ALJDEC decisions subject to certification as final

2019A-04341-CHC-ROC · Registrar of Contractors · 2020-02-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Timothy Theodore Woehl,

COMPLAINANT

Republic Air Conditioning and Heating LLC,

License No. ROC 324714,

RESPONDENT

No. 2019A-04341-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: January 29, 2020

APPEARANCES: Timothy Theodore Woehl on his own behalf; Donald Peterson for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On December 26, 2019, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on January 29, 2020 at the Office of Administrative Hearing.

Through the Notice of Hearing, ROC alleges that Respondent Republic Air Conditioning and Heating LLC may have violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22) as set out in a complaint and citation that were served on Respondent on November 27, 2019.

Respondent holds license number 324714 issued by ROC. Donald Peterson is a member of Republic Air Conditioning and Heating LLC.

Complainant is Timothy Theodore Woehl.

Dr. Woehl and his wife entered a contract with Republic Air Care LLC to have two Trane air conditioner/heat pumps installed at their house.

Republic Air Care LLC holds license number 276966 that has been on inactive status since December 4, 2018. Mr. Peterson is a member of Republic Air Care LLC.

On May 25, 2018, Republic Air Care LLC installed two American Standard units (model number 4WHC4036A1000A) at the Woehls’ house. The units show that they were manufactured by Trane U.S. Inc.

At the hearing, Steve Nelsen, ROC’s assistant chief of compliance, testified that American Standard model number 4WHC4036A1000A and Trane model number 4WHC4036A1000B are essentially the same units, with the only difference being the covers.

Dr. Woehl and his wife were home when the units arrived, and before installation began Dr. Woehl and his wife were aware that the units that Republic Air Care planned to install were American Standard units. They asked Nathan, the installer, why they were getting American Standard and he explained that Trane had purchased American Standard. The Woehls did not ask Republic Air Care LLC not to install the units.

At the hearing, Dr. Woehl testified that his wife was knowledgeable about Trane because she has worked for Trane.

On August 27, 2019, Dr. Woehl filed with ROC a complaint naming Republic Air Care LLC as the contractor, but giving Respondent’s license number (#324714), and naming Mr. Peterson as the person representing the contractor.

In his complaint, Dr. Woehl alleged that Republic Air Care LLC had performed poor work and committed fraud.

ROC assigned investigator Dennis Bierma to the complaint.

Through a Notice to Respondent and Dr. Woehl dated September 4, 2019, ROC informed the parties that Mr. Bierma would conduct a jobsite inspection on October 3, 2019. Dr. Woehl and Mr. Peterson were both present at that inspection.

On October 28, 2019, ROC issued to Respondent a Directive with the following pertinent information:

DIRECTIVE REQUIREMENTS

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

Complaint Item 4: “For over a year I have talked with Mr. Peterson at least 4 times that I now know Trane is still made and I want the units replaced. Every time he can only repeat the same line, “they are the same unit”. I am claiming consumer fraud and poor workmanship and want the units replaced with Trane units I ordered.”

Investigator’s Observation: Verified. Upon investigation of this item it has been verified that the new units installed on the Complainants home are not the units to be installed according to contract agreement. There is no evidence of a change order or agreed signed document stating that there was a change to install the other units. Respondent shall complete project per original contract agreement. Respondent shall correct this item of the correct unit installation by appropriate means.

Governing Rule: Workmanship Rule: ARS §32-1154 (A) (3), namely R4-9-108, Poor work not performed in accordance with professional industry standards.

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Complaint Item 1: “I had 2 roof top heat pump units that needed to be replaced. One of the bidders was Republic Air. We met with the owner on at least 2 occasions. We had Trane units on the roof which lasted me for 20 years, plus my wife use to work for Trane, so we were adamant that we wanted Trane units and were only taking bids for Trane units. Since Republic price was competitive and my wife knew them because they provided the HVAC service in our office building, she trusted them we agreed to purchase and have installed 2 Trane 14 SEER 3 Ton heat pump systems for $11,000.00.”

Investigator’s Observation: This is a statement and not an allegation that implicates poor work that I can inspect and report on.

Governing Rule: N/A

Complaint Item 2: “On May 25, 2018 the units were to be installed. It was getting hot and our oldest unit was starting to fail, so we were eager to get the new units on the roof. When the installer arrived, there were 2 American Standard heat pump systems on the trailer. I questioned him telling him that they not what we purchased. We bought Trane units. He told us, “Oh, those are Trane now”, he tersely responded while continuing to unload the units. I was taken off guard and confused, but I assumed that those were now the new trane units because Trane was purchased by American Standard. They were installed.”

Investigator’s Observation: This is a statement and not an allegation that implicates poor work that I can inspect and report on.

Governing Rule: N/A

The Directive required Respondent to provide ROC with written proof that it had made the repairs that ROC ordered it to complete by no later than 5:00 p.m. November 20, 2019.

Respondent did not complete the work ROC ordered it to complete by the deadline imposed by ROC.

On November 27, 2019, ROC issued to Respondent a Citation through which ROC alleges that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22).

Respondent filed an answer showing Mr. Peterson’s name in the signature block. In its answer, Respondent denied that Republic Air Care LLC engaged in a bait and switch scam, and asserted that although the units say “American Standard,” they are Trane units that are manufactured by Trane. Mr. Peterson did not explicitly assert that Republic Air Care LLC, and not Respondent, was the responsible contractor, nor did he request that the Citation be amended to show Republic Air Care LLC as the respondent.

At the hearing, Respondent had entered into evidence a letter to ROC dated January 15, 2019, that Respondent styled as a response to the citation. The reasonable assumption is that the letter should have been dated January 15, 2020.

In the letter of January 15th, Respondent stated: the job at issue was done under Republic Air Care LLC’s license number 276966; Republic Air Care LLC was “closed down” on December 4, 2018; Mr. Peterson was an employee of Republic Air Care LLC when the Woehl job was completed; Mr. Peterson opened Respondent in January 2019 after Republic Air Care LLC closed its doors; and Mr. Peterson had been “giving this complaint the attention to try to satisfy the Woehls and to try to help them out ....”

Through Respondent’s letter of January 15th, Respondent requested that the complaint be amended to show Republic Air Care LLC as the respondent.

At the hearing, Mr. Peterson testified that someone from ROC told him that he should bring to the attention of the Administrative Law Judge the issues raised in Respondent’s letter of January 15th.

At the hearing, Mr. Peterson testified to the effect that Trane and American Standard are part of the same company and both brands are made in the same factory. According to Mr. Peterson, the Trane units were not in stock so he ordered the American Standard units to complete the project, even though it resulted in a greater cost to Republic Air Care LLC. Mr. Peterson added that he had made the same substation many times.

The two units Republic Air Care LLC installed were model no. 4WHC4036A1000BA (serial numbers 17443LADDF and 17324R6JDF), with the manufacturer’s name plates showing they were made by Trane U.S. Inc. Both units also have a sticker or decal showing the American Standard name.

ROC’s Mr. Nelsen confirmed that American Standard model number 4WHC4036A1000A and Trane model number 4WHC4036A1000B are essentially the same units, with the only difference being the covers. But Mr. Nelsen testified to the effect that ROC could not determine whether Respondent complied with the contract because the contract does not identify the model number of the units that were to be installed.

Dr. Woehl did not take the position that the wrong model was installed. But rather he testified to the effect that it does not matter if the American Standard units that were installed are identical to Trane units because the brand name of the unit matters and he wanted Trane units installed.

CONCLUSIONS OF LAW

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.

“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).

“At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(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).

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.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

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).

The Administrative Law Judge may consider ROC’s administrative record. See Ariz. Admin. Code § R4-9-118.

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:

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3. Violation of any rule adopted by the registrar.

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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 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.

Ariz. Admin. Code section R49108 provides that “A contractor shall perform all work in a professional and workmanlike manner [and a] contractor shall perform all work in accordance with any applicable building codes and professional industry standards.”

Ariz. Rev. Stat. section 32-1154(E) provides that ROC may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of Ariz. Rev. Stat. section 32-1154(A)(22).

Respondent asserts that Republic Air Care LLC is the proper respondent because Republic Air Care LLC performed the work at issue. But Respondent did not explicitly raise that issue in its answer to the complaint and Mr. Peterson testified as to his involvement in purchasing the two units at issue. Consequently, Respondent has not shown that it was inappropriate for ROC to issue the Citation to Respondent.

The parties’ agreement called for two Trane units to be installed and shows that units with serial numbers 17443LADDF and 17324R6JDF were installed. Those units each have a manufacturer’s name plate showing that the units were made by Trane U.S. Inc. Mr. Nelsen provided credible evidence to the effect that units identified as Trane are essentially identical those identified as American Standard, which was also the testimony of Mr. Peterson.

It has not been shown by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(3).

Because Respondent has not violated section 32-1154(A)(3), its failure to comply with ROC’s directive was justified, and it has not been shown by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(22).

Consequently, this matter should be dismissed.

RECOMMENDED ORDER

IT IS ORDERED that on the effective date of the final Order in this matter case number 2019-04341 is dismissed.

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.

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-137160-45720000Done this day, February 6, 2020.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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