ALJDEC

00F-O990021-BFS · Department of Building and Fire Safety · 1999-11-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 8, 1999 APPEARANCES: Patti Shelton, Assistant Attorney General, on behalf of the Department of Building and Fire Safety-Office of Administration (Department) No one appeared on behalf of the Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Case Numbers 989409 and 990012 Findings Of Fact 1. The Respondent, Sidney Dando (Dando), dba Western Log Modular, was issued his Class M-9A manufacturer’s license by the Department in April of 1997. 2. In approximately April of 1998, Jerry Chadwick (Chadwick) contacted the Respondent at a home show in Flagstaff, Arizona, where the Respondent was displaying a modular home. Chadwick does not hold a dealers license issued by the Department and went to the show as a consumer. 3. Chadwick entered into an initial agreement to purchase one of the homes from the Respondent but rescinded the agreement. 4. In May of 1998, Chadwick entered into a written agreement with the Respondent for the purchase of a modular home. Total price, including tax was $113,532.00. Chadwick paid a deposit and made subsequent payments under the contract. 5. The plans for the home which were submitted to Coconino County did not match the physical structure of the home that the Complainant thought he was purchasing. Nevertheless, Coconino County (County) issued a permit for the home in August or September, 1998. 6. The Respondent had a foundation laid but it did not match the plans which had been filed with the County and the County pulled the permit. 7. Prior to being set on the foundation, the home which consisted of three units (A, B, and D), and was without a roof, sat in the open for a number of months exposed to rain and snow. 8. The evidence did not disclose when, but at some point, the permit was restored and the modular home was placed on the foundation sometime in the Spring of 1999. Doors were warped, various items were missing and there was still no roof on the home. There were numerous other problems which are not relevant to this case. 9. To date Chadwick estimates he has paid the Respondent approximately $92,000.00 and the home has not been completed. 10. On June 23, 1999, Chadwick filed a complaint against the Respondent with the Department. 11. The Department reviewed the complaint and looked at the building plans. The Respondent’s original stock plans did not match the Chadwick home. Dando did not respond to a request from the Department that he provide the serial number and insignia report for the Chadwick home. Unit D had not been approved as a utility room and was a change from plans which were on file with the Department. There is no loft shown on the plan which was reviewed by the Department although Chadwick had contracted for a home with a loft. There had been no submission of the foundation plan prior to the delivery of the units to the site. 12. Dando came to Phoenix and was given an opportunity to make necessary corrections and submit “as built” modifications to the Department. The Respondent has not submitted any documentation to the Department in response to the request. Case Number 990021 Findings Of Fact 1. On September 1, 1998, the Respondent, Sidney Dando, dba Western Log Modular, holder of a Class M-9A manufacturer’s license, as seller, entered into a written contract with Yvonne Wilson (Wilson), as buyer, for the sale of a modular home for a total price of $79,672.00. The contract was contingent on Wilson obtaining financing. 2. Wilson put down $2,390.00 but could not obtain the necessary financing and the sale was not consummated. Applicable Law 1. A.R.S. §41-2154.A requires in pertinent part that prior to the construction of any new model of a factory built building or sub assembly, the manufacturer shall submit detailed plans of each model and obtain approval from the Director of the Department. 2. A.R.S.§41-2186 provides that the Assistant Director may suspend, revoke or impose an administrative penalty under §41-2186.1, for failure to comply with Title 41, Chapter 16, Articles 2 or 4, §41-2186.6., the doing a wrongful or fraudulent act by a licensee relating to Title 14, Chapter 16, Articles 2 or 4, and §41-2186.21., failure of a licensee to work within the scope of the issued license. 3. In addition, notice is taken of the definition of dealer and manufacturer in A.R.S.§41-2142 and the specific trust and escrow requirements which apply to a dealer or broker, but not a manufacturer, under A.R.S.§41-2180 Case Number 989409 1. The cited statutes in the case are A.R.S.§§41-2154.A and 41-2186.1 and .6. A.A.C. R4-34-301(A)(1), also requires the manufacturer to obtain plan approval for units or sub assemblies from the Department prior to construction. In addition, the rule sets forth, in applicable part, those things which are necessary for a plan approval, including a quality assurance manual under A.A.C. R4-34-302 and drawings and specifications under A.A.C. R4-43-303. Other requirements of the referenced rules are noted, but are not directly relied upon in reaching a conclusion in this case. 2. The evidence shows that the Respondent failed to submit plans to, or obtain approval for, factory built subassemblies from the Director of the Department. Assistant Director Larry Pointer testified that although original stock plans had been received from the Respondent, these plans did not match the Chadwick home. Even after the Department gave the Respondent an opportunity to submit “as built” plans, he failed to do so. This is a violation of A.R.S. §§41-2154(A) and therefore also a violation, although not separate and distinct, of §41-2186.1. No separate violation of A.R.S.§41-2186.6., is found. Case Number 990012 1. The evidence shows that the Respondent sold the home to Chadwick who was not a licensed dealer of manufactured homes but rather a consumer. This is a violation of A.R.S.§41-2186.21 in that this activity is appropriate under a dealer’s license but outside the scope of a manufacturer’s license. 2. The same activity establishing the violation of A.R.S.§41-2186.21. constitutes violations of A.R.S. §41-2186.1. and .6., but not as separate and distinct violations. Case Number 990021 1. The same conclusion applies to this case as to the previous case. Although there was no delivery in the instant case the Respondent executed a contract for the sale of a modular home to Wilson, a consumer. This requires a dealer license which the Respondent does not have. 2. The activity establishing the violation of A.R.S.§41-2186.21., constitutes violations of A.R.S. §41-2186.1. and .6., but not as separate and distinct violations.

Recommended Order In view of the foregoing and upon recommendation of the State, with there being no mitigating or exculpatory evidence of record; It is recommended that commencing on the effective date of the Order entered in this matter, that the Respondent’s Class M-9A License No. 6900, be revoked.

Done this day, November 12, 1999

______________________________________ Allen Reed Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1999, to:

Department of Building and Fire Safety N. Eric Borg, Director E. Virginia, Suite 100 Phoenix, AZ 85004 ATTN: Michelle M. Castaneda

By ___________________________ -----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826