ALJDEC

01F-R012017-BFS · Department of Building and Fire Safety · 2001-12-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On December 5, 2001, a hearing was held to determine if the Complainant is entitled to payment from the Consumer Recovery Fund. Gail Ferren (“Complainant”) appeared on her own behalf. The Respondent failed to appear. The record was kept open until approximately 2.00 p.m. to allow for the appearance of the Respondent or the receipt of any information which would constitute good cause for the Respondent’s absence or delay. No such information was received from or on the behalf of the Respondent. Based upon the entire record, the undersigned Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Decision.

FINDINGS OF FACT 1. On or about August 22, 2001, the Complainant filed a complaint with the Department of Building and Fire Safety (“Department”) against the Respondent. Mr. Mathew Madrid is the Respondent’s qualifying party.

2. At the hearing in this matter, the Complainant testified that on or about July 24, 2001, she entered into a contract to purchase a mobile home (“Home”) for $30,000.00. The Complainant testified that she was required to pay $5,000.00 to the Respondent as a deposit. The Complainant testified that she submitted a personal check in the amount of $5,000.00 to the Respondent. The Complainant testified that the personal check was made out to the Respondent.

3. The Complainant testified that the Respondent subsequently returned the personal check to her. The Complainant testified that the Respondent asked her to re-submit a $5,000.00 personal check. However, the Respondent requested that the check be made out to Mr. Madrid instead of the Respondent. The Complainant testified that Mr. Madrid immediately cashed the check. The Complainant testified that the Respondent failed to deposit the $5,000.00 in an escrow or trust account.

4. The Complainant testified that the closing date for her Home was August 13, 2001. The Complainant testified that on August 13, 2001, she did a walk-through of the Home with a lady named Denise who was the Respondent’s representative. The Complainant testified that Denise asked the seller of the Home to sign the Home’s title so she could return to the Respondent’s office and have the signature notarized. The Complainant testified that the seller refused.

5. The Complainant testified that she subsequently went with Denise to the Respondent’s office. The Complainant testified that she submitted a $25,000.00 cashier’s check to the Respondent. The Complainant testified that she received no closing documentation from the Respondent.

6. The Complainant testified that she heard nothing further from the Respondent. The Complainant testified that she subsequently called the seller. The Complainant testified that the seller had received a post- dated check in the amount of $23,800.00 from the Respondent. The Complainant testified that the seller refused to transfer title in the Home until the check cleared. Unfortunately, the Complainant subsequently learned that the Respondent had insufficient funds to cover the post-dated check.

7. The Complainant testified that the bank told her that the Respondent had only $21,000.00 in its checking account. The Complainant testified that the Respondent’s checking account balance dropped another $700.00 while she spoke to the bank representative. The Complainant testified that the bank refused to clear the Respondent’s post-dated check that was made out to the seller.

8. The Complainant testified that she feared that she was about to lose $30,000.00 without a title transfer to show for it. The Complainant testified that it was imperative for the Respondent’s $23,800.00 post-dated check to clear or she would lose all of her $30,000.00 and the Home. To avoid this travesty, the Complainant and the seller each deposited $2,350.00 into the Respondent’s checking account so that the Respondent’s post-dated check in the amount of $23,800.00 would clear. The Complainant testified that the Respondent’s check cleared after she and the seller deposited the additional funds. The Complainant testified that she subsequently received title to her Home.

9. Mr. Dennis Butzen is an Inspector for the Department. On August 27, 2001, Inspector Butzen investigated this matter. Inspector Butzen verified that (1) the Respondent failed to deposit the Complainant’s $5,000.00 check into a trust or escrow account; (2) the Respondent failed to provide a closing statement to the Complainant; and (3) the Respondent failed to utilize the Complainant’s deposits, totaling $30,000.00, for the purpose for which they were provided (i.e., paying the seller). See Verified Complaint & Sign-Off Form.

10. On or about September 7, 2001, the Complainant filed a Consumer Recovery Fund Claim Form with the Department.

11. The Respondent failed to appear for the hearing scheduled in this matter on December 5, 2001, at 9:00 a.m. at the Office of Administrative Hearings, located at 1400 West Washington Street, Suite 101, Phoenix, Arizona. The Notice of Hearing correctly states the date, time and place of this hearing. The Notice of Hearing was sent by certified mail to Mathew Madrid, Qualifying Party, Radiant Manufactured Homes, 11361 N. 99th Ave., STE #202, Peoria, Arizona 85345. The undersigned Administrative Law Judge finds that the Respondent received proper notice of this hearing.

CONCLUSIONS OF LAW 1. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A "preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not." Morris K. Udall, Arizona Law of Evidence, §5 (1960). It "is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not." Black's Law Dictionary, 1182 (6th ed. 1990).

2. The undersigned Administrative Law Judge concludes that the Respondent has violated A.R.S. §41-2180(A) by failing to deposit the Complainant’s $5,000.00 personal check into a trust account.

3. The undersigned Administrative Law Judge concludes that the Respondent has violated A.R.S. §41-2180(L) by failing to utilize the Complainant’s deposits, totaling $30,000.00, for the purpose of paying the seller for the Home.

4. The undersigned Administrative Law Judge concludes that the Respondent has violated A.A.C. R4-34-303(D) by failing to provide the Complainant with a closing statement.

5. The undersigned Administrative Law Judge concludes that the Appellant is entitled to recovery from the Consumer Recovery Fund pursuant to A.R.S. §41-2190(A) because the Respondent has violated A.R.S. §41-2180, or rules adopted pursuant to that section. The undersigned Administrative Law Judge further concludes that the Complainant is entitled to the amount of $2,350.00. The undersigned Administrative Law Judge concludes that this amount represents the Complainant’s actual or compensatory damages caused by the Respondent. A.R.S. §41-2188(D).

RECOMMENDED DECISION It is recommended that the Board of Manufactured Housing shall pay the Complainant the sum of $2,350.00 from the Consumer Recovery Fund.

It is further recommended that the Respondent’s Class D-8B License No. 7442 be suspended until such time that the Respondent has repaid in full, plus interest at a rate of ten percent per year, the amount paid to the Complainant from the Consumer Recovery Fund.

Done this day, December 6, 2001.

______________________________________ Casey J. Newcomb Administrative Law Judge

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

N. Eric Borg Department of Building and Fire Safety 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