ALJDEC decisions subject to certification as final

2019A-06140-OMC-ROC · Registrar of Contractors · 2020-08-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT

Energy Source Electric Inc.,

ROC License: ROC 190817, 190818

RESPONDENT

No. 2019A-06140-OMC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 31, 2020

APPEARANCES: The Arizona Registrar of Contractors was represented by Assistant Attorney General John Tellier. Felipe Angel Villalba, Owner, appeared on behalf of Respondent Energy Source Electric Inc.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Energy Source Electric Inc. (“Respondent”) is the holder of License Nos. 190817 (R-11 residential electrical) and 190818 (C-11 commercial electrical).

On or about September 26, 2019, the Arizona Registrar of Contractors (“Registrar”) received a complaint filed by Tucson Electric Power Company (“TEP”) against Respondent, which was designated Complaint No. 2019-04888.

The complaint indicated that Respondent:

repeatedly works on TEP’s electrical distribution wiring without permission or inspection required by TEP, resulting in damage to equipment, and installation of service wires not sufficient for 200amp service panels. This contractor is handling service wires and performs cutovers on hot wires, which is the responsibility of TEP employees. TEP is in the process of preparing a comprehensive package of complaints regarding dangerous jobs by this contractor during the last 6 months. However, as this particular job just occurred, and is extremely dangerous, TEP is filing this complaint separately.

On or about November 19, 2019, Registrar Investigator Gregory Johndrow received from TEP additional information related to the allegations made in complaint 2019-04888.

On or about December 6, 2019, the Registrar issued a warning letter to Respondent alleging that Respondent violated A.R.S. § 32-1154(A)(16) by bidding on, contracting for, or performing work requiring an A-17 electrical and transmission lines license.

On or about December 9, 2019, the Registrar received an email from TEP that Respondent “is continuing to perform electrical repairs without proper permits, clearances and in a potentially dangerous manner,” specifically at 2150 N. Isabel Blvd. The email included the description of the work observed by a field technician and documented as follows:

Illegal upgrade and customer performed Power Kill. Tampering with TEP equipment. Angel Villalba is the electrician and has been warned numerous times. Meter ring is not sealed, and has the potential to be tampered with, or create an unsafe condition. Without a TEP Journeyman line man to inspect the socket prior to reconnect and meter set, (policy for power kill) TEP cannot say with certainty that the meter base is safe. This address does not have a City Clearance as of this time. The city inspector has to now look at an energized panel, without knowledge of it being illegally energized. Field Tech’s are not allowed to pull meters to perform these inspections. Property is vacant and has workers onsite.

All errors in original.

Based on TEP’s December 9, 2019 submission, the Registrar opened the instant investigation in case number, 2019-06140.

On or about December 13, 2019, the Registrar issued a second warning letter to Respondent alleging violations of A.R.S. § 32-1154(A)(16) by bidding on, contracting for, or performing work requiring an A-17 electrical and transmission lines license.

On or about January 31, 2020, Lucia Sandquist, Respondent’s Vice President, emailed the Registrar regarding the allegations as follows:

[W]e have done our research on the addresses TEP claims we have done work without permits.

We hope you understand that all we want to do is help our customers and that every case is different. We definitely don’t go around deliberately breaking the rules. Finally the last thing we want is for none to get hurt and we strive for continuing not having any fatal accidents like we been for all these years. We also feel very helpless of how TEP is the only company to provide this service since they use that to stomp on small companies like ours. They know there are no other options for us and complaining about their bad customer service will do nothing. Im sure there are things they could do to improve the time they make customers wait. Please consider this to make a decision.

All errors in original. Respondent did not deny the allegations made by TEP.

On or about February 18, 2020, TEP reached out to Respondent to schedule a meeting on March 4, 2020, to go over TEP policies to ensure Respondent was aware of the policies with the hope it would comply going forward. Respondent agreed to attend the meeting.

On or about March 4, 2020, Respondent failed to appear at the March 4, 2020 meeting with TEP. TEP emailed the presentation it was intending to go over during the meeting to Respondent.

On June 15, 2020, TEP submitted additional information alleging that Respondent “continues to operate very dangerously,” including a spreadsheet listing new jobs performed by Respondent.

Given the frequency and nature of the alleged violation, the Registrar found that the public welfare imperatively required emergency action with respect to Respondent’s licenses.

On July 20, 2020, the Registrar issued an Order of Summary Suspension and Notice of Promptly Instituted Proceedings charging Respondent with possible violations of A.R.S. § 32-1154(A)(11) and A.R.S. § 32-1154(A)(16).

Specifically, the Registrar alleged that between June 2019 and May 2020, Respondent performed contracting work at the following residential properties in and around Tucson, Arizona, in violation of Arizona Corporation Commission rules, and in violation of regulations promulgated by the federal Occupational Health and Safety Administration (OSHA) at 29 C.F.R. § 1910.269 (“Subpart R: Electric Power Generation, Transmission, and Distribution”) and § 1910.301 et seq. (“Subpart S: Electrical”):

a. 7370 S. Sorrel Ln.

b. 518 W. Oregon St.

c. 3031 E. 21st St.

d. 939 W. Nebraska St.

e. 1724 Rosemary and 1732 Rosemary

f. 5150 S. 13th St.

g. 6301 E. Calle Bellatrix

h. 4350 E. 14th St.

i. 9 E. Corona Rd.

j. 1055 W. Columbia St.

k. 4945 E. Adams St.

l. 7634 E. Jalapa Pl.

m. 4534 E. 12th St.

n. 2011 S. Kelvin Stra

o. 1411 E. 27 St.

p. 4860 W Red Wolf Dr

q. 818 W. Melridge

r. 1111 W. Pelaar St.

s. 2431 W Bovino Way

t. 307 E. Lincoln St.

u. 1111 W. Pelaar

At hearing, Jennifer Necas, TEP Design Team Supervisor, testified as to TEP’s processes and procedures for service applications. According to Ms. Necas, TEP employs the following steps:

1) Contactor obains a permit from the Authority Having Jurisdiction (AHJ) and contacts TEP’s Design Services.

2) TEP processes the request and initiates a field check, which occurs within three to five business days. TEP reviews the scope of work, contacts the responsible party on site, and determines if a power kill or cutover is required.

3A) For a power kill, after the electrician schedules an appointment with the AHJ, TEP personnel schedules the power kill with the electrician. One to three days after re-energization, TEP conducts an inspection.

3B) For a cutover, the electrician schedules inspections with the AHJ and a TEP Field Tech and after the inspections pass, the TEP schedules the date and time for the cutover.

Ms. Necas also testified as to TEP’s observations related to the work Respondent performed at 1411 E. 27 St., 4534 E. 12th St., 4945 E. Adams St., 7634 E. Jalapa Pl., 1055 W. Columbia St., 9 E. Corona Rd., 4350 E. 14th St., 6301 E. Calle Bellatrix, 5150 S. 13th St., 1724 Rosemary, 1732 Rosemary, 939 W. Nebraska St., 3031 E. 21st St., 7370 S. Sorrel Ln., 301 E. 4th St., 226 E. Michigan Dr., 1411 E. 27th St., 951 W Valencia. In each of those cases, Ms. Necas stated that Respondent failed to follow TEP’s required process with respect to the work performed. Ms. Necas described illegal cutovers, illegal upgrades, illegal power kills, tampering with meters, and unauthorized usage.

Ms. Necas indicated that the only reason Respondent provided for its violation of TEP policies and procedures was that it felt TEP took too long to respond to its requests for service. Ms. Necase stated that if a contractor believes TEP is not timely responding to requests, it can file a complaint with the Arizona Corporation Commission.

Mr. Villalba testified that Ms. Necas was “bullying” Respondent because Respondent had not had any complaints for years and now it had 18 complaints against it. Mr. Villalba admitted that Respondent energized 3 of the 18 panels at issue. Mr. Villalba asserted that on 15 of the jobs, Respondent pulled the permit, another contractor performed the work on the project, and the Respondent obtained the approval. Mr. Villalba acknowledged that he did the project involving a swimming pool while the line was “hot.”

Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on August 19, 2020. Such prior License record reflects that Respondent’s License Nos. 190817 and 190818 were first issued on November 26, 2003, and were suspended on July 20, 2020. Neither license had any prior complaints filed against it.

CONCLUSIONS OF LAW

These matters lie within the Registrar’s jurisdiction and were properly brought before OAH. See A.R.S. § 32-1154(A) and A.R.S. §§ 41-1092 et seq.

The purpose of the ROC’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 summarily suspended status of Respondent’s licenses does not deprive the Registrar of its ability to prosecute these complaints or prevent the Registrar from determining the merits of these complaints. See A.R.S. § 32-1154(D).

The Registrar bears the burden of proof to establish grounds for suspension or revocation of Respondent’s contractor’s license by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952).

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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.” Black’s Law Dictionary 1220 (8th ed. 1999).

A.R.S. § 32-1154(A)(11) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license the “[f]ailure of a contractor to comply with any safety or labor laws or codes of the federal government, state or political subdivisions of this state.”

The Arizona Corporation Commission rules governing electric utilities including TEP provide that “[s]ervice establishments shall be made only by qualified utility service personnel.” A.A.C. R14-2-206(A)(5). Further, “[w]hen a utility discovers that a customer or customer’s agent is performing work . . . adjacent to or within an easement or right-of-way and such work . . . poses a hazard or is in violation of federal, state or local laws, ordinances, statutes, rules or regulations, . . . the utility shall . . . take whatever actions are necessary to eliminate the hazard, obstructions, or violation.” A.A.C. R14-2-206(C)(2).

Federal OSHA regulations provide that “[l]ive parts shall be deenergized before the employee works on or near them, unless the employer can demonstrate that deenergizing introduces additional or increased hazards or is infeasible due to equipment design or operational limitations.” 29 C.F.R. § 1910.333(a)(1).

While Respondent’s employees are not employees of TEP, Respondent’s employees connecting to live parts that have not been deenergized creates a significant hazard to the individuals.

The Registrar established by a preponderance of the evidence that Respondent failed to comply with the safety codes of the federal government and the state of Arizona in violation of A.R.S. § 32-1154(A)(11).

A.R.S. § 32-1154(A)(16) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.

Respondent admitted that it performed work beyond the scope of its license on 3 of the jobsites at issue including working on one project where the line was “hot”. Respondent’s denial that it obtained a permit, had another contractor perform the work, and then obtained the inspection approval for the permit at the 15 other jobsites was not credible. Respondent offered no explanation why it would engage in such a practice and no reasonable explanation can be fathomed.

Respondent’s License No. 190817 (R-11) allows Respondent “to install and repair residential electrical systems.” A.A.C. R4-9-103(B).

The work performed by Respondent at the locations addressed at the hearing involved connecting residential electrical systems to utility equipment owned by TEP, which is beyond the scope of the R-11 classification.

Respondent’s License No. 190818 (C-11), while not applicable here because each of the jobs was residential, allows Respondent

to install, alter, and repair any wiring, related to electrical material and equipment used in the generating, transmitting, or utilization of electrical energy less than 600 volts, including all overhead electrical wiring on public right-of-ways for signs and street decorations, and all under-ground electrical distribution systems of less than 600 volts serving private properties. This classification also allows the licensee to install, alter, and repair all outside, overhead, and underground electrical construction and all wiring in or on any building of less than 600 volts, but does not permit work in public right-of-ways.

A.A.C. R4-9-102(B).

The work performed by Respondent at the locations addressed at the hearing involved altering overhead wiring and connecting to transmission lines in excess of 600 volts.

The work performed by Respondent in the cases addressed at the hearing may only be performed under an A-17 license classification, which permits a licensee to install, alter, and repair transmission lines on public right-of-ways, including erection of poles, guying systems, tower line erection, cellular and communication towers, street lighting of all voltages, and all underground systems including ducts for signal, communication, and similar installations. This classification also allows the licensee to install transformers, circuit breakers, capacitors, primary metering devices and other related equipment of all commercial electrical construction. A.A.C. R4-9-102(B).

The work performed by Respondent on the residential properties addressed at the hearing required an A-17 license (electrical and transmission lines), and therefore was outside the scope of Respondent’s residential License No. 190817, as well as Respondent’s commercial License No. 190818.

The Registrar established by a preponderance of the evidence that Respondent knowingly contracted beyond the scope of its licenses in violation of A.R.S. § 32-1154(A)(16).

RECOMMENDED ORDER

In light of the foregoing,

IT IS RECOMMENDED that the Registrar’s Order of Summary Suspension of Respondent’s License No. 190817 and License No. 190818, as issued on July 20, 2020, be affirmed.

IT IS FURTHER RECOMMENDED that on the effective date of the Final Order in this matter, Respondent’s License No. 190817 and License No. 190818 shall be revoked by the Registrar.

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 five days from the date of that certification.

-54864001

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-137160-45720000Done this day, August 20, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

001

-137160-45720000