ALJDEC

01F-A012014-BFS · Department of Building and Fire Safety · 2002-02-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 1, 2001. APPEARANCES: Complainant represented herself. Respondent was represented by M. Elizabeth Burns. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________ In this matter, Complainant Kristen L. Fast (hereinafter Complainant) appeals the denial of her application for a salesperson’s license by the Department of Building and Fire Safety (hereinafter Department). Based on the evidence adduced at the hearing, the following findings of fact, conclusions of law, and recommended decision are made. RECOMMENDED DECISION 1. On October 11, 2001, Complainant submitted an application to the Department to obtain a salesperson’s license. The application contained a questionnaire. Among other things, the questionnaire asked Complainant whether anyone had ever obtained a judgment against her involving fraud or misrepresentation. Complainant responded “No.” 2. In fact, at the time that Fast had applied for her license, she had been a named partner for an entity that had a license, Radiant Manufactured Homes. Radiant manufactured Homes was, at that time, in the process of having its license revoked. Radiant’s license was revoked on October 25, 2001 as a result of repeated improper and fraudulent practices in which the dealership had engaged. Among other things, Radiant had mishandled earnest money, had failed to pay sellers of mobile homes for homes that Radiant had sold for them, and Radiant’s trust money account had been closed and there was no notification to the Department of Building and Fire Safety that a new trust account had been opened. By way of example, the recommended decision of the administrative law judge in the case against Radiant found that Radiant “failed to utilize the funds for the purpose for which they were received in at least three transactions: for L. Solis-Minjarez; for M. Bubbico, and for J.Cameron. . . . Additionally, the evidence and testimony showed that Respondent did not convey the earnest deposit to the lending institution(s) “ as required by A.R.S. § 41-2180 J. 3. In that same administrative proceeding, the administrative law judge found that Radiant’s “multiple acts and omissions in violation of Arizona statute as to each of the transactions it conducted, and its persistent failures to comply with applicable Arizona statute, over which a qualifying party is tested prior to issuance of a license , are manifest demonstrations of the qualifying party’s disregard of the law and public policy set forth to protect Arizona citizenry (emphasis in original).” The administrative law judge also recommended “that no business license in this arena be approved or issued to Matthew Madrid, or to any other party named on Respondent’s license.” All of the administrative law judge’s findings in the case against Radiant were adopted by the Director of the Department and became the final order in that matter 4. According to the testimony of the Department’s investigator, Complainant in this case was made aware of the charges and allegations regarding Radiant’s business practices in July, 2001. Complainant was informed at that time that she should attempt to contact the individuals and entities which had been victimized by Radiant’s practices and attempt to take action to correct those problems. Despite this, Complainant made no effort to appear and or take action to correct any deficiencies in Radiant’s business dealings. 5. Radiant was not the first business for which Complainant acted as the licensee which ran into trouble. Complainant and her husband, Michael Madrid, had earlier operated Majestic Mobile Homes in Colorado. That entity, too, engaged in business practices that would have amounted to violations of A.R.S. §41-2186. Of particular concern is the conduct of Majestic in its dealings with Mary Jo Mathewes, the owner of a mobile home who had the unfortunate experience of selling it through Majestic. Ms. Mathewes testified at the hearing in the instant matter that Majestic fraudulently informed Mathewes that they had sold her mobile home for $42,800.00 In fact, Majestic had sold the home for $50,000. As a result, Mathewes was forced to file suit against Majestic to recover the difference. Majestic was sued in its corporate capacity and Complainant was sued in her individual capacity. Before trial, Complainant entered into an agreement with Mathewes on August 19, 1999, whereby Complainant agreed to pay Mathewes at the rate of $234.16 per month for 24 months until the entire balance was paid off. Judgment was then entered on behalf of Mathewes in the amount of $5,168.00. Despite her agreement, Complainant has failed to pay the monthly amounts due to Mathewes. Complainant has never contacted Mathewes attempting to arrange to make payments on the judgment as she had promised to do. Instead, it appears to the undersigned from both Mathewes’ and Complainant’s testimony that Complainant simply moved to Arizona attempting to evade payment of the amount owed to Mathewes. 6. Majestic’s problems did not end with the Mathewes case. The theme was repeated with other creditors who, like the Mathewes, were forced to seek judgments against Complainant and Majestic in order to recover debts owed to them by Majestic. 7. Complainant contends that it was her husband, Mike Madrid, who was responsible for all of the problems. Complainants position is not tenable. Complainant was aware of the debt owed to the Mathewes and in fact personally entered into the agreement with the Mathewes. Instead of staying in contact with them or attempting to set up some other method of payment, Complainant has simply chosen to hide from the that debt. This conduct alone demonstrates that Complainant at this time is not fit to hold a salesperson’s license in this state. Furthermore, Complainants suggestion that she was unaware of the practices going on with Radiant is also untenable. Complainant was apprised of the problems by the Department’s investigator at least three months before the hearing in the administrative proceeding that resulted in the revocation of Radiant’s license. Complainant, however, did nothing to rectify the situation. CONCLUSIONS OF LAW 1. Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). 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). It "is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not." Black's Law Dictionary, 1182 (6th ed. 1990). 2. Arizona Revised Statute 41-2175 (E) provides: Prior to the issuance of any license pursuant to this article, the owner, if the applicant is sole proprietorship, all partners, if the applicant is a partnership, the general partner, if the applicant is a limited partnership, the president, vice-president, secretary, and treasurer, if the applicant is a corporation or other type of association, the individual, if the applicant is a salesperson, and the qualifying party shall be of good character and reputation and shall submit a fingerprint card for background analysis. Lack of good character and reputation may be established by showing that such person has committed any act which, if committed by any licensee, would be grounds for suspension or revocation of such license.

3. Complainant has failed to demonstrate that she is a person of good character as required by A.R.S. § 41-2175(E). At a minimum, her conduct as a licensee in Colorado and her failure to pay and apparent attempt to evade her obligations under the judgments entered against her in Colorado provide the requisite basis upon which to deny the license. RECOMMENDED DECISION Based on the foregoing, it is recommended that the Director affirm the denial of Complainant’s application for salesperson’s license. Done this day, February 19, 2002

______________________________________ Gregory L. Hanchett Administrative Law Judge Original transmitted by mail this ____ day of ____________, 2002 to:

Department of Building and Fire Safety N. Eric Borg ATTN: Shawna Blank East Virginia, Suite 100 Phoenix, AZ 85004

By ___________________________

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