ALJDEC

01F-R012024-BFS · Department of Building and Fire Safety · 2002-02-26

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

The above-entitled matter came on for hearing on Monday, February 25, 2002 at 9:00 a.m. pursuant to advance notice duly sent to all interested parties. The Complainant, Charles G. Amy, appeared in his own behalf. Neither the named Respondent, Nationwide Homes, nor the Department of Building and Fire Safety (herein called the “Department”) appeared through any authorized individual or by any proper legal representative. 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. The start of the scheduled hearing was delayed for more than a reasonable extra time period in order to afford a reasonable opportunity for Respondent and the Department to appear and to participate. However, no legal representative or other authorized individual appeared for or on behalf of either Respondent or the Department.

The parties had concluded a written contract on September 11, 2001 pursuant to which Complainant agreed to purchase and Respondent, as the dealer,

agreed to sell a certain designated manufactured home unit. The specified contractual cost price was to have been $54,488.00, of which Complainant was shown to have paid to Respondent an expressly requested and required down payment deposit of $1,000.00. The agreed deposit amount was tendered and paid with a money order.

3. After the down payment deposit had been negotiated, Complainant was unable to obtain any responsive sales performance action from Respondent’s personnel despite numerous and repeated attempts by telephone and visits.

4. When Complainant ultimately sought to have his deposit returned, he was consistently informed that a refund was being processed and would be sent or delivered to Complainant. Instead, no monies were received, and it was subsequently learned that Respondent was out of business, thereby tending to indicate that Complainant’s funds had been used for other purposes.

5. Complainant not only has been unable to obtain a refund of any part of the advance deposit payments made to Respondent but also he has never received the unit that was the subject matter of the purchase contract.

6. The case file indicated that the within claim for damages, as filed by Complainant, had been duly verified by the Office of Manufactured Housing, a division of the Department. Such verification is a statutory requisite for the successful pursuit of an award from the Fund.

The actions or, more properly the inaction, of Respondent in improperly retaining the funds deposited in advance for this transaction constitutes a violation of the express provisions of the statute pursuant to which disciplinary measures may be imposed on the license holder. The monetary damages sustained by Complainants as

a direct result of Respondent’s wrongdoing are found to be in an amount equal to the total sum previously transmitted as an advance deposit on the purchase agreement that was breached by Respondent.

8. The evidence of record supports the granting of a monetary award from the Consumer Recovery Fund to Complainant in the amount of $1,000.00, such sum representing the total sum needed to fully refund the amount paid in advance for the home that was never delivered, thereby depriving Complainant of the benefit of his contractual bargain with Respondent.

9. The undisputed evidence further demonstrated that Complainant was and is an individual currently receiving disability benefits from Social Security. These dealings reflect an instance of a business operation that has taken unfair advantage of a vulnerable class of persons. Since it was also shown that some individuals may be continuing operations, the Department may and should properly initiate an investigation into the propriety of any and all continued activities of these individuals or of the company, and if warranted, to commence disciplinary proceedings on its own motion against entities or individuals as may be appropriate in an ongoing effort to protect the interests and rights of all future prospective consumers.

CONCLUSIONS OF LAW

1. The Department of Building and Fire Safety has established a Consumer Recovery Fund from which an individual party, such as Complainant, may, pursuant to the provisions of A.R.S. §41-2188(B), obtain a monetary award limited to actual or compensatory damages, exclusive of attorneys fees.

2. If a consumer of a manufactured home is damaged by the failure of a home dealer to perform a sales agreement, the consumer may file a claim with the Department for a payment from the Fund A.R.S.§41-2190(B). The filed claim must be verified by or on behalf of the Department.

3. The express provisions contained in A.R.S. §41-2190(D) mandate that the Department shall pay from the Fund whatever sum the Administrative Law Judge finds payable upon the claim.

4. Compensatory damages are those directly flowing from the breach of any breach of contract. The evidence revealed that Respondent had violated A.R.S. §41-2180 by failing to properly perform its obligations under the sales contract with Complainant. Consequently, Complainant is entitled to compensation from the Fund in the amount of his actual damages.

5. In this case, the totality of the evidence of record supports a determination by the Administrative Law Judge that Complainant has adequately established his actual or compensatory damages attributable to the acts or omissions of Respondent to be in the amount of $1,000.00, representing the full advance deposit payment. The facts and circumstances of this case further serve to generate a compelling and valid basis for the Department’s subsequent verification of the Complainant’s claim. Therefore, an award from the Fund should be appropriately granted.

6. By operation of law, as set forth in A.R.S. §41-2190(D), the Class D-8B license of Radiant Manufactured Homes must be suspended until such time that the award to Complainants has been repaid in full, plus interest at ten percent per year.

…….

ORDER

In view of the foregoing, IT IS HEREBY ORDERED by the undersigned Administrative Law Judge that on the effective date of the Order entered in this matter, the Director of the Department shall commence and finalize payment procedures from the Consumer Recovery Fund to Complainant, Charles G. Amy, in the amount of $1,000.00 as damages that are properly chargeable against the account of Respondent.

IT IS FURTHER ORDERED that Respondent’s Class D-8B license shall be suspended until the sum of $1,000.00 that will be paid from the Fund, plus statutory interest, chargeable against Respondent’s account, is repaid or replenished to the Fund by or on behalf of Respondent.

Dated: February 27, 2002. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

N. Eric Borg, Director Department of Building and Fire Safety East Virginia (Suite 100) Phoenix, AZ 85004

ATTN: Shawna Blank -----------------------

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