ALJDEC - Licensing

2022A-06995-CHC-ROC · Registrar of Contractors · 2023-07-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jennifer Paielli ,

COMPLAINANT

v.

ABCO Solar Inc

License No. ROC 258378,

RESPONDENT

No. 2022A-06995-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 7, 2023, 9:00 A.M.

APPEARANCES: Maria McKee, Esq., and Erin McManis, Esq., appeared on behalf of Complainant Jennifer Paielli; David Shorey, President, appeared on behalf of Respondent

ADMINISTRATIVE LAW JUDGE: Roger Geddes

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

1. ABCO Solar, Inc. (Respondent), is the holder of License Number 258378 issued by the Registrar of Contractors (Registrar).

2. On or about August 17, 2022, Jennifer Paielli (Complainant) filed a Complaint against Respondent with the Registrar alleging abandonment and poor work by Respondent in connection with a commercial remodel of a complex in Phoenix, Arizona (“project”).

3. The Registrar performed a Job Inspection of the project on October 17, 2022. Thereafter, the Registrar issued a Written Directive, dated October 17, 2022, directing Respondent to remedy the following violations by appropriate means by November 18, 2022 (“Directive deadline”):

The job is incomplete.

Respondent shall complete project per original contract agreement, plans,

specifications, properly executed change orders, local building codes and

manufacturer’s installation instructions.

Complaint #1 Unfinished Lighting retrofit

Complaint #2 Unfinished AC and Air handler replacements missing about 43 of the 66 units which were supposedly ordered June 2020

Complaint #3 Poor Install HVAC Building A,

Complaint #4 Unfinished flat roof repairs and coating

Complaint #5 Unfinished Replacement of building B roof tile

Complaint #6 unfinished sealing & caulking

Complaint #7 Unfinished submetering on all water and electrical meters,

Complaint #8 Unfinished wire and circuit tracing

Complaint #9 Unfinished power filtering and surge suppression installs.

4. The Registrar performed a Compliance Job Inspection on February 2, 2022, listing its compliance findings identical to the nine items listed in the Written Directive.

5. After observing that not all corrective work had been done, the Registrar then issued a Citation to Respondent, dated February 24, 2023, for the alleged violation of the following:

a. A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108(a)) for failure to perform work in a professional and workmanlike manner);

b. A.R.S. § 32-1154(A)(22) (failure to perform corrective action without valid justification).

6. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing, and issued a Notice of Hearing for July 7, 2023, at 1:00 P.M.

7. At the July 7, 2023, hearing, Complainant Jennifer Paielli testified on her own behalf. Respondent presented the testimony of David Shorey, President, and Klaus Wyatt. Steve Klein, the Registrar Investigator (Investigator), testified on behalf of the Registrar. The Tribunal received and admitted Complainant’s Exhibit Nos. 1 - 29. No exhibits were submitted on behalf of Respondent.

8. The Investigator testified on behalf of the Registrar consistently with his findings contained in the Directive and his job inspection notes. He testified that he was not able to get on the roof for the initial Job Site Inspection, but relied on Complainant’s representations with regard to unfinished items on the roof. He further testified he did not hear from Complainant after the Directive expiration and closed the Complaint on December 19, 2022, but reopened the Complaint soon thereafter when Complainant contacted him. He testified that with regard to the Compliance Inspection, while he said he was able this time access the roof and did observe some of the Directive items, he also stated he relied in large part upon the representations of Complainant.

9. Complainant Jennifer Paielli testified, as herein relevant to the Citation, that she was a member of the Board of Directors for Northview Plaza Owners Association and in that capacity was familiar with the contract for the project and the progress of the project. She testified the project was a major renovation that began in 2020 with a contract amount of $881,689.00. She further testified as to the Directive items that were incomplete to the extent she had personal knowledge.

10. David Shorey, President, testified on behalf of Respondent, as herein relevant to the Citation, consistently with his progress report dated November 22, 2022 (Complainant’s Exhibit No.16), and Respondent’s Written Answer to the Citation, dated March 11, 2023 (Complainant’s Exhibit No. 21). He further testified that he misunderstood the Written Directive, and that he had been told by the Investigator to simply finish the project as soon as he could and provide progress reports. He testified he provided two reports in that regard.

He further testified as the financial problems of the company as well as the effect of the pandemic on the project. He stated he has been more than willing to still complete the project.

11. Klaus Wyatt testified on behalf of Respondent, as herein relevant to the Citation, that he believed that all items were completed with the exception of the replacement of the HVAC units. He stated there were a lot of miscommunications regarding Respondent’s progress because the board’s management company was not passing information on to the board. He stated the last work done was replacing two air conditioning units in December 2022 or January 2023, but that there were no funds to replace more at that time.

12. Administrative notice is taken of the Registrar’s public website which reflects Respondent was first issued the subject license on September 3, 2009. The site also reflects no open cases, no disciplined cases, and no resolved/settled cases.

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154.

2. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by preponderance of the evidence. See Arizona Administrative Code Rule 219-119.

3. To warrant sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B. R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” BLACK’S LAW DICTIONARY 1182 (Rev. 6th ed. 1990).

4. A.R.S. § 32-1154(A) includes in pertinent part among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, the following that were included in the Citation:

3. Violation of any rule adopted by the registrar.

...

22. Failure to take appropriate corrective action to comply with his 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.....

5. With regard to the “violation of any rule adopted by the registrar” under A.R.S. § 32-1154(A)(3) referenced in the Citation, the rule allegedly violated in this case is Arizona Administrative Code Rule 4-9-108(A) which requires that “[a] contractor shall perform all work in a professional and workmanlike manner,”

6. A.R.S. § 32-1154(A)(3). Complainant has presented sufficient evidence to establish that Respondent’s failure to complete the project with regard to some of the Written Directive items constituted a failure to perform work in a professional and workmanlike manner as required by Arizona Administrative Code Rule 4-9-108(a).

Complaint Item No. 1 - Complainant did not meet its burden of proof with regard to this Directive item. Respondent testified that this component was signed off on September 15, 2022, and that it did in fact complete this component. Complainant did not dispute that sign-off occurred, but testified it was done for financial reasons and not because this component was completed. However, the testimony of the Investigator that some of the lights did not look retrofitted and the photographs purportedly depicting this component as being unfinished were insufficient to persuade the Tribunal that the lighting retrofit was not substantially completed.

Complaint Item No. 2 – Complainant met its burden of proof with regard to this Directive item. There was no dispute that Respondent had not completed replacing the HVAC equipment. Respondent testified it had not replaced 39 of the 66 units, and Complainant did not present contrary evidence as to that number of units.

Complainant Item No. 3 – Complainant did not meet its burden of proof with regard to this Directive item. First, the alleged poor installation of HVAC equipment appears to be one of the items Complainant represented to the Investigator that he relied upon. To support this item, Complainant offered a written demand from an attorney of an apparent tenant, dated April 11, 2023, relating to HVAC deficiencies (Complainant’s Exhibit 11) and a report apparently from another HVAC vendor, dated March 18, 2023 (Complainant’s Exhibit 10), relating to those deficiencies. However, these documents came about well after the Written Directive and there was no documentary evidence presented of deficiencies existing at the time of the Directive, October 17, 2022. Perhaps some, if not all, of the deficiencies listed in the March 18, 2023, report existed on October 17, 2022. However, there was no evidence presented that Respondent had notice of these specific deficiencies at the time of the Directive in order to be given a fair opportunity to correct them.

Complainant Item No. 4 – Complainant met its burden of proof with regard to this Directive item. It should be noted at the outset that the Investigator testified he did not have access to the roof at the time of the Job Site Inspection and therefore was apparently relying upon the representations of Complainant that this item was unfinished. However, Respondent admitted that the roof repair and coating were unfinished with regard to the areas under the HVAC units that Respondent still needed to replace.

Complainant Item No. 5 – Complainant did not meet its burden of proof with regard to this Directive item. Respondent contended it finished this item, and Complainant contended it did not. The photographs purportedly depicting this Directive item, without further explanation, were insufficient to persuade the Tribunal that it was unfinished or that the replacement of the specified roof tile was within the scope of the project.

Complainant Item No. 6 – Complainant did not meet its burden of proof with regard to this Directive item. Respondent contended it finished this item, and Complainant contended it did not. The photographs purportedly depicting this Directive item, without further explanation, were insufficient to persuade the Tribunal that it was unfinished.

Complainant Item No. 7 – Complainant did not meet its burden of proof with regard to this Directive item. The Investigator testified that he took Complainant’s word that the sub-metering was unfinished. Further, Respondent testified that during the course of project it was discovered that the sub-metering was going to be much more intensive and costly than anticipated. Respondent stated it advised against the sub-metering and offered a cost adjustment to the contract to remove this component of the project. Complainant did not dispute this and the evidence was not clear whether Complainant accepted this proposal. Regardless, there was no evidence that Respondent could have anticipated this potential increase in the scope of the project or that Respondent should be responsible for completing it without a change order.

Complainant Item No. 8 – Complainant did not meet its burden of proof with regard to this Directive item. Respondent contended it finished this item, and Complainant contended it did not. The photographs purportedly depicting this Directive item, without further explanation, were insufficient to persuade the Tribunal that it was unfinished.

Complainant Item No. 9 – Complainant met its burden of proof with regard to this Directive item. Respondent did not dispute that it had not completed the power filtering and the surge suppression installs.

7. A.R.S. § 32-1154(A)(22). Complainant has presented sufficient evidence to establish that Respondent failed to perform corrective action without a valid justification. Respondent claims several factors justified it not completing the work, most significantly, cash flow problems created by the pandemic. Indeed, when Mr. Wyatt was questioned as to the reason the last work performed by Respondent consisted of the replacement of only two HVAC units and not the other 39 due to be replaced, he stated that that was all the money they had to purchase the units. Further, Mr. Stoney stated he lost his partner and 21 staff members, that there was problem with supplies, and that the city of Phoenix and APS delayed inspections and permitting, although no documentary evidence was presented to substantiate these claims. Mr. Stoney also alluded to not being paid by Complainant ostensibly as one factor for not completing the project. However, the evidence in fact showed the opposite, that Complainant had made payments to Respondent earlier than was required under the contract.

Mr. Shoney also claimed he misunderstood the Written Directive and that he believed from representations made by the Investigator that all he had to do was proceed with the work diligently to completion and provide progress updates. While the Investigator may have suggested something to that effect, the evidence presented showed that the report of progress and the progress itself was limited. Respondent did provide a report of some progress on November 22, 2022 (Complainant’s Exhibit No.16); however, there was no other evidence presented of any progress reports generated prior to the Compliance Inspection date on February 2, 2023, or the date of the Citation on February 24, 2023.

While the foregoing factors may very well have been reasons for not completing the corrective work, the Tribunal finds them to be unsubstantiated claims that would not constitute a “valid justification” as contemplated under the statute.

8. Accordingly, the Tribunal finds that Complainant has established that Respondent’s license should be disciplined for a violation of § 32-1154(A)(3) with respect to Complaint Item numbers 2, 4, and 9, and for a violation of A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of this Order, ABCO Solar, Inc.”s, License Number 258378 is suspended for five (5) days.

IT IS FURTHER RECOMMENDED that pursuant to A.R.S. § 32-1154(E), Respondent must pay to the Registrar a civil penalty of $500.00 in certified funds on or before 30 days from the effective date of this Order.

IT IS FURTHER RECOMMENDED that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of the outstanding prior civil penalty.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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 forty (40) days from the date of that certification.

Done this day, July 27, 2023.

/s/ Roger Geddes

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Martín Quezada

Director

Registrar of Contractors

[email redacted]

Erin E. McManis, Esq.

Maria G. McKee, Esq.

Carpenter, Hazlewood, Delgado & Bolen, LLP

1400 E. Southern Ave., Suite 400

Tempe, Arizona 85282

[email redacted]

[email redacted]

[email redacted]

Jennifer Paielli

[email redacted]

ABCO Solar, Inc.

[email redacted]

By: OAH Staff