ALJDEC

99F-R989012-BFS · Department of Building and Fire Safety · 1999-06-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 28, 1999 at 1:30 p.m. APPEARANCES: Complainant Thelma Armenta appeared on her own and her husband’s behalf[1]; Respondent did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

Complainant Thelma Armenta presented evidence and testimony and, based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT The Assistant Director of the Office of Administration of the Department of Building and Fire Safety has issued License No. 6567, Class D-8, to Respondent, a master dealer. On or about September 19, 1997, Complainants purchased from Respondent a 1997 Cavco Villager 3-bedroom manufactured home for $63,505.00. The contract of sale included a $2,500.00 charge for “septic” and a $1,250.00 charge for “up to 50’ water, sewer, electric.” Subsequently, Complainants made a complaint to the Director of the Department of Building and Fire Safety about various items, which complaint was designated Complaint File 98-0258. Complainants amended their complaint at least twice. The Department’s inspector Dennis Butzen performed inspections of the home on January 27, 1998, May 14, 1998, and September 28, 1998 pursuant to Complainants’ original complaint and the two subsequent amendments. Complainants complained that Respondent had failed to perform its side of the sales agreement in the following respects: (1) Cracks have appeared in the walls throughout the home; (2) the carpeting is separating and unraveling throughout the home; (3) the home has a hole in the wall in front of the second bathroom; and (4) the washer drain had never been connected to the sewer system. Inspector Butzen verified these items against Respondent as, respectively, Item nos. 9, 14 and 21; 4, 12, and 18; and 17; and 23. Complainants also made several complaints that the residence was not level; the installer leveled the residence at least once in response to Complainant’s complaint. See Item Nos. 2 and 15. The installer also corrected the skirting at least once. See Item No. 16. These two items have not been verified against Respondent, however. On February 22, 1999, the Department’s investigator Carla Anderson sent Complainants a letter informing them that, because Respondent was no longer licensed with the Department, the only recourse open to Complainants for Respondent’s failure to perform warranty work was a claim against the Consumer Recovery Fund under A.R.S. § 41-2190(B) for the costs of repairing the items verified against Respondent. The letter further provided: If you contracted for, but did not receive certain items, you must supply three different itemized vendor estimates which are written on vendor stationery and state the cost/ installation of the missing item. Vendor estimates must be signed and dated by the employee who executed the estimate . . . .

[Emphasis in original.] On or about March 4, 1999, Complainants made a claim against the Consumer Recover Fund based for the following: Carpet is coming apart – cannot even [vacuum] it. Grey water was never hooked up and it smells. Home is not level and skirting is coming apart. Hole in wall. Cracks all around ceiling & many ew ones appearing. Carpeting 2000.00. Leveling and skirting $600.00. Cracks & hole in wall 500.00. Sewer hook up $250.00. Doors will not close or when closed will not open. Three handicapped people live here and cannot depend on doors working because of unlevel condition of trailer.

No signed cost estimates accompanied Complainants’ claim. On March 16, 1999, the Department sent copies of the notice of this hearing to Complainants and to Respondent’s qualifying party, Sean Comerford, at 1150 N. Penrod, Show Low, Arizona, the last address of record for Respondent. Although the beginning of the duly noticed hearing was delayed 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 dispute Complainant’s verified complaint and claim to the Consumer Recovery Fund under A.R.S. § 41-2190(A). At the hearing in this matter, Complainant Thelma Armenta testified that the skirting around the home has continued to buckle, the cracks in the walls have worsened, and Respondent told her that the cracks in the walls were caused by the residence not being level and continuing to settle. It was her opinion, which is not contradicted by any evidence in the record, that the settling was due to the ground underneath the manufactured home becoming soft as a result of the washing machine draining there. Mrs. Armenta testified that the amounts that she included in her claim to the Consumer Recovery Fund were provided by Rick Poundstone, who repairs manufactured homes but did not provide a written bid. Mrs. Armenta had been unable to obtain estimates for the necessary repairs to her house because she lives in a remote area and has been very ill. Mrs. Armenta did not know whether Mr. Poundstone was licensed or not. As a result of Mrs. Armenta’s hearing testimony, the undersigned ordered Mrs. Armenta to provide at least two estimates from appropriately licensed contractors to correct the four items that had been verified against Respondent, as well as estimates to correct the levelling and skirting.[2] The undersigned also requested that Inspector Butzen perform one more inspection of the home to verify whether the home was no longer level and the skirting was continuing to buckle. To allow Mrs. Armenta to undergo her shortly upcoming surgery and Inspector Butzen to perform a fourth inspection, the record was ordered remained open until June 28, 1998 for receipt of the estimates and Inspector Butzen’s report. On or about May 24, 1999, the Office of Administrative Hearings received a letter and two estimates from Mrs. Armenta, which the letter asserted were the only estimates that she could get. One of the estimates was on the letterhead of Jeff Baldwin Mobile Home Services, License No. 6940, and included the following services: 14. Relevel double wide mobil [sic] home . . . (the beams are not touching piers in many area’s) 15. New skirting around entire home. 16. Many cracks throughout interior. 17. Texture falling off many areas. 18. Repair hole under kitchen sink where plumbing goes through floor. 19. Repair hole in hall wall. (Right side bottom.) 20. Paint entire interior after repairs. 21. Hookup washing machine to sewer line (it is draining under home). 22. Doors throughout home do not shut properly (readjust after leveling). 23. Repair smoke alarm wiring problem.

The total of the unsigned estimate was $5,785.00. The costs for each repair were not itemized. Mrs. Armenta also submitted a bid from High Country Floor Coverings to install 90 square yards of carpeting and padding at a price of $2,296.45. 14. Mrs. Armenta also included in her May 24, 1999 correspondence a letter to the undersigned, as follows: When I was at the hearing . . . I forgot to tell you about the handy man that [Respondent] sent out to put the skirting up. I did not know that he was not a licensed contractor at that time. It was a very bad time for my son and I. As I explained before, my husband was in the hospital and almost did not live. My son who is 24 and has a learning disability and I were trying to get our home ready for him [and] really were at the mercy of these people and it cost us a lot of money and pain. We paid Jim Straddling $5,700.00 to build a pump house and build 2 decks, put in a wood stove, put in wiring for generator and hook up to the house. After we were in the home we found out that he was not licensed to do any of this. The pump house is falling in a hole, the stove was not approved by our insurance co. and we had to have it completely done over, the electrical work had to be completely redone by Matt Hamilton, a licensed electrician, to correct the problem. The decks or pump house have not been corrected. We are on a fixed income and could not afford to pay again. Since then we do have APS. Thank God. I filed a complaint with the Registrar of Contractors in Show Low but nothing happened that I know of. I also filed in small claims for $2,500.00 and I won but did not get any money and my alternative was to attach his vehicle and I just could not do that to him as he has several children so I dropped the lawsuit. The work still needs to be corrected. The stove, I paid $200.00 to correct it to meet insurance standards, and had to be done over.

The undersigned notes that the contract of sale does not mention anything about a stove or construction of decks or a pump house, although it does mention providing up to 50’ of electrical line. The record also does not show that Complainants ever complained to the Department about these items or that they were ever verified against Respondent. On or about June 8, 1999, the Office of Administrative Hearings received Inspector Butzen’s report of his fourth inspection of Complainants’ home, again verifying the four items described in Finding of Fact No. 5. Regarding the level of the home and condition of the skirting, Inspector Butzen noted: Inspection of piers under home found center line column supports to be loose or not touch rim joist, pier supports were found to be loose or not touching I-beams – about 20% of rear end of home. Administrative review of the level of the home shows that the complainant stated at the 9-28-98 inspection that the level home, item #15, had been corrected by installer. Maintaining the level of the home and future releveling is homeowner responsibility after one year from date of installation. Level of home has caused buckling of skirting.

CONCLUSIONS OF LAW In this administrative proceeding, Complainants bear the burden of proof and must establish a statutory violation 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 establishes that Respondent violated A.R.S. § 41-2186(1), (6), (19), and (20) in failing to perform warranty work with respect to the verified items described at Finding of Fact No. 5 and that, therefore, Complainants are entitled to recover under A.R.S. § 41-2190(B) the costs necessary to repair these items. Because the items described at Finding of Fact No. 6 have never been verified against Respondent, arguably Complainants cannot recover from the Consumer Recovery Fund the costs of making these repairs. See A.R.S. § 41- 2190(B) and (C) (requiring the Department to verify claims before scheduling a hearing). A complainant may recover from the Fund “actual or compensatory damages, including costs but excluding interest or attorney’s fees.” A.R.S. § 41-2188(B). Although Complainants may be able to recover the costs of releveling the home and replacing the skirting in a civil suit against Respondent,[3] the statute governing timeliness of administrative complaints requires that such complaints be made no more than one year after the home was installed. See A.R.S. § 41-2153(B)(9); cf. A.R.S. § 32- 1155 (Allowing consumers to file claims to Registrar of Contractors against persons licensed under Title 32 “within two years . . . of an act which is cause for suspension or revocation of a license . . . .”). Because the home settled and Complainants renewed their complaints more than one year after the manufactured home was installed, the costs of leveling the home and replacing the skirting should not be included in any award from the Consumer Recovery Fund. Complainants also are not entitled to payment from the Consumer Recovery Fund for the costs of repairing the deck, pump house or additional electrical work, because these items have never been verified against Respondent. The undersigned therefore recommends that the Director deduct $600.00 (the cost of releveling the home and repairing the skirting in the original claim) from Complainants’ claim of $8,081.45, for a total award of $7,481.45. RECOMMENDED ORDER In view of the foregoing, it is recommended that $7,481.45 be paid to Complainants 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. 6567, Class D-8 remain revoked until it has repaid $7,481.45 to the Consumer’s Recovery Fund, plus interest at a rate of 10% annually. Done this day, June 18, 1999.

______________________________________ Diane Mihalsky Administrative Law Judge

Original transmitted by mail this ____ day of June, 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 has amended the caption to include both Thelma Armenta, the original Complainant, and Daniel R. Armenta, her husband, as Complainants because the record establishes that both own and appear on the title to the manufactured home at issue. Under Arizona community property law, see A.R.S. § 25-211, any payment from the Consumers’ Recovery Fund should therefore be made to Complainants jointly.

[2] Unfortunately, although the undersigned itemized the items for which estimates should be obtained, she did not specify that the estimates should be itemized. [3] “Actual damages are such losses as are actually sustained and are susceptible of ascertainment.” Arizona Copper Co., Ltd. v. Burciaga, 20 Ariz. 85, 94, 177 P. 989 (1918). “Actual damages [are] those damages ‘in satisfaction of, or in recompense for, loss or injury sustained; such compensation or damages for an injury as follow from the nature and character of the act, and will but the injured party in the position in which he was before he was injured . . . .’” United States Fidelity & Guaranty Co. v. Davis, 3 Ariz. App. 259, 263, 413 P.2d 500 (1966) (quoting C.J.S. “Damages” § 2 at 615 (1966)).

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