ALJDEC decisions subject to certification as final

08F-R089025-BFS · Department of Fire Building and Life Safety · 2008-12-08

STATE OF ARIZONA OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 21, 2008

APPEARANCES: Attorney Perry Casazza appeared on behalf of Complainant Douglas Heckman, who was also present and testified 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 Douglas Heckman seeks an award from the Consumer Recovery Fund (“Fund”), administered by the Board of Manufactured Housing (“Board”) of the Arizona Department of Fire, Building, and Life Safety (“Department”). He claims damages that he alleges were caused by Respondent House Mart Factory Outlet’s failure to fulfill the terms of a sales agreement. Complainant and his attorney 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 $46,000.00 on Complainant’s claim. FINDINGS OF FACT 1. Respondent was the holder of a class D-8 Retailer of Manufactured Homes or Mobile Homes license (No. 7731) issued by the Office of Manufactured Housing (OMH). That license authorizes Respondent to act as a retailer of mobile homes, manufactured homes, and factory-built buildings by buying and selling them.[1] This includes authority to contract with other properly licensed entities for the setup or installation of the homes. The Qualifying Party on the license was Debra Quesenberry. The license was revoked in August 2008. 2. In January 2008, Complainant paid Respondent $1,000.00 earnest money for the purchase of a new manufactured home.[2] In March 2008, they entered into a contract for the purchase of a home.[3] Complainant paid Respondent $20,000.00 as a down payment on the home.[4] In addition, the terms of the agreement called for a trade-in of Complainant’s existing home for a value of $25,000.00 toward the purchase price.[5] To that end, Complainant and his wife signed a deed and a bill of sale for the trade- in.[6] 3. Respondent took the existing home from the property. Complainant never received the new home. Complainant made attempts to get the new home from Respondent, but eventually could not contact Respondent. 4. In September 2008, Complainant was informed by the Department that Respondent’s license had been revoked. Complainant filed a Consumer Recovery Fund Claim against Respondent immediately thereafter, seeking recovery of the earnest money deposit, the down payment, and the trade-in credit, totaling $46,000.00. The Department verified the claim and set a hearing to determine the amount payable. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action.[7] Further, the standard of proof at hearing is by preponderance of the evidence.[8] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that the claim is payable.[9] Complainant has 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.

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 agreement. Complainant received no benefit for the money he paid to Respondent. 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.”[10] 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.”[11] Costs are incidental damages that are allowed to indemnify a party against the expense of successfully asserting his rights in court.[12] Therefore, Complainant must show that the amounts sought for each item are either actual damages or costs. 5. The evidence shows that the amount sought by Complainant is for actual damages caused by Respondent’s failure to perform. 6. The evidence of record supports an award to Complainant in the amount of $46,000.00, 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 $46,000.00. IT IS FURTHER ORDERED, pursuant to A.R.S. § 41-2190(D), that license 7731, Class D-8, held by House Mart Factory Outlet, LLC be 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 8th day of December 2008.

Office of Administrative Hearings

______________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of January 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 Arizona Administrative Code (A.A.C.) R4-34-203. [2] The cleared check is part of Exhibit A. [3] Exhibit B. [4] The cleared check is part of Exhibit A. [5] Exhibit B. [6] Exhibits D and E. [7] 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). [8] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A). [9] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [10] A.R.S. § 41-2188(D). [11] 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). [12] In Re Estate of Stavro, 17 Ariz. App. 257, 262, 497 P.2d 77, 82 (1972).

-----------------------

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