ALJDEC decisions subject to certification as final

08F-R089022-BFS · Department of Fire Building and Life Safety · 2008-11-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 6, 2008 at 9:00 a.m. APPEARANCES: Complainant Ken Reid appeared on his own behalf; Respondent Advantage Manufactured Homes, Inc. did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT The Office of Administration of the Department of Fire, Building and Life Safety (“the Department”) has issued License No. 7635, Class D-8, to Respondent Advantage Manufactured Homes, Inc., a dealer of manufactured homes. On or about August 13, 2007, Complainant Mr. Reid entered into a contract with Respondent to purchase two modular buildings at a total cost of $177,215.00. Mr. Reid made a cash downpayment of $66,856.00 by personal check no. 2274, dated August 14, 2007, payable to Respondent. On August 15, 2008, Respondent negotiated Mr. Reid’s personal check and deposited it into its bank account. Respondent did not provide the modular buildings to Mr. Reid. In a letter dated March 13, 2008, Respondent informed Mr. Reid that it had ended its business operations due a poor economic climate and that Mr. Reid would have to purchase the modular buildings through another dealer. With the March 13, 2008 letter, Respondent sent Mr. Reid a cashier’s check in the amount of $60,000.00. The letter informed Mr. Reid that it would refund the balance of his down payment. In June or July 2008, Respondent stopped returning Mr. Reid’s telephone calls. Respondent did not refund the $6,856.00 balance of Mr. Reid’s down payment. On or about July 30, 2008, Mr. Reid made a complaint to the Department about Respondent’s failure to refund all of his down payment. On September 15, 2008, the Department’s Investigator/Auditor Donna Grant verified the complaint against Respondent. On September 15, 2008, the Department also informed Mr. Reid that Respondent was no longer licensed with the Department and that time remained for him to make a claim to the Consumer Recovery Fund under A.R.S. § 41-2190(J). On or about September 23, 2008, the Department received Mr. Reid’s completed Consumer Recovery Fund Claim Form for $6,856.00. Mr. Reid provided all the evidence that the Department requested, including a copy of the contract of sale, copies of the front and back of his personal check for the down payment, a copy of Respondent’s March 13, 2008 letter, and copies of the front and back of the March 13, 2008 cashier’s check. The Department referred the matter to the Office of Administrative Hearings. On September 26, 2008, the Department issued a Notice of Hearing on Mr. Reid’s claim to the Consumer Recovery Fund. The Department sent a copy of the Notice of Hearing to Respondent’s Qualifying Party at his most recent address of record, which is the same address as appears on the copy of the contract of sale that Mr. Reid provided to the Department. Although the beginning of the duly noticed hearing was delayed fifteen minutes to allow Respondent additional travel time, it neither appeared through a duly authorized representative or attorney, contacted the Office of Administrative Hearings to request a continuance or that the time scheduled for the hearing to begin be delayed, nor presented any evidence at the hearing to controvert Complainant’s verified complaint and claim to the Consumer Recovery Fund under A.R.S. § 41-2190(A) and (B). Mr. Reid credibly testified that Respondent at the time of the hearing still had not returned the $6,856.00 balance of his down payment. CONCLUSIONS OF LAW 1. The notice of the hearing that the Department mailed to Respondent at its address of record was reasonable and it is deemed that Respondent received notice of the hearing.[1] 2. Complainant bears the burden of proof and must establish Respondent’s statutory violations and her right to a payout from the Consumer Recovery Fund by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] 3. Complainant has established that Respondent violated A.R.S. § 41-2180(A) or (I) by failing to deposit Complainant’s down payment into an escrow or trust account established for that purpose or, if such deposit was made, by failing to hold such funds until the sale transaction had been consummated. Complainant also established that Respondent violated A.R.S. § 41-2180(L) by using Complainant’s down payment for a purpose other than a sales transaction. 4. Complainant also has established that he has been damaged by Respondent’s violations of A.R.S. § 41-2180 in the amount of $6,856.00. 5. The Department has verified Complainant’s claim in this amount and, therefore, his claim to the Consumer Recover Fund should be granted and Respondent’s license should be suspended under A.R.S. § 41-2190. 6. If in the future Respondent’s qualifying party or any other person listed on Respondent’s license applies to the Department of Building and Fire Safety for another license, this suspension may be considered as evidence of lack of good character and reputation and furnish grounds for denial of the license.[4] RECOMMENDED ORDER In view of the foregoing, it is recommended that $6,856.00 be paid to Complainant from the Consumer Recovery Fund under A.R.S. § 41-2190(A). It is further recommended that, pursuant to A.R.S. § 41-2190(D), Respondent’s License No. 7635, Class D-8 be suspended until it has repaid $6,856.00 to the Consumer’s Recovery Fund, plus interest at a rate of 10% annually. Done this day, November 6, 2008.

______________________________________ Diane Mihalsky Administrative Law Judge

Original transmitted by mail this ____ day of November, 2008, to:

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

By ___________________________ ----------------------- [1] See A.R.S. §§ 41-1092.04; 41-1092.05(D); 41-1061(A). [2] See A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] See A.R.S. § 41-2175(E).

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