ALJDEC decisions subject to certification as final
2022A-05106-CHC-ROC · Registrar of Contractors · 2022-11-07
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Ariel Leonardi,
COMPLAINANT,
v.
Maximum Comfort Specialists LLC
ROC License No. 286693,
RESPONDENT.
No. 2022A-05106-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: October 26, 2022 at 9:00 AM.
APPEARANCES: Ariel Leonardi (“Complainant”) appeared on her own behalf. Daniel De Julio, Esq. and DeVon Veater, Esq. appeared on behalf of Maximum Comfort Specialists LLC (“Respondent”) with Jacob Lyle Cortez and Matthew Pryor as witnesses. David Thomas appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Joel Wresh observed.
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
_____________________________________________________________________
After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar.
FINDINGS OF FACT
Background and Procedure
Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website. On December 03, 2013, the Registrar issued License No. 286693 Specialty Dual CR-39 Air Conditioning and Refrigeration contracting license to Respondent. The license is renewed through December 31, 2023. Matthew Shawn Pryer Jr. is the Qualifying Party/Member/Owner on this license. Respondent’s address of record for the license is 625 W. Deer Valley Rd., Ste. 103 #406 Phoenix, AZ 85027. Respondent has an active $6,750.00 surety bond on the license issued by RLI Insurance Company, effective November 06, 2020. There is no prior discipline noted for the license, save one previously resolved or otherwise settled complaint and an open complaint which is presumably related to this matter.
On June 23, 2022, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 286693 alleging poor workmanship of a furnace installation project. The Registrar designated it Complaint No. 2022-05106 and assigned to David Thomas (“Investigator Thomas”) for investigation.
On July 15 2022, Investigator Thomas issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on August 02 2022, at 2:00 p.m.
On June 29, 2022, Investigator Thomas conducted a review of the contract, payment, correspondence executed between the parties, and inspected the work that had been performed on the project to date. He also took 17 photographs of the project site. When he was finished, Investigator Thomas drafted his Inspection Notes. Ultimately, Investigator Thomas determined that Complainant’s narrative constituted a single complaint item, which he substantiated as failing to meet the Registrar’s minimum workmanship standards.
On August 17, 2022, Investigator Thomas issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s workmanship allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on September 02, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22), and 32-1154(E).
On September 07, 2022, Investigator Thomas forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On September 08, 2022, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). Respondent was given until September 23, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.
On September 08, 2022, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted the following:
[Respondent] was working with Choice Home Warranty and [Complainant].
We were initially at the property in October 2021 where we made minor repairs. The minor repairs did not fix the issue and we sent to Choice Home Warranty a bid to replace the furnace. On 10/20/2021 we received a notice from Choice home warranty that the claim was dispatched to a different provider. On 11/09/2021 Choice home warranty approved for the claim to move forward and the furnace to be replaced. 11/10/2021 Choice home warranty ordered the wrong equipment and we had to return it to the distributor. On 11/30/2021 The correct equipment arrived and was installed in the customer's home.
The homeowner called our office in June 2022, we sent a technician out 06/21/2022. His findings were a leak located in the coupling that was original to the line set. We welded the line set 2 feet above where the leak is coming from. We did offer to repair this at retail or through home warranty. Homeowner refused as another company was out and told her it was from the furnace repair. Unfortunately, when using older parts connections can fail and this was also relayed to customer and home warranty.
(All errors in original.)
On September 12, 2022, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on October 26, 2022. Per the September 22, 2022, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violations:
Charge 1: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108(a)
Charge 2: A.R.S. § 32-1154(A)(22)
Hearing Evidence
Complainant testified on her own behalf and called Investigator Thomas as a witness. Respondent called Jacob Lyle Cortez and Matthew Pryor as witnesses. The Registrar’s agency file, including the supplement and Notice of Hearing, were admitted into the record as their own exhibits. The substantive evidence of record is as follows:
Complainant owns residential property located at 8790 E. Totem Cir. Prescott Valley, AZ 86314.
On or about June 23, 2022, Complainant and Respondent entered into a $2,400.00 contract to install the furnace component of her HVAC unit.
Complainant paid Respondent in full for the project.
Complainant has a dual split HVAC system whereby the air-conditioner (“a/c”) and furnace are connected but work independently from one another. When Complainant purchased the home in 2019, the a/c component of the HVAC unit was new.
Although work on the project commenced on or about November 30, 2021, the leak at issue was not discovered until sometime in June 2022.
Complainant did not immediately report the leak to Respondent because it had not been her intent to have Respondent address it, as she had been dissatisfied with Respondent’s initial performance on the project, in large part, because Respondent had allegedly “brazed” the line. After consulting multiple contractors, she was left with no other choice but to ask Respondent to remediate the problem under the warranty.
Complaint No. 2022-05106 is not about the furnace, rather it is about a leak in the a/c.
Respondent did not participate in the jobsite inspection because its designated representative reported to an incorrect address.
Respondent did not address the Registrar’s Directive because the business relocated during the compliance period and Mr. Pryer failed to take note of the compliance deadline.
Neither party asked the Registrar to extend the Directive’s compliance deadline.
Additional Evidence
Investigator Thomas’ testimony
Investigator Thomas opined that Respondent had not tested the furnace post installation, and that if a test had been performed the underlying leak at the socket joint, referred to as a “Chapman fitting,” would have been discovered at that time. However, when asked, Investigator Thomas could not identify how Respondent caused the leak to occur, or was otherwise liable/responsible. Investigator Thomas admitted that it was possible the leak began after Respondent’s furnace installation due to an unrelated issue like corrosion.
Complainant had advised that Respondent had not performed any checks on the system after the furnace was installed. Based on that information, because Respondent “had to touch the line to access the area” Investigator Thomas instructed Respondent to correct the leak since no leak had been present prior to Respondent’s work in the area.
Complainant’s testimony
Complainant did not use the furnace until mid-winter 2021, and did not use the a/c after that time until summer of 2022. Complainant has not used the furnace since that time.
Mr. Cortez’s testimony
Mr. Cortex performed the installation of Complainant’s furnace. He denied “brazing” Complainant’s a/c line or the Chapman fitting, and noted that all work was performed beneath the Chapman fitting.
Mr. Cortez was adamant that he “pumped the system down” by pushing the refrigerant back into the compressor. Afterward, he tested the line with 400lbs of nitrogen to make sure that the line did not leak. Mr. Cortez did not note any leaks after the unit was put on a vacuum.
Mr. Cortez testified that components go bad over time and can disintegrate.
Although Mr. Cortez’s employment with Respondent was terminated, the separation had nothing to do with his work on this project.
Mr. Pryer’s testimony
Respondent was assigned the underlying project by Complainant’s home warranty company. As such, Respondent was incentivized to find additional issues, such as a leak, to bill for additional work. Since no other issues were noted after the furnace was installed, no additional labor or materials were billed to Complainant’s home warranty company.
The leak in the a/c line is “pinhole” sized and is coming from an old fitting that appears to be original to the home.
Mr. Pryer denied that Respondent could have caused the fitting to become dull and corroded.
Closing Arguments
In closing, Complainant argued that Respondent should have replaced old component parts, and that the record established Respondent “could have” touched the refrigerant line and caused the leak at issue.
In closing, Respondent argued that Complainant’s burden of proof had not been sustained. Respondent argued that the record was devoid of evidence to establish that Respondent had not performed the installation of the furnace in a workmanlike manner, or that Respondent had been a direct or proximate cause of the leak in Complainant’s a/c line. Per Respondent, the record established that Respondent’s work was beneath the leak at issue and Respondent had performed multiple post-installation tests to ensure the unit worked properly prior to leaving, and that none were noted. Respondent opined that Investigator Thomas unreasonably relied on Complainant’s allegation(s) against Respondent, and that further argued that the Registrar’s Directive should not have been issued. Respondent asked that, at a minimum, no discipline be imposed against its license.
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.
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(a) requires that “[a]ll work shall be performed in a professional and workmanlike manner.”
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 this matter clear.
It is clear from the record that the parties had a furnace installation contract, for which Complainant paid the price in full. It is also clear that Investigator Thomas substantiated the sole complaint item as failing to meet the Registrar’s minimum workmanship standards, and that Respondent failed to perform corrective work in compliance with the Registrar’s Directive in violation of Ariz. Rev. Stat. §§ 32-1154(A)(3) and (A)(22).
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 Complainant’s project per contract. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent has sustained its burden. Respondent was contracted to install a furnace, which it did. There is no evidence in the record to support an allegation that its workmanship regarding the installation failed to meet the Registrar’s minimum workmanship standards. Additionally, though the record clearly reflects that Complainant suffered a leak in her a/c line, nothing in the record supports the contention that Respondent caused or exacerbated this leak. Respondent’s technician credibly testified that he installed the furnace without causing damage the a/c line, performed 2 tests prior to leaving, and did not see any leaks from the Chapman fitting. Additionally, the record reflects that the leak is from an old corroded part, which was not noticed until several months after Respondent completed its work near the area. It is unreasonable and inequitable to hold Respondent liable for the leak, as Investigator Thomas admitted he could not say for certain that Respondent caused it. Accordingly, Respondent was not required to comply with the Directive as it should not have been issued.
Thusly, because no violation(s) of Ariz. Rev. Stat. § 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a) have been established by a preponderance of the evidence, there can be no violation of § 32-1154(A)(22) as the Directive in this matter was issued in error. As a result, Complainant has not established cause for the Registrar to discipline Respondent’s contractor’s license.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that Complaint No. 2022-05106 be closed.
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, November 07, 2022.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
Registrar of Contractors
Ariel Leonardi, Complainant
8790 E. Totem Cir.
Prescott Valley, AZ 86314
[email redacted]
DeVon Veater, Esq.
Daniel De Julio, Esq.
Brentwood Law Group, PLLC , Counsel for Respondent
2520 E. University Dr., Ste. 103
Tempe, AZ 85281
[email redacted]
[email redacted]
By Miranda Alvarez
Legal Secretary