ALJDEC

01F-O001244-BFS · Department of Building and Fire Safety · 2001-06-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 18, 2001. APPEARANCES: The Department of Building and Fire Safety, Office of Administration, was represented by Assistant Attorney General Melissa Cornelius. Respondent was represented by its managing member, Robert Miller. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ 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. This matter came on for hearing pursuant to the Citation and Complaint and Notice of Hearing issued by the Department of Building and Fire Safety, Office of Administration, (“Department”) against the Respondent. 2. At the outset of the hearing, counsel for the Department requested that the Citation and Complaint be amended to reflect in Count IV that the earnest money for J. Craven received on July 7, 1999, be changed from “$2,000.00” to “$2,600.00”. Respondent did not object to the amendment. The amendment was granted. 3. The Respondent is the holder of License No. 6978, a Class D-12 dealer’s license, issued by the Department. It has been in business since 1984. 4. Carla Morin is an investigator/auditor for the Department. She has approximately 17 years of experience with the Department. 5. On or about February 13, 2001, Ms. Morin, in her official capacity as an investigator/auditor for the Department, conducted a routine audit of Respondent’s records at its principal place of business. The records subject to the audit are records which Respondent, as a licensee, is required to maintain. 6. Respondent was given two weeks prior notice of the audit by the Department. 7. During her audit, Ms. Morin was treated professionally and courteously by the Respondent’s staff. 8. Ms. Morin examined 16 of Respondent’s files while conducting her audit. Ms. Morin was familiar with Respondent’s filing system as a result of her conducting previous, regular audits of Respondent’s files. 9. Ms. Morin’s audit conducted on February 13, 2001, took longer than usual to complete due to a lack of records maintained by the Respondent. 10. Ms. Morin documented her audit by utilizing a worksheet and creating an investigative report[1]. 11. Ms. Morin’s audit revealed that Respondent failed to perform the following action on purchase agreements for B. Henneman, M. Reynolds and J. Stewart:

a) Respondent failed to retain true copies of the purchase agreements; and b) Respondent failed to write its dealer’s license number and the salesperson’s license number on the purchase agreements.

12. The audit revealed that Respondent failed to write the salesperson’s license number on the contracts for the following purchasers: L. McMaken; N. Sloan; B. Keffeler; and V. Montemurro. 13. Respondent failed to receipt earnest money in its earnest money receipt book for the following purchasers:

a) D. Straight in the amount of $6,207.00 (date received unknown); b) B. Keffeler in the amount of $60,927.00 (date received unknown); c) R. Flores in the amount of $500.00 (date received unknown); d) B. Henneman in an unknown amount (date received unknown); and e) M. Reynolds in an unknown amount (date received unknown).

14. Respondent failed to deposit all earnest monies into an escrow account received from the following purchasers:

a) D. Straight in the amount of $6,207.00 (date received unknown); b) B. Keffeler in the amount of $60,927.00 (date received unknown); c) R. Flores in the amount of $500.00 (date received unknown); d) B. Henneman in an unknown amount (date received unknown); e) M. Reynolds in an unknown amount (date received unknown); f) J. Craven in the amount of $2,600.00[2] (received on July 7, 1999); and g) J. Craven in the amount of $500.00 (received on June 9, 1999).

15. Respondent failed to maintain a complete record of all earnest monies received from the following purchasers: B. Henneman; M. Reynolds; R. Flores; J. Craven; B. Keffeler; and D. Straight. 16. Respondent failed to hold earnest monies in Respondent’s Bank One trust account no. 0886-5936 for the following purchasers:

a) D. Straight, in the amounts of $54,504.00 and $10,000.00 which were withdrawn on January 28, 2000, with no record of the date of consummation; b) D. Straight, in the amount of $604.00, which was withdrawn on January 30, 2000, with no record of the date of consummation; c) B. Keffeler, in the amount of $7,100.00, which was withdrawn on July 22, 1999, with no record of the date of consummation; d) R. Flores, in the amount of $3,500.00, which was withdrawn on April 28, 1999, with no record of the date of consummation; e) B. Henneman, in the amount of $4,580.00, which was withdrawn on March 20, 2000, with no record of the date of consummation; and f) M. Reynolds, in the amount of $8,354.00, with no record of the date of consummation.

17. Respondent failed to maintain evidence to show that the following described agreed upon good and services have been provided for the following purchasers:

a) Title transfer and unit installation for D. Straight; b) Title transfer for B. Keffeler; c) Title transfer for R. Flores; d) Unit installation for J. Craven; e) Title transfer, unit installation and any other installation items for B. Henneman; f) Title transfer, unit installation and any other installation items for M. Reynolds; and g) Unit installation for J. Lobley.

18. Respondent failed to retain evidence to show that the deposits were utilized for the transaction for which they were provided for the following purchasers:

a) Title transfer and unit installation for D. Straight; b) Title transfer for B. Keffeler; c) Unit payoff for G. Johnson; d) Title transfer for R. Flores; e) Unit installation for J. Craven; f) Title transfer, unit installation, any other installation items and unit payoff for B. Henneman; g) Title transfer, unit installation, any other installation items and unit payofffor M. Reynolds; and h) Unit installation for J. Lobley.

19. After the completion of her audit, Ms. Morin gave Respondent an additional ten business days to furnish additional documentation to her. Respondent did not submit any such documentation to her. 20. On or about March 15, 2001, the Department issued the Citation and Complaint in this matter. 21. Respondent timely answered the Citation and Complaint. 22. Respondent has not submitted any additional documentation to either Ms. Morin or the Department. 23. Respondent’s managing member, Robert Miller appeared and testified at the hearing. Mr. Miller doesn’t dispute the evidence presented by the Department. Mr. Miller’s explanation that his company is failing does not excuse Respondent’s failure to comply with the applicable state statutes and regulations to which it is subject to as a licensee. 24. Respondent is found to be a harm to the public.

CONCLUSIONS OF LAW

1. Respondent’s conduct described in Finding of Fact No. 11 violates the provision of A.R.S. §§ 41-2176(E), 41-2180(K) and 41-2186(1) and (6). 2. Respondent’s conduct described in Finding of Fact No. 12 violates the provisions of A.R.S. §§ 41-2176(E), and 41-2186(1) and (6). 3. Respondent’s conduct described in Finding of Fact No. 13 violates the provisions of A.R.S. §§ 41-2180(D) and 41-2186(1) and (6). 4. Respondent’s conduct described in Finding of Fact No. 14 violates the provisions of A.R.S. §§ 41-2180(A) and 41-2186(1) and (6). 5. Respondent’s conduct described in Finding of Fact No. 15 violates the provisions of A.R.S. §§ 41-2180(H) and 41-2186(1) and (6). 6. Respondent’s conduct described in Finding of Fact No. 16 violates the provisions of A.R.S. §§ 41-2180(K) and 41-2186(1) and (6). 7. Respondent’s conduct described in Finding of Fact No. 17 violates the provisions of A.R.S. § 31-2186(1), (6) and (19). 8. Respondent’s conduct described in Finding of Fact No. 18 violates the provisions of A.R.S. §§ 41-2180(L) and 41-2186(1) and (6). 9. Pursuant to the provisions of A.R.S, § 41-2186, the Department may “temporarily suspend or permanently revoke any license issued” for violation of the statute’s enumerated acts or omissions. The evidence of record supports the Department’s request that Respondent’s license be suspended as an appropriate disciplinary sanction. 10. Pursuant to the provisions of A.R.S. §§ 41-2186 and 41-2193(F), the Department may impose an administrative penalty in an amount not to exceed $1,000.00 for each proven statutory violation. The record supports the Department’s request that administrative penalties in the amount of $300.00 for each statutory violation be imposed on 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. 6978 be suspended for 30 calendar days. It is further recommended, in addition to the above-provided license suspension, that administrative penalties be imposed on Respondent, in a total amount of $2,400.00, for the following described proven violations:

a) an administrative fee in the amount of $300.00 for the violations described in Conclusion of Law No. 1 above; b) an administrative fee in the amount of $300.00 for the violations described in Conclusion of Law No. 2 above; c) an administrative fee in the amount of $300.00 for the violations described in Conclusion of Law No. 3 above; d) an administrative fee in the amount of $300.00 for the violations described in Conclusion of Law No. 41 above; e) an administrative fee in the amount of $300.00 for the violations described in Conclusion of Law No. 5 above; f) an administrative fee in the amount of $300.00 for the violations described in Conclusion of Law No. 6 above; g) an administrative fee in the amount of $300.00 for the violations described in Conclusion of Law No.7 above; and h) an administrative fee in the amount of $300.00 for the violations described in Conclusion of Law No. 8 above.

Those administrative penalties shall be paid in full to the Department of Building and Fire Safety on or before 30 days following the effective date of the entered Order in this matter. If those administrative penalties are not timely paid, the it is recommended that Respondent’s license be revoked, effective on such deadline date.

Done this day, June 4, 2001

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2001, to:

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

By ___________________________

----------------------- [1] Exhibits 1 and 2 respectively. [2] As amended.

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