ALJDEC

99F-A989015-BFS · Department of Building and Fire Safety · 1999-07-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 26, 1999 at 9:00 a.m. APPEARANCES: Appellants appeared on their own behalf; Metro Factory Outlet did not appear; Cavco Industries appeared through its employee, Mike Edwards. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

Appellants[1] and Cavco Industries presented evidence and testimony on the issues of whether Appellants’ complaints concerning the snack bar, smoke damage, and stains and dirt on the carpet in their manufactured home should have been verified against either Respondent. Based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order. / / / / / / / / / / / / FINDINGS OF FACT Procedural Background The Assistant Director of the Office of Administration of the Department of Building and Fire Safety (“Department”) has issued License No. 6978, Class D-12, to Respondent Jentra Limited Company, dba Metro Factory Outlet, a combination dealer (“Metro”). The Assistant Director has issued License No. 7098, Class M-9E, to Respondent Cavco Industries, L.L.C., dba Cavco Industries Durango Division, a master manufacturer (“Cavco”). On or about July 9, 1998 Appellants entered into a contract with Metro to purchase a new double-wide residence manufactured by Cavco, which would be transported to Appellants’ land to be installed. Relevant contractual terms regarding the items of complaint at issue are set forth separately below. Following installation of the residence on September 23, 1998, Appellants complained about 51 specific items to the Department’s Office of Manufactured Housing, including the three items at issue in this hearing. The Department’s Inspector Dennis Butzen inspected the residence on April 28, 1999 and issued a Verification Inspection Report on May 4, 1999. Among the items on Inspector Butzen’s report were the following: 6. Snack bar is incorrect: NOT VERIFIED. No documentation. . . . .

38. Cleaning and painting interior of house for smoke damage caused by improper installation of chimney vent: NOT VERIFIED. Statement.

39. Carpet needs to be cleaned: NOT VERIFIED. No documentation of walk-through inspection for spots on dining room carpet.

Inspector Butzen’s report informed the parties that, if Respondents did not correct the items that had been verified against them within 30 days, Appellants could request that a Citation and Complaint be made against Respondents. On May 16, 1999, Appellants alleged six additional items of complaint against both Respondents and provided further documentation on the three items noted above that were not verified against either Respondent. On May 19, 1999, the Department scheduled a second verification of these six additional items for July 22, 1999 and informed the parties that “the new verification inspection will restart the time period” for Respondents to correct the items verified against them in the earlier inspection. The Department declined to address the three items that were not verified in the earlier inspection but informed Appellants that they could appeal the decision not to verify the three items noted above. On May 25, 1999, Appellants requested a hearing on these three items. On June 7, 1999, the Department issued a Notice of Hearing, informing the parties that a hearing would be held on July 26, 1999 at 9:00 a.m. at the Office of Administrative Hearings. A copy of the notice was sent via certified mail to Respondent Metro’s qualifying party at P.O. Box 3683, Camp Verde, Arizona 86322, the current address of record for Metro. On July 23, 1999, the day after his second inspection, Inspector Butzen issued a second Verification Inspection Report on the six new items Appellants alleged, verifying several new items against both Respondents. Inspector Butzen’s second report informed the parties that, if Respondents did not correct all the items that had been verified within 30 days, or by August 23, 1999, Appellants could request that a Citation and Complaint be made against Respondents. Although the start of the hearing was delayed fifteen minutes and the hearing concluded over two and one-half hours later, Respondent Metro neither appeared at the July 26, 1999 hearing nor contact the Office of Administrative Hearings to request a continuance. Items at Issue The Snack Bar Appellants credibly testified that, when they ordered the Cavco manufactured residence through Metro, they told the Metro salesman that they wanted a long snack bar in the kitchen under which stools could be placed. The standard bar on this model was a short extension from the kitchen counter, somewhat lower than the countertop, had cabinets above it, and had shelves below the counter adjacent to the extension. Stools cannot be placed under the snack bar that is standard on the Cavco model that Appellants selected. Appellants believed that Metro had charged them for making this modification to the snack counter. Appellants understood that Metro provided information on the order forms it sent to Cavco to convey the changes that they had requested. Specifically, the order forms showed that the kitchen counter top was “flat” and contained instructions to “omit cabinets above the snack bar” and to “omit cabinets below snack bar.” Unfortunately, the Metro salesman who prepared the final order form for the manufactured home that Appellants purchased, D.J. Keas, stopped working for Metro before the manufactured home was delivered. After the manufactured home was delivered and installed, Appellants testified that Metro admitted that a mistake had been made and that the snack bar had not been modified as Metro had promised it would be modified. Metro asked contractor Larry Stanton of the Cabinet Shop for and accepted a bid to make the snack bar conform to Metro and Appellants’ contract. After Inspector Butzen declined to verify this item against Metro, however, Metro withdrew its acceptance of Mr. Stanton’s bid, declined to make any other arrangements for the snack bar to be modified, and disclaimed all responsibility for any modification. Cavco’s employee, Mike Edwards, credibly testified that, after a dealer sells a manufactured home to a customer, usually the dealer and Cavco exchange preliminary sales orders several times before the home is manufactured. This allows the dealer several opportunities to verify that the information conveyed to Cavco accurately describes the home that the customer has agreed to purchase. Mr. Edwards credibly testified further that, for Metro to have ordered the snack bar that it agreed to provide to Appellants, it was responsible for submitting a “P and E,” or print and engineering change, that altered the standard elevations for the model by raising the height of the snack bar, which it had not done. The “flat” style of countertop specified on the order form referred to the style of the countertop edge throughout the kitchen, not its configuration, and was one of several standard options, which also included a wooden and curved edge. The Smoke Damage If a dealer’s customer has ordered a manufactured home having a fireplace, Cavco’s practice is to ship the home with the chimney extension, spark arrester, and storm collar (which is used to secure these pieces to the home) loose inside because, otherwise, the chimney would be too tall to ship without a significant risk of damage. Cavco informs its dealers that they should receive all three chimney parts and are responsible for correctly assembling them. When Appellants’ manufactured home was installed, Metro did not install the chimney extension, spark arrester, or storm collar. After Appellants complained to Metro that they could not make a fire in their fireplace, Metro sent out a workman who attached the spark arrester directly onto the roof, without the chimney extension or the storm collar. Appellant Mrs. Ross then started a fire in the fireplace, using a manufactured log that was designed to produce less smoke than natural wood. Because no chimney extension had been installed, all the rooms in the manufactured home filled with smoke, which resulted in smoke damage throughout the house. After Appellants complained about the smoke problem, Cavco investigated it, sending its contractors All-American and, later, A & S to inspect the manufactured home. Cavco made this investigation to show good faith to Appellants and to discover the cause of the problem, not because it felt contractually responsible. Cavco has arranged for a chimney extension and storm collar to be installed, which has resolved the smoke problem. Cavco tells its dealers that they should not allow customers to start fires unless the chimney extension and storm collar have been properly installed. Metro also sent out contractors to inspect the smoke damage and to submit bids to repair that damage. After Metro received the bids, however, its employee Bob told Appellants that the bids were too high and that they should submit a claim to their homeowner’s insurer for the cost of repairing the smoke damage and that Metro would pay the amount of their deductible. Stains on Carpet If customers order a double-wide manufactured home, like Appellants’, which must be joined after shipping, Cavco does not install the carpet at the factory but instead ships the new rolled carpet for the dealer to install after the two halves of the manufactured home have been joined in installation. Cavco has no control over the carpet after the manufactured home is shipped. Appellants testified that numerous workmen performed various construction inside the home as part of the installation of the home, after the carpet was installed. Specks were visible on the carpet when Appellants moved into the manufactured home. Metro’s employees Bob and Lori admitted to Appellants that paint, spackle, drywall mud, outdoor mud, and clay were present on the carpet. Although Cavco’s contractor All-American attempted to and did remove some of the stains on the carpet, some still remain. Metro has never conducted a walk-through inspection of the manufactured home with Appellants. CONCLUSIONS OF LAW In this administrative proceeding, Appellants bear the burden of proof and must establish that these three items should have been verified against one of the Respondents by a preponderance of the evidence. See A.A.C. R2-19- 119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary at page 1064 (6th ed. 1990). The evidence that Appellants presented at the hearing in this matter establishes that Metro breached its contract with Appellants when it failed to convey their requirements with respect to the snack bar to Cavco, when it failed to install the chimney extension, smoke arrester and storm collar on the home, and when it installed the carpet before other trades had completed their work or failed to clean the debris from the carpet that other trades had left. These items therefore should have been verified against Metro. RECOMMENDED ORDER In view of the foregoing, it is recommended that the May 4, 1999 verification be amended to verify item nos. 19, 38, and 39 against Jentra Limited Company dba Metro Factor Outlet, License No. 6978, Class D-12. It is further recommended that, to minimize the delay occasioned by this hearing, the Director not extend the present deadline for either Respondent to show it has complied with the original May 4, 1999 verification and July 23, 1999 verification but instead allow Appellants to request a hearing on Respondents’ compliance with both verifications in due course according to the presently established deadline, August 23, 1999. If Appellants later request a that a Citation and Complaint be issued with respect to the items recommended to be verified in this recommended decision, the matter may be consolidated in due course with the other matters. Done this day, July 28, 1999.

______________________________________ Diane Mihalsky Administrative Law Judge

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

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

By ___________________________

----------------------- [1] The undersigned on her own motion amended the caption to include both Richard Ross, the original Complainant, and his wife as Appellants because the record in this matter establishes that both own and appear on the title of the manufactured home at issue.

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