ALJDEC

01F-O012065-BFS-res · Department of Building and Fire Safety · 2002-02-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 15, 2002. APPEARANCES: Assistant Attorney General Elizabeth Burns represented Complainant Department of Building and Fire Safety. Respondents failed to appear. ADMINISTRATIVE LAW JUDGE: Constantino Flores _____________________________________________________________________ The issue presented by this matter is whether grounds exist to take disciplinary action against Respondents Christopher A. Palos and/or Copperwynd Homes, Inc., for alleged violations of various provisions of A.R.S. § 41-2186, in regards to engaging in false, misleading or deceptive sales practices in the sale or offer of sale of a 1997 Skyline manufactured home, serial No. 7B710722J, A & B, to Pauline and Carl Torp. Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT Christopher A. Palos holds a Salesperson’s License (No. S06681), and Copperwynd Homes, Inc., (“Copperwynd”), holds a Class D-8 License (No. 7417), both licenses issued by the Arizona Department of Building and Fire Safety (the “Department”). Christopher A. Palos is the president and also the secretary of Copperwynd. Mary L. Palos, Christopher Palos’ wife, is the qualifying party, vice-president and treasurer of Copperwynd. On or about June 5, 2000, Pauline and her husband Carl Torp entered into an agreement with Respondents for the purchase of a manufactured home. The home that the Torps purchased, however, did not have carpet installed. Christopher Palos represented to the Torps that Larry Ward’s Remodeling Service would install the carpet, at an agreed cost to the Torps of $1,750.00. The Torps paid Mr. Palos in full, with the understanding that Mr. Palos would then pay that amount to Mr. Ward. Also on June 5, 2000, Christopher Palos submitted to the Torps a purported invoice from Larry Ward’s Remodeling Service, which set out the work to be done and the associated cost in the amount of $2,049.00, which was then adjusted to the previously agreed amount of $1,750.00. (Exhibit 1) On or about the middle of August 2000, the Torps discovered that neither Mr. Palos nor Copperwynd had paid Mr. Ward for the installation of the carpet in their house. Conseco Financial Corporation (“Conseco”), the finance company that carried the loan, had actually paid Mr. Ward for this work as part of the financial agreement, and neither Mr. Palos nor Copperwynd had reimbursed it. Upon finding this information, Ms. Torp attempted to contact Mr. Palos, leaving a message in his phone answering machine demanding that Mr. Palos return the $1,750.00. On or about September 1, 2000, Mr. Palos returned the $1,750.00, in cash, to Ms. Torp. During this meeting, Mr. Palos stated to Ms. Torp “I was a naughty boy, huh?” The invoice that Mr. Palos submitted to the Torps in regards to the carpet work is false. According to a sworn affidavit submitted by Larry Ward, who was not available to testify at the hearing, Mr. Ward was never hired by Mr. Palos or Copperwynd Homes to do the carpet work in the Torps home. (Exhibit 14) In fact, Mr. Ward did this work at the Torps’ house while working for Conseco, which he billed and from which he received payment. Further, in regards to the invoice for the carpet work that Mr. Palos submitted to the Torps, the affidavit states that Mr. Ward never prepared or submitted an invoice to Mr. Palos or Copperwynd Homes in association with the installation of the carpet in the Torps’ house. In connection with the sale of the house to the Torps, on or about August 20, 2001, the Department of Building and Fire Safety filed a Citation and Complaint against Christopher Palos, and another Citation and Complaint against Copperwynd Homes alleging violations of various sections of A.R.S. § 41-2186. Both Citations and Complaints were mailed, via certified mail, to the latest address reflected in the Department’s records, which was P.O. Box 20894, Mesa, Arizona 85277. On or about August 30, 2001, Christopher Palos and Copperwynd Homes filed Answers to the two Citations and Complaints. In the Answers, the Respondents denied the agreement with the Torps as to the carpet work, denied that Mr. Palos supplied the Torps with the Larry Ward invoice, and also denied that Mr. Palos repaid $1,750.00 to Ms. Torp. On January 14, 2002, the Department mailed notices of hearing to Respondents, via certified mail, setting the hearing in regards to both case numbers for February 15, 2002, at 9:00 a.m. The notices were sent to the address mentioned in Paragraph 7 of the Statement of Facts. 10. The Respondents failed to appear at hearing.

CONCLUSIONS OF LAW The burden of proof at an administrative hearing is generally upon the Complainant. Utah Construction Company v. Berg at al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is by preponderance of the evidence. A preponderance of the evidence is “such proof as convinces the trier of fact that contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). A.R.S. § 41-2186(1) grants the Department the authority to take disciplinary action against a licensee who fails “in any material respect to comply with the provisions of this article . . .” A.R.S. § 41-2186(6) grants the Department the authority to impose disciplinary action against a licensee for “the doing of a wrongful or fraudulent act by act . . . which relates to this article . . .” A.R.S. § 2186(14) grants the Department the authority to impose disciplinary action against a licensee for any “false, misleading or deceptive sales practices . . . in the sale or offer of sale of any unit regulated by this article . . .” The Administrative Law Judge finds that the Department has satisfied its burden of proof. The evidence shows that Christopher Palos and Copperwynd Homes violated A.R.S. § 2186(1), (6), and (14) by committing a wrongful or fraudulent act and engaging in false, misleading or deceptive sales practices as to the agreement with the Torps to have the carpet installed in their house, and the surrounding facts and circumstances to this agreement, to include the presentation and/or authorship of the false invoice.

RECOMMENDED ORDER In view of the foregoing and upon recommendation of the Department, 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 Respondent Christopher A. Palos Salesperson’s License (No. S06681) and Respondent Copperwynd’s Class D-8 License (No. 7417) both be revoked. Done this day, March 7, 2002

______________________________________ Constantino Flores 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