ALJDEC decisions subject to certification as final

2022A-07692-OMC-LS-ROC · Registrar of Contractors · 2022-09-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors,

COMPLAINANT,

v.

Prescott Valley Heating and Cooling LLC

dba My HVAC Store

ROC License Nos. 316193, 333250, 333912,

RESPONDENT.

No. 2022A-07692-OMC-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 26, 2022 at 9:00 AM.

APPEARANCES: Assistant Attorney General Justin Larson, Esq. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with Chance Peterson and Steve Nelsen as witnesses. No appearance(s) by or on behalf of Prescott Valley Heating and Cooling LLC (“Respondent”).

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 license files as shown on the Registrar’s public website.

On October 23, 2017, Respondent was issued ROC License No. 316193 for Specialty Dual CR-39 Air Conditioning and Refrigeration contracting. The license was suspended effective September 09, 2022. Ragen Paul Hamilton is listed on the license as its Qualifying Party and Member. Respondent’s address of record for the license is 7420 E. Racers Way, Prescott Valley, AZ 86315. The license has an active $6,750.00 surety bond issued through RLI Insurance Company. There are six (6) open complaints against the license, some of which are presumed to be related to this matter. There is no prior discipline listed for the license.

On May 04, 2021, Respondent was issued ROC License No. 333250 for Specialty Residential R-37R Plumbing contracting. The license was suspended effective September 09, 2022. Dustin Charles Thorn is listed on the license as its Qualifying Party, and Ragen Paul Hamilton is listed as the Member. Respondent’s address of record for the license is 7420 E. Racers Way, Prescott Valley, AZ 86315. The license has an active $4,250.00 surety bond issued through RLI Insurance Company. There is one (1) open complaint against the license, which is also presumed to be related to this matter. There is no prior discipline listed for the license.

On July 02, 2021, Respondent was issued ROC License No. 333912 for Specialty Residential R-11 Electrical contracting. The license was suspended effective September 09, 2022. Ragen Paul Hamilton is listed on the license as its Member. Respondent’s address of record for the license is 7420 E. Racers Way, Prescott Valley, AZ 86315. The license has an active $4,250.00 surety bond issued through RLI Insurance Company. There is one (1) open complaint against the license, which is also presumed to be related to this matter. There is no prior discipline listed for the license.

Between August and September of 2022, the Registrar received five (5) complaints against Respondent’s licenses alleging poor workmanship and/or abandonment of contract. Upon investigation, the Registrar substantiated all five complaints. Given the circumstances, the Registrar determined that the public health, safety or welfare imperatively required emergency action under Ariz. Rev. Stat. § 41-1092.11(B). As such, on September 09, 2022, the Registrar issued an Order of Summary Suspension and Notice of Promptly Instituted Proceedings against Respondent’s licenses. The Order set forth facts supporting the Registrar’s summary suspension regarding complaints received by the following homeowners: Dyani Juarez (Complaint No. 2022-07036), Christopher Peerless (Complaint No. 2022-07126), Eric Schaefer (Complaint No. 2022-07430), Joseph Gallant Jr. (Complaint. No 2022-07509), and David Williamson (Complaint No. 2022-07667).

On September 13, 2022, a Supplemental Notice against Respondent was issued that provided a statement of facts and alleged violations, and the Registrar’s requested relief.

The Order and Supplemental Notice were mailed to Respondent’s address of record via certified mail and emailed. The correspondence was not returned by the United States Postal Service or Respondent’s domain as refused or undeliverable.

On September 26, 2022, at 9:00 a.m. an evidentiary hearing was held before the Office of Administrative Hearings (“OAH”), an independent state agency, located in Phoenix, Arizona per the Order and Notice to determine whether cause exists to uphold the summary suspension of Respondent’s licenses based on the following alleged violations:

Charge 1: Abandonment of a Contract without Legal Excuse (Ariz. Rev. Stat. § 32-1154(A)(1)) – Four Counts

Charge 2: Minimum Workmanship Standards (Ariz. Rev. Stat. § 32-1154(A)(3); Ariz. Admin. Code R4-9-108) – One Count

The Registrar was represented by Assistant Attorney General Justin Larson, Esq., who submitted Exhibits A-M and presented the testimonies of Steve Nelsen – Assistant Chief of Compliance (“Investigator Nelsen”) and Chance Peterson – Assistant Chief Counsel (“Mr. Peterson”).

Although afforded a ten minute grace period, Respondent did not appear on his own behalf, through an authorized officer, employee, or attorney, and did not contact OAH to request that the start of the hearing be further delayed or continued, or request permission to appear via alternative means. Consequently, Respondent did not present any evidence to defend the suspension of its licenses.

Hearing Evidence

Homeowner Complaints

Dyani Juarez (Complaint No. 2022-07036)

On August 19, 2022, the Registrar received Complaint No. 2022-07036 against License No. 316193, alleging that Respondent abandoned the parties’ $18,506.12 July 22, 2022, HVAC installation contract after Ms. Juarez tendered $8,703.06 to Respondent on July 25, 2022. Attached to the complaint was a copy of the underlying contract and Ms. Juarez’s proof of payment to Respondent.

On September 09, 2022, the Registrar issued a Citation to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(1). Respondent was given until September 23, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § and 32-1155(C).

Respondent did not submit an Answer to the Registrar.

Christopher Peerless (Complaint No. 2022-07126)

On August 19, 2022, the Registrar received Complaint No. 2022-07126 against License No. 316193, alleging poor workmanship on a $7,702.00 July 01, 2022, HVAC installation contract that Mr. Peerless paid in full. Attached to the complaint was a copy of the underlying contract, building permit, and Mr. Peerless’ proof of payments to Respondent.

Eric Schaefer (Complaint No. 2022-07430)

On August 30, 2022, the Registrar received Complaint No. 2022-07430 against License No. 316193, alleging that Respondent abandoned the parties’ $13,890.00 May 03, 2022, HVAC installation contract after Mr. Schaefer tendered $6,945.00 to Respondent on May 23, 2021. Attached to the complaint was a copy of the underlying contract and Mr. Schaefer’s proof of payment to Respondent.

On September 07, 2022, assigned Registrar investigator Sheldon White (“Investigator White”) performed a jobsite inspection of Mr. Shaefer’s project. Respondent was not present. A recorded message stated the company was out of business when Investigator White called Respondent. Investigator White reviewed the parties’ contract and took note of the fact that no work had been performed by Respondent, nor had any materials been delivered to the project site. Investigator White took three photographs of the project site and drafted Jobsite Inspection Notes once he was finished with his inspection. Ultimately, Investigator White verified Mr. Shaefer’s abandonment claim and issued a Written Directive from the Registrar (“Directive”) on September 07, 2022, as a result. Respondent was put on notice that it had until 5:00 p.m. on September 26, 2022, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A), 32-1154(A)(22), and 32-1154(E).

As of the hearing date, Respondent had not commenced any corrective work on the Schaefer project.

Joseph Gallant Jr. (Complaint No 2022-07509)

On September 01, 2022, the Registrar received Complaint No. 2022-07509 against License No. 316193, alleging that Respondent abandoned the parties’ $21,000.00 July 28, 2022, HVAC installation contract after Mr. Gallant Jr. tendered $10,500.00 to Respondent on July 29, 2022. Attached to the complaint was Mr. Gallant Jr.’s proof of payment to Respondent.

On September 08, 2022, the Registrar issued a Citation to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(1). Respondent was given until September 23, 2022, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § and 32-1155(C).

Respondent did not submit an Answer to the Registrar.

David Williamson (Complaint No. 2022-07667)

On August 19, 2022, the Registrar received Complaint No. 2022-07667 against License No. 316193, alleging that Respondent abandoned the parties’ $9,000.00 July 26, 2022, HVAC installation contract after Mr. Williamson tendered $4,500.00 to Respondent on July 27, 2022. Attached to the complaint was a copy of the underlying contract and Mr. Williamson’s proof of payment to Respondent.

Mr. Mr. Williamson also submitted a photograph of a notice allegedly posted at Respondent’s business address that states, “WE ARE CLOSED” and instructs interested parties to contact [email redacted]. (Emphasis in original.)

Additional Evidence

Mr. Peterson and Investigator Nelsen both testified that they made multiple attempts to reach Respondent at its phone number of record, as well as other phone numbers they were able to obtain elsewhere, to no avail. Each number either went to voicemail and/or instructed the caller to contact “Majors Law Group.”

All attempts by the Registrar to reach an attorney on behalf of Respondent at Majors Law Group have been unsuccessful.

CONCLUSIONS OF LAW

These matters lie within the Registrar’s jurisdiction, and was properly brought before OAH.

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

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.

The Order and Supplemental Notice the Registrar mailed to Respondent at its address of record was reasonable. Neither the Notice of Hearing nor Supplemental Notice sent to Respondent were returned as undeliverable. Thus, Respondent is deemed to have received notice of the scheduled proceedings.

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.

“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. § 41-1092.11(B) provides, in pertinent part, that if an “[a]gency finds that the public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, the agency may order summary suspension of a license pending promptly instituted proceedings for revocation or other action.”

Ariz. Rev. Stat. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”

Ariz. Rev. Stat. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” Ariz. Admin. Code R4-9-108(A) states that “[a] contractor shall perform all work in a professional and workmanlike manner.”

The evidence in this matter is clear and undisputed.

The record reflects that the Registrar received no less than five homeowner complaints against Respondent’s license(s) between August and September of 2022 alleging abandonment and/or poor workmanship. In four of the underlying complaints the Registrar received reliable evidence that each complaining homeowner paid at least half of the payment due on their respective contracts with Respondent, and in the fifth complaint the Registrar received reliable evidence that the complaining homeowner paid the contract in full. Here, although two Citations and a Directive were issued, Respondent failed to submit an Answer and also failed to perform any corrective work as instructed by the Registrar.

Thus, considering the nature and frequency of the alleged conduct at bar, more than ample cause exists to uphold the Registrar’s summary suspension of ROC License Nos. 316193, 333250, and 333912 based on Respondent’s alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(1) and 32-1154(A)(3); Ariz. Admin. Code R4-9-108. Public welfare imperatively required the Registrar’s swift emergency action in this matter.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to timely and completely finish the projects at issue per their respective agreements. These are affirmative defenses that Respondent bears the burden to establish. In failing to appear for the duly noticed hearing, Respondent failed to provide evidence in mitigation, refute the Registrar’s evidence, or justify its inaction in this matter. Thus, Respondent’s burden has not been sustained.

Respondent’s pattern of taking payments on new contracts, while failing to fulfill existing contracts, jeopardizes public safety and welfare. Additionally, Respondent’s absence from an administrative hearing regarding his license is a factor in aggravation, and confirms that at this time Respondent cannot be regulated by the Registrar. Notably, the tribunal is particularly troubled by the fact that Respondent accepted $38,350.06 in payments from victimized homeowners during its apparent grift. Because Respondent failed to appear, no evidence was offered to establish an affirmative defense to the above-captioned conduct.

Because the Registrar has established cause to summarily suspend Respondent’s license(s) under Ariz. Rev. Stat. § 41-1092.11(B), the Tribunal must affirm the Registrar’s Order of Summary Suspension issued against Respondent’s License Nos. 316193, 333250, and 333912 as appropriate and in the best interest of the public.

RECOMMENDED ORDER

In light of the foregoing,

IT IS RECOMMENDED that on the effective date of the Final Order in this matter, the Registrar uphold the Order of Summary Suspension issued September 09, 2022, to Respondent Prescott Valley Heating and Cooling LLC, dba My HVAC Store, ROC License Nos. 316193, 333250, and 333912.

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.

Done this day, September 28, 2022.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

c/o Legal Department

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Prescott Valley Heating and Cooling LLC

dba My HVAC Store

7420 E Racers Way

Prescott Valley, AZ 86315

[email redacted]

Justin Larson, Assistant Attorney General

Office of the Attorney General, Counsel for the Registrar

2005 N. Central Ave.

Phoenix, AZ 85004

[email redacted]

By Miranda Alvarez

Legal Secretary