ALJDEC

01F-C012139-BFS · Department of Building and Fire Safety · 2002-03-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 13, 2002. APPEARANCES: The Complainant was represented by Assistant Attorney General M. Elizabeth Burns. The Respondent did not appear. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ The commencement of the scheduled hearing was delayed for 15 minutes to allow for the late arrival by an authorized representative or attorney for Respondent. Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made;

FINDINGS OF FACT

1. Scarlett Enterprises, Inc., doing business as Red Mountain Homes Sales is the holder of License No. 7642, a Class D-8 license, issued by the Arizona Department of Building and Fire Safety (“Department”) on May 31, 2001. The official records of the Department reveal that License No. 7642 has been suspended in two prior disciplinary actions. 2. Mark A. Scarlett is the Respondent’s qualifying party. 3. Mark A. Scarlett, doing business as Red Mountain Home Sales, previously held License No. 7380, a Class D-8 license, from February 2, 2000 until May 31, 2001. 4. Due to a change in legal entity, Mark A. Scarlett voluntarily canceled License No. 7380. 5. On or about November 8, 2000, Mark A. Scarlett, doing business as Red Mountain Home Sales, received the sum of $11,763.80 from a purchaser, David Johnson. 6. Mr. Scarlett failed to deposit Mr. Johnson’s earnest money into his company’s trust [account number redacted] maintained at Bank of America. 7. The Department has no knowledge as to whatever happened to Mr. Johnson’s earnest money.

CONCLUSIONS OF LAW

1. The Department has jurisdiction over the subject matter in this action and over the Respondent. 2. The failure of Mark A. Scarlett, doing business as Red Mountain Home Sales, to deposit Mr. Johnson’s earnest money in his company’s trust account is a violation of A.R.S. §§ 41-2180(A) and 41-2186(1) and (6). 3. Pursuant to the provisions of A.R.S. §41-2175E), Respondent was required to show that its corporate officers and qualifying party had good character at the time it applied for licensure. That provision provides that lack of good character can be established by showing that such an individual committed any act, which committed by a licensee, would be grounds for the Department to discipline such license. 4. Pursuant to A.R.S. § 41-2186(8), the Department may discipline a licensee if it subsequently discovers facts, which if known at the time of issuance of a license, would have been grounds to deny the issuance of the license. 5. Mark A. Scarlett’s failure to deposit Mr. Johnson’s earnest money into his company’s trust fund, in violation of A.R.S. §§ 41-2180(A) and 41- 2186(1) and (6), establishes his lack of good character at the time Respondent applied for its license. 6. Mark A. Scarlett’s failure to deposit Mr. Johnson’s earnest money into his company’s trust account, in violation of A.R.S. §§ 41-2180(A) and 41- 2186(1) and (6), is a subsequently discovered fact which would have been grounds for the Department to deny the issuance of Respondent’s license. 7. The evidence of record supports the Department’s revocation of Respondent’s license, pursuant to the provisions of A.R.S. § 41-2186. 8. Pursuant to A.R.S. § 41-2193(F), the Department may impose an administrative penalty in an amount not to exceed $1,000.00 per violation. The evidence of record supports the imposition of an administrative penalty against Respondent.

RECOMMENDED ORDER

In view of the foregoing, it is recommended commencing on the effective date of the entered Order in this matter that Respondent’s License No. 7642 be revoked. It is further recommended, in addition to the foregoing revocation, that Respondent be assessed an administrative penalty in the amount of $1,000.00. No future license shall be issued to any entity consisting of persons named on Respondent’s License No. 7642 unless payment of any outstanding prior administrative penalty is tendered. Done this day, March 28, 2002

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2002, to:

Department of Building and Fire Safety N. Eric Borg, Director 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