"I had the system checked by 2 independent contractors and both agree that he unit is slightly oversized for the house and my current ducts and the unit was not installed properly,"

Up to you but if it has been a year you made a mistake in your initial hiring and it is obvious he is going to make this right. You keep hoping, maybe take him to court and hope in a year or so he is ordered to fix it or give you money back. OR you suck it up and have it fixed correctly now before you end up with more mold and health issues because of it. Then you decide if it is worth it to pursue him in court.

Is the air handler located on the second floor? Is the duct above the refrigerator running between floor joists? Where are you located and what is the temperature and humidity level in the house on a typical summer day?

Condensation occurs when warm moist air comes in contact with a cold surface and the ambient air temperature is below the dew point. I suspect the warm air coming off the back of the refrigerator is rising up through the ceiling and condensing on the duct. Increasing the size of the heat pump from 3 to 4 ton makes this condensation problem worse. Why was the heat pump size increased to 4 tons?

The fix is to lower the humidity in the house and insulate the duct work. A humidity below 50% will probably low enough to stop the condensation. You might be able to achieve this by slowing down the blower in the air handler. You should also wrap the duct with an insulation that has a moisture barrier. Insulate all the duct work above the kitchen area. The cooking in the kitchen is the biggest source of moisture and warm air. Do this as part of the remodeling work.

The unconnected duct work needs to be addressed. Hire someone you trust to fix the installer's poor workmanship.

Thanks guys for your valuable input.
Well @Millworkman After thinking and investigating this issue through I came to the conclusion that I made a mistake I'm my initial hiring unfortunately, but that doesn't mean I deserve to have my house destroyed.

I have been out of my house since September due to this problem, Mold is everywhere , so I filed a complaint with the State Board in September 2020, and the hearing just happened , I don't have the final report yet, but as I understand their license will be suspended.

I filed a claim with his GL insurance company and also with my Homeowners insurance, we don't have the final numbers yet but we are looking at a very minimum $120k in damages. The 1st floor has to be gutted to the studs and start over again.

Needless to say I have to replace the AC unit again. What do you guys recommend? Should I stay with 1 unit or 2 units ( since ceilings and wall will be open) All the ductowork will be replaced as well.

Thanks for your help in advance.

Thanks @Charles Ross Homes for the details.

It has been determined by County inspectors and State Board inspectors that the issue here was wrong/ not to code installation, the system per se is fine, not right for my house , but no issues with the unit. Yes, they failed to seal the closet after they replaced the floor boards.

If you look at 2nd and 4th pic, you can see the poor install, keep in mind unit is in a closet, house sits in crawl space, the fact the the duct was not connected, the unit was drawing humid air from crawl space, also the vent they put in the closet ( not to code) created negative pressure in the closet.

Duct work is in conditioned space, first floor around the house chase. No issues with the ductwork never before until the installation of this new unit.

I will hire a professional to do J manual, D manual and complete system design, and look into zoning.

Forgot to mention, my county and state for that matter does require a permit and final inspection within 15 days of completion. Enforced by the county and the State Board.