ALJDEC

01F-R012026-BFS-res · Department of Building and Fire Safety · 2002-04-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 9. 2002 APPEARANCES: Nancy Chapman appeared at the hearing on her own behalf. Radiant Manufactured Homes did not appear at the hearing. ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ FINDINGS OF FACT 1. In early December, 2000, Nancy Chapman (Complainant) saw a double- wide Cavco manufactured home (Manufactured Home) that she wished to purchase. The listing agent for the Manufactured Home was Radiant Manufactured Homes (Respondent). 2. Complainant contacted Respondent and dealt with Respondent’s owner, Michael Madrid (Mr. Madrid) regarding the purchase of the Manufactured Home. 3. On December 11, 2000, Complainant executed an application to purchase the Manufactured Home. Mr. Madrid told Complainant that the Manufactured Home would sell for about $22,000.00 after the home was repaired. Mr. Madrid informed Complainant that the Manufactured Home would sell for a lesser amount if Complainant assumed responsibility for the repairs. 4. Complainant informed Mr. Madrid that she wanted to purchase the Manufactured Home in a repaired condition without having to assume any responsibility for the repairs. 5. Mr. Madrid contacted the lending institution that had repossessed the Manufactured Home and learned that the institution was not interested in re- financing the Manufactured Home. Subsequently, it was arranged that Respondent would purchase the Manufactured Home from the lending institution and Complainant would purchase the Manufactured Home from Respondent. According to that arrangement, Complainant would pay Respondent $22,000.00 for the Manufactured Home and Respondent would be responsible for making specified repairs to the Manufactured Home. It was understood that Complainant intended to move into the Manufactured Home, which was located at Peoria Polynesian Village (Park), upon completion of the repairs. 6. The above-mentioned arrangement was memorialized in a written contract dated January 12, 2001, executed by Complainant and Respondent. 7. The repairs to the Manufactured Home were not completed by the time Complainant signed the closing documents for the financing of the Manufactured Home. On the date of closing, Mr. Madrid informed Complainant that he felt bad that Complainant’s financing for the purchase of the Manufactured Home had a greater interest rate than what Complainant had been seeking. As an incentive for Complainant to execute the necessary documents to close on the Manufactured Home, Mr. Madrid promised that Respondent would pay Complainant’s first three months of rent at the Park. 8. After signing the necessary documents to close on the Manufactured Home, and in reliance on Mr. Madrid’s representation that the Manufactured Home would be ready by the upcoming weekend, Complainant entered into a rental agreement with the Park to lease space 203. 9. It is undisputed that Respondent paid the Park for the January 2001 rent on space 203 in the Park. 10. Complainant testified that her monthly rate for leasing space 203 at the Park was $297.00. 11. Complainant testified that Respondent represented it had left a check for Complainant in the Manufactured Home for the February 2001 rental for space 203. Complainant testified that she never located or received that check. Complainant paid the Park the February 2001 rent for space 203 in the amount of $297.00. 12. Complainant testified that Mr. Madrid made representations that Respondent would issue checks for the March 2001 rent for space 203 but did not do so. Complainant paid the Park the March 2001 rent for space 203 in the amount of $297.00. 13. Complainant did not pay the April 2001 rent when due because she relied on representations made by Respondent that it would pay that rent. Because the April 2001 rent was not paid when due, the Park charged Complainant late fees and rent totaling $385.00, which Complainant paid. Complainant contends that Respondent owes Complainant the $385.00 that she paid to the Park for the April 2001 rent and late charges. 14. The evidence of record established that Complainant was responsible for the April 2001 rent. Although Complainant had a right to look to Respondent for such payment, under the particular circumstances, given that Respondent had failed to provide the rent for February or March 2001, Complainant knew or should have known that Respondent would not pay the April 2001 rent. Further, Complainant knew she was contractually obligated to pay the Park the April rent and that failure to do so would cause late charges to accrue. Therefore, it is determined that Complainant is not entitled to reimbursement of the late charges but is entitled to be reimbursed for the April 2001 rent. 15. Complainant testified that the Manufactured Home was not ready for her occupancy until April 23, 2001. 16. In reliance on Mr. Madrid’s representations as to when the Manufactured Home would be ready for occupancy, Complainant changed her living accommodations and moved in with a friend. Complainant testified that Mr. Madrid promised that Respondent would pay her $35.00 per day for room and board. Complainant testified that Respondent owes her the sum of $2,765.00 for room and board during the period of time when the Manufactured Home was not ready for her occupancy. 17. Complainant contends that Respondent owes her the sum of $99.11 for electricity because although she had the electricity turned on at the Manufactured Home in January 2001 she did not move in to the home until April 23, 2001, when the Manufactured Home was ready for occupancy. Therefore, Complainant believes she is entitled to be reimbursed for her electricity costs for January, February, and March, 2001, which amount to $99.11. 18. Complainant contends Respondent owes her $13.45 for the January 2001 sewer and trash charges she had to pay the Park, because Respondent had paid the January rental and was responsible for the sewer and trash charges. 19. Complainant contends Respondent owes her reimbursement for $92.79 representing the telephone charges she incurred in January, February, March, and part of April, 2001, when she was not occupying the Manufactured Home. Those charges were incurred because Complainant had initiated telephone service at the Manufactured Home in January, 2001 believing she would be occupying the Manufactured Home by that date. 20. Complainant incurred a cost of $20.00 to remove an old refrigerator at the Manufactured Home that Mr. Madrid represented he would take possession of. Neither Mr. Madrid nor any agent of Respondent came to the Manufactured Home to remove the old refrigerator. Consequently, Complainant incurred a cost of $20.00 to have the refrigerator removed from the Manufactured Home. 21. Complainant testified that Mr. Madrid agreed to reimburse Complainant the sum of $250.00 for clean up expenses that Complainant incurred after the sub-flooring and carpet was removed and replaced and Respondent failed to provide Complainant such reimbursement. 22. Complainant contends that she is owed $795.54 for three months of rent for May, June, and July, 2001 because Respondent represented that it would pay her first three months of rent. According to Complainant, because she did not move into the Manufactured Home until the end of April, 2001, she is entitled to the first three months of rent after her occupancy of the Manufactured Home. During the hearing, Complainant acknowledged that her claim to the $795.54 is based on her interpretation of Respondent’s promise to pay her first three months of rent. 23. The arrangement Complainant had with Respondent regarding the Park rent was that Respondent would pay for Complainant’s first three months of rent. That sum has already been taken into consideration and is being awarded to Complainant. Complainant failed to establish that Respondent was obligated to pay rent from the date when Complainant moved into the Manufactured Home. Therefore, it is determined that Complainant did not establish any right of reimbursement for the rent of space 203 for the months of May, June or July 2001. 24. Complainant testified that she paid $75.00 for the removal of the old carpet and tile that was approved by Mr. Madrid with the representation that Respondent would reimburse Complainant for her expenditure of that sum. 25. Complainant testified that she purchased $305.88 in supplies and labor that were approved by Mr. Madrid to clean glue from the tiles, to replace molding and base boards that were damaged and not reinstalled, and to complete work that Respondent did not finish. 26. Complainant testified that that Mr. Madrid approved Complainant’s purchase of a washer and dryer for $577.31, which Respondent was to have provided to Complainant. Complainant also testified that Mr. Madrid agreed to reimburse Complainant for that sum plus labor costs of $915.00 to install the washer and dryer, and dishwasher. 27. The testimony of Complainant, as set forth above, is determined to be credible. 28. The weight of the evidence of record established that with the exception of the electricity charges of $99.11, telephone charges of $92.79, $20.00 for removal of the old refrigerator, and $795.54 in rent for May, June, and July, 2001, all other items for which Complainant claims reimbursement from the Consumer Recovery Fund are items that Respondent was obligated to pay or reimburse to Complainant. 29. With respect to the electricity and telephone charges, Complainant initiated and incurred the charges based on her belief that she would be living in the Manufactured Home by January, 2001. Respondent never agreed to reimburse Complainant for those charges and Complainant did not mitigate her damages and stop those charges from accruing when she learned that the Manufactured Home was not ready. Under the circumstances, the weight of the evidence of record established that Complainant initiated and incurred those expenses when she was not ready to move into the Manufactured Home. 30. With respect to the $20.00 removal of the old refrigerator, Complainant did not establish that Respondent has agreed to pay or accept responsibility for the $20.00 removal charge. Therefore, Complainant is not entitled to have such sum paid from the Consumer Recovery Fund. 31. The weight of the evidence established that the sum of $5,792.64 is the amount of money that Respondent owed Complainant concerning the above- mentioned transaction involving the Manufactured Home that can be awarded and paid from the Consumer Recovery Fund. The sum of $5,236.76 was derived as follows: $891.00 for rent of space 203 at the Park for the months of February, March, and April, 2001 plus $305.88 for supplies and labor for removal of glue on tile and replacement of baseboards plus $577.31 for the washer and dryer plus $915.00 for labor cost to install dishwasher, washer & dryer plus cleanup costs of $250.00 plus $2,765.00 for room and board at $35.00 per day plus $13.45 for the January 2001 sewer and trash charge plus $75.00 for trash removal. CONCLUSIONS OF LAW 1. The weight of the evidence of record established that Complainant has a valid claim pursuant to A.R.S. §41-2190(D) and that the sum of $5,792.64, which Respondent owes Complainant, is a proper and reasonable sum that the Consumer Recovery Fund should pay to Complainant. 2. Grounds exist for Respondent’s license to be suspended pursuant to A.R.S. §41-2190(D). ORDER IT IS ORDERED that on the effective date of this Order, the Board of Manufactured Housing shall pay $5,792.64 to Complainant from the Consumer Recovery Fund. IT IS FURTHER ORDERED that on the effective date of this Order, Respondent’s license shall be suspended and shall remain on suspension until Respondent has repaid the Consumer Recovery Fund the sum of $5,236.76 plus interest at the rate of ten per cent per year. Done this day, April 29, 2002.

______________________________________ Lewis D. Kowal 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