ALJDEC

01F-C001247-BFS · Department of Building and Fire Safety · 2001-07-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 25, 2001 APPEARANCES: Complainant Ellen Wagner appeared representing herself. The Qualifying Party for Award Homes, Marcel French, appeared, and was represented by Carmen Chenal, Esq. No Inspector or witnesses from the Department appeared. ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn _____________________________________________________________________ Evidence and testimony were presented regarding repair compliance at Complainant’s residence, and based upon review of the hearing record, the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. This matter was forwarded to this tribunal by the Department of Building and Fire Safety - Office of Manufactured Housing (Department). 2. Respondent Award Homes, Inc. (“Respondent”) holds a Class D-8 license [License No. 6949] issued by the Department. Respondent was the Dealer of the home in question. Marcel French is the Qualifying Party for Respondent Award Homes, Inc. “Respondent” may refer, herein, either to the company or to Mr. French. 3. On October 26, 1999, Complainant’s manufactured home was installed. In November 1999, the skirting was installed. In December 1999, additional concrete work was completed at the home. 4. After the installations, Complainant was not satisfied with some items. 5. Complainant filed a complaint regarding continued problems with her home or the installation. No copy of the original filed complaint was forwarded to the Tribunal, nor was a copy presented at hearing by any party. 6. After an inspection on December 1, 2000, the Department’s Inspector Dennis Butzen (Inspector) issued a Verified Complaint and Sign- Off Form (“Verified Form”). This Verified Form indicated that certain items had been “verified” as needing correction or repair by the Respondent (and the Installer and the Manufacturer), that certain items were already corrected, or that certain items had been “not verified”. Thirty-two items were reviewed and determinations made in the Verified Form. The parties are given the opportunity to file a Notice of Appeal if they disagree with the Verified Form. 7. There was no indication in the forwarded information, or presented at hearing, that either party filed a Notice of Appeal in disagreement with any of the items on the Verified Form. 8. In February, 2001, the Manufacturer requested re-verification for its determined items, having indicated to the Department’s Inspector that it had completed all of its items but that “Mr. Wagner refused to sign off” on those items. 9. A re-verification inspection time was set, but the re-verification inspection was not held. See Findings 10 and 15. 10. At some point, Complainant apparently indicated to the Department that Item #18 had been signed off but had reoccurred. On February 22, 2001, the Department issued a letter to Complainant, indicating that it was forwarding her file to the legal section, and canceling the re-verification inspection. 11. On March 16, 2001, the Department issued its Citation and Complaint against Respondent, citing violations of Arizona Revised Statutes (A.R.S.) §§41-2186.1, 41-2186.12, 41-2186.19 and 41-2186.20. Respondent was directed to file a written answer to the Citation pursuant to A.R.S. §41-2181. 12. As to Respondent, the Citation and Complaint alleges that Respondent did not satisfy verified item numbers 1, 2, 4, 5, 6, and 18. 13. In its March 22, 2001 written answer, Respondent states that the home passed all inspections prior to any damage experienced by Complainant. Respondent states that the skirting [Items 1, 2, 5, and 6] was installed properly per the inspection. Respondent states that the land was low and needed extra grading of a forty foot buffer to meet flood control, which then passed inspection. Respondent states that the pad area was compacted correctly several times before the concrete [Item 4] was poured and had been approved by flood control. Respondent states that the damage was caused by an Act of God, not poor workmanship. Respondent states that the severe rains in October of 2000 caused flooding on the Wagner property which caused the problems with the concrete pad, skirting and shifts in the residence. Respondent states that these problems should be taken care of by the homeowner’s flood insurance. As to Item 18, Respondent states that this is a Manufacturer related item, under the manufacturer warranty and that Respondent cannot work on it or it would void the warranty. 14. At the hearing, Complainant testified that when they purchased the home, Mr. French had advised them they needed a cement slab to get the water away from the house. Complainant testified that the cement was laid the second week in December 1999 and the cracks in the concrete appeared within two weeks. Complainant testified that the concrete was to have been sloped so that the water would run off and away from the house. Complainant testified that the cement is sinking towards the house and is allowing water not only to sit on the concrete but also to drip and seep under the concrete and the house, causing the concrete to sink even further. Complainant testified that the skirting was connected to the concrete but the seams have been coming apart, allowing water to seep into and under the home. Complainant presented photographic evidence of the concrete cracks and the skirting at several areas around the house. Complainant testified, and presented copies of two letters [February 2000 and September 2000], she had written to Respondent regarding these, and other, problems. Complainant testified that she never got any response from Respondent. 15. Complainant indicated that Item 18 was taken care of by the Manufacturer, and that is why the re-verification inspection was canceled.

16. Complainant testified that the severe rain and flooding problems which occurred in October 2000, which Respondent keeps alleging are the cause of these problems, did not affect her property or her home. Complainant testified that the flooding was a problem at her parent’s home, but not at hers. 17. Complainant testified that Mr. French had wanted her to get quotes to replace the concrete, but that she had only been able to obtain one contractor’s quote, as the other contractors did not show up to give a quote. 18. At the hearing, Respondent testified that everything was inspected at every step of the process according to codes and that nothing was ever written up[1] by the inspectors. Respondent later testified that there were four inspections, insisting the inspections were all done by the State, but then was not sure if there was one or two departmental verification inspections. Respondent was testifying that the flood control inspections were also done by the State. 19. Respondent testified that, after it had done the backfill, “flood control” had come out to see if there was proper drainage and to check the slope away from the house. Respondent testified that the concrete was properly sloped so that the water would drain away from the house. Respondent testified that his backfill contractors had compacted the soil when they backfilled it, and that all Respondent then had to do was put on ABC rock and compact again before the concrete was poured. Respondent argued that handcompacting was all that was required at that stage, and that it had done the compacting it felt was necessary for the concrete to be poured. Respondent testified that the compacting had been done about one month before the concrete was poured. Respondent testified that he would not have been able to proceed to that step if flood control had not approved[2] everything. 20. Respondent testified that there is an inspection before the skirting goes on and that skirting can’t be done until the State inspects everything and under the home to see if all utilities are proper and the blocking. Respondent also testified that this is all done before any backfilling. Respondent testified that it gets an OK to proceed with the skirting, which then has to have a silicone seal around the house. Respondent testified that the treated wood skirting was properly installed at the time of installation. Respondent testified that the silicone covering had disappeared sometime, but argued that this and the skirting were homeowner maintenance items. 21. Respondent testified that there was nothing wrong with the skirting or the concrete, on the first inspection, but only the minor cracks. Respondent agreed there were minor cracks which Respondent had been willing to fix, but that every time he went to the site, Complainant had more and more complaints on things that had previously been approved and passed on state inspections. Respondent testified that by the time it got around to sending someone out to correct the cracks, the Complainants[3] had other larger complaints. Respondent testified that, at that point, Respondent felt it was not its responsibility to have to replace the concrete, because it was not Respondent’s fault. Respondent argued that these problems were caused by the excessive rains and the flooding on the property, Acts of God, and that the homeowners flood insurance should take care of these problems. 22. Respondent argued that cracks at the carport were caused by Complainant getting on top of the concrete too soon after it was poured and not cured. Respondent testified that people and cars had to stay off the concrete for a minimum of two weeks. Respondent testified that the other minor cracks were actually within Registrar of Contractor tolerance, stating that you could not put a dime in them. 23. Respondent testified that, at the original[4] inspection, the state inspector verified only the cracks and not the skirting or the concrete sinking and that, after that, it was always something more. Respondent testified that when the inspector came for the second review, it was already well beyond the complaint period, which he testified was a one year complaint period. Respondent testified that he told the inspector that he was objecting[5] to the verification of a problem because the time frames were over and he had no control over the excessive rains. 24. Respondent testified that he had suggested the installation of concrete and that the concrete was properly sloped so that the water would drain away from the house. Respondent insisted that there had been flooding at the house site and that the excessive rains had meant that water sat around on the concrete and then seeped under the concrete causing it to sink, but only in a couple places. Respondent testified that when the concrete sunk, it also deteriorated the seal around the skirting. Respondent insisted that he should not be responsible for an Act of God. Respondent testified that, when he had come out to see Complainant’s father’s property, he had looked over to Complainant’s property and found “it was pretty much the same thing” as to flooding, “There was water sitting all round there. The water had soaked away, but you could see where it had been sitting. I saw sandbags to prevent water from coming to the houses at the east side of the property.” 25. Respondent testified that there were concrete splinters and edges that break off and that he was, and is still, willing to repair those. However, Respondent then went on to testify that there was no use in his repairing the cracks when there was a more serious problem, with all the future complaints even after the complaint period. Respondent testified that there was no use in starting anything until all the complaints were in. Respondent testified that he did receive the letters and faxes from Complainant but just put them in the file because it was past the complaint period of one year. 26. Per the Verified Form, item number 1 is “Skirting not finished/protected from water at top”. The Inspector verified this item, also indicating “Voids in greenboard skirting and gaps to concrete”, and assigned it to Dealer to correct. 27. Per the Verified Form, item number 2 is “Skirting extends above concrete due to the sinking”. The Inspector verified this item, noting Living room front door side, on rear door side between second bedroom and master bath” and assigned it to Dealer to correct. 28. Per the Verified Form, item number 4 is “Backfill not compacted, causing concrete to sink: Same as item #2.” 29. Per the Verified Form, item number 5 is “Concrete is leaning towards house: Same as item #2.” 30. Per the Verified Form, item number 6 is “Concrete cracks all around house”. The Inspector verified this item, noting locations: “Master bath - front door side, crack at hitch end corner - rear door side, crack at grate at hitch end, at hitch end front door side, and chips at expansion joint on corner front door side, crack left of den window, and chips at expansion joint right of den” and assigned it to Dealer to correct. APPLICABLE LAW 1. A.R.S. §41-2186 generally provides, in the following portions, that a holder of a license or a person listed on a license shall not commit the following acts or omissions: 1. Failure in any material respect to comply with the provisions of this article or article 2 of this chapter. xxx 12. Failure to respond relative to a verified complaint after notice of such complaint. xxx 19. Failure to provide all agreed goods and services.

xxx 20. Failure to manufacture or install in a workmanlike manner all subassemblies, units and accessory structures which are suitable for this intended purpose.

A.R.S. §41-2186 further provides that the Department’s Office of Administration may temporarily suspend a license, permanently revoke a license, impose an administrative penalty or place a license on probation for the failures or actions. CONCLUSIONS OF LAW 1. The Department of Building and Fire Safety is empowered to suspend or revoke or penalize the license of any licensed manufacturer, dealer, broker, salesperson or installer for any violations of A.R.S. §41-2186. 2. Complainant credibly and consistently testified with respect to facts surrounding the problems of which she complained to Respondent and to the Department and for which she had requested repairs by Respondent. Complainant presented photographic evidence of the skirting and concrete problems which existed in December 1999, only weeks after the concrete and skirting were installed. 3. Respondent’s allegations fail, that the problems were, in fact, caused by Acts of God - the October 2000 rains and flooding. There is no proof that any “flooding” existed at Complainant’s house on this property; Complainant and her father credibly testified that no flooding existed at Complainant’s home, but only at the father’s home. 4. Respondent ignored the requests of Complainant, by simply filing away her February 2000 and September 2000 letters, and making no efforts to make repairs at the time of those letter, both of which were within one year of the installations. However, Respondent also errs in considering the complaint period to somehow expire even though there are continuing complaints which arise during a warranty or repair period. A.R.S. §41- 2182.04.D provides that the purchaser may file a complaint with the Department within a twelve month period when the licensee failed to repair items within the repair and replacement period. 5. Respondent essentially ignored the findings of the Department’s inspector, apparently verbally disagreeing with the Inspector’s findings at the site but not filing any appeal of disagreement with the Verified items. Respondent also ignored the Inspector’s findings by making no efforts to make corrections of these problems. 6. The evidence and testimony showed that Verified Items 1, 2, 4, 5, and 6 were assigned to the Respondent Dealer to correct. The evidence and testimony showed that Respondent has not corrected any of these verified items on the December 1, 2000 Verified Form. Complainant has shown this Respondent‘s violation of A.R.S. §§41-2186.1, 41-2186.12, 41-2186.19 or 41- 2186.20. 7. The record failed to establish any grounds for departure from long- standing policy to allow the Dealer a reasonable opportunity, after an administrative hearing, to correct any remaining determined deficiencies. /// /// RECOMMENDED ORDER In view of the foregoing: 1. IT IS RECOMMENDED that commencing on the effective date of the Department’s ORDER entered in this matter, that the Respondent Award Homes, Inc.’s Class D-8 license, License No. 6949, be actively suspended unless the Department receives written notification from the parties that Respondent has completed appropriate and effective repairs to the cracked and sinking concrete and to the skirting, in accordance with workmanship standards and regulatory standards; 2. IT IS FURTHER RECOMMENDED that if written notification and agreement of this repair is received, or if Complainant refuses to allow access to Respondent for such repairs, before the effective date of Department’s ORDER, that no suspension of Respondent’s license occur, and the Department’s Case 00-1/247 [OAH Docket No. 01F-C001247-BFS] be closed.

RECOMMENDED and DATED this day, July 17, 2001.

______________________________________ Kay A. Abramsohn Administrative Law Judge

Original transmitted by mail this _____ day of July, 2001, to:

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

By ___________________________ ----------------------- [1] Respondent may have been referring to state or county building inspections, and not to the departmental verification inspection by Inspector Dennis Butzen. Respondent’s testimony was unclear and confusing on this point. Respondent gave no dates for any of the inspections. [2] Respondent did not specifically elaborate the areas for which “flood control” had inspected or approved, or over which “flood control” had authority. However, at one point, Respondent testified that flood control approved the backfilling they had done. At another point, Respondent testified that flood control sets the heights of houses. [3] A portion of the confusion in the testimony may have come from the fact that Complainant and Complainant’s parents each have complaints against Respondent on their respective homes on adjoining property. There were several times when Respondent or his attorney corrected his testimony, saying that was the other complaint. There were several times when Complainant also corrected or clarified the testimony in this regard. [4] The record is unclear on how many inspections there were on Complainant’s complaint. The record contains only one departmental Verified Form, and Complainant testified that the second scheduled inspection was canceled because the Manufacturer took care of Item 18. [5] There is no evidence of any written appeal filed by Respondent to the verified items in the Verified Complaint and Sign Off Form prepared by the Department’s Inspector.

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