ALJDEC - Licensing

22F-REC2022003-ADH · Arizona State Department of Housing · 2023-02-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Nancy Carmen – Engle, et al.,

Complainant

v.

Randy Instine LLC., et al.,

Respondent.

No. 22F-REC2022003-ADH

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 23, 2023

APPEARANCES: Complainant Nancy Carmen – Engle appeared and was represented by Kristyne Olson. Randy Instine appeared on behalf of Respondent Randy Instine LLC.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Respondent Randy Instine LLC holds dealer license number 8418, Class D-12, issued by the Department of Fire, Building and Life Safety, that is now the Department of Housing (Department)

On July 18, 2022, the Department issued a Notice of Hearing setting the above-captioned matter for hearing on August 22, 2022. The matter was continued multiple times and convened on January 23, 2023.

The Notice of Hearing provided that Complainant was seeking payment in the amount of $60,610.00 from the Consumer Recovery Fund due to the actions of Respondent Randy Instine LLC.

On or about November 9, 2018, Appellant purchased a manufactured home and hired Respondent to build a walkout basement and a deck on the location and complete the installation of the manufactured home.

On or about May 4, 2021, Appellant filed a Licensed Complaint Form with the Arizona Registrar of Contractors (Registrar) against Respondent alleging workmanship issues with the work on the project.

During its review of the complaint, the Registrar determined that the work involved did not fall within its scope, but should be filed with the Department.

In July 11, 2021, Complainant filed a complaint with the Department.

On or about September 27, 2021, the Department conducted a verification inspection of the consumer complaint.

On or about October 8, 2021, the Department issued a Verified Complaint & Sign-Off Form which contained the findings from the consumer complaint verification inspections. The Verified Complaint & Sign-Off Form noted, in relevant part, the following deficiencies:

1.) Belly band needs to be filled, possibly replace?

ADOH FINDING: VERIFIED

Responsibility: DEALER

Inspector’s Note: Corrected prior to inspection per the homeowner.

. . . .

3.) ______ Grind down, and level off, and away dirt on walkout basement side (water coming up on porch, and pooling.

ADOH FINDING: VERIFIED

Responsibility: DEALER

Inspector’s Note: Negative slope along house wall (see photos).

Department Note: Grading should performed to code, eliminating improper drainage (water to flow away from unit).

4.) ______ Cut, and remove risers on septic to beat, below grade (allow for water to run off).

ADOH FINDING: VERIFIED

Responsibility: DEALER

Inspector’s Note: Local jurisdiction zoning may need to be involved to determine drainage requirements.

Department Note: Verify that risers are installed per code/zoning standards.

5.) ______ AZ room not sealed properly on exterior (air coming in, birds go inside the walls).

ADOH FINDING: VERIFIED

Responsibility: DEALER

Inspector’s Note: See photos.

Department Note: At time of Complaint Verification Inspection, Dealer agreed to address the Issues and repair.

. . . .

7.) ______ Re-paint the entire exterior of home.

ADOH FINDING: VERIFIED

Responsibility: DEALER

Inspector’s Note: New touch-up paint doesn’t match manufacturer’s original paint.

Department Note: Homeowner and Manufacturer state that there was a verbal agreement between the Dealer, homeowner, and Manufacturer to repaint the complete exterior of the home. The Manufacturer has provided the paint (on-site). Dealer stated that he did not agree.

8.) ______ Deck needs to be checked for quality, and safety (railing pulled apart, gaps).

ADOH FINDING: VERIFIED

Responsibility: DEALER

Inspector’s Note: Workmanship standards (see Photos).

Department Note: Dealer to verify, and ensure that the deck/railings are safe. Correct railing gaps (workmanship standards).

9.) ______ Seal around storage room, and garage door.

ADOH FINDING: VERIFIED

Responsibility: DEALER

Inspector’s Note: See previous photos sent by homeowner.

Department Note: Dealer installed seal where garage door meets the cement when closed (only installed on one of the two doors to see if this will correct the problem or not). Dealer to correct. Follow code/workmanship standards. Ensure that there is proper drainage (pitch/slope), as to allow proper water flow away from unit.

10.) _____ Grind patio, and at garage doors (better drainage). Epoxy.

ADOH FINDING: VERIFIED

Responsibility: DEALER

Inspector’s Note: Workmanship standards.

Department Note: Dealer to correct. Follow code/workmanship standards. Ensure that there is proper drainage (pitch/slope), as to allow proper water flow away from unit.

The information in the record indicated that the items listed above remained uncorrected. Complainant admitted that Respondent performed work on some of the items, but that the work did not correct the items or the repairs had since failed.

On or about January 13, 2022, the Department issued a Citation and Complaint alleging that Respondent was subject to sanctions pursuant to A.R.S. § 41-4039. Respondent was directed to respond to the Citation and Complaint within ten days.

On or about February 16, 2022, the Department issued an Order of Suspension in which it was noted that Respondent failed to respond to the Citation and Complaint within ten days. As a result, Respondent’s license was suspended until “Respondent submits the required documents.”

Nothing in the record indicates Respondent appealed the Order of Suspension.

Complainant requested a payout from the Consumer Recovery Fund in the amount of $60,610.00 to pay for the repairs of the items that remained uncorrected.

A hearing was held on January 23, 2023.

At hearing, Appellant testified as to the items in the Verified Complaint & Sign-Off Form that remained uncorrected. Appellant presented estimates from different contractors with the scope of work to be corrected. Appellant detailed how she arrived at the total of $60,610.00.

Mr. Instine asserted that the amount Appellant sought was in excess of the amount necessary to complete the repairs. Mr. Instine estimated that the corrective work would require approximately $10,000.00 to $15,000.00.

CONCLUSIONS OF LAW

This administrative hearing was held under authority of and pursuant to Ariz. Rev. Stat. § 41-4031 and Ariz. Rev. Stat. § 41-1092 et seq.

A party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

A preponderance of the evidence is:

The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

Black’s Law Dictionary 1373 (10th ed. 2014).

Pursuant to Ariz. Rev. Stat. § 41-4043, the Department is empowered to provide a payout from the Consumer Recovery Fund to a consumer who is damaged as a result of an act or omission by a licensed dealer of manufactured homes. Ariz. Rev. Stat. § 41-4043(D) limits payouts from the Consumer Recovery Fund “to actual or compensatory damages, including costs but excluding interest or attorney fees.”

Ariz. Rev. Stat. § 41-4043(D) provides, in pertinent part, as follows:

The director shall pay from the consumer recovery fund whatever sum the administrative law judge finds payable on the claim. A decision granting a claim shall include an order suspending the license of the licensee on whose account the claim was filed. The license shall remain suspended until the licensee has repaid in full, plus interest at the rate of ten percent per year, the amount paid from the consumer recovery fund on the licensee's account.

Appellant bears the burden of proof to establish the with respect to her actual damages and the appropriate payout from the Consumer Recovery Fund.

Complainant provided numerous photographs and estimates from contractors regarding the nature of the issues and the work that needed to be completed to repair the work.

Respondent wanted to argue the underlying complaint items and presented no evidence or testimony relating to the cost to repair the items that were substantiated by the Department and were not signed off by Complainant.

The credible testimony and evidence presented at hearing established that Complainant’s actual damages total $60,610.00.

RECOMMENDED DECISION

IT IS ORDERED that the Department issue to Complainant a payout from the Consumer Recovery Fund in the amount of $60,610.00.

IT IS FURTHER ORDERED that Respondent’s dealer license number 8418 be suspended and remain suspended until Respondent repays the Consumer Recovery Fund in full, plus interest at the rate of ten percent per year, the amount paid from the Consumer Recovery Fund on the Respondent’s account.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of that certification.

Done this day, February 22, 2023.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Tom Simplot, Director

Arizona Department of Housing

Randy Instine

[email redacted]

Kristyne M Schaaf-Olson

Becke & Olson

[email redacted]

[email redacted]

By: OAH Staff