ALJDEC - Licensing

2024A-04310-CHC-ROC · Registrar of Contractors · 2024-09-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Lynne M. Fulp,

COMPLAINANT,

SunUp America LLC,

License Nos. ROC 333266 and 325273,

RESPONDENT.

No. 2024A-04310-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 5, 2024

APPEARANCES: Complainant Lynne M. Fulp appeared on her own behalf. Arizona Registrar of Contractors Investigator John Smith appeared as a witness. Respondent SunUp America LLC did not appear.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: ROC Notice of Hearing Packet (Packet).

____________________________________________________________________

FINDINGS OF FACT

SunUp America LLC (Respondent), is the holder of License No. 333266 and License No. 325273 issued by the Arizona Registrar of Contractors (Registrar).

On April 13, 2024, the Registrar received a Licensed Complaint Form (Complaint) against Respondent from Complainant making several allegations: the installed photovoltaic solar system [with a battery back-up] was not as was agreed in the contract; the installer made substantial changes without discussing them with Complainant; there are flaws in the system and it is not producing as expected; and, Respondent is unresponsive. Complainant also noted that the installation took over seven (7) months and the meters are not providing clear data to the Tucson Electric Company (TEP).

The Registrar assigned the Complaint to Investigator John Smith. On May 24, 2024, Investigator Smith conducted a Jobsite Inspection. The Jobsite Inspection Notes provide as follows:

Complaint Item 1: “SunUp took over 7 mos to complete project, never communicated with owner about nature of installation, made unilateral changes contrary to what owner anticipated when contract signed, and brushed aside owner's attempts to understand installation. Owner ended up with flawed partial home system rather than desired whole home; SunUp unresponsive.”

Investigator’s Observations: These statements by the complainant do not implicate a specific workmanship issue, or a specific violation of A.R.S. § 32-1154(A).

Governing Rule: N/A

Complaint Item 2: “Installed system is not as agreed when contract signed; substantial change never discussed with owner.”

Investigator’s Observations: This allegation is NOT verified as a violation of A.R.S. § 32-1154(A). The contract includes:

• ...installation of a 6.480 kW system which will produce a minimum first-year output of 11044 kWh

• Special Instruction

o You will be having a Tesla Powerwall + (plus) installed. Powerwall Plus will operate the AC system for up to 4 hours dependent upon the usage of the AC.

o SunUp will provide a Tesla Powerwall +, with no substitutions.

As stated by the complainant, in the submitted complaint:

• (They installed 18 panels at 370 W each = 6,660 watt system)

As verbally explained by the complainant during the jobsite inspection.

• They installed a partial home system, when she was expecting a whole home system.

The contract is for a grid-tied photovoltaic solar system with a battery back-up. The contract does not specify “Whole home system” or “Partial home system”

There is insufficient evidence to verify the system is not installed as per the contract.

Governing Rule: N/A

Complaint Item 3: “System now reliant on energy export to grid at wholesale and paying retail for use of same to power home.”

Investigator’s Observations: Verified. The system is not functioning properly. Included in an email from the respondent to the complainant:

• On May 14, 2024, at 10:55 AM, Alex Elder <[email redacted]> wrote: Hi Lynne, we continued to monitor the system after Vince was there and Tesla determined that the inverter was faulty, so they're sending a replacement inverter. This is called an RMA. So we have the tracking on the inverter and will keep you posted as soon as it arrives in our warehouse. The respondent’s representative, during this inspection, confirmed the inverter is bad, needs to be replaced, is not functioning properly, and is not allowing the rest of the system to function properly.

Governing Rule: A.R.S. § 32-1154 (A)(3) - R4-9-108(a): Violation of any rule adopted by the registrar; Namely R 4-9-108(a) A contractor shall perform work in a professional and workmanlike manner.

Complaint Item 4: “Requests for discussion of possible remedies are now being completely ignored by all SunUp personnel.”

Investigator’s Observations: These statements by the complainant do not implicate a specific workmanship issue, or a specific violation of A.R.S. § 32-1154(A).

Governing Rule: N/A

Complaint Item 5: “TEP meters are not receiving clear data from PV system; no response from SunUp. ROC inspection scheduled for April 26. Tesla app shuts down during simulated power outage test for system function. No response from SunUp.”

Investigator’s Observations: Verified. The system is not functioning properly. Included in an email from the respondent to the complainant:

Governing Rule: A.R.S. § 32-1154 (A)(3) - R4-9-108(a): Violation of any rule adopted by the registrar; Namely R 4-9-108(a) A contractor shall perform work in a professional and workmanlike manner.

ADDITIONAL VIOLATIONS

In addition to the allegations in the complaint, the following violations were verified:

Elements of a Contract

Investigator’s Observations: The respondent’s contract is missing the following information:

• Information about the customer’s right to file a complaint with the registrar

o Included, but specifies: “At any time throughout this construction project...”

The applicable time period as set forth in section A.R.S. § 32-1162, subsection A includes more than just “throughout this construction project”.

o Included, but specifies: “...the Buyer may file a written complaint with the Registrar of Contractors...”

 Eligibility to file a complaint is not limited to the “buyer”. Eligibility to file a complaint extends to the property owner, and/or, future property owner(s).

Governing Rule: A.R.S. § 32-1154(A)(12), Namely A.R.S. § 32-1158(A) Minimum Elements of a Contract. Any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:

1: The name of the contractor and the contractor's business address and license number.

2: The name and mailing address of the owner and the jobsite address or legal description.

3: The date the parties entered into the contract.

4: The estimated date of completion of all work to be performed under the contract.

5: A description of the work to be performed under the contract.

6: The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.

7: The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.

8: The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.

9a: That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A.

9b: The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1162, subsection A.

9c: The information in this paragraph must be prominently displayed in the contract in at least ten- point bold type...

9d: ...and the contract shall be signed by the property owner and the contractor or the contractor’s designated representative. This paragraph does not apply to a person who is subject to and complies with section 12-1365.

REQUIRED CORRECTIVE ACTION: The respondent is to submit a contract form (for use on future projects) that complies with A.R.S. § 32-1158.

On May 28, 2024, Investigator Smith issued a Directive, which required corrective action to be performed by June 25, 2024 on Complaint Item #3, on Complaint Item #5, and with regard to elements of a written contract.

While some corrective work was performed, the system was still not functioning per its contractual designation. Investigator noted that Respondent had referred Complainant to contact Tesla with regard to the irregular functioning. While Respondent also told Complainant that it would send a team member out, at hearing, Investigator Smith indicated Respondent could not have performed additional work due to the status of its licenses.

Investigator Smith forwarded the matter to the Registrar’s Legal Department.

On July 11, 2024, the Registrar issued a Citation against Respondent charging possible violations of the following laws: A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a); A.R.S. § 32-1154(A)(12), specifying A.R.S. § 32-1158; and A.R.S. § 32-1154(A)(22).

On July 12, 2024, the Registrar received an Answer to the Citation. A company named SunUp- Arizona, LLC d/b/a Simple Solar Industries (SSI) filed a response indicating that prior to the suspension, cancellation or revocation of the Respondent’s licenses, Respondent sold “its existing customer base” to SSI and that SSI planned to continue to attempt to resolve complaints and get customers’ systems activated.

The Registrar subsequently referred the matter to the Office of Administrative Hearings, an independent State agency, for an evidentiary hearing.

By Registrar Notice of Hearing on Contested Case (Notice), the hearing was noticed to convene on September 5, 2024, via Google Meet.

By Tribunal ORDER dated August 8, 2024, the parties were informed how to connect to the hearing via Google Meet. The hearing was conducted via Google Meet on September 5, 2024. On the date and at the time set for hearing, Respondent did not appear through an authorized member, employee, or attorney. Respondent did not request that the hearing be continued. Because Respondent failed to appear, Respondent did not present any evidence to defend its license.

Investigator Smith testified consistent with his findings contained in his Jobsite Inspection Notes and Directive. Investigator Smith indicated that a further new “inverter” had been ordered but not yet installed. Investigator further indicated that there would be no “visible” item for him to re-inspect as the malfunction seemed to be within the inverter.

Complainant testified that the inverter continued to malfunction in that, according to the SSI worker, “one of the meters” within the inverter was not functioning appropriately. Complainant indicated that she had no hard feelings against Respondent but she was dissatisfied with the installed product and wants it to be working in the manner in which it was intended (i.e., contracted) to be working.

Administrative notice is taken of the status of Respondent’s licenses according the Registrar’s public records, which show Respondent’s three licenses are revoked, effective August 8, 2024.

CONCLUSIONS OF LAW

The copy of the Notice of Hearing that the Registrar mailed to Respondent at its address and email address of record was reasonable and Respondent is deemed to have received notice of the hearing. A.R.S. §§ 41-1092.04 and 41-1092.05(D).

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Respondent’s revoked license does not deprive Complainant of her right to prosecute the Complaint and does not prevent the Registrar from determining the merits of the Complaint and imposing discipline on a license. See A.R.S. § 32-1154(D).

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazzano v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

The evidence of record established that Respondent’s work was not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent had not completed the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A) and had not corrected the two Directive Items by June 25, 2024, in violation of A.R.S. § 32-1154(A)(22).

The evidence of record established that Respondent’s written contract was not in compliance with statutory requirements set forth in A.R.S. § 32-1158. Therefore, the hearing record established that Respondent was in violation of A.R.S. § 32-1154(A)(12), specifically A.R.S. § 32-1158.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, the Registrar shall revoke Respondent’s License No. 333266 and shall revoke Respondent’s License No. 325273.

It is further recommended that, pursuant to A.R.S. § 32-1154(E), the Registrar require Respondent to pay the sum of $1,000.00 as a civil penalty, consisting of $500.00 for the failures to have performed the Directive work Item #3 and Item #5 by the June 25, 2024 deadline.

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 any outstanding prior civil penalty.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision (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 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 25, 2024.

/s/ Kay Abramsohn

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

John Smith

[email redacted]

SunUp America LLC

[email redacted]

Lynne M. Fulp

[email redacted]

By: OAH Staff