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In re Licensing Order Issued to All Main Street Electric

Court of Appeals of Minnesota

November 4, 2013

In the Matter of the Licensing Order Issued to All Main Street Electric and Timothy Barrett

UNPUBLISHED OPINION

Minnesota Department of Labor and Industry File No. 16-1902-22137-2

Lori Swanson, Attorney General, Christie B. Eller, Deputy Attorney General, Christopher M. Kaisershot, Assistant Attorney General, St. Paul, Minnesota (for respondent).

Christopher J. Perske, The Law Office of Christopher J. Perske, Jordan, Minnesota (for appellant).

Considered and decided by Cleary, Presiding Judge; Connolly, Judge; and Larkin, Judge.

CONNOLLY, Judge

In this certiorari appeal from the decision of the Department of Labor and Industry (DLI), relators, All Main Street Electric (AMSE) and Timothy Barrett (Barrett), argue that (1) the commissioner's decision was not supported by substantial evidence in view of the entire record, (2) the commissioner's decision to revoke Barrett's journeyman license was an abuse of discretion, (3) the administrative-law judge's failure to grant relators' motions for a continuance was an abuse of discretion, and (4) that relators' constitutional rights have been violated. We affirm.

FACTS

Barrett obtained his Class A Journeyman Electrician's license on March 23, 1982. The journeyman license enables him to perform electrical work and supervise registered unlicensed individuals while he is employed by licensed electrical contractors. He subsequently obtained his Class A Master Electrician license on May 28, 1986 and a Class A Electrical Contractor's license on behalf of AMSE on August 15, 2001. The master electrician license allows him to perform electrical work, to supervise registered unlicensed individuals while he is employed by licensed contractors, and to be the responsible master electrician for an electrical contractor or registered employer.

The properties of electricity are scientifically well established. Voltage is the electrical force that moves electricity through a conductor. Residential electrical systems consist of an incoming electrical line service from a utility company transformer that travels through a metering system to a circuit breaker box. The voltage delivered by a utility company to a residential home is generally 240 volts. Residential electrical wiring is rated up to 600 volts. Voltage significantly in excess of a component's rating can damage that component by causing thermal overload. Catastrophic events, such as lightning, can cause power surges that damage residential electrical systems. When lightning contacts residential wiring, it can cause the wiring insulation to fail and can melt grounded objects. A lightning strike will not necessarily damage every circuit branch in a home. When lightning or other catastrophic events occur, electricians commonly use a device called a megohmmeter to measure damage to wiring insulation.

In their work as electricians, relators used the "Ideal SureTest Meter" to measure the occurrence of "voltage drop" in residential electrical systems. Voltage drop is a naturally occurring phenomenon in which the amount of voltage between two points on an electrical circuit decreases. This phenomenon can be caused by a variety of factors including old age, poor workmanship, and loose or corroded connections. The SureTest meter can measure voltage drop but cannot determine its cause.

Relators made repairs to their customers' homes based on voltage drop damage that they identified by using the SureTest meter. Relators often told their customers that their homes needed extensive electrical work based on voltage drop caused by lightning. Relators represented that their customers' insurance providers were required by law to pay for electrical repairs based on voltage drop tests. They incorrectly claimed that the amount of voltage drop is restricted by the National Electrical Code (NEC).[1]

Relators often billed State Farm insurance for the substantial repairs they made to residential electrical systems. State Farm's standard homeowner's policy covers sudden, accidental, and direct physical losses caused by an occurrence such as lightning. To be included within its coverage, the loss must be causally related to the event and must be reasonable and necessary. State Farm's standard insurance does not cover electrical damage due to ordinary wear and tear.

State Farm became suspicious of relators' business activities after being billed for electrical work that was completed based on relators' insistence that total electrical replacements were needed. In May 2010, State Farm notified relators that it wanted to inspect any alleged damage prior to relators performing or completing electrical work.

In response to this request, AMSE began conducting business under the name "Layton Electric, Inc." in order to continue securing insurance proceeds to rewire homes based on the presence of voltage drop. Barrett falsely held himself out as "Tim Johnson, " and invoiced customers using the Layton name. The Layton invoices were practically identical to AMSE's invoices.

In 2010, State Farm sent independent experts to investigate relators' proposed and completed work. State Farm representatives determined that the claims of extensive damage were inconsistent with basic scientific principles and were overall unsupportable. In the homes where relators had already completed work, State Farm paid for the claim under its vandalism coverage.

After receiving a customer complaint, respondent launched an investigation into relators' work at approximately 20 homes. On July 29, 2010, DLI sent relators a request for information via certified and first-class mail requesting a complete list of all of their customers since 2009, copies of all contracts, bids, estimates, and invoices for those customers, and a complete list of all employees, subcontractors and independent contractors that performed work on AMSE's behalf. On July 30, 2010, AMSE's representative signed an acknowledgement of receipt of certified mail from DLI. On the same day, Barrett supplemented a police report that he originally filed on July 9, 2010. In this supplement, he claimed that a UPS envelope with work documents had been stolen from his ...


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