ALJDEC decisions subject to certification as final

08F-R089021-BFS · Department of Fire Building and Life Safety · 2008-12-03

STATE OF ARIZONA OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 17, 2008

APPEARANCES: Robert Leon appeared on his own behalf; no one appeared on behalf of Respondent; nor did anyone appear on behalf of the Consumer Recovery Fund.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant Robert Leon seeks an award from the Consumer Recovery Fund (“Fund”), administered by the Board of Manufactured Housing of the Arizona Department of Fire, Building, and Life Safety (“Department”). Complainant alleges damages that were caused by Respondent Statewide Homes’ failure to perform its obligations under a sales agreement. Complainant appeared at the appointed time and place for hearing. As noted above, Respondent did not appear. Neither did anyone appear on behalf of the Fund. Therefore, Complainant’s evidence is uncontested. Complainant presented documentary evidence and testimony. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Order that the Fund payout an amount of $23,521.00 on Complainant’s claim.

. . . FINDINGS OF FACT 1. Respondent Mohave Investments & Developments, LLC dba Statewide Homes Glendale was the holder of a class D-12 Master Retailer’s license (No. 8153) issued by the Department’s Office of Manufactured Housing (“OMH”). That license authorized Respondent to act as a retailer or broker of mobile homes, manufactured homes, and factory-built buildings, including contracting with installers for installation of the homes.[1] Richard Trojanek was the Qualifying Party. Respondent’s license is not current.[2] 2. Although Respondent was properly notified of the hearing, no one appeared on behalf of Respondent. This is deemed a voluntary failure to appear. 3. In October 2007, Complainant entered into a sales agreement with Respondent for the purchase and setup (installation) of a new Cavco manufactured home.[3] This included, as a line item in the agreement, site preparation per a contract attached to the sales agreement. The attached contract consists of a proposal sheet from T-Rex Construction, LLC, a licensed installer, for the tear down and removal of the existing house on Complainant’s lot, and site preparation of the lot. Thus, T-Rex was a subcontractor for Respondent. The proposal sheet was broken out into sections, covering work such as obtaining permits for the work, excavation and grading, building of a foundation system, and preparation for electrical hookup of the new house on the site. As incorporated into the sales agreement, the proposal sheet is part of the contract between Complainant and Respondent. 4. Complainant paid Respondent $23,021.00[4] for start of the site preparation work. That work was never performed. Furthermore, Complainant paid Respondent $500 in March 2008 for a variance for the new house. Because the work was not performed, the variance expired and Complainant will have to obtain another in order to put a new house on the lot. 5. Complainant filed a complaint against Respondent in June 2008. 6. In August 2008, the OMH told Complainant via a letter that Respondent was no longer licensed and that Complainant’s only recourse was to file a claim with the Fund. The OMH then performed a review of documentation and verified the complaint regarding the $23,021.00 paid to Respondent.[5] 7. In September 2008, Complainant filed a Consumer Recovery Fund Claim, seeking recovery the amount paid for site preparation and the amount to cover the cost of the variance that expired. The claim was verified and referred to this tribunal for hearing. 8. At hearing, Complainant presented supporting documentation for the site preparation payment and the variance payment. The documentation proves his damages caused by the failure of Respondent to perform the sales agreement. 9. Therefore, the total amount of damages found to be reasonable is $23,521.00. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action.[6] Further, the standard of proof at hearing is by preponderance of the evidence.[7] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that the claim is payable and that the amounts sought are reasonable.[8] Complainants have met the burden. 2. Arizona Revised Statutes (A.R.S.) § 41-2190(B), relating to administration of the Fund, provides the following: If any consumer of manufactured homes, mobile homes or factory- built buildings designed for use as residential buildings is damaged by the failure of the principal to perform a sales agreement or to perform repairs under a warranty, the consumer may file a claim with the office for payment from the consumer recovery fund. The claim shall be verified by the office [OMH].

Furthermore, A.R.S. § 41-2190(D) provides that the Board “shall pay from the consumer recovery fund whatever sum the administrative law judge finds payable upon the claim. . . .” 3. In this case, the uncontested evidence shows that Complainant was damaged by Respondent’s failure to perform the sales agreement. Complainant’s claim was then verified by the OMH. Therefore, Complainant is eligible for payment from the Fund. 4. Recovery from the Fund is limited to “actual or compensatory damages, including costs but excluding interest and attorney fees.”[9] Actual damages are “such compensation or damages for an injury as follow from the nature and character of the act, and will put the injured party in the position in which he was before he was injured.”[10] Costs are incidental damages that are allowed to indemnify a party against the expense of successfully asserting his rights in court.[11] Thus, Complainant must show that the amounts sought for each item are actual or compensatory damages or costs. 5. The evidence shows that the amounts sought by Complainant are for actual damages caused by Respondent’s failure to complete performance of the sales agreement. 6. The evidence of record supports an award to Complainants in the amount of $23,521.00, all of which shall be chargeable against Respondent and any other persons on the license as set forth in A.R.S. § 41-2190(D). ORDER In view of the foregoing, IT IS ORDERED that the Board of Manufactured Housing, Arizona Department of Building and Fire Safety make payment from the Consumer Recovery Fund to Complainant in the amount of $23,521.00. IT IS FURTHER ORDERED, pursuant to A.R.S. § 41-2190(D), that license 8153, Class D-12, held by Mohave Investments & Development, LLC dba Statewide Homes--Buckeye is hereby suspended 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 the licensee’s account.

Done this 3rd day of December 2008.

Office of Administrative Hearings

______________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of December 2008, to:

Robert Barger, Director Arizona Department of Fire, Building, and Life Safety ATTN: Debra Blake 1110 West Washington Ave., Suite 100 Phoenix, AZ 85007

By ___________________________ ----------------------- [1] See A.A.C. R4-34-203. [2] In a letter dated August 19, 2008, the OMH informed Complainant that Respondent was “no longer licensed with this agency.” [3] The Purchase Agreement is attached to Complainants’ Consumer Recovery Fund Claim. [4] This amount was financed through a loan that has been repaid. [5] See Complaint Review dated August 19, 2008. [6] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949); Arizona Administrative Code (A.A.C.), OAH Rule R2-19-119(B). [7] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A). [8] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [9] A.R.S. § 41-2188(D). [10] Havasu Heights Ranch and Development Corp. v. Desert Valley Wood Products, Inc., et al., 179 Ariz. 456, 459, 880 P.2d 676, 679 (App. 1994) citing United States Fidelity & Guaranty Co. v. Davis, 3 Ariz. App. 259, 263, 590, 594 (1966). [11] In Re Estate of Stavro, 17 Ariz. App. 257, 262, 497 P.2d 77, 82 (1972).

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