ALJDEC decisions subject to certification as final

2021A-03365-CHC-ROC · Registrar of Contractors · 2021-12-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Thomas Toto ,

COMPLAINANT,

v.

S G H and C LLC

DBA: Scott Guerin Heating and Cooling,

License No. ROC 252995,

RESPONDENT.

No. 2021A-03365-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 09, 2021 at 1:00 PM.

APPEARANCES: Thomas Toto (“Complainant”) appeared on his own behalf. Manual Bermudez appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of S G H and C LLC (“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 Registrar.

FINDINGS OF FACT

Background and Procedure

On February 19, 2009, the Registrar issued License No. 252995 for Specialty Dual Cr-39 Air Conditioning and Refrigeration contracting to Respondent. Respondent’s address of record for the license is 909 W. Hadley St. Tucson, AZ 85705. David Scott Guerin is listed as the Qualifying Party and Member on the license.

Pursuant to Ariz. Admin. Code R4-9-117 Administrative Notice is taken of Respondent’s prior license record, for ROC License No. 252995, as reflected on the Registrar’s public website. Such prior license record reflects that Respondent’s license is active and currently renewed through February 28, 2023. The license is in good standing and has not been previously disciplined. The record reflects that there is one open complaint against Respondent’s license, which is presumed to be related to this matter. Respondent has a $6,750.00 surety bond for the license issued through Contractors Bonding & Insurance Company, effective March 20, 2013.

On July 20, 2021, the Registrar received Complaint 2021-03365 filed by Complainant alleging incomplete workmanship on a residential HVAC project. Attached to the complaint was a copy of Complainant’s proof of payment to Respondent.

On an unknown date, 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 August 18, 2021, at 9:00 a.m.

On October 05, 2021, Registrar investigator Manny Bermudez (“Investigator Bermudez”) reviewed the contract agreement between the parties, inspected the work that had been done on the projects to date, and took 9 photographs of the project. When he was finished, Investigator Bermudez drafted Jobsite Inspection Notes. Ultimately, Investigator Bermudez substantiated 2 of Complainant’s 5 complaint items. Specifically, Investigator Bermudez found that complaint items 1 and 2 were in need of remediation by Respondent.

On October 06, 2021, Investigator Bermudez issued a Written Directive from the Registrar (“Directive”) to Respondent based on the workmanship allegations he substantiated during his jobsite inspection. Respondent was put on notice that he had until 5:00 p.m. on September 07, 2021, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, 32-1154(A)(22), and 32-1154(E).

On August 23, 2021, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(2) for Respondent’s failure to obtain a building permit prior to commencing work on the underlying project.

On August 23, 2021, the Registrar issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(16) because Respondent failure performed work outside and beyond the scope of his license.

On September 17, 2021, Investigator Bermudez escalated Complaint 2021-03365 to the Registrar’s legal department with a Citation Recommendation.

On September 21, 2021, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until October 06, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On October 05, 2021, the Registrar received Respondent’s Answer. Respondent denied all 3 charges, and offered the following defenses: (a) Complainant denied Respondent’s access to the project prior to filing Complaint 2021-03365, so Respondent was unable to correct the air flow issue, (b) Respondent completed corrections required by the Directive on or before September 07, 2021, and (c) Respondent had obtained a mechanical permit but not an electrical permit from the City of Tucson.

On October 15, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on December 09, 2021. Per the November 05, 2021, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following charges:

Charge 1: A.R.S. § 32-1154(A)(2)(a)

Charge 2: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108

Charge 3: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on his own behalf and called Investigator Bermudez as a witness. The Registrar’s agency file was admitted into the record as its own exhibit. The substantive evidence of record is as follows:

Complainant owns residential property located at 7570 E. Speedway Unit 303 Tucson, AZ 85710.

On or about April 21, 2021, the parties entered into a contract agreement whereby Complainant agreed to tender $6,000.00 to Respondent for the installation of a new HVAC unit. Complainant paid for the contract in full. Respondent informed Complainant that he would pull all necessary permits for the project from the City of Tucson.

On or about May 19, 2021, work on the project began. Work stopped on or about May 20, 2021.

In an email July 26, 2021, to Investigator Bermudez, Complainant noted that he was concerned about (a) the return air duct not being the correct size, (b) insufficient air was coming out of the supply vents, (c) hot air in his home not being taken out through the correct return, and (d) the bottom of the HVAC unit having condensation on it.

Respondent was advised in the Directive that he was obligated to “ensure that any and all required building permits are obtained from the Local Building Authorities prior to making corrections listed in this directive that require a building permit.” (Emphasis in original.)

In order to be compliance, Respondent needed to obtain an electrical permit and a mechanical permit for the project.

On August 25, 2021, Respondent applied for a mechanical permit from the City of Tucson. It was issued before September 07, 2021.

On September 02, 2021, Respondent applied for an electrical permit from the City of Tucson. It was not issued before September 07, 2021.

Respondent did not comply with the Directive by September 07, 2021.

The parties have not settled their underlying dispute.

Complainant declined to provide a closing argument.

CONCLUSIONS OF LAW

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.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

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.

The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from the Registrar as well.

Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

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.”

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.”

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.”

The material facts in the case at bar are not in dispute.

It is undisputed that the parties had a residential HVAC installation agreement, of which Complainant paid the full amount. It is also undisputed that a result of Respondent’s poor workmanship, the Registrar issued a Directive that required compliance by September 07, 2021. It is further undisputed that Respondent did not timely comply with the Directive.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and complete Complainants’ project per contract. This is an affirmative defense that Respondent bears the burden to establish. Because Respondent failed to appear, the record is devoid of mitigation evidence to refute Complainant’s evidence and justify subpar workmanship and corrective inaction in this matter.

Because Complainant established violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Scott Guerin Heating and Cooling, ROC License No. 252995, be suspended for three (3) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3), and 32-1154(A)(22).

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, December 21, 2021.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors