ALJDEC

99F-R989020-BFS · Department of Building and Fire Safety · 1999-06-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 16, 1999 at 9:00 a.m. APPEARANCES: Complainants appeared on their own behalf; Respondent did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

Complainants[1] 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 Mountain Brook Homes, Inc., a master dealer of manufactured homes. On or about October 9, 1997, Complainants purchased a double-wide manufactured home from Respondent. Included in the sales price was $5,500.00 for “concrete foundation & well floor.” Complainants subsequently complained to the Director of the Department of Building and Fire Safety (the “Director”) about various aspects of the manufactured home and, on March 10, 1999, the Director adopted the recommended decision of the administrative law judge concerning Complainants’ complaint. The Director’s decision found that Complainants had established the following deficiencies in Respondent’s performance of the parties’ sale contract: d) The Home is not level. The Home is not placed properly upon piers. The marriage line is uneven in that one side of the Home is higher in elevation than the other side. All doors within the Home do not close properly.

e) Cracks exist under all of the windows and throughout the Home.

f) All three bedroom doors and the master bedroom closet door have cracks and gaps at the top and sides between the doors and the frames. Those doors need to be finished, reframed and rehung.

g) The door to the master bathroom has rough edges and gaps between the door and the frame. That door needs to refinished and rehung.

h) Large gaps exist in the stemwall.[2]

i) Gaps exist around the trim at the corners of the Home. The trim at those areas is not square.

j) The right window in the family room is out of square and requires straightening.

Finding of Fact No. 4 in Case No. 99F-C978229-BFS (97-8/229). The Director concluded that the deficiencies identified above constituted violations of A.R.S. § 41-2186(1), (12), (19), and (2) in Case No. 99F- C978229-BFS (97-8/229). As a result of these established violations, the Director revoked Respondent’s Class D-8 license. On or about April 26, 1999, Complainants submitted a claim to the Director for reimbursement from the Consumer Recovery Fund (the “Fund”) for the costs of correcting the deficiencies that the Director had found in Case No. 99F-C978229-BFS (97-8/229). This hearing subsequently was scheduled. Complainants credibly testified that they could obtain only one bid to correct each item because they live in a remote area.[3] Complainants therefore attached to their claim a bid of $650.00 from HomeCo., Inc. to “rebuild[] or adjust[] 6 doors in home and furnish materials where necessary” and a bid of $550.00 from Southwest Mobile Home Service to “relevel 2-wide Champion [and] take up and relay carpet in hall & fix floor.” These amounts appear fair and reasonable. Complainants also attached to their claim a bid of $450.00 from Copp Masonry “to cut in 6 foundation vents, one entry door, and to patch and replace broken block along outside of trailer skirting (will not guaranty work [due] to footing).” To guarantee its work, Copp Masonry needed to tear out the existing stem wall, dispose of the material, and replace the stem wall with a 12” footing, vents, and a block skirting, at a cost of $7,500.00. At the hearing in this matter, Complainants testified and offered into evidence photographs to substantiate that the stem wall has cracked severely in ten places. According to Copp Masonry, the cracks result from the footings for the wall being inadequate to bear its weight. Complainants testified that the existing footings for the wall are only 4” deep. Complainant Mr. Brewer testified that Copp Masonry told him that the cost of a stem wall is usually between $4,500.00 and $5,500.00, which approximates the $5,500.00 Respondent originally charged Complainants for the “concrete foundation & well floor” and which Complainants testified was included in this charge. The additional amount in Copp Masonry’s bid is to remove the existing wall. Although Complainants originally only included the cost of patching, not replacing, the stem wall in his claim to the Fund, they fear that, if the wall is merely patched, additional cracks will appear, leaving them without a remedy since Copp Masonry will not warranty patch work. On May 11, 1999, the Department sent copies of the notice of this hearing to Complainants and to Sean Comerford, Qualifying Party, Mountain Brook Homes, Inc., 1150 N. Penrod, Show Low, Arizona, the last address of record for Respondent. Respondent 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 Complainants’ complaint, which was verified in Case No. 99F-C978229-BFS (97- 8/229), and claim to the Consumer Recovery Fund under A.R.S. § 41-2190(A). Complainant Mr. Brewer testified that he has paid Southwest Mobile Home Service and HomeCo, Inc. the amounts bid, respectively, to level and to adjust the doors in the manufactured home. Complainants await the outcome of this proceeding to correct the cracks in the stem wall. CONCLUSIONS OF LAW In this administrative proceeding, Complainants bear the burden of proof and must prove the reasonable costs of correcting Respondent’s statutory violations 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). In Arizona, “‘[p]ublic policy dictates that there be an end to litigation; that those who have contested the issue shall be bound by the result of the contest; and that matters once tried shall be considered forever settled as between the parties.’” Lofts v. Superior Court, 140 Ariz. 407, 410, 682 P.2d 412, 415 (1984) (quoting Baldwin v. Iowa State Traveling Men’s Ass’n., 283 U.S. 522, 525, 51 S. Ct. 517, 518, 75 L. Ed. 1244 (1931)). “That the judgment was rendered by default does not affect its validity, for such a judgment admits as true all the material allegations properly set forth in the complaint and is just as binding and conclusive as to them as though it had been rendered after answer and contest.” Collister v. Inter-State Fidelity Building and Loan Ass’n, 44 Ariz. 427, 435, 38 P.2d 626 (1934) (citations omitted). This means that the Director’s decision in Case No. 99F-C978229-BFS (97-8/229) conclusively establishes that Respondent violated A.R.S. § 41-2186(1), (12), (19), and (2) in its performance of its sale contract with Complainants and that, therefore, Complainants are entitled to compensation from the Fund in the amount of his actual damages under A.R.S. §§ 41-2188(B) and 41-2190(B). The record establishes that Complainants have been damaged by Respondent’s statutory violations in the amount of $8,700.00.[4] Although it would have been cheaper to pay only for the stem wall to be repaired, not replaced, the sale contract between the parties entitled Complainants to a warranty on the stem wall. The measure of his damages therefore is the amount necessary to pay for repairs that will place Complainants in the same position they would have occupied had Respondent fully performed the sale contract. See, e.g., United States Fidelity & Guaranty Co. v. Davis, 413 P.2d 590, 3 Ariz. App. 259, 263 (1966) (quoting 25 C.J.S. Damages § 2 at 615 (1966)). Complainants are therefore entitled to a warranty on the stem wall. RECOMMENDED ORDER In view of the foregoing, it is recommended that $8,700.00 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 $8,700.00 to the Fund, plus interest at a rate of 10% annually. Done this day, June 16, 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 Edward Brewer, the original Complainant, and his wife as Complainants because the record in this matter establishes that both own and appear on the title of the manufactured home at issue. Under Arizona community property law, see A.R.S. § 25-211, any payment from the Consumers’ Recovery Fund should be made to Complainants jointly.

[2] The term “stem wall” in the Director’s decision in Case No. 99F-C978229- BFS (97-8/229) refers to the block-wall skirting around the manufactured home, not to its foundation. The purpose of the stem wall is to prevent heat loss and to keep vermin from entering the area underneath the manufactured home, not to provide a foundation. [3] The undersigned notes that Complainants’ mailing address is in Snowflake, Arizona. [4] This amount is the sum of the $550.00 bid to level the manufactured home, the $650.00 bid to adjust the doors and windows, and the $7,500.00 bid to remove, replace, and warranty the stem wall.

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