ALJDEC

99F-R989021-BFS · Department of Building and Fire Safety · 1999-07-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 16, 1999. APPEARANCES: COMPLAINANTS: Dean and Lori Wine, on their own behalf. RESPONDENT: No appearance.

ADMINISTRATIVE LAW JUDGE: Anthony Halas _____________________________________________________________________ Hearing in this matter convened on July 16, 1999, as duly scheduled before the undersigned administrative law judge of the Office of Administrative Hearings, to consider the claim of Complainants Dean and Lori Wine (the Wines) from the Consumer Recovery Fund administered by the Department of Building and Fire Safety (Department) pursuant to A.R.S. § 41- 2190. Mr. and Mrs. Wine appeared and presented evidence and sworn testimony, and based on that and administrative notice of the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made to the Director of the Department:

FINDINGS OF FACT

1. Respondent Golden East Home Sales, Inc., (Golden East) is the holder of License No. 6684, Class D-12, issued by the Department of Building and Fire Safety. Earlena Lawrence is the qualifying party. 2. On the basis of the testimony and evidence of record, it is found that on August 25, 1998, Complainants Lori Wine and her husband Dean executed a PURCHASE CONTRACT AND DEPOSIT RECEIPT (the Purchase Contract) with Golden East Home Sales, Inc. in which Golden East was to purchase their manufactured home (located in Windsong Mobile Home Park, at 2292 North Ironwood Drive, Space #78, Apache Junction, AZ) for the approximate price of $17,500.00. During the course of the contract negotiations and all subsequent acts on its behalf relevant to this proceeding, Golden East was represented by Earlena and Bob Lawrence. 3. The terms included and specified that Golden East, as the buyer, was “to be responsible for mtg. payments, taxes, space rent and maintenance on said mobile home.” 4. Golden East was to pay $500.00 down, and a promissory note for $1500.00, with monthly payments of $150.00. When the check for $500.00 was returned for insufficient funds, Golden East executed a second promissory note for $2000.00, in lieu of the first promissory note. 5. Complainants subsequently filed a complaint with the Department on March 25, 1999, and a claim against the Consumer Recovery Fund (Fund) on May 15, 1999, in the amount of $1644.38, documenting the complaint and the claim with a copy of the Purchase Contract, additional financial records, and an extensive narrative chronology to substantiate the manner in which Golden East had failed to abide by the terms of the contract and the second promissory note, despite reasonable and persistent efforts by

the Wines seeking performance. Administrative notice is taken of those documents comprising the complaint and the Recovery Fund claim, as compiled by the Department. 6. The complaint and claim alleged that Golden East had paid a total of only $800.00 toward the $2000.00 promissory note, and therefore owed $1200.00 to the Wines, for which they sought reimbursement from the Fund. 7. The complaint and claim further alleged that Golden East had failed to make the required mortgage payments in September and October, 1998, which were then paid by Complainants in the total amount of $444.38, for which they sought reimbursement from the Fund. 8. Based on an In-house verification conducted on May 18, 1999, by the Department’s Investigator/Auditor, Carla Anderson (Anderson), the complaint was verified, with the DEALER TO CORRECT by payment of the balance of $1644.38. (The subsequent testimony of Mr. and Mrs. Wine clarified the memorandum authored by Anderson, confirming the total amount owed by Golden East was $1644.38, but explaining that they had received a total of $800.00 against the promissory note, not $300.00 as indicated in Anderson’s memo.) 9. Based on the uncontroverted and credible testimony of Mr. and Mrs. Wine, and administrative notice of documents made a matter of record relative to their complaint of March 25, 1999, and Recovery Fund claim filed on May 15, 1999, it is found that Golden East paid a total of $800.00 of that Promissory note for $2000.00, leaving an amount owed of $1200.00. 10. It is further found that Golden East failed to pay a total of $444.38 for the mortgage payments for which the company had contractually assumed responsibility, and which were due in September and October, 1998, with that amount then paid by the Wines.

11. In their testimony at hearing, the Wines confirmed that they had been unable to contact anyone on behalf of Golden East since late February, 1999, after six months of dissembling by Earlena and Bob Lawrence, shortly after which the Wines found the company’s business premises vacated, with no forwarding address or telephone information available.

CONCLUSIONS OF LAW

1. The convening of the hearing in this matter was delayed 30 minutes to allow Respondent, through its authorized representative, to make an appearance, and although the record then remained open for more than an hour after the scheduled start of the hearing, no such appearance was made to dispute Complainants’ verified complaint or their claim to the Consumer Recovery Fund, nor was any information provided this office to explain the absence of Respondent’s representative, or to request a continuance. 2. Reference to the Notice of Hearing issued by the Department on May 28, 1999, confirms that it was issued by certified mail to : Earlena J. Lawrence Qualifying Party GOLDEN EAST HOME SALES, INC. 2702 E. University Suite #2 Mesa, Arizona 85213

This is the last known address Respondent has provided the Department, and there is no indication that Respondent did not receive the Notice, so it is found and concluded herein that the notice and opportunity to be heard required by the demands of due process have been fully and fairly met. 3. In this administrative proceeding, Complainants bear the burden of proof such that they must establish their right to a recovery from the Fund pursuant to A.R.S. § 41-2190.B, 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). 4. The evidence, by greater than a preponderance, establishes that Complainants have been damaged in the amount of $1644.38 by Respondent’s failure to perform pursuant to contractual agreement, pursuant to A.R.S. § 41-2180.B. The Department has verified Complainant’s original complaint and, therefore, their claim arising from that complaint to the Consumer Recover Fund should be granted and Respondent’s license should be suspended under A.R.S. § 41-2190. If in the future Respondent’s qualifying party or any other person listed on Respondent’s license applies to the Department of Building and Fire Safety for another license, this suspension may and should be considered as evidence of lack of good character and reputation and furnish grounds for denial of the license. See A.R.S. § 41-2175.E. 6. The purpose of the hearing was to allow Complainants to present evidence on their claim to the Consumer Recovery Fund and to assess whether Respondent’s license should be penalized as a result of the claim. Although the evidence suggests that Respondent used Complainant’s earnest money deposit for its own purposes and may be guilty of fraud, theft, or conversion, a criminal prosecution lies beyond the scope of the jurisdiction of the Department of Building and Fire Safety and, therefore, cannot be included in the undersigned’s recommendation. However, Complainants’ assertion of this claim does not preclude them from making a criminal complaint against Respondent or its qualifying party to the Attorney General or another governmental entity having appropriate jurisdiction. See A.R.S. § 41-2180.M.

RECOMMENDED ORDER

In light of the foregoing, it is recommended that $1644.38 be paid to Complainants from the Consumer Recovery Fund pursuant to A.R.S. § 41- 2190.B. It is further recommended that, pursuant to A.R.S. § 41-2190.D, Respondent’s License No. 6684, Class D-12 be suspended until it has repaid $1644.38 to the Consumer’s Recovery Fund, plus interest at a rate of 10% annually. Done this day, July 16, 1999.

______________________________________ Anthony Halas Administrative Law Judge

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

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

By ___________________________

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