STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, )

FLORIDA CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 77-637

)

REINALDO CASTELLANOS d/b/a ) WORLD WIDE AMERICAN BUILDERS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice a hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings at Room B-20, Police Building, 2801 Salzedo Street, Coral Gables, Florida, at 10:00 A.M., June 14, 1977. Respondent was not in attendance although he had been noticed of the hearing by the undersigned and that notice had been forwarded to the address given by the Respondent in his March 1, 1977 letter answering the administrative complaint. The Petitioner was represented by Barry Sinoff, Esquire, 1010 Blackstone Building, Jacksonville, Florida, 32202.

ISSUES

1. Whether or not the Respondent, Reinaldo Castellanos and World Wide American Builders, did unlawfully violate Section 10-22 (b) of the Code of Metropolitan Dade County, Florida by abandoning without legal excuse, a construction project for Mr. John J. Piscitello, at 140 Southwest 107th Avenue, Sweetwater, Dade County, Florida, between May 14, 1975 and March 22, 1976, thereby violating Section 468.112(2)(a) Florida Statutes.

   
   

2. Whether or not the Respondent, Reinaldo Castellanos and World Wide American Builders, Inc., did unlawfully violate Section 10-22(g) of the Code of Metropolitan Dade County, Florida, in that on six separate instances they failed to live up to their contractual obligation to pay creditors for services performed, said failure occurring between May 14, 1975, and March 22, 1976, pertaining to construction project for Mr. John J. Piscitello at 140 Southwest 107th Avenue, Sweetwater, Dade County, Florida, thereby violating Section 468.112(2)(a), Florida Stautes.

   
   

3. Whether or not Reinaldo Castellanos is guilty of diversion of funds or property received for prosecution or completion of a specified construction project or operation, where as a result of the diversion the contractor is or will be unable to fulfill the terms of his obligation or contract, in the construction project of Mr. John J. Piscitello at 140 Southwest 107th Avenue, Sweetwater, Dade County, Florida, in violation of Section 468.112(2)(a), Florida Statutes.

FINDINGS OF FACT

1. Reinaldo Castellanos is the holder of certified general contractor's license no. CG C004329, held with the State of Florida, Division of Occupations, Department of Professional and Occupational Regulation, Florida Construction Industry Licensing Board. At the time of the allegations in this complaint the Respondent was doing business as World Wide American Builders.

   
   

2. On May 14, 1975, Respondent, through the company World Wide American Builders and in the capacity of a certified general contractor under a license held with the State of Florida, entered into a contract with John J. Piscitello to construct a shopping center known as Westvale Stores to be located on 107th Avenue in Sweetwater, Dade County, Florida. The terms of this standard form of agreement between contractor and owner are found in Petitioner's Exhibit 1, admitted into evidence. This exhibit is a copy of the contract. The contract also has an addendum which was later added. The terms of the contract show that the contract amount is $130,000.00 and an additional $10,350.00 was added to the contract for air conditioning bringing the total amount to $140,350.00. Under the contract conditions as shown in Petitioner's Exhibit 1, the contractor, Respondent, was to furnish all of the materials and perform all of the work shown on the drawings and described in the specifications which were entitled Westvale Stores (Shopping Center). Piscitello paid World Wide American Builders

   $102,837.00 in an initial installment. He paid an additional $4,500.00 in a joint check written to World Wide American Builders and A & A Enterprises, a drywall contractor. The portion of the check received by World Wide American Builders is unknown. The contract called for the job to commence on or about May 20, 1975 and to be completed within 120 days. On June 20, 1975, at a time when the job was 50 percent to 60 percent completed, Reinaldo Castellanos presented to Mr. Piscitello a notarized affidavit requesting payment of

   $28,600.00 for construction on the job and certifying that the undisbursed amount of the contract was sufficient to complete the building free and clear of all liens and encumbrances. This money requested was in addition to the amount already received. It was subsequently discovered by Mr. Piscitello, that liens totaling at least $9,523.28 had been filed against his property, contrary to the representation which had been made by Mr. Castellanos in his affidavit requesting payment, and these liens were valid.

   
   

3. In October, 1975, Piscitello went to the job site after no work had been performed for a week or more. He met with a Mr. Pina of World Wide American Builders, who was an officer and partner in that firm with Castellanos. At that time Pina and Castellanos again demanded $28,000.00 to complete the job and Piscitello responded by saying that they were already $10,000.00 ahead of draw under the terms of the contract. Either Pina or Castellanos responded that they would also need an additional $8,000.00 out of pocket to complete the job over and above the $28,000.00 which they were requesting. Piscitello refused to give them the $28,000.00, which refusal was in keeping with paragraph two of the addendum to the contract. After being told that they would not be paid the

   $28,000.00 upon demand, either Pina or Castellanos indicated that the job would not be completed. Neither World Wide American Builders nor Castellanos caused the job to be completed, and in fact World Wide American Builders whose licensing contractor was Reinaldo Castellanos, abandoned the job.

   
   

4. The job was completed under Piscitello's direction at a total cost for the matters agreed to between World Wide American Builders and Piscitello, of

   $173,000.00, ($160,470.00 of that amount is itemized in the Petitioner's Exhibit 3, admitted into evidence). This exhibit is a hand written itemization of those costs which Piscitello recalls expending.

5. As a result of the cost of completing the project, Piscitello brought suit against World Wide American Builders, Inc. and recovered damages in the amount of $29,380.00 against that corporation. A copy of the final judgement in that matter may be found as Petitioner's Exhibit 2, admitted into evidence. A complaint was also brought before the Dade County Construction Trades Qualifying Board, a board established to consider complaints against contractors operating in Dade County. That Board, on November 10, 1976, after an investigation, referred Mr. Piscitello's complaint to the Petitioner for prosecution.

   
   

6. One of the allegations of the Dade County Construction Trades Qualifying Board's Investigation pertained to Section 10-22(b) of the Code of Metropolitan Dade County, Florida. This Section states:

   
   

   "It shall be unlawful for any contractor, as defined

   by this chapter operating anywhere within the county or any partner, officer, director or qualifying agent of such a contractor to commit any one or more of the following

   acts or omissions: ... (b) abandon without legal excuse a construction project or operation in which the contractor is engaged or under contract as a contractor."

   
   

7. The facts in this cause show that World Wide American Builders, Inc. abandoned the subject project without legal excuse, which project was a construction project in which the contractor was engaged or under contract as a contractor. This abandonment was with the knowledge and/or permission of 7Reinaldo Castellanos and was a willful and deliberate disregard of the above Section of the Code of Metropolitan Dade County and thereby violated Section 468.112(2)(a), Florida Statutes.

   
   

8. Another section of the Metropolitan Dade County, Florida code which was investigated by the Dade County Construction Trades Qualifying Board pertained to Section 10-22-G, which says:

   
   

   It shall be unlawful for any contractor, as defined

   by this chapter operating anywhere within the county or any partner, officer, director or qualifying agent of such a contractor to commit any one or more of the following acts or omissions: . . . (g) failing to fulfill his contractual obligations, including but not limited to the payment of all creditors for materials furnished or work or services performed."

   
   

   There has been no showing of six separate instances of failure to live up to contractual obligation to pay creditors for work or services performed. There has been a showing that $9,523.28 worth of liens have been filed against the project, and testimony was offered as to the legitimacy of those liens.

   Therefore, contractual obligation to pay those liens as a just obligation to Respondent's company's creditors, has been shown, and this violates Section 10- 22-G, supra, and thereby violates Section 468.112(2)(a), Florida Statues, since the violation of the Code was willful and deliberate.

   
   

9. There is also an allegation under Section 468.112(2)(e), that the Respondent is guilty of a diversion of funds or property received for prosecution or completion of a specified construction project or operation, where as a result of the diversion the contractor is or will be unable to fulfill the terms of his obligation or contract. The facts in this cause do not

   show that the monies paid to World Wide American Builders, Inc., of which the Respondent was a principal, were diverted and a result of that diversion was that the contractor was or will be unable to fulfill the terms of his obligation or contract.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction in this cause.

    
    

11. It has been established by the facts in this cause that the project which was contracted between World Wide American Builders, Inc., with Reinaldo Castellanos being the signing party, and John J. Piscitello; was abandoned by World Wide American Builders, Inc. with the permission and/or knowledge of the Respondent in violation of Section 10-22(b) of the Code of Metropolitan Dade County, Florida and was done so on Castellanos' part with a willful or deliberate disregard of that building code, thereby constituting a violation of Section 468.112(2)(a), Florida Statutes.

    
    

12. The facts in this cause do not demonstrate that between May 14, 1975 and March 22, 1976 that on six separate instances Reinaldo Castellanos and World Wide American Builders, Inc. failed to pay the creditors for work or services performed on the subject project. The facts do establish that on some occasions World Wide American Builders, Inc. and Reinaldo Castellanos failed to pay the creditors on the subject project. Therefore the Petitioner has established a violation of Section l0-22-G of the Code of Metropolitan Dade County, Florida and in turn there is a violation of Section 468.112(2)(a), Florida Statutes for the deliberate or willful disregard of the Code.

    
    

13. The fact in this cause do not establish that World Wide American Builders, Inc. or Reinaldo Castellanos diverted funds or property received for prosecution and completion of the subject construction project or operation where as a result of the diversion the contractor was or will be unable to fulfill the terms of his obligation or contract. Therefore the Petitioner has failed to establish a violation of Section 468.112(2)(e) , Florida Statutes.

RECOMMENDATION

It is recommended that the certified general contractor's license of Reinaldo Castellanos, no. CG C004329, be revoked.

DONE AND ORDERED this 15th day of July, 1977, in Tallahassee, Florida.

CHARLES C. ADAMS

Hearing Officer

Division of Administrative Hearings

530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675

COPIES FURNISHED:

Barry Sinoff, Esquire 1010 Blackstone Building

Jacksonville, Florida 32202

Mr. Reinaldo Castellanos Fernandez Post Office Box 29235

Avenue 65th de Infanteria Station Rio Piedras, Puerto Rico 00929

Docket for Case No: 77-000637

Orders for Case No: 77-000637