ALJDEC - Licensing

2024A-01512-CHC-ROC · Registrar of Contractors · 2024-09-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Tina Jones,

COMPLAINANT,

v.

SunUp America LLC

ROC License No. 333266,

RESPONDENT.

No. 2024A-01512-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 29, 2024 at 1:00 PM.

APPEARANCES: Tina Jones (“Complainant”) appeared on her own behalf. Thomas Littler, Esq. appeared on behalf of SunUp America LLC (“Respondent”) with Alexander Elder as a witness. Gregory Johndrow appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Debbie Dean, Les Lovett, John Rushing, Jessie Jones, Elizabeth Crane, Stephan Roblez, Paulina Elder, and Paul Gugel observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

EXHIBITS ADMITTED INTO EVIDENCE: The Notice of Hearing on Contested Case (“Notice of Hearing”), including the Registrar’s attached agency file, August 07, 2024, Hearing Order, and Complainant Exhibit 1 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 record as reflected on the Registrar’s public website. On May 06, 2021, the Registrar issued License No. 333266 General KB-1 Dual Building contracting license to Respondent. Although the license was renewed through May 31, 2025, on August 28, 2024, the Registrar revoked the license. Elizabeth Mae Crane, Stephan Roblez, and Paulina Elder are all listed as the Members on the license. Respondent’s address of record for the license is 625 S. Johndrow Rd., Ste. 11 Tempe, AZ 85288. Respondent has an active $14,000.00 surety bond on the license issued by RLI Insurance Company, effective February 25, 2021. The license has been disciplined on four (4) prior occasions, and has had one (1) complaint settled or otherwise resolved against it. Currently, there are seven (7) open complaints against the license; one of which is presumed to be related to this matter.

On February 07, 2024, the Registrar received a brief narrative complaint from Complainant against Respondent’s License No. 333266 alleging abandonment of their residential photovoltaic system installation project. The Registrar designated it Complaint No. 2024-01512 and assigned to Gregory Johndrow (“Investigator Johndrow”) for investigation.

On February 12, 2024, Investigator Johndrow issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on April 10, 2024, at 9:00 a.m. Correspondence was not returned as undeliverable to Respondent.

On March 07, 2024, the Registrar received an addendum complaint from Complainant that contained three (3) additional complaint items.

On April 10, 2024, Investigator Johndrow inspected the work that had been performed on the project to date. Respondent was not present. Investigator Johndrow also reviewed the contract-related correspondence between the parties, and took 4 photographs of the project site. When he was finished, Investigator Johndrow drafted his Inspection Notes. Ultimately, Investigator Johndrow derived five (5) separate and distinct complaint items from Complaint No. 2024-01512, one of which he substantiated based on his firsthand observations. Specifically, Investigator Johndrow determined Respondent’s workmanship on complaint item 4 was a departure or disregarded approved plans or specification and required Respondent to complete or otherwise perform corrective work to remediate the identified deficiency.

On April 15, 2024, Investigator Johndrow issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated one of Complainant’s complaint allegation(s) against Respondent. Respondent was put on notice that it had until 5:00 p.m. on May 03, 2024, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A) and 32-1154(E). Correspondence was not returned as undeliverable to Respondent.

On or about May 06, 2024, Investigator Johndrow forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On May 06, 2024, the Registrar issued a Citation to Respondent for alleged violations 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 May 21, 20243, 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 May 17, 2024, the Registrar received Respondent’s timely Answer whereby Paul Gugel denied the allegation in the Citation. Specifically, Mr. Gugel argued that, “Not only was [Respondent’s] departure from plans not prejudicial to [Complainant], but, indeed, according to [utility authority] regulations, to have put the system where the plans originally called for would have been prejudicial to her because [the utility authority] would have refused to permit the installation.” Mr. Gugel explained further as follows, in pertinent part:

We are unable to relocate the DG (distributed generation) equipment to the north-facing wall because of [Tucson Electric Power (“TEP”)]’s service requirements that strictly state that the DG equipment (i.e. DG meter, DG disconnect switch, & utility isolation disconnect switch) has to be located within 10 feet of the customer's existing service entrance and revenue meter, and has to be within line of sight, and not separated by walls, gates, or obstructions. SR-702.6(b) & SR-702.7(b). I have attached SR-710 & SR-702 from TEP's interconnection service requirements handbook for reference. However, we are able to relocate the Tesla Powerwall+ battery storage to the north-facing wall as per the customer's preference and per the AHJ approved drawings, as there is no utility restriction on placement of the energy storage.

On July 01, 2024, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on August 29, 2024. Per the July 22, 2024, 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)(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)

Hearing Evidence

Complainant testified on her own behalf and called Investigator Johndrow as a witness. Alexander Elder testified on behalf of Respondent. The substantive evidence of record is as follows:

Complainant and her husband own secondary residential property located at 5531 S. Lamplighter Dr. Tucson, Arizona 85746. Complainant’s daughter has used the property as her primary residence since about 2016/17. One day, Complainant’s daughter complained to her about the electric utility bill, and encouraged Complainant to have a solar system installed on the property to mitigate the utility cost. Complainant agreed and delegated the duty of interviewing and selecting a contractor for the project.

On or about August 30, 2023, the parties entered into a $44,000.00 photovoltaic system installation contract.

On September 13, 2023, Respondent submitted a building permit application to the City of Tucson. On October 24, 2023, after two (2) resubmissions, the City of Tucson issued building permit #TC-RES-0923-07980 for the project.

Work on the project commenced on or about September 01, 2023, and stopped on or about January 22, 2024.

Approved plans show south-facing installation. Respondent installed the unit on the north side, in violation of the line of sight rule due to an alleged “design mistake.”

Complainant paid Respondent in full towards the project.

Although ROC License No. 333266 was active and in good standing with the Registrar, Respondent did not perform any corrective work on substantiated complaint item 4 between April 15, 2024, and May 03, 2024.

At no point in time did Respondent allege a denial of access to the project site during the Directive’s compliance period, or the extension thereof.

On March 05, 2024, Complainant cancelled a system activation appointment scheduled for the following day, and informed Respondent that it was not allowed to activate the system “until the equipment placement is fixed.”

On an unknown date, Complainant filed a formal complaint with the City of Tucson regarding building permit #TC-RES-0923-07980. On April 19, 2024, the City of Tucson changed the electrical clearance on the permit from passed to failed, and placed a hold on the permit. The City of Tucson also contacted TEP and rescinded the clearance approval status. On May 10, 2024, after Respondent had submitted an updated plan set to the permit, the City of Tucson placed an indefinite stop work order and plan review hold on the permit.

Additional Evidence

Plans for the project were never revised. No Change Orders were issued for the project.

On May 30, 2024, Complainant’s credit card refunded $39,000.00 back to her credit card for the underlying project after she submitted a chargeback dispute.

Closing Arguments

Both parties declined to provide closing arguments.

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.

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 [p]lans or specifications in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.”

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.

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 not in dispute.

It is undisputed from the record that the parties had a photovoltaic system installation contract, which Complainant paid Respondent in full. It is also undisputed that Respondent’s installation deviated from approved city plans, without Complainant’s knowledge or consent. It is further undisputed that Respondent failed to comply with the Registrar’s Directive, and further failed to request an extension thereof. It is also undisputed that Complainant received a refund of $39,000.00 from her credit card issuer regarding the project.

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 remediate Complainant’s project. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain his burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance/competence on this project. The record clearly establishes that Respondent was appropriately licensed for the underlying scope of work at issue, and did not attempt to modify the permit, remediate the project in line with approved plans or the Directive, or settle with Complainant. No mitigating evidence exists in the record in favor of Respondent. Respondent’s arguments regarding “design mistakes” and “lack of prejudice” to Complainant are legally and factually incorrect.

Because Complainant has established Respondent’s violations 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), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

Complainant may petition the Registrar’s Recovery Fund for financial recompense in this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent SunUp America LLC, ROC License No. 333266, be suspended for ten (10) business days.

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, September 11, 2024.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors, Complainant

c/o Legal Department

1700 W. Washington St., Ste. 105

Phoenix, AZ 85007

[email redacted]

Tina Jones, Complainant

2001 Crestwood Dr.

Sierra Vista, AZ 85635

[email redacted]

Thomas Littler, Esq.

Littler PC, Counsel for Respondent

341 W. Secretariat Dr.

Tempe, AZ 85284

[email redacted]

By: OAH Staff