ALJDEC

02F-L002007(4)-BFS · Department of Building and Fire Safety · 2002-03-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 7, 2002. APPEARANCES: PETITIONERS: by Maynard and Delores Schiller, representatives for petitioners, with Daniel Mudd, Jesse Elizalde, and Alois and Beth Rauscher. RESPONDENTS: by Michael Parham, Esq., with Wayne Churchman, park manager, and Gary Jackson, regional manager.

ADMINISTRATIVE LAW JUDGE: Anthony Halas. _____________________________________________________________________ Petitioners Maynard and Delores Schiller and certain other residents of the Las Palmas Mobile Home Resort in Mesa, Arizona, bring this action against the owner of the resort, the property management company, and the on-site manager. Petitioners allege violations of A.R.S. § 33-1452.D.3, 5, and 7, and A.R.S. § 33-1409(11) of the Arizona Mobile Home Parks Residential Landlord and Tenant Act (A.R.S. §§ 33-1401 through 33-1491). The parties presented evidence and testimony at the hearing and, based upon the entire record, this Administrative Law Judge, acting as Mobile Home Parks Hearing Officer under A.R.S. § 41-2198 through 41-2198.04, makes the following Findings of Fact, Conclusions of Law, and Order. // // FINDINGS OF FACT

1. Petitioners Maynard and Delores Schiller (the Schillers), et al. filed the instant PETITION FOR HEARING (PETITION) on January 2, 2002. Petitioners Schiller and the other petitioners are all residents of the Las Palmas Mobile Home Resort (Las Palmas; the mobile home resort), which is located at 215 North Power Road, in Mesa, Arizona. The PETITION alleges generally that the owner, management company, and manager of the mobile home resort have not complied with A.R.S. §§ 33-1452.D.3, 5, and 7, and A.R.S. § 33-1409(11), subsections of the Arizona Mobile Home Parks Residential Landlord and Tenant Act (the Act). 2. Factually, the allegations of the PETITION describe actions by the mobile home resort management and Art Hewitt (Hewitt), a sales agent for Valley of the Sun[1] which actions Petitioners assert interfered with the residents’ rights to sell their mobile homes, in order to monopolize the sales for Valley of the Sun, which in any event was ineffectual in selling their mobile homes. 3. A. The cited statutory subsections of A.R.S. § 33-1452.D generally provide that a person who owns or operates a mobile home park (such as Las Palmas Mobile Home Resort) shall not deny any resident the right to sell his mobile home at a price of his choosing; or require a tenant to use any specific sales agency; or prohibit a tenant from advertising the sale of his home, including the use of a small sign in the window of the home, and a display on a central posting board in the mobile home park reasonably accessible to the public seven days a week during daylight hours. B. In addition, A.R.S. § 33-1409(11) defines “good faith” to be honesty in fact in the conduct or transaction concerned. 4. Mr. and Mrs. Schiller testified at the hearing, and several fellow petitioner-residents of the mobile home park also provided additional testimony, as did a non-petitioner resident. Their testimony was consistent in describing a shared common interest in maximizing resale of their respective homes at the mobile home resort, and a common frustration at the ineffective efforts and results of Art Hewitt as the Valley of the Sun on-site sales agent in selling their homes. Petitioners also asserted that actions by Hewitt and management of the mobile home resort restricted them from using other allowable means of listing their homes for sale.

5. Respondents appeared through counsel and presented the testimony of Wayne Churchman (Churchman), himself one of the named Respondents. He is (and has been at all times relevant) the non-resident manager of Las Palmas Mobile Home Resort, and testified to describe relevant rules and regulations of the mobile home resort. He also described his own actions vis-a-vis the Petitioners’ concerns. Respondents also offered Exhibit 1, which was marked and admitted without objection. 6. On the testimony and evidence presented, the undersigned finds that Las Palmas Mobile Home Resort was designed and at all times has existed as a “closed” mobile home park, with access significantly limited to the public by means of a perimeter wall permitting entry at only two points: through the security guard station at the main gated entrance, and through a rear gate. Residents may enter either gate through operation of an assigned remote control device or by use of a security code number. 7. With regard to non-residents, the evidence demonstrates that “closed” means that access to the mobile home park by the public is limited and restricted in several ways, such that: the “55+” age group is encouraged for residents (in accord with the requirements of an exception to the federal fair housing laws); casually-curious drive-ins are not encouraged or allowed (except for organized events sponsored by management such as bingo and dances); and access by solicitors and other commercial interests - including ‘outside’ mobile home sales agents - is significantly restricted. 8. To that end, visitors are all required to check in at the guard station, and are generally classified in one of two ways: • those members of the public entering as a guest of, and with approval of a resident; and • all other members of the public, including bingo and dance attendees, and those interested in viewing a particular mobile home for re-sale by its resident owner or agent; or in buying an available mobile home or space listed for sale by the mobile home resort’s agent, Valley of the Sun. 9. A. The record demonstrates that the first class of public, i.e., guests, are directed by the guard to the space of the particular resident they are seeking if they are on a resident’s pre-approved list; or the resident is telephoned and authorizes the visitor. B. Event-attendees are directed to the clubhouse for bingo and dances, and prospective homebuyers are directed to the Valley of the Sun clubhouse on-site sales office of Valley of the Sun (where Hewitt and other sales agents are employed), or to the central posting board near the mailboxes at the end of the clubhouse. 10. With regard to violation of A.R.S. § 33-1452.D.3, Petitioners testified to specifically contend that on two weekends early in December, 2001, Hewitt acted on behalf of Respondents to improperly limit the activities of a number of residents from advertising to the public on the sidewalk outside the main entrance to Las Palmas an ‘Open House’ of the sale of certain homes - which were listed by owner or with Arnold Anderson Associates rather than Valley of the Sun. 11. Petitioners also contend that the mobile home resort management also selectively and inconsistently enforced the statutory window sign restrictions against residents whose homes for sale were not listed with Valley of the Sun, and that owner/management attempted to intimidate through the use of notices and warnings, in violation of A.R.S. §§ 33- 1452.D. 5 and 7. 12. In addition, Petitioners contend that certain actions by management in refusing to accept Petitioners’ ‘Notice of Intent to Sell’ was a hindrance to open communications and not taken in good faith. 13. Petitioners therefore contend that Hewitt’s activities on behalf of Respondents, and selective and inconsistent enforcement of the mobile home resort’s architectural standards by management, improperly violated the law and prevented the public from considering homes placed for re-sale by an individual owner or an outside agent (such as Arnold Anderson Associates), rather than those homes for sale by the sales agents of Valley of the Sun, as associated with the mobile home resort ownership and management. 14. Petitioners also perceived Hewitt, the on-site sales agent, to be incompetent and/or rewarded for a lack of effort in selling their homes because they understood that he gained commissions for simply referring potential homebuyers to a newer (and still significantly vacant) nearby mobile home park also owned and operated by Respondents. 15. Petitioners further contend that the “central posting board” area presently maintained by Respondents is not reasonably accessible to the public seven days a week during daylight hours given the more restricted hours public access is allowed (from 6:00 a.m. to 10:00 p.m.), and that the public would not know (and would not likely be directed by the security guard or sales office agent) to find the posting board outside the clubhouse near the mailboxes. 16. Respondents, through the testimony of Wayne Churchman, the park manager, contend that limiting public access to protect the privacy and security of the residents was very important, both to management and to a majority of the residents.[2] 17. Churchman opined that directing prospective home-buyers to the Valley of the Sun sales office on site was reasonable, and did not preclude the residents from using other sales agents, even if such outside agents cannot maintain an on-site office or use an empty home for such purpose. 18. Churchman further asserts that the central posting board is reasonably accessible to the public as situated by the mailboxes near the clubhouse - even if not for all daylight hours, since the ‘closed’ nature of the park meant that public access was limited to the hours from 6:00 a.m. to 10:00 p.m. 19. Churchman conceded that he was not present during the two December weekends when the confrontations between Hewitt and the residents occurred, in which Hewitt told them they could not advertise an Open House as they intended, but Churchman explained that the mobile home resort had reason to be concerned with residents blocking the sidewalk with signs, since Las Palmas had previously been cited by the city of Mesa for similar signage on the sidewalk. 20. Churchman denied that Hewitt was provided any special advantages by the mobile home resort’s owners or management, and explained that Hewitt was not provided commissions just for referring potential homebuyers to the newer nearby mobile home park, but instead only received a small flat fee if such referral ended in a sale. 21. Churchman also denied that he or other management staff had selectively or inconsistently enforced the statutes or the mobile home resort’s own rules and regulations, including the use of the architectural standards, to interfere with residents from listing their homes for sale other than by the Valley of the Sun sales agents. He stated that he attempted to enforce all rules the same for every resident, but that given the size of the mobile home resort (550 spaces), there were occasions when he would not be immediately aware of a particular violation. 22. With regard to the ‘Warning’ issued by Chris Hagen for Valley of the Sun on October 8, 2001, Churchman stated that the intent was not to intimidate the residents but was based on information that Arnold Anderson Associates was not initially licensed to sell mobile homes at the time it was already soliciting residents to list their homes for sale, and was intended to compare what management considered to be the questionable qualifications of Arnold Anderson Associates with the qualifications of the Valley of the Sun.

APPLICABLE LAW A.R.S. § 33-1452.D.7 is the subsection of the Arizona Mobile Home Parks Residential Landlord and Tenant Act which defines rules and regulations, and the subsections at issue specifically provide that: D. A person who owns or operates a mobile home park shall not: . . . 3. Deny any resident of a mobile home park the right to sell his mobile home at a price of his own choosing during the term of the tenant’s rental agreement, … . . . 5. Require a tenant or prospective tenant to use any specific sales agency. . . . 7. Prohibit a tenant from advertising the sale or exchange of his mobile home, including the display of a sign in the window of the mobile home stating the name, address and telephone of the owner of the mobile home or his agent. The sign may be no larger than twelve inches wide and eighteen inches long. In addition to the display of a sign in the window, the tenants may display the signs on a central posting board in the park which is reasonably accessible to the public seven days a week during daylight hours. . . .

A.R.S. § 33-1409 provides general definitions for the terms used in the Act, and the specific subsection cited states: (11). “Good faith” means honesty in fact in the conduct or transaction concerned.

CONCLUSIONS OF LAW 1. The Arizona Department of Building and Fire Safety referred this case to the Arizona Office of Administrative Hearings pursuant to A.R.S. §§ 41-2198 and 41-2198.01(D). This Office has jurisdiction to hear and decide the allegations in the PETITION FOR HEARING pursuant to A.R.S. §§ 41-1092.02, 41-2198, and 41-2198.02. 2. This case is governed by the Arizona Mobile Home Parks Residential Landlord and Tenant Act (the Act), Arizona Revised Statutes Title 33, Chapter 11 (A.R.S. §§ 33-1401 through 33-1491). 3. To sustain their burden of proof, Petitioners Schiller et al. must demonstrate by a preponderance of the evidence that Respondents Las Palmas Mobile Home Resort et al. violated any or all of the statutory sections alleged. Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994. 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 (Rev. 6th ed. 1990). 4. Petitioner’s allegations claim Respondents have violated A.R.S. § 33-1452.D.3, 5, and 7 regarding their right to sell their homes through means and methods other than those which most benefit the Respondents, and that Respondents actions have not been in good faith, in violation of A.R.S. § 33-1409(11). 5. There is no doubt to the undersigned that the language of A.R.S. § 33-1452.D stands in some degree of tension with the concurrent interests of the ownership, management, and residents of Las Palmas Mobile Home Resort in operating the park with but limited access to the public. Presuming the legality of a “closed” mobile home park, the question is whether the rules and regulations implemented by Respondents (and the manner in which implemented) violate the language and intent of the law. 6. In this instance, the undersigned concludes and determines that Petitioners have not demonstrated, by a preponderance, that Respondents are in violation of A.R.S. § 33-1452.D.3, 5 and 7, or A.R.S. § 33-1409(11). This is so - despite the frustrations credibly expressed by the Petitioners in their efforts to market and sell their homes at the mobile home resort - given the essential difficulty of reconciling the policy of closed access, approved by the residents as a whole, with an individual resident’s freedom to post his mobile home for sale in a manner of his or her own choosing.

RECOMMENDED DECISION Based on the above findings and conclusions, IT IS RECOMMENDED that the Petition in Case No. LTA 00-2/007 be dismissed. Done this day, March 27, 2002.

______________________________________ Anthony Halas 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 ___________________________

----------------------- [1] Valley of the Sun is the on-site mobile home sales company associated with the mobile home resort’s owner and management company. [2] Certain of the residents who testified at hearing expressed the desire that access restrictions to the public be eased, or entirely done away with, while other testimony by residents was to the effect that many non- residents had access through the rear gate by means of lax control of the access security code by residents and management alike.

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