ALJDEC - Licensing
2023A-01156-CHC-ROC · Registrar of Contractors · 2024-06-24
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
James S. Russ,
COMPLAINANT,
v.
Titan Solar Power AZ Inc.,
ROC License Nos. 340249 & 334037
RESPONDENT.
No. 2023A-01156-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: June 21, 2024 at 1:00 PM.
APPEARANCES: James Russ (“Complainant”) appeared on his own behalf. Jim Dimond appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). No appearance(s) by or on behalf of Titan Solar Power AZ Inc. (“Respondent”). Juliana Torres and Ken Ragan observed.
ADMINISTRATIVE LAW JUDGE: Jenna Clark.
EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the attached agency file, and Complainant Exhibit 3 were admitted into the evidentiary record.
_____________________________________________________________________
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 Arizona Administrative Code (“Ariz. Admin. Code”) R4-9-117, Administrative Notice is taken of Respondent’s prior license records as reflected on the Registrar’s public website. On July 14, 2021, the Registrar issued License No. 334037 Specialty Dual CR-11 Electrical contracting license to Respondent. The license has been renewed through July 31, 2025. Thomas Lynn Porter is listed as the Qualifying Party on the license. David Michael Williamson is listed as the President, Officer and Director on the license. Kyle Allen Beddome is listed on the license as the Chief Financial Officer, Director, and Secretary on the license. Respondent’s address of record for the license is 2222 E. Yeager Dr., Ste. 100 Chandler, Arizona 85286. Respondent has an active $32,500.00 surety bond on the license issued by Western Surety Company, effective July 02, 2021. The license has no prior disciplinary record, save four (4) complaints that have been settled or otherwise resolved against it.
On August 17, 2022, the Registrar issued License No. 340249 General Dual KB-2 Residential and Small Commercial contracting license to Respondent. The license has been renewed through August 31, 2024. Christopher Lowe Verner is listed as the Qualifying Party on the license. David Michael Williamson is listed as the President, Officer and Director on the license. Kyle Allen Beddome is listed on the license as the Chief Financial Officer, Director, and Secretary on the license. Respondent’s address of record for the license is 2222 E. Yeager Dr., Ste. 100 Chandler, Arizona 85286. Respondent has an active $40,000.00 surety bond on the license issued by Western Surety Company, effective July 02, 2021. The license has no prior disciplinary record, save one (1) complaint that have been settled or otherwise resolved against it. There is one open complaint listed against the license which is presumed to be related to this matter.
On January 30, 2023, the Registrar received a narrative complaint from Complainant alleging abandonment and poor work of a solar installation project against Respondent’s License No. 340249. The Registrar designated it Complaint No. 2023-01156 and assigned to Jim Dimond (“Investigator Dimond”) for investigation.
On February 06, 2023, Investigator Dimond issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on March 03, 2023, at 10:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On March 03, 2023, Investigator Dimond inspected the work that had been performed on the project. Respondent was present. Investigator Dimond also reviewed the contract-related correspondence between the parties, and took 14 photographs of the project site. When he was finished, Investigator Dimond drafted his Jobsite Inspection Notes. Ultimately, Investigator Dimond derived four (4) complaint items from Complaint No. 2023-01156, three (3) of which he was able to substantiate against Respondent based on his firsthand observations. Specifically, Investigator Dimond concluded that Respondent’s workmanship failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.
On May 11, 2023, Investigator Dimond issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated most of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on May 31, 2023, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.
On June 07, 2023, Complaint No. 2023-01156 was closed by the Registrar per Complainant’s request.
On or about September 04, 2023, Complaint No. 2023-01156 was reopened by the Registrar per Complainant’s request, which included thirteen (13) addendum complaint items.
On an unknown date, Investigator Dimond issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an addendum inspection for the project on October 05, 2023, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.
On October 05, 2023, Investigator Dimond conducted an onsite inspection of Complainant’s addendum complaint items. Respondent was present. When he was finished, Investigator Dimond drafted his Addendum Jobsite Inspection Notes. Ultimately, Investigator Dimond substantiated addendum complaint items 5-12 and 16 against Respondent based on his firsthand observations. Specifically, Investigator Dimond concluded that Respondent’s workmanship failed to meet the Registrar’s minimum standards and required Respondent to perform corrective and/or completion work to remediate the identified deficiencies.
On January 08, 2024, Investigator Dimond issued an Addendum Written Directive from the Registrar (“Addendum Directive”) to Respondent because he substantiated most of Complainant’s addendum complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on January 29, 2024, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Arizona Revised Statutes (“Ariz. Rev. Stat.”) §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.
On February 28, 2024, Investigator Dimond forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.
On March 08, 2024, Investigator Dimond confirmed with the Registrar’s Legal Department that his escalation was for Respondent’s electrical license, License No. 334037.
On March 11, 2024, the Registrar issued a Citation to Respondent for alleged violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3); Ariz. Admin. Code R4-9-108(a), and 32-1154(A)(22). Respondent was given until March 26, 2024, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. Correspondence was not returned as undeliverable to Respondent.
On April 02, 2024, the Registrar issued a Final Administrative Decision and Order (Default) because a timely Answer had not been received on behalf of Respondent. The Default Order suspended both of Respondent’s licenses for two (2) days, beginning April 09, 2024, and assessed a $250.00 civil penalty.
On April 03, 2024, the Registrar received an (Emergency) Request to Vacate Decision and Order (Default) and Schedle [sic] Hearing on the Merits on behalf of Respondent.
On April 05, 2024, the Registrar received Respondent’s Answer whereby Respondent denied all alleged statutory violations levied in the Citation.
On April 24, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on June 21, 2024. Per the May 20, 2024, Notice of Hearing on Contested Case (“Notice of Hearing”) the issue(s) to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violation(s):
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(a)
Charge 3: A.R.S. § 32-1154(A)(22)
Additional Evidence
On June 20, 2024, at 9:20 p.m., Counsel for Respondent submitted a Notice of Chapter 7 Bankruptcy and Automatic Stay and Notice of Withdrawal of Counsel. On June 21, 2024, the Tribunal issued the following Minute Entry, in pertinent part:
Respondent’s motion to stay proceedings scheduled for the Office of Administrative Hearings June 21, 2024, at 1:00 p.m. is denied, as the federal Bankruptcy Code is inapplicable to non-monetary state agency police actions against licensees, as is the case in the above-captioned matter.
Husch Blackwell, LLP’s withdrawal as Counsel of record for Respondent is accepted.
Digital correspondence issued to Respondent’s email address of record was not returned as undeliverable.
Hearing Evidence
Complainant testified on his own behalf, and called Investigator Dimond as a witness. Although afforded a ten (10) minute grace period, Respondent failed to appear, request an alternative appearance, and/or submit a Motion to Continue. The substantive evidence of record is as follows:
Complainant and his wife, Juliana Torres, own residential property located at 1048 E. Rd. 4 South Chino Valley, Arizona 86323.
On April 26, 2022, Respondent and Complainant, along with Ms. Torres, entered into a $100,000.00 solar purchase and installation agreement. Complainant financed the project through GoodLeap, who paid for the project in full on Complainant’s behalf.
Work on the project commenced July 05, 2022, and stopped on or about July 14, 2022.
Shortly after the initial jobsite inspection Respondent agreed to address Complainant’s “list of demands” in exchange for the closure of Complaint No. 2023-01156.
In Investigator Dimond’s closure letter to the parties, he noted that Complainant had six (6) months from the date of the letter to request reopening of the complaint.
After no corrective work had been performed by Respondent, and Respondent had not addressed Complainant’s agreed upon concerns, Complainant requested reopening of Complaint No. 2023-01156.
Between May 11, 2023, and January 29, 2024, no corrective work on the project was performed by Respondent. At no point during this period of time did Respondent allege a denial of access to the project site. Respondent’s licenses were active and in good standing with the Registrar during this time.
Respondent did not provide the Registrar with any accounting statements or affidavits regarding the state of its “finances” related to the completion of the underlying project.
The parties have not entered into a settlement agreement for any portions of the underlying project.
Closing Argument
In closing, Complainant argued that he had sustained his burden of proof and as such the Registrar was required to take disciplinary action against Respondent’s construction license(s).
CONCLUSIONS OF LAW
This matter lies within the Registrar’s jurisdiction. The matter 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 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 for the Registrar 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)(2)(a) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications in any material respect that is prejudicial to another without consent.”
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] contractor shall perform all work 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.
Ariz. Rev. Stat. § 32-1154(E) holds, in pertinent parts, that the Registrar may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also holds that no future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.”
Statutes shall be liberally construed to affect their objects and to promote justice. In interpreting a statute, “[w]e first consider the language of the statute and, if it is unclear, turn to other factors, including ‘the statute’s context, subject matter, historical background, effects, consequences, spirit, and purpose.”
Statutes should be interpreted to provide a fair and sensible result. “In applying a statute its words are to be given their ordinary meaning unless the legislature has offered its own definition of the words or it appears from the context that a special meaning was intended.”
The Tribunal is required to apply equitable principles when rendering decisions. The application of equity entails offering a remedy to avoid an unconscionable or unjust result.
The material facts in the case at bar are clear.
It is clear from the record that the parties had a solar installation project that Complainant paid in full. It is also clear from the record that Respondent did not complete the project per contract, and that Respondent further failed to comply with the Registrar’s Directive and Addendum Directive to complete the project leaving Complainant with nonoperational solar system.
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 did not sustain its burden. The Tribunal is not at liberty to make presumptions in favor of Respondent or accept facts in mitigation on behalf of Respondent that are not supported by the evidence. Respondent’s absence from this administrative proceeding is, however, a factor in aggravation. The evidentiary record in this matter reflects that Respondent’s performance on the underlying project failed to meet the Registrar’s minimum workmanship standards, and had no affirmative defense(s) for doing so. No evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project.
Notably, the evidentiary record is devoid of any credible evidence that would warrant the Registrar to take disciplinary action against Respondent’s Residential and Small Commercial contracting license, License No. 340249. The record clearly establishes that all work performed in the underlying matter was done under Respondent’s Electrical contracting license, and that both Complaint No. 2023-01156 and Investigator Dimond’s escalation to the Legal Department were filed under the license.
Because Complainant has established Respondent’s violation(s) of Ariz. Rev. Stat. §§ 32-1154(A)(2)(a), 32-1154(A)(3), and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s Electrical contracting license, License No. 334037.
Complainant may petition the Registrar’s Recovery Fund for financial recompense in this matter.
RECOMMENDED ORDER
Based on the foregoing,
IT IS RECOMMENDED that the Registrar take no disciplinary action against ROC License No. 340249, as issue to Titan Solar Power AZ Inc.
IT IS RECOMMENDED, due to the egregiousness of Respondent’s conduct, that five days after the effective date of the Final Order in this matter, ROC License No. 334037, as issued to Titan Solar Power AZ Inc., be revoked.
NOTICE
Pursuant to Ariz. Rev. Stat. § 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, June 26, 2024.
Office of Administrative Hearings
/s/ Jenna Clark
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
c/o Legal Department
Registrar of Contractors
1700 W. Washington St., Ste. 105
Phoenix, AZ 85007
[email redacted]
James S. Russ, Complainant
1048 E. Rd. 4 South
Chino valley, AZ 86323
[email redacted]
Titan Solar Power AZ Inc., Respondent
2222 E. Yeager Dr., Ste. 100
Chandler, AZ 85286
[email redacted]
By: OAH Staff