vs. ) CASE NO. 78-1970
CHARLES H. ANDERSON, )
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William E. Williams, held a public hearing in this case on April 20, 1979, In Jacksonville, Florida.
For Petitioner: Barry S. Sinoff, Esquire
For Respondent: Robert M. Barnes, II, Esquire
On or about September 13, 1978, the State of Florida, Construction Industry Licensing Board (hereinafter "Petitioner") filed an Administrative Complaint charging Respondent, Charles H. Anderson (hereinafter "Respondent") with violations of Sections 468.112(2)(a), (e) and (h) Florida Statutes. Respondent requested a formal hearing pursuant to Section 120.57(1), Florida Statutes, asserting that there were disputed issues of fact contained in the Administrative Complaint. Thereafter, by letter dated October 23, 1978, Petitioner requested the appointment of a Hearing Officer from the Division of Administrative Hearings to conduct a formal hearing in this cause. Final hearing was initially scheduled for January 17, 1979, by Notice of Hearing dated November 15, 1978. By Motion for Continuance dated December 22, 1978, Respondent requested a continuance of this hearing, which was granted and hearing was rescheduled for February 28, 1979, by Amended Notice of Hearing dated January 9, 1979. Thereafter, petitioner, by Motion for Continuance dated January 17, 1979, requested a continuance of the hearing, which motion was granted, and the hearing was reset for March 28, 1979. Subsequently, final hearing was again rescheduled for April 20, 1979, by Notice of Hearing dated March 2, 1979.
At the final hearing, Petitioner called Thomas A. Thompson and Dr. Walter Scott as its witnesses. Respondent testified in his own behalf. Petitioner offered Petitioner's Exhibits Nos. 1 through 14, inclusive, each of which was
received into evidence. Respondent offered Respondent's Exhibits Nos. 1 through 10, each of which was received into evidence.
At the conclusion of the hearing, counsel for the respective parties agreed to submit Proposed Findings of Fact and Conclusions of Law within 15 days from the filing of the transcript of the final hearing with the Division of Administrative Hearings. The transcript of the final hearing was filed with the Division of Administrative Hearings on May 29, 1979. It was also agreed between counsel for the parties and the Hearing Officer that the Hearing Officer would have 30 days from the filing of Proposed Findings of Fact and Conclusions of Law by counsel for Petitioner and Respondent in which to enter his Recommended Order. However, the Hearing Officer was advised by telephonic conversation with counsel for Petitioner during the second week of September, 1979, that counsel for both parties had agreed to forego filing of Proposed Findings of Fact and Conclusions of Law.
At all times material hereto, Respondent was the holder of general contractor's license number CG C007235, and certified residential contractor's license number CR C006769.
On or about January 6, 1976, Respondent entered into a Building Agreement with Walter and Ellen Scott (hereinafter "owners") for construction of a residence to be located at 10244 Deerwood Club Road in Jacksonville, Duval County, Florida. Among the provisions contained in this agreement was the following:
[Respondent] will construct house for actual Construction Costs plus
$10,000 profit. Addendum to contract Number 19 contains construction estimate sheet and allowance sheet which is guaranteed by [Respondent] not to
exceed $85,000, plus $10,000 profit.
All construction costs above $85,000 will be absorbed by contractor resulting from faulty workmanship or incorrect overall estimate. Additional costs resulting from exceeding allowances
or phases not covered by estimate, (Wallpaper, Light fixtures, etc.),
will be paid by purchaser. [Respondent] will be compensated at $2,500.00
out of each of the last four construction draws. Purchaser will be refunded
in difference of construction under
$85,000.00. Purchaser has the right to examine cost of construction at any
stage to determine how close cost [sic] are running to estimate. (Emphasis added.)
In addition, the Building Agreement contains a listing of allowances for various items such as carpet, flooring, wallpaper, doors, fireplaces, appliances, plumbing fixtures, wiring and windows. These provisions of the contract deal with standard items to be included in the construction, absent
some request and agreement between the parties to specific changes. With respect to changes, the agreement provides specifically that:
Should the Purchaser at any time during the progress of said residence require any
alterations to or deviations from, additions to, or omissions, in said Agreement,
which are acceptable to the Contractor, they shall have the right and power to
make such change or changes when practicable, and the same shall in no way make void the Agreement; but the differences shall be
added to, or deducted from the amount of the Agreement as the case may be, by a fair and reasonable evaluation . . . (emphasis added.)
Finally, the Building Agreement also provides that Respondent was to use his best effort to deliver the completed residence on or about 180 days from the start of construction, which, by terms of the agreement, is defined as the date on which footings are poured or the day rough plumbing was begun. Although Respondent obtained a building permit for construction of the residence, from the City of Jacksonville, Florida, dated February 5, 1976, there is nothing in the record of this proceeding on which a firm determination can be made as to when construction actually started.
Although the actual starting date for construction is unclear, it is obvious from the record that Respondent and the owners began to experience problems from the outset. The owners received a notice of lien soon after the slab for the residence was poured. In addition, there appears to have been some miscalculation with respect to the size of the slab for the structure to which some additions had to be made. Respondent apparently failed to pay for the initial treatment for subterranean termites at the time of the pouring of the slab, and the termite bond on the residence was cancelled. In addition, the slab appears to have been poured in such a fashion as to require adjustments in the construction of the driveway to avoid rainwater runoff entering the residence. One of the more difficult problems in the initial stages of construction involved leaks in the roof of the structure. When it appeared that efforts to repair the leaks had not been entirely successful, the owners requested that Respondent delay work on the interior in order that repairs on the roof might be accomplished before proceeding in order to avoid interior damage. After an extended delay occasioned by an unusual period of dry weather which prevented a determination as to whether the roof would continue to leak, work on the interior was recommenced, only to discover that the roof had not been sufficiently repaired. As a result of continuing problems with the roof, work which had been completed in the interior of the structure was damaged by rainwater. In fact, as of the date of final hearing in this cause, it appears that final repairs to the roof had still not been accomplished.
It appears from the record that construction delays attributable to roof leaks in the residence set the tone for the remainder of the business dealings between Respondent and the owners. From this point forward, the relationship between Respondent and the owners became virtually adversary in tone. This state of affairs was complicated by an extensive series of changes or substitutions in the original plans and specifications by the owners. As indicated above, the original Building Agreement contained provisions concerning allowances for various portions of the work, and optional items which could be
added at additional charge to the owner. Unfortunately, the record is unclear as to exact dollar amounts attributable to extras selected by the owners, as well as to amounts actually received by Respondent in the course of construction draws on the original contract. However, it is clear that extras selected by the owners totalled between $20,000 and $25,000. These items, which were not contained in the original contract, included ceramic tile flooring; double oven; wooden window frames; extensive extra bricking work, including brick more expensive than that described in the original contract; a larger driveway; burglar alarms; simulated marble vanities, tubs and sinks instead of cast iron fixtures as originally contemplated; crown moldings and interior door moldings throughout the interior of the residence; more expensive plumbing fixtures; extensive parquet flooring; larger closet areas; and extensive changes in the location of plumbing fixtures and electrical outlets. In addition, what appears from the evidence to have been a handmade stairway was substituted at an additional cost of approximately $5,000. The construction of the staircase not only included additional expense, but for some reason not entirely apparent from the record, caused additional delay in construction of other areas in the residence.
Respondent apparently did not maintain a separate checking account for construction draws on this project, instead comingling disbursements on the construction loan with other funds in his general checking account. Additionally, no documentation was submitted by either Petitioner or Respondent to establish dates on which draw requests were either submitted by Respondent to the owners or the financial institution financing construction, or the dates on which any such draw requests were funded, either in whole or in part. As a result, it is virtually impossible from the record in this proceeding to determine the basis for disbursements from the construction loan account, or the disposition of those sums once disbursed. Although there was some general testimony about the filing of liens by various subcontractors, no documentation of these liens was submitted into evidence.
What is, however, apparent from the record is that in early 1977, almost one year after initial disbursement of construction funds to Respondent, almost the entire $95,000 constituting the construction account was depleted. At that time the residence was approximately 90 percent complete.
Thereafter, by Agreement dated February 18, 1977, Respondent and owners agreed that an additional $25,000 would be necessary to complete construction of the residence. Respondent acknowledged that he was in default under the terms of the original Building Agreement, and agreed to reimburse owners for the additional $25,000 needed to complete construction of the residence, subject to certain adjustments. Respondent agreed to complete construction of the residence within 40 days, and further agreed that the financial institution holding the mortgage on the residence was authorized to disburse the additional
$25,000 directly to subcontractors, materialmen and laborers for work performed for services rendered on the property. Respondent executed a note in the amount of $25,000, secured by certain property belonging to him as evidence of his obligation to complete construction.
However, shortly after execution of the February, 1977, Agreement, Respondent and owners had a dispute over payment of certain laborers. As a result, Respondent was advised by owners not to return to the job site. After this notification, evidence in the record establishes that Respondent contacted the financial institution which held the mortgage on the property and advised them that he would not be completing construction of the residence.
It is clear from the record that the owners had more than ample cause for dissatisfaction with both the quality of workmanship and the timeliness with which work was performed by Respondent. Those matters are not, however, at issue in this proceeding. It is also abundantly clear that both Respondent and owners conducted their dealings with one another in a most informal fashion. With the exception of the original Building Agreement, and the February, 1977, agreement, most of the dealings between Respondent and the owners were verbal. Additionally, the absence of detailed documentary evidence makes resolution of many of the factual disputes in this proceeding difficult at best. However, the record clearly establishes that Petitioner failed to request that official notice be taken of any of the provisions of the building codes or other laws of the City of Jacksonville, and that none of these codes or laws were offered into evidence in this proceeding. As a result, a motion to dismiss that portion of the Administrative Complaint alleging violation of applicable building codes was granted by the Hearing Officer at the close of Petitioner's case.
Further, although the owner testified as to his belief that certain building materials were "floating" between the project which is the subject of this proceeding and other projects being constructed by Respondent, there is no direct evidence to establish that Respondent, in fact, diverted any funds or property improperly. Finally, as to the question of abandonment, it appears from the record that the owner dismissed the Respondent prior to the expiration of the 40-day period contemplated in the February, 1977, Agreement, and that Respondent advised both the owner and the financial institution financing construction of the project that he would not complete construction of the residence as contemplated in the various agreements between the parties.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Section 120.57(1), Florida Statutes.
Section 468.112(2), Florida Statutes, provides that the following acts constitute cause for disciplinary action:
Willful or deliberate disregard and violation of the applicable building codes or laws of the state or any municipality, city, or county thereof.
* * *
(e) Diversion of funds or property received for prosecution or completion of a specified construction project or operation when, as a result of the diversion, the contractor is, or will be, unable to fulfill the terms of his obligation or contract.
* * *
(h) Abandonment of a construction project in which the contractor is engaged
or under contract as a contractor. A project is to be considered abandoned after 90 days if the contractor terminates said project without notification
to the prospective owner and without just cause.
Petitioner has failed to establish by competent substantial evidence that Respondent has violated the provisions of Section 469.112(2)(a), (e) or (h), Florida Statutes. The record in this proceeding is devoid of any evidence of applicable building codes which Respondent is alleged to have violated. Further, there is no competent evidence to support the allegation that Respondent in fact diverted funds or property from the construction project, or that his failure to complete construction resulted from any such diversion. Finally, the evidence clearly establishes that the owners, no doubt out of a sense of extreme frustration, terminated the services of the Respondent despite the Respondent's offer to complete the job. No doubt the owners considered the Respondent's offer to complete a hollow gesture. However, the facts in this record clearly do not establish a case for statutory "abandonment."
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Construction
Respondent.
DONE and ENTERED this 19th day of October, 1979, in Tallahassee, Florida.
WILLIAM E. WILLIAMS
Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301
Barry S. Sinoff, Esquire 2400 Independent Square
Robert M. Barnes, II, Esquire 1843 Atlantic Boulevard
