ALJDEC

01F-R012007-BFS · Department of Building and Fire Safety · 2001-10-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 17, 2001. APPEARANCES: Richard and Linda Dunfee, Complainants; and Flora McCollum, witness. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ Richard and Linda Dunfee were damaged by their manufactured home dealer who provided them with the wrong model home, then went out of business and was unable to complete proper set-up and repairs. They have established that the amount of damages they are claiming, $3,754.17, is reasonable. Therefore, it is recommended that a pay-out from the recovery fund be issued to the Dunfees in that amount and that Arizona Best Buys’ license be suspended until the full pay-out has been reimbursed to the fund with interest. FINDINGS OF FACT 1. On June 11, 1999, Richard and Linda Dunfee purchased a manufactured home from Arizona Best Buys, LLC, a licensed manufactured home dealer. Shortly thereafter, Arizona Best Buys went out of business but the sale was completed. The Dunfees moved into the home on September 11, 1999. Unfortunately many items needed repair. Also, the home was not the model or size they contracted for. This was clearly established at hearing when they presented a copy of the floor plan they bargained for and a measurement of one of the actual rooms, showing that the home they received was much smaller than the one they purchased. 2. On July 23, 2001, the Dunfees filed a recovery fund claim with the Department of Building and Fire Safety ("BFS") Office of Manufactured Housing. Even though they are still not satisfied with the size of the home, they requested only enough money from the fund to pay for some repairs. They submitted one estimate for the appropriate repairs which was $3,754.17. The Dunfees explained at hearing that they only had one estimate because the other licensed contractors they called would not come to their home. Evidently, it is in a very remote location. 3. The estimate provided at hearing included items that had been the subject of an earlier complaint and may or may not have been verified at that time. Nevertheless, the contractor who gave the estimate toured the home and gave his professional estimate based on his direct observations of what needed to be done. Arizona Best Buys did not appear at hearing; therefore, the weight of the evidence supported the estimate as being the best calculation of damages presented at hearing. 4. A heat duct included in the estimate has been corrected. Its value, however, is minimal given the overall damage to the Dunfees in being supplied with the wrong model home. The estimate also included a charge for re-leveling the home. Although this may generally be considered to be the responsibility of the manufactured home installer, the Dunfees established that the contract called for Arizona Best Buys to furnish the installation. Thus, by contract, proper installation was the responsibility of the dealer as well as the installer and may properly be included here as damages. Another item, replacement of the decking under the sink, is an area that was damaged by the failure of Arizona Best Buys to caulk the outside of the home. Without proper sealing around the home, sink water or rain water damaged the decking. Although this item was imputed to the manufacturer in the Verified Complaints, the manufacturer's employees, while fixing its other items, informed the Dunfees that this was a dealer item. There was no evidence at hearing to dispute this other than the Verified Complaints, and their conclusions were without explanation or the supporting testimony of any witness. Consequently, the evidence at hearing established that the estimate offered by the Dunfees was a reasonable cost calculation of the damages they suffered. CONCLUSIONS OF LAW 1. “If any consumer … is damaged … by a licensed dealer or broker of manufactured home … , that consumer may file a claim with the office (Department of Building and Fire Safety Office of Manufactured Housing) for payment from the consumer recovery fund. The claim shall be verified by the office.” A.R.S. §41-2190(A). 2. “Upon verification of the claim for payment, the assistant director shall provide for a hearing pursuant to chapter 6, article 10 of this title.” A.R.S. §41-2190(C). The Arizona Office of Administrative Hearings is authorized to conduct hearings in contested matters arising out of state regulation pursuant to A.R.S. §41-1092 et seq. 3. “The board (Board of Manufactured Housing, A.R.S. §41-2142(4)) shall pay from the consumer recovery fund whatever sum the administrative law judge finds payable upon the claims. A decision granting a claim shall include an order suspending the license of the licensee upon whose account the claim was filed. Such a license shall remain on suspension until the licensee has repaid in full, plus interest at the rate of ten per cent per year, the amount paid from the consumer recovery fund on his account.” A.R.S. §41-2190(D). 4. “Recovery from the consumer recovery fund is limited to actual or compensatory damages, including costs but excluding interest or attorney fees.” A.R.S. §41-2188(B). 5. In this case, the Dunfees have established a legitimate and measurable basis for their claim for $3,754.17. This amount, though it may include a small additional item for installation of a heating duct, is appropriate for a pay-out from the recovery fund. The perhaps immeasurable damage they suffered from being supplied a smaller home more than offsets the small portion of the estimate comprised by the heating duct. 6. As to the items in the estimate that were not in the complaint, were not verified or were imputed to the manufacturer, the Dunfees have carried the weight of proving that they were properly payable from the fund. They offered believable testimony that the dealer had the responsibility to complete the repairs and failed to do so. Without any testimony disputing the accuracy of the evidence, the Administrative Law Judge must conclude that it is sufficient to support the claim. It is therefore recommended that the Dunfees' recovery fund claim for $3,754.17 be awarded by order of the Assistant Director of the Department of Building and Fire Safety. RECOMMENDED DECISION Based upon the foregoing, the undersigned Administrative Law Judge hereby recommends to the Director of the Department of Building and Fire Safety that the Complainant’s claim for a pay-out from the recovery fund in the amount of $3,754.17 be granted. It is further recommended that Respondent’s Class D-12 license be suspended until the licensee has repaid the fund in full the amount of the pay-out plus interest at 10% per year.

Done this day, October 30, 2001.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang Administrative Law Judge

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