onsite review would be conducted at the project site by an investigator on September 30, 2019, at 11:00 a.m.9 5. On July 11, 2019, Registrar investigator Dennis Bierma (“Investigator Bierma”) inspected the work that had been done on the project to date and took 18 photographs of the project.10 When he was finished, Investigator Bierma drafted JOBSITE INSPECTION NOTES.11 6. On October 31, 2019, Investigator Bierma issued a DIRECTIVE FROM THE REGISTRAR to Respondent because he substantiated Complainant’s allegation that the work Respondent had done on the project failed to meet minimum workmanship standards.12 Respondent was put on notice that he had until 5:00 p.m. on November 25, 2019, to notify the Registrar of its compliance with the DIRECTIVE or face discipline

Id. Id. Id. Id. See Agency File, pages 31-32. 8 See Agency File, page 34. See Agency File, pages 37-39. 10 See Agency File, pages 47-64 See Agency File, pages 45-46. 12 See Agency File, pages 41-44. 2 RECEIVED 2.25.2020 ROC LEGAL

pursuant to ARIZ. REV. STAT. §§ 32-1154(A)(3); ARIZ. ADMIN. CODE R4-9-108, 32- 1154(A)(22), and 32-1154(E).13 7. On December 02, 2019, the Registrar issued a CITATION AND COMPLAINT to Respondent for alleged violations of ARIZ. REV. STAT. §§ 32-1154(A)(3); ARIZ. ADMIN. CODE R4-9-108, and 32-1154(A)(22).14 Respondent was given until December 17, 2019, to respond with its ANSWER or face discipline pursuant to ARIZ. REV. STAT. §§ 32- 1154(A)(22) and 32-1155.15 8. On December 17, 2019, the Registrar received Respondent’s ANSWER whereby Respondent blamed Complainant’s roofer (“Roofer”) for the alleged damage to Complainant’s roof.16 Specifically, Respondent alleged that upon installation of Complainant’s a/c unit he observed that “the stand for the old unit had broken on the bottom and stuck to the roof from the previous work that was done by [Roofer].” Respondent further alleged that he agreed to move forward with the installation of the a/c unit, and reinstall it free of charge after Roofer made repairs to the roof, but that the parties’ agreement fell through “because of communication.”17 9. On December 18, 2019, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on February 14, 2020. Per the January 14, 2020, NOTICE OF HEARING the issue to be determined is whether the Registrar has cause to discipline Respondent’s license based on the following charges: Charge 1: 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). Charge 2: 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

13 Id. See Agency File, pages 8-12. 15 Id. See Agency File, pages 4-5. 17 Id. 3 RECEIVED 2.25.2020 ROC LEGAL

compliance shall not be less than fifteen days from the date of issuance of the directive.”).18 HEARING EVIDENCE 10. Complainant testified on his own behalf, called Investigator Bierma as a witness, and submitted one exhibit. Francesco Perfetti testified on behalf of Respondent and submitted one exhibit. The Registrar’s agency file and NOTICE OF HEARING were admitted into the record as their own exhibits. Complainant’s testimony 11. On July 23, 2019, Complainant’s 25 year old a/c unit failed. Complainant’s home warranty company referred Complainant to Respondent for repair. 12. On July 24, 2019, Respondent inspected Complainant’s a/c unit and notified Complainant that it would cost approximately $1,700.00 out of pocket to repair. Respondent also advised that Complainant could secure a brand new a/c unit for

$5,500.00 and that Complainant’s local utility company, SRP, was currently offering an

$800.00 rebate on new a/c units with their Cool Cash Rebate Program.

13. Complainant was incentivized by SRP’s rebate program to replace his a/c

unit in lieu of having it repaired, as the total cost for a new unit would only be $4,700.00.19

Additionally, because SRP’s rebate program was offered for a limited time, Complainant

felt that he had to act quickly to have his a/c unit replaced in order to gain access into the

rebate program.

14. In addition to submitting a timely application, one of the requirements for rebate program qualification was that Complainant’s a/c unit had to pass an inspection administered by SRP. 15. On or about July 26, 2019, Complainant entered into a contract agreement with Respondent whereby Respondent agreed to install a new a/c unit on Complainant’s roof for the sum total of $5,500.00.20 The project commenced on July 24, 2019, and was completed on July 26, 2019. Complainant paid the contract in full.

18 See NOTICE OF HEARING. See Complainant Exhibit 1. 20 See Agency File, page 34. 4 RECEIVED 2.25.2020 ROC LEGAL

16. On January 07, 2020, Complainant was notified by SRP that his newly installed a/c unit failed inspection. 17. After contacting Respondent shortly thereafter, Respondent denied any wrongdoing and advised Complainant to contact Roofer regarding SRP’s concerns. 18. At the time of Respondent’s installation, Complainant’s roof was 2 years old and still under warranty by Roofer. Roofer completed an inspection of the roof per Complainant’s request, and advised Complainant that the damage at issue was caused by Respondent. Roofer provided Complainant photos of what his roof looked like after Roofer completed its work 2 years prior, and additional photos of the current state of Complainant’s roof. 19. On August 16, 2019, Complainant filed Complaint 2019-04147 with the Registrar. 20. Respondent did not attend the Registrar’s jobsite inspection. 21. During the DIRECTIVE’S corrective period, Respondent sent several voicemail messages directly to Complainant’s phone without ever calling him. Complainant did not check the messages until after the DIRECTIVE’S compliance deadline passed. Although the parties were in contact via other means during this time, Respondent did not make any effort to remediate his poor workmanship on the project prior to November 25, 2019. Investigator Bierma’s testimony 22. During his September 30, 2019, jobsite inspection, Investigator Bierma observed the state of the a/c unit Respondent installed for Complainant. Specifically, Investigator Bierma took note of damaged shingles surrounding the immediate area of the a/c unit, exposed wiring, the fact that the back of the frame was not appropriately attached to the a/c unit causing it to tilt backward, and an excessive amount of product around the a/c unit.21 Investigator Bierma concluded that Respondent’s workmanship fell below minimum standards in violation of ARIZ. REV. STAT. § 32-1154(A)(3); ARIZ. ADMIN.

21 See Agency File, pages 46-64. 5 RECEIVED 2.25.2020 ROC LEGAL

CODE R4-9-108. Investigator Bierma issued a DIRECTIVE which required compliance by November 25, 2019. 23. On November 25, 2019, Respondent requested a second inspection of the project site, which was denied by the Registrar.22 While Respondent did not accuse Complainant of denying access to the project site, he did accuse Complainant of being “[un]cooperative during this process.”23 24. On November 25, 2019, Complainant provided written notice to the Registrar that Respondent did not comply with the DIRECTIVE.24 No documentation was received to establish that the parties reached a financial agreement to settle the dispute. As a result, Complaint 2019-04147 was escalated to the Registrar’s legal department with citation recommendations. 25. A compliance inspection was not performed. 26. Regarding the existence of an alleged preexisting issue with the frame on Complainant’s roof, Investigator Bierma testified that Respondent assumed the risk of moving forward with the installation of Complainant’s a/c unit because he did not notify Complainant of the alleged condition and obtain a signed waiver and consent agreement from Complainant. Respondent’s testimony 27. Respondent testified that he installed Complainant’s a/c unit to the best of his ability. However, prior to installation, Respondent noted an existing partial frame where Complainant’s old a/c unit had been attached. The frame had a broken bar that had been covered in tar and roofing shingles, which Respondent had not wanted to remove before installing Complainant’s new a/c unit. 28. Respondent chose to move forward with the installation because he did not want to leave Complainant without air-conditioning in the middle of summer, and he wanted to make sure Complainant qualified for the SRP rebate program.

22 See Agency File, pages 25-27. See Agency File, page 21. 24 See Agency File, page 20. 6 RECEIVED 2.25.2020 ROC LEGAL

29. Respondent did not inform Complainant about the existing frame until after he completed the installation of the new a/c unit. Respondent made no mention to Complainant of the wires he left exposed on the a/c unit or the excessive glue surrounding the unit. 30. During his testimony, Respondent did not deny that he left excessive glue around the a/c unit he installed for Complainant, or that he left wires exposed from the unit. 31. Respondent denied causing damage to Complainant’s roof shingles. Respondent argued that the old frame broke Complainant’s shingles. 32. Respondent arrived late the jobsite inspection. By the time he made it the project site the inspection had concluded. 33. Per Respondent, he made multiple telephone calls to Complainant during the DIRECTIVE’S compliance period but was unable to reach Complainant until November 25, 2019. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter pursuant to ARIZ. REV. STAT. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to ARIZ. REV. STAT. §§ 41-1092 et seq. 2. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.25 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.26 4. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.27 Respondent bears the burden

25 See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 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). 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). 7 RECEIVED 2.25.2020 ROC LEGAL

to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.28 5. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”29 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.”30 6. 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.” 7. 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.” 8. ARIZ. REV. STAT. § 32-1154(A)(22) provides, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or 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. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.” 9. ARIZ. REV. STAT. § 32-1154(E) provides, in pertinent parts, that the Registrar may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each

28 See ARIZ. ADMIN. CODE R2-19-119(B)(2). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). 8 RECEIVED 2.25.2020 ROC LEGAL

violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty.” It also provides that “[n]o future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.” 10. The material facts in this case are clear. 11. It is undisputed that Complainant contracted with Respondent for an a/c unit installation project. It is undisputed that Complainant paid the full price of the contract. It is also undisputed that Respondent’s work on the project fell below the Registrar’s minimum workmanship standards. It is further undisputed that the Registrar’s post investigative DIRECTIVE required Respondent’s full compliance by November 25, 2019, and that Respondent did not timely comply. 12. Therefore, the only remaining issue to address is whether Respondent raised sufficient justification or excuse for failing to timely and completely remediate all complaint action items outline in the Registrar’s DIRECTIVE. This is an affirmative defense that Respondent bears the burden to establish. Here, the record reflects that Respondent failed to adhere to a Registrar DIRECTIVE, and had no affirmative defense(s) for doing so. 13. Because Complainant established violations of ARIZ. REV. STAT. §§ 32- 1154(A)(3); ARIZ. ADMIN. CODE R4-9-108, and 32-1154(A)(22) by a preponderance of the evidence, Complainant has also established grounds for the Registrar to take disciplinary action against Respondent’s license and impose a civil penalty against Respondent pursuant to ARIZ. REV. STAT. § 32-1154(E). 14. Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter, as the Tribunal has no jurisdiction to award a refund of the underlying amount contracted between the parties. RECOMMENDED ORDER Based on the foregoing, IT IS RECOMMENDED that on the effective date of the FINAL ORDER in this matter Respondent Extreme Services HVAC Corp, ROC License No. 318123, be suspended for two (2) days. 9 RECEIVED 2.25.2020 ROC LEGAL

IT IS FURTHER RECOMMENDED that the Registrar require Respondent to pay the sum total of $200.00 in certified funds as a civil penalty. IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s Order, the Registrar shall revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in ARIZ. REV. STAT. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty. 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, February 24, 2020.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

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