ALJDEC decisions subject to certification as final

2021A-05601-NPC-ROC · Registrar of Contractors · 2022-06-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Nationwide Sunrooms and

Contracting LLC,

COMPLAINANT

Phoenix Energy Products, LLC

DBA: Pep Solar,

License No. ROC 256695,

RESPONDENT

No. 2021A-05601-NPC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: March 23, 2022, with further hearing on May 24, 2022

APPEARANCES: Rick Craven appeared on behalf of Complainant Nationwide Sunrooms and Contracting, LLC. Melissa Bauer and Mike Andrade also appeared on behalf of Complainant. Joe O’Connor, Esq. represented Respondent Phoenix Energy Products, LLC, doing business as Pep Solar. Sean Monaghan, Bonnie Katz, and Elinor Schottstaedt appeared as witnesses for Respondent.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Phoenix Energy Products, LLC, doing business as Pep Solar (“Respondent”) is the holder of License No. 256695, issued by the Arizona Registrar of Contractors (“Registrar”).

On or about November 3, 2021, Nationwide Sunrooms and Contracting, LLC (“Complainant”) filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $2,835.00, representing the final payment for the construction of a pergola at Respondent’s customer, Elinor Schottstaedt’s, residence.

On November 30, 2021, the Registrar issued a Citation charging Respondent with an alleged violation of A.R.S. § 32-1154(A)(10). Respondent timely filed an Answer to the Complaint.

The hearing of this matter convened on March 23, 2022. Due to the inability to conclude the hearing in the allotted time, the hearing was set for further hearing on May 24, 2022. Rick Craven, Complainant’s owner, and Melissa Bauer, Complainant’s Office Manager, appeared on behalf of Complainant. Mike Andrade, Complainant’s foreman, was present for the initial hearing setting. Joe O’Connor, Esq. represented Respondent. Sean Monaghan, Bonnie Katz, and Elinor Schottstaedt appeared as witnesses for Respondent.

The Project

The parties met at a home and garden show, at which time they discussed the project. Respondent informed Complainant that the project consisted of the construction of a free standing pergola for the purpose of mounting solar panels. The parties followed up on that discussion via email correspondence.

On June 8, 2021, Respondent’s Project Manager, Mike Gaddis, emailed Rick Craven, in which Mr. Gaddis stated:

The homeowner has requested the pergola be sloped 15 degrees towards the back of the home (for a winged look) with minimal material used for the covering. I don’t know if this is something that you would be able to do but she wants essentially a skeleton frame for nothing more than mounting the solar modules to.

We will be using 20 bi-facial panels, which are transparent and will allow light to come through . . . The modules are 84” Tall x 41.3” Wide with 1” between each panel and on each end for hold down clips. 36” long, by 15” wide with a 15 degree sloped roof . . .

Later, on June 8, 2021, Mr. Craven responded stating, “No problem you guys. What we will do is the Pergola framing and space it out according to the specs that you mentioned below. From an engineering standpoint that will suffice. . . .”

On or about June 25, 2021, the parties contracted for Complainant to “supply and install a 15ft by 36ft pergola system framing only.” The contract price was $18,900.00. Respondent paid Complainant a down payment of $5,670.00 and a progress payment of $10,395.00.

Subsequent to entering into their contract, the parties continued to communicate via email regarding the specifics of the project, and exchanged renderings.

On July 1, 2021, Mr. Gaddis emailed Complainant and advised that the “pergola should be supported 360 degrees by posts (total of 6) and will not be attached to the home. . . .”

Mr. Craven responded to the email thirteen minutes later, stating, “OK we can do that. I’m just curious why would you want to do that? The products engineer to meet 40 pounds per square Live load which covers all of your panels and everything else needed . . . As a reference anything that’s freestanding requires much more work, engineering and cost well above and beyond an attachment. . . .”

On July 2, 2021, Mr. Gaddis emailed Mr. Craven and advised that Ms. Schottstaedt requested a “winged appearance” and wanted the pergola to slope back toward the house. Mr. Gaddis suggested raising three posts to accommodate the “winged look” to a 15 degree pitch.

Mr. Craven responded five minutes later stating, “We can do that!! No problem there. I will order as freestanding . . .”

On July 6, 2021, Respondent emailed Complainant stating in pertinent part, “We need the proper documentation and engineering to show that the pergola will be ‘tilted’ so that one south end is lower and the north end at a higher height as the customer requested from the beginning with a free standing structure (not attached to the home).”

The renderings dated September 8, 2021, show a free standing structure with six posts.

On October 19, 2021, Complainant, through its Office Manager, Melissa Bauer, emailed Respondent to inform Respondent that Complainant was planning to install the pergola on that Thursday and “just wanted to confirm the rendering with you before hand to make sure everything is right. . . .” Attached to the email was the September 8, 2021 rendering showing a free standing structure with six posts.

Rick Craven’s Testimony

Mr. Craven testified that Complainant installed the structure to code and the renderings and the fact that Respondent’s client “wants to put solar on top is not within the scope of Complainant’s work.” Mr. Craven testified that Respondent has not paid the final payment for Complainant’s scope of work.

Mr. Craven testified that “manufacturers don’t design according to other people’s specs” and that it was Respondent’s “responsibility to go into the building department and make sure the calcs can hold what they want.” However, Mr. Craven acknowledged that Complainant was aware that the purpose of the structure was to hold solar panels.

Mr. Craven further acknowledged that the July 2, 2021 email exchange between the parties states that the structure was to be free standing and Complainant was to order such, as well as the fact that the slope was to be 15 degrees. Mr. Craven also acknowledged that as of September 8, 2021, the date of the renderings, the structure was to be free standing with six posts.

Mr. Craven contended that the City of Scottsdale would not allow a free standing structure, and that the slope could not be accomplished “without extensive guttering because of drainage” and that the structure “could not be pitched because it was to have solar panels on top.”

Mr. Craven testified that he had contact with the City of Scottsdale’s building department from July 2021 through October 2021, in order to have the plans approved. Mr. Craven testified that Complainant first attempted to have the September 8, 2021 plans depicting a free standing structure with six posts approved by the City of Scottsdale, however, the City would not approve the plans.

Mr. Craven testified that after September 2021, Complainant had the plans changed/revised to reflect an attached structure in order to have the structure approved by the City of Scottsdale, and that the revisions to the site plan were dated December 16, 2021, showing the structure attached to the home.

Mr. Craven contended that Respondent “made a suggestion and wish” for a free standing structure with a 15 degree slope, however, the City of Scottsdale would not permit that structure. Mr. Craven testified that the reason the City of Scottsdale would not permit a free standing structure was because Mr. Schottstaedt “had too many free standing structures” on her property.

Mr. Craven further asserted that Complainant was not required to install footings because the structure was on a four inch concrete slab, and that footings were not specified in the parties’ contract.

Steve Gallant’s Testimony

Steve Gallant is the Building Inspector Supervisor for the City of Scottsdale. Mr. Gallant testified that he attended a site meeting on December 6, 2021, because the assigned building inspector indicated that the structure was not constructed to plan. When Mr. Gallant inspected the structure, he observed that the structure “did not match the approved plans.” Mr. Gallant testified that the approved plans contained footings and a free standing structure. However, the structure as constructed by Complainant was attached to the fascia of the existing home and not free standing.

Mr. Gallant testified that he told Complainant that if Complainant “wanted it approved as built, [Complainant] needed to submit drawings to match what’s built.”

Mr. Gallant testified that the revised plans resubmitted by Complainant, dated December 16, 2021, matched what was actually constructed, and were approved.

Sean Monaghan’s Testimony

Sean Monaghan, Respondent’s Chief Operating Officer, testified that he met Mr. Craven at a home and garden trade show, and it was there that they discussed the instant project. Mr. Monaghan testified that Complainant was aware from the outset that the purpose of the pergola was to hold solar panels.

Mr. Monaghan testified at length regarding the string of emails between the parties that are detailed above. Mr. Monaghan testified that as set forth in a July 1, 2021 email, the pergola was to be supported 360 degrees by six posts, was not to be attached to the home, and the pergola was to be sloped. Mr. Monaghan testified that Mr. Craven responded, “We can do that!! No problem there. I will order as freestanding . . .” Mr. Monaghan referenced the September 8, 2021 rendering that Complainant was to utilize which illustrates six posts and a free standing pergola. Mr. Monaghan explained that Respondent and its client were expecting the structure to be constructed pursuant to this plan and did not communicate or approve any changes to Complainant.

Mr. Monaghan testified that on October 19, 2021, Complainant emailed that the installation was scheduled, that the permit had been pulled, and the September 8, 2021 rendering was confirmed.

Mr. Monaghan testified that Complainant installed an attached structure with three posts, without a 15 degree tilt, and without concrete footings. Mr. Monaghan testified that Respondent had not authorized any changes to the plans, there were no change orders, and no emails authorizing any deviations from the specifications.

Mr. Monaghan testified that the installation completed by Complainant was unprofessional and dangerous in that the posts were not secured, there were only three posts, not six, as specified, and no footings. Because footings were not installed, the structure could not be weight bearing, and therefore, was not constructed to withstand the weight of the solar panels, the purpose for which the pergola was constructed. Mr. Monaghan testified regarding the photographs submitted into evidence depicting only three posts, no footings, and attachments with screws.

Mr. Monaghan testified that Respondent did not pay Complainant’s final invoice because Respondent and its client did not receive a finished product for which it contracted, and believed Complainant had done a “bait and switch.” Mr. Monaghan asserted that Complainant constructed something that Respondent did not purchase. Mr. Monaghan testified that the finished structure was not what the parties agreed upon and emailed about, it was not professional, it was not safe, and it cannot be used for the purpose for which it as intended and for which purpose Complainant was fully aware.

Bonnie Katz’s Testimony

Bonnie Katz is Respondent’s Chief Executive Officer, having founded Respondent approximately 40 years ago. Ms. Katz testified that she met Mr. Craven at a home show and that he knew from the first conversation that the structure needed to be constructed to hold solar panels and that it needed to be tilted 15 degrees for this purpose as well. Ms. Katz testified that Respondent provided Complainant with the load calcs and that all engineering was to be performed by Complainant. Ms. Katz testified that the structure as constructed by Complainant is not what Respondent ordered. Ms. Katz testified that Respondent never gave Complainant permission to change the plans, she only instructed Complainant to “get it done” because she was concerned that Ms. Schottstaedt would no longer qualify for the tax credit because the project had been so protracted.

Ms. Katz testified that the City of Scottsdale approved plans revised and resubmitted by Complainant that reflected what Complainant actually built, not what was agreed upon by the parties.

Elinor Schottstaedt’s Testimony

Ms. Schottstaedt testified that she never approved an attached structure, and that the structure was always supposed to be free standing with a 15 degree slope to hold solar panels. Ms. Schottstaedt testified that the structure as it exists is not sturdy enough to hold solar panels.

CONCLUSIONS OF LAW

The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof in this matter is by a preponderance of the evidence.

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

A.R.S. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license:

Failure by a licensee or agent or official of a licensee to pay monies in excess of $750 when due for materials or services rendered in connection with the licensee's operations as a contractor unless the licensee proves that the licensee lacks the capacity to pay and has not received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

The evidence established that Complainant did not perform the work it was contracted to perform. The credible, probative, and substantial evidence of record established that Respondent contracted with Complainant to install a free standing pergola with six posts and a slope of 15 degrees and instead, Complainant installed an attached structure with three posts, no slope, and no footings, and then revised the plans to conform to what Complainant actually installed, without acceptance and permission from Respondent, and resubmitted those plans to the City of Scottsdale for approval.

Complainant failed to establish by a preponderance of the evidence that Respondent owes Complainant any monies for the work performed by Complainant, as Complainant failed to perform its scope of work pursuant to the agreement and communications between the parties.

Based upon the credible evidence presented at hearing, Complainant failed to establish a violation by Respondent of A.R.S. § 32-1154(A)(10). Therefore, grounds do not exist to impose discipline against Respondent’s license.

RECOMMENDed order

Based on the foregoing, it is recommended that the Registrar dismiss Complainant’s Complaint against Respondent.

In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of the certification.

-54864001

001

-137160-45720000Done this day, June 3, 2022.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

-54864001

001

-137160-45720000By Miranda Alvarez

Legal Secretary