ALJDEC decisions subject to certification as final

2019A-04223-OMC-ROC · Registrar of Contractors · 2019-10-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 8, 2019 APPEARANCES: John Tellier, Esq. for Complainant; Lily Richardson, Esq. for Respondent ADMINISTRATIVE LAW JUDGE: Thomas Shedden FINDINGS OF FACT 1. On August 22, 2019, the Registrar of Contractors (“ROC”) issued an Order of Summary Suspension, Order Consolidating Cases, and Notice of Promptly Instituted Proceeding (“Order”). 2. Through the Order, ROC summarily suspended Respondent All Environmental Electric LLC’s license number 204972, and set the above-captioned matter for hearing on September 5, 2019 at the Office of Administrative Hearings. 3. The matter was continued and the hearing was conducted on October 8, 2019. 4. Edgar Ramirez is Respondent’s qualifying party and a member of the LLC. Respondent’s license number 204972 is a Specialty Dual CR-11 Electric. 5. On August 29, 2019, ROC issued a Supplemental Notice providing additional information about its decision to suspend Respondent’s license. 6. Through the Order and Supplemental Notice, ROC alleges that Respondent committed three violations of Ariz. Rev. Stat. section 32-1154(A)(1)(abandonment) and four violations of section 32-1154(A)(9)(aiding and abetting).[1] 7. On August 1, 2018, Respondent “and or” Mr. Ramirez entered into a “Qualifying Party Agreement” with “Mike Bulatovich, Member for Screw Solar LLC.” 8. Screw Solar has never been licensed by ROC. 9. Mr. Bulatovich was a member of Sundrop Solar LLC that held license number 293661 issued by ROC. That license was revoked as of October 5, 2018. 10. Through the Qualifying Party Agreement, Respondent offered his services and license ROC 204972 as a qualifying party for Screw Solar. The Agreement allows Screw Solar to use the license for solar sales and installation under the applicable laws for which the license was granted. Screw Solar agreed to comply with the law and to not discredit Respondent. 11. The Agreement shows that Respondent was to be considered a “1099 Private Contractor” for services provided under the Agreement. 12. Respondent was to be paid $0.05/watt DC for completed residential photovoltaic systems and between $0.01 to $0.05/watt DC for completed commercial systems. 13. Respondent never received any payments from Screw Solar, but Screw Solar never completed any projects. 14. Respondent was to have the first right of refusal for any subcontracted electrical work; Mr. Ramirez testified to the effect that Mr. Bulatovich or Screw Solar would have been providing this work. 15. The Agreement called for Respondent to procure multiple financing outlets for the purpose of helping customers fund their projects. 16. Companies that provide financing for installation of solar projects typically require a licensed electrical contractor be a party to the contract. 17. The Qualifying Party Agreement called for Respondent and Screw Solar to open a joint bank account, and for funding for customers to be immediately secured by Respondent with Screw Solar’s assistance. 18. Prior to ROC’s issuance of the Order, ROC received complaints against Respondent’s license from Craig J. Mansfield, which ROC designated as Case 2019-03065, from Jonathan B. Weisbuch and Mary Ellen Bradshaw-Weisbuch (Case 2019-03780) and James P. McMahon (Case 2019-04204). 19. Through the Order, ROC consolidated these three cases for consideration under Case Number 2019-04223. Mansfield -- Case 2019-03065 20. Mr. Mansfield paid to Screw Solar $47,675.97 for the installation of a solar system at his house. 21. Mr. Mansfield filed his complaint against Respondent on June 13, 2019. ROC Investigator Wes Ellington conducted a jobsite inspection on July 25, 2019. 22. Mr. Ramirez attended that inspection, but Mr. Mansfield acknowledged that he had never met Mr. Ramirez and that he had dealt only with Mr. Bulatovich. According to Mr. Ellington, the conversation became “heated” and he dismissed Mr. Ramirez. 23. Mr. Mansfield’s complaint included two Purchase Agreements. One Purchase Agreement was dated August 1, 2018, and shows a Screw Solar logo and does not reference All Environmental Electric LLC. The second Purchase Agreement is dated October 17, 2018, and has a combination of the Screw Solar and All Environmental Electric LLC logos. The second Purchase Agreement shows that the installation was to be completed by, and the third party financing was provided through, All Environmental Electric, LLC CR-11 204972. 24. The second Purchase Agreement shows that the contract could be canceled by contacting All Environmental Solar LLC at 1955 West Baseline Road, 113 128 in Mesa, which is Screw Solar’s address. 25. Respondent has never gone by the name All Environmental Solar LLC. 26. Mr. Ramirez testified that that he did not authorize Screw Solar to use his logo. 27. Mr. Ramirez did not participate in providing funding for Mr. Mansfield’s project. 28. Mr. Ellington’s Jobsite Inspection Notes show that he became aware of the Qualifying Party Agreement during his investigation. 29. Mr. Ellington determined that Respondent had abandoned the Mansfield project and ROC issued to Respondent a Directive ordering Respondent to complete the project. Respondent did not comply with the Directive. 30. Material for the project, including solar panels, was shipped to Mr. Mansfield’s house, but was not present when Mr. Ellington conducted his inspection. 31. Mr. Mansfield did not make any payments to Respondent. 32. On August 2, 2019, ROC issued a warning letter to Respondent showing that he might be in violation of Ariz. Rev. Stat. section 32-1154(A)(9), based on “information indicating that [Respondent] may be contracting with an unlicensed person named Mike Bulatovich/Screw Solar.” 33. Through the Order and Supplemental Notice, ROC alleges that Respondent abandoned Mr. Mansfield’s project and that Respondent aided and abetted an unlicensed contractor. Weisbuchs -- Case 2019-03780 34. The Weisbuchs filed a complaint against Respondent on July 26, 2019. 35. The Weisbuchs’ complaint shows that on October 11, 2018, they entered into a contract with Respondent to add a solar system to their home for a total price of $56,818, they financed the purchase through Dividend Finance Co., and they were making monthly payments of $272. 36. Their complaint included a Purchase Agreement showing the combined logos of Screw Solar and All Environmental Electric LLC. 37. The Weisbuchs’ Purchase Agreement shows that the installation was to be completed by, and the third party financing was provided through, All Environmental Electric, LLC CR-11 204972. 38. The Weisbuchs’ Purchase Agreement shows that the contract could be canceled by contacting All Environmental Solar LLC at 1955 West Baseline Road, 113 128 in Mesa, which is Screw Solar’s address. 39. Mr. Ramirez did not participate in providing funding for the Weisbuchs’ project. 40. The Weisbuchs did not make any payments to Respondent. 41. Mr. Ramirez testified that on the day of the hearing, he had spoken to the Weisbuchs who informed him that the finance company was going to complete their project. 42. On August 20, 2019, ROC issued a warning letter to Respondent showing that he might be in violation of Ariz. Rev. Stat. section 32-1154(A)(9), based on “information indicating that [Respondent] may be contracting with an unlicensed person named Mike Bulatovich/Screw Solar.” 43. Through the Order and Supplemental Notice, ROC alleges that Respondent abandoned the Weisbuchs’ project and that Respondent aided and abetted an unlicensed contractor. McMahon -- Case 2019-04204 44. Mr. McMahon submitted a complaint against Respondent on August 19, 2019. 45. Mr. McMahon’s complaint shows that on November 14, 2018, he entered into a contract with Respondent to add a solar system to a home in Phoenix for a total price of $31,742, and that he had paid Respondent $27,693.49 of that amount. 46. Mr. McMahon made payments to Screw Solar and to Sundrop Solar LLC, but made no payments to Respondent. 47. Mr. McMahon’s complaint included a Purchase Agreement showing the combined logos of Screw Solar and All Environmental Electric LLC. 48. Mr. McMahon’s Purchase Agreement shows that the installation was to be completed by, and the third party financing was provided through, All Environmental Electric, LLC CR-11 204972. 49. Mr. McMahon’s Purchase Agreement shows that the contract could be canceled by contacting All Environmental Solar LLC at 1955 West Baseline Road, 113 128 in Mesa, which is Screw Solar’s address. 50. On August 20, 2019, ROC issued a warning letter to Respondent showing that he might be in violation of Ariz. Rev. Stat. section 32-1154(A)(9), based on “information indicating that [Respondent] may be contracting with an unlicensed person named Mike Bulatovich/Screw Solar.” 51. Mr. Ellington scheduled an inspection of Mr. McMahon’s project for August 29, 2019. Mr. Ellington’s opinion was that the project had been abandoned. 52. Through the Order and Supplemental Notice, ROC alleges that Respondent abandoned Mr. McMahon’s project and that Respondent aided and abetted an unlicensed contractor. Mr. Ramirez’s Testimony 53. Mr. Ramirez was first licensed in 2003 but not as an LLC; All Environmental LLC was licensed in 2005. 54. Mr. Ramirez received a call from Mr. Bulatovich, who told him that he had been referred to Mr. Bulatovich. Mr. Ramirez did not know who made that referral. Mr. Ramirez could not recall when this was, but he thought it was July or August 2018. 55. The two men met, and Mr. Bulatovich showed Mr. Ramirez information about solar projects and led Mr. Ramirez to believe that these were completed by Screw Solar or Sundrop Solar LLC. Mr. Ramirez found Mr. Bulatovich to be knowledgeable about the business. 56. Initially, Mr. Ramirez testified that Mr. Bulatovich did not tell Mr. Ramirez that Screw Solar was unlicensed, and that he thought that Mr. Bulatovich was licensed based on the projects that Mr. Bulatovich represented he had completed. On cross- examination, he testified that Mr. Bulatovich said he was licensed. 57. Mr. Ramirez did not ask Mr. Bulatovich what type of license he had or what his license number was. Mr. Ramirez made no effort to verify whether Mr. Bulatovich or Screw Solar were actually licensed. Mr. Ramirez did not investigate Mr. Bulatovich, Screw Solar, or Sundrop Solar LLC before entering into the Qualifying Party Agreement. 58. Mr. Ramirez argues that he was duped by Mr. Bulatovich and to the effect that he is a victim as are those who entered contracts with Screw Solar. 59. Mr. Bulatovich wanted someone who was licensed to do electrical work to enter into an agreement and the two entered the Qualifying Party Agreement. 60. During his discussion with Mr. Bulatovich, Mr. Ramirez was under the impression that Mr. Bulatovich had previously been working with an electrician for solar installations, but the partnership had dissolved over a financial dispute. 61. Mr. Ramirez was not aware that Mr. Bulatovich had been using Respondent’s logo until after ROC informed him that complaints had been filed against Respondent’s license. 62. Mr. Ramirez had not seen the Purchase Agreements until after ROC informed him that complaints had been filed against Respondent’s license. 63. Mr. Ramirez was not involved in soliciting customers for the projects that were to be performed under the Qualifying Party Agreement. 64. Respondent did not receive any money as a result of the Qualifying Party Agreement, but when he entered the Agreement, it was with the intention of being paid. 65. Mr. Ramirez thought that Mr. Bulatovich would comply with the Qualifying Party Agreement’s requirement that he not engage in any unlawful acts. 66. When he entered the Qualifying Party Agreement, Mr. Ramirez was not aware that Screw Solar could not legally subcontract work to Respondent because Screw Solar did not have general contractor’s license. As of the hearing he was aware of that fact. 67. Mr. Ramirez provided ROC with a copy of the Qualify Party Agreement after he learned that complaints had been filed against Respondent’s license. 68. Mr. Ramirez testified that he did not intend to violate any statutes or rules. 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. 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. 3. 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). 4. 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."). 5. “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B). 6. 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). 7. During the times pertinent to this matter, Ariz. Rev. Stat section 32-1154(A) provided 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. **** (9) Aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one's license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.

8. ROC received three complaints against Respondent’s license in a short period of time and it learned that Respondent had entered into the Qualifying Party Agreement with Screw Solar, which was unlicensed. Consequently, the preponderance of the evidence shows that ROC was justified in summarily suspending Respondent’s license because the public health, safety or welfare imperatively required emergency action. Ariz. Rev. Stat. § 41-1092.11(B). 9. Mr. Ramirez entered the Qualifying Party Agreement Mr. Bulatovich and Screw Solar, which agreement allowed them to use Respondent’s license. This is a violation of Ariz. Rev. Stat. section 32-1154(A)(9). 10. Mr. Ramirez entered the Qualifying Party Agreement without doing any investigation as to Mr. Bulatovich, Screw Solar, or Sundrop Solar LLC. As such, he recklessly combined with an unlicensed person, which is a violation of Ariz. Rev. Stat. section 32- 1154(A)(9). 11. The preponderance of the evidence shows that Mr. Mansfield’s, the Weisbuchs’, and Mr. McMahon’s projects were abandoned by Screw Solar. Considering the terms of the Qualifying Party Agreement which allowed Screw Solar to use Respondent’s license number, Respondent has violated Ariz. Rev. Stat. section 32- 1154(A)(1) for each of those projects. 12. Considering the facts and circumstances of this matter, particularly Mr. Ramirez’s failure to conduct any investigation of Mr. Bulatovich or Screw Solar before entering the Qualifying Party Agreement, Respondent’s license should be revoked. ORDER IT IS ORDERED that on the effective date of the final Order in this matter, All Environmental Electric LLC’s license number 204972 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, October 23, 2019.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Ariz. Rev. Stat. section 32-1154(A)(9) was amended effective in August 2019. ROC alleges that Respondent violated the terms of (A)(9) that was in effect prior to that time.

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