ALJDEC

98F-C978228-BFS-com · Department of Building and Fire Safety · 1999-03-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 22, 1999 APPEARANCES: Martin Pickens on his own behalf; Robert Bass, Esq. On behalf of Davis Homes, Ltd.; David John Sanger on his own behalf ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ FINDINGS OF FACT 1. The scope of this hearing is whether the Order issued by the Director of the Arizona Department of Building and Fire Safety (“Department”) in Docket No. 98F-C978228-BFS was complied with and to reconsider as to any disciplinary penalty that should be imposed. 2. In the above-mentioned case, the Director adopted the Recommended Decision of this Administrative Law Judge which set forth the terms of a settlement agreement reached by all parties to that matter. 3. The crux of the issue of the instant hearing is whether the Respondents complied with the terms of the settlement agreement. During the hearing, Mr. John Sanger (“Mr. Sanger”) asserted the position that he was willing to share the cost of elevating Complainant’s manufactured home (“the Home”) but is not responsible in dealing for work involving the porch and awning at the Home. Mr. Sanger further asserted that he did not agree to share with Davis Homes Ltd. the expense of performing repairs to the exterior of the Home. 4. Mr. Sanger did not review the record of Docket No. 98F-C978228-BFS prior to the instant proceeding to determine what occurred at that hearing. 5. This Administrative Law Judge reviewed the record of Docket No. 98F- C978228-BFS and determines that the terms of the settlement agreement as set forth in the Recommended Decision in Docket No. 98F-C978228-BFS accurately reflect the terms of the settlement agreement that all parties agreed to. 6. Although the settlement agreement does not define what constitutes Complainant’s home in terms of the provision regarding the shared expense of elevating the Home, it is important to note that no condition or exception was mentioned in that provision as it was relayed to the Administrative Law Judge or as confirmed by the parties. 7. The weight of the credible evidence at this hearing established that at the time of entering into the above-mentioned settlement agreement, Complainant’s porch and awning were attached to the home. In light of that fact and the failure by any of the parties to address or distinguish the porch or awning with regard the Home, it is determined that the awning and porch, by inference and implication, constitute the Home and the responsibility of the Respondents under the settlement agreement was, in part, to share the expense of elevating the Home, including the awning and porch. 8. Although Mr. Sanger does not believe that he agreed to share the expense of repairing the exterior of the Home, the weight of the credible evidence presented and the record of Docket 98F-C978228-BFS established that Mr. Sanger agreed to share the cost of repairing the exterior of the Home with Davis Homes, LTD., with each respondent bearing one-half of that expense. 9. The difficulty in this case is that due to the fact that some of the shared responsibilities of the Respondents were to be performed contemporaneously. Respondent Davis Homes, Ltd. Could not perform its share of the settlement agreement although the evidence established that it has remained ready and willing to do so. In fact, Complainant testified that he does not believe that Davis Homes, Ltd. is in breach of the settlement agreement. 10. Technically, because Davis Homes , Ltd. has not performed pursuant to the terms of the settlement agreement, it is in breach of that agreement. However, the evidence established that Davis Homes, Ltd. could not perform unless and until Mr. Sanger performed as well. Due to Mr. Sanger’s refusal to comply with the terms of the settlement agreement as set forth above, Davis Homes, Ltd. was frustrated in its attempt to comply with the terms of the settlement agreement. However, it is determined that impossibility of performance does not excuse Davis Homes’ nonperformance in this case but does serve as a reason not to impose sanctions. 11. It is determined that Mr. Sanger’s is in breach of the above-mentioned settlement agreement. It is further determined that such breach was intentional and the position asserted by Mr. Sanger with respect to his obligation for the exterior of the Home is unreasonable because the record of Docket No. 98F-C978228-BFS established his responsibility. If, as Mr. Sanger claims, he was uncertain as to what was required, he could have reviewed the record of that matter. During the hearing, Mr. Sanger represented that, as of the date of the instant hearing, he had not reviewed the record of that matter although he acknowledged that copies of tapes of that proceeding were recently obtained.

CONCLUSIONS OF LAW The evidence of record established that both Davis Homes, Ltd. and Sanger’s Mobile Home Set-Up and Service breached the terms of the settlement agreement adopted by the Director of the Department in the Order issued in Docket No, 98F-C978228-BFS and that the breach by Davis Homes, Ltd. is solely due to the intentional noncompliance by Sanger, thus thwarting compliance by Davis Homes Ltd. During the hearing of Docket No. 98F-C978228-BFS, the Administrative Law Judge had inquired as to whether the Respondents would be jointly and severally liable for the obligations in the settlement agreement and the response was that they would not be. Therefore, Complainant assumed the risk that the settlement agreement may be frustrated in the event that one Respondent did not comply with its terms. RECOMMENDED ORDER On the effective date of the Order entered in this matter, Respondent Sanger’s Class I-10C license issued by the Department shall be suspended unless on or before such effective date, Sanger complies with the terms of the settlement agreement and provides written notice to the Department of such compliance. In the event that Sanger complies with the above, on or before the effective date of the Order entered in this matter, the suspension shall not take place. The Class D-12 license issued by the Department to Respondent Davis Homes Ltd. shall be suspended 35 days after the effective date of the Order entered in this matter, unless on or before such date, Davis Homes, Ltd. Complies with the terms of the settlement agreement adopted by the Director of the Department in the Order issued in Docket No. 98F-C978228-BFS. However, in the event that Sanger does not comply with the above, Davis Homes, Ltd. is to perform its obligations under the terms of the settlement agreement with the condition precedent that Complainant assumes Sanger’s obligations under the above-mentioned settlement agreement and performs such obligations no later than 20 days after the effective date of the Order entered in this matter.1 In the event that Complainant does not satisfy the above-mentioned condition precedent, no disciplinary action shall be taken against Davis Homes, Ltd. and this matter shall be closed. Done this day, March 3, 1999

______________________________________ Lewis D. Kowal Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1999, to:

Department of Building & Fire Safety Mr. N. Eric Borg, Director E. Virginia, Suite 100 Phoenix, AZ 85004 ATTN: Michelle M. Castaneda

By ___________________________

1Complainant may be entitled to recoup that expense from the recovery fund or seek legal advice as to its his legal rights.

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