ALJDEC - Licensing

2023A-11431-CHC-ROC · Registrar of Contractors · 2024-01-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Thomas Shepherd,

COMPLAINANT,

v.

ABCO Solar, Inc.

License No. ROC 258378,

RESPONDENT.

No. 2023A-11431-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 16, 2024

APPEARANCES: Complainant Thomas Shepherd appeared. David Shorey appeared on behalf of Respondent ABCO Solar, Inc. Arizona Registrar of Contractors Investigator Gregory Johndrow appeared as a witness.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

EXHIBITS ADMITTED INTO EVIDENCE: Complainant’s Exhibits A-G

FINDINGS OF FACT

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

On or about June 27, 2023, the Tohono O’odham Ki:Ki Association (“TOKA”) contracted with Respondent for Respondent to supply and install ten (10) solar street light pole assemblies in the San Xavier Black Mountain Community. The contract price was $41,482.12. Complainant paid Respondent a deposit in the amount of $21,757.12.

On or about October 2, 2023, the Registrar received a Complaint against Respondent from Thomas Shepherd (“Complainant”), TOKA’s Senior Contract Officer, alleging that Respondent had abandoned the project.

The Registrar assigned the Complaint to Investigator Gregory Johndrow. Investigator Johndrow reviewed the Complaint and on October 16, 2023, called Respondent to notify Respondent of the filed Complaint. Investigator Johndrow spoke with Respondent’s representative, David Shorey. On that same date, Investigator Johndrow issued to Respondent an acknowledgment letter from the Registrar advising that the Registrar had received the Complaint and requested a response to the Complaint by October 27, 2023.

On November 1, 2023, as no response from Respondent had been received, Investigator Johndrow forwarded the Complaint to the Registrar’s Legal Department for the issuance of a Citation charging Respondent with abandonment. The Registrar issued a Citation against Respondent charging a possible violation of A.R.S. § 32-1154(A)(1).

Investigator Johndrow testified that Respondent’s assertion of financial difficulties is not a legal excuse not to perform, and that in this case, Respondent accepted monies that should have been allocated for this project, and instead, Respondent used those funds for other expenses. Therefore, Respondent improperly used those funds, and Respondent would have had adequate funds for the project had they been used appropriately.

Complainant testified that Respondent was awarded the solar project in June 2023, and a deposit check was issued on July 5, 2023, in the amount of $21,757.12. Complainant further testified that the payee on the check was altered from ABCO Solar, Inc., to reflect ABCO Air Conditioning Services, Inc.

Complainant testified that three (3) months elapsed and Respondent had not performed any work on the project. Consequently, on or about September 19, 2023, Complainant sent Respondent a Notice of Contractor Default and Intent to Terminate for Cause; and Owner’s Demand for Assurances (“Notice”). Respondent did not respond to the Notice.

Thereafter, Complainant filed the instant Complaint.

Complainant testified that $188.35 was recovered through Bank of America.

David Shorey, Respondent’s President, did not dispute Complainant’s testimony. Mr. Shorey testified that he lost personnel and that Respondent’s business decreased from two million dollars per year to less than half a million dollars per year, placing financial stress on the company. Mr. Shorey testified that because Respondent suffered losses on other projects, it could not perform on the contract within the agreed upon time frame because it could not purchase the necessary supplies. Mr. Shorey acknowledged that Respondent utilized the deposit monies paid for this project for other purposes. Mr. Shorey testified that Respondent is willing to repay the monies or to perform on the contract.

Administrative notice is taken of Respondent’s prior License record on January 22, 2024. Such prior License record reflects that Respondent’s License Number 258378 was first issued on September 3, 2009, and is active. Such prior License record also reflects that there is only the instant open complaint, no resolved/settled complaints, and one complaint resulting in discipline against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish Respondent’s statutory violation(s) 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.”

The evidence established that Respondent contracted with Complainant for the installation of a solar system, Respondent accepted a deposit in the amount of $21,757.12, and thereafter abandoned the project without legal excuse, having expended the deposit monies for purposes other than the project for which it contracted to perform. Therefore, the credible evidence of record established that Respondent violated A.R.S. § 32-1154(A)(1).

Based on the foregoing, it is appropriate for the Registrar to impose discipline against Respondent’s license.

Upon consideration of all of the facts and circumstances presented by this case, the Administrative Law Judge concludes that the Registrar should suspend Respondent’s license.

The Registrar’s authority in matters such as presented herein, includes the ability to impose restitution, in whole or in part, as a reasonable condition to reduce any possible disciplinary action against contractors. The exercise of such authority is deemed appropriate in the instant case. Therefore, based upon all of the evidence, a reasonable condition in this case would consist of the payment by Respondent to Complainant/TOKA in the amount of $21,568.77, as partial or full restitution, representing the deposit paid ($21,757.12) to Respondent minus the amount recovered from Bank of America ($188.35). Imposing such a condition is more preferable than merely imposing a disciplinary action against Respondent’s license without providing a condition to reduce or eliminate same. However, nothing in this order would prevent either party from seeking a lesser or greater monetary award from a civil court of competent jurisdiction.

The Administrative Law Judge concludes that the Registrar should suspend Respondent’s license subject to the condition that Respondent can avoid such suspension by paying the sum of $21,568.77 to Complainant/TOKA.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, Respondent’s License Number 258378 shall be suspended until the Registrar receives written proof that Respondent has paid the sum of $21,568.77 to Complainant/TOKA.

It is further recommended that if Respondent pays the sum of $21,568.77 to Complainant/TOKA on or before the Order’s effective date, then no license suspension shall be imposed and this matter shall be closed.

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, January 23, 2024.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted by e-mail to:

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

[email redacted]

Gregory Johndrow

[email redacted]

ABCO Solar, Inc.

[email redacted]

Thomas Shepherd

[email redacted]

By: OAH Staff