STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA CONSTRUCTION INDUSTRY ) LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 79-1355

)

JOHN R. MEYER, )

)

Respondent. )

)

RECOMMENDED ORDER

This case was heard pursuant to notice in Bradenton, Florida, on November 28, 1979, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case was presented on an Administrative Complaint and an amendment thereto filed by the Florida Construction Industry Licensing Board against John R. Meyer. This Administrative Complaint alleged that Meyer had violated Section 468.112(2)(c) Florida Statutes, by knowingly combining or conspiring with an uncertified or unregistered person by allowing one's certificate or registration to be used by any uncertified or unregistered person with the intent to evade the provisions of this part; had violated Section 468.112(2)(e), Florida Statutes, by diversion of funds or property received for prosecution or completion of a specified construction project or operation; had violated Section 468.112(2)(h), Florida Statutes, by abandoning a construction project in which the contractor was engaged or under contract as a contractor; and had violated Section 468.112(2)(b), Florida Statutes, by aiding or abetting any uncertified or unregistered person to evade any provision of this part, to wit: Florida Statutes 468.111, which makes it unlawful for any person to engage in the business or in the capacity of a contractor without having been duly registered or licensed.

The issue in this case is whether the Respondent, John R. Meyer, violated the statutes as alleged.

APPEARANCES

For Petitioner: Michael E. Egan, Esquire

217 South Adams Street Post Office Box 1386

Tallahassee, Florida 32302

For Respondent: Ronald A. Cyril, Esquire

2070 Ringling Boulevard

Sarasota, Florida 33577 FINDINGS OF FACT

1. The Respondent is a certified building contractor, holding License No. CB C012853.

2. The Respondent became acquainted with Merit Construction and Development Corporation (Merit) through a meeting with Wallace Coleman in August of 1978. Mr. Coleman was the qualifying agent for Merit at that time.

   
   

3. Prior to the time that the Respondent became a Vice President of Merit, Wallace Coleman had ceased to be affiliated with that corporation.

   
   

4. On September 6, 1978, the Respondent was elected Vice President of Merit by corporate resolution which stated as follows:

   
   

   "At a corporate meeting of all the officers of Merit Construction and Development Corporation, held at 2830 South Tamiami Trail, Sarasota, Florida, on 6 September, 1978, at 3:00 p.m.,

   it was resolved that John R. Meyer is legally qualified to act for the corporation in all matters in connection with its contracting business and that he has authority to supervise construction undertaken by the corporation, and that John R. Meyer shall hold the office of vice president with Merit Construction and Development Corporation effective 6 September, 1978. This resolution shall be included and is a part of the

   minutes of the corporation.

   
   

   Dated this 6th day of September, 1978, at Sarasota, Florida."

   
   

5. On September 17, 1978, Merit entered into a contract with the City of North Port, Florida, to construct a maintenance facility adjacent to City Hall.

   
   

6. On October 17, 1978, the Respondent made application for a building permit from the building officials of the City of North Port. The only reference to Merit on this application is the handwritten entry Merit Corporation" entered by persons unknown and at a time uncertain. The Respondent's uncontroverted testimony was that he applied for this permit in his individual capacity.

   
   

7. The Respondent made application to be the qualifying agent for Merit in an application for change of status dated October 18, 1978.

   
   

8. The Respondent's application for change of status was approved and became effective on October 31, 1978.

   
   

9. The building permit for the construction of a maintenance facility for the City of North Port was approved and issued on November 1, 1978. Work commenced on this project immediately thereafter.

   
   

10. On November 3, 1978, a contract was entered into between Merit, represented by Ronald Tenaro, and Steven Shulman to construct two (2) prefabricated steel buildings.

    
    

11. The Respondent was present during the negotiations of this contract, and it was represented to Mr. Shulman that the Respondent was a licensed contractor and working for Merit; however, the Respondent was not present when

    this contract was executed on November 3, 1978. Neither was the Respondent present when Mr. Shulman gave Tenaro a check in the amount of $4,650 representing a ten (10) percent downpayment required by the contract for construction of the two (2) prefabricated buildings.

    
    

12. On November 15, 1978, Merit, represented by Tenaro, executed a contract with L. A. McRae for construction of a prefabricated steel building. McRae gave Tenaro a check in the amount of $1,105.50 as initial payment on the contract. McRae had no contact with the Respondent, who had nothing to do with receipt of the initial payment.

    
    

13. The Respondent began to have difficulties with Tenaro in November of 1978, after the City of North Port job commenced. He found that Tenaro was uncooperative in assisting him in obtaining the proper plans and drawings for construction of the City of North Port project. The Respondent had to obtain these plans and drawings from the company which manufactured the prefabricated building in order to lay out and construct an appropriate foundation. At about the same time, the Respondent became aware that Merit was experiencing financial difficulties. When Tenaro advised him of the Shulman and McRae contracts, the Respondent advised Tenaro that he would not pull any further permits until work on the city project was proceeding in a workmanlike fashion. Because of the problems the Respondent was encountering with Tenaro and his concern over the corporation's financial status, in late November of 1978, he contacted the Florida Construction Industry Licensing Board's offices in Jacksonville, Florida, and spoke with a Mr. Hoskins (phonetic). In addition he sought legal counsel and advice. In summary, he was advised by the Board and legal counsel to sever his association with Merit and notify the local building authorities.

    
    

14. The Respondent continued to work on the City of North Port job, charging certain building materials to his personal account, until the first part of December, 1978. At that time a load of structural steel was delivered to the construction project and the bill presented to the city for payment. The mayor refused to authorize payment for the structural steel, because the bill was in excess of the amount owed Merit by the city on the next draw.

    
    

15. On December 6, 1978, the Respondent advised the Florida Construction Industry Licensing Board by letter that he had resigned and severed his relationship with Merit. Three (3) weeks later, Merit employed another licensee to qualify the company.

    
    

16. The Respondent's duties included directing construction, coordinating field work, hiring and firing employees, and oversight of subcontractors and building superintendents. Although he wrote payroll checks when Tenaro was not in the office, the Respondent did not pay materialmen beyond materials which he paid for personally. However, the Respondent was aware of the financial aspects of the business and did what he could to force Tenaro to operate the business properly. The Respondent's actions in this regard included his refusal to pull any further construction permits and notification of the Florida Construction Industry Licensing Board.

    
    

17. There is no evidence in the record that the Respondent received any portion of the monies received by Merit for the Shulman and McRae jobs.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Florida Construction Industry Licensing Board charges the Respondent with violation of Sections 468.112(2)(b), (e) and (h), Florida

    Statutes. The Board charges that the Respondent violated Section 468.112(2)(b), by violating Section 468.111, Florida Statutes. Section 468.111, Florida Statutes, is a criminal provision and as such must be construed narrowly. It provides that it is unlawful for any person to engage in the business or act in the capacity of a contractor without having been duly registered.

    
    

19. The facts relating to this allegation are that the Respondent, prior to his change of status, applied for the building permit for the City of North Port job. However, the Respondent was licensed as an individual when he applied for this permit, and the only reference to Merit on the application is a handwritten entry made by an unknown person at an unknown time. The Respondent's uncontroverted testimony was that he applied for this permit in his individual capacity. There is no allegation that the Respondent was not responsible for and did not direct this project. While the Respondent may have violated Section 468.112(2)(d) Florida Statutes, no violation of Section 468.111, Florida Statutes, is proven because the Respondent was licensed at all times.

    
    

20. The Board alleges that the Respondent violated Section 468.112(2)(c), Florida Statutes, by knowingly combining or conspiring with an uncertified or unregistered person by allowing his certificate or registration to be used by the uncertified or unregistered person with the intent to evade the provision of this part. No evidence was presented that the Respondent permitted Merit to improperly use his certification to obtain building permits. Only one building permit was obtained, as indicated above, and the Respondent was responsible for that project from the time of applying for the building permit until his resignation from Merit. The evidence presented indicates that the Respondent exercised the requisite degree of control over the construction activities of the company and, while he did not engage in the financial direction of Merit, the Respondent maintained sufficient oversight of the financial operation to correct or attempt to correct abuses of the financial management of the company. The evidence presented shows that Meyer was appointed Vice President with authority as required by law. He actively pursued construction of the city project, and it was only through experience that he became aware of Merit's financial problems and the limitations on his stated authority. After becoming aware of these problems, he refused to pull further permits on the Shulman and McRae projects and pressed Tenaro to finish the city job and not take any further contracts. The Respondent sought legal advice and advice from the Board when it became evident that Tenaro would not follow the Respondent's directions and advice. There is no evidence that the Respondent let his license "be used" by Merit or Tenaro. No violation of Section 468.112(2)(c), Florida Statutes, is proven.

    
    

21. The Respondent is charged with violation of Section 468.112(2)(e), Florida Statutes, by diverting funds or property received for the prosecution or completion of a specified construction project or operation. There is no evidence that the Respondent received any monies on any of the three (3) contracts at issue. The issue is whether the Respondent is vicariously liable for the actions of Tenaro, who was the financial manager of Merit. Because of the legislative scheme of regulation, a licensee who is a qualifying agent for a company may be held accountable for diverted funds or property received by the contracting company with which he is associated. However, such a determination must be based upon the licensee's failure to take a hand in the operation of the company, failure to stay aware of the company's financial situation, and failure to take appropriate action if a problem arises. In the instant case, the Respondent became aware of Merit's financial problems during the course of his employment. He attempted to get Tenaro to pursue construction of the city

    project. When Tenaro obtained two (2) additional contracts, the Respondent refused to obtain building permits on these jobs. Realistically, there was no way he could prevent Tenaro from accepting the Shulman and McRae jobs. The Respondent continued to push construction on the city project until completion of that project became impossible upon refusal of the city to accept delivery of the structural steel. At this point, the Respondent resigned and severed his association with Merit. The Respondent recognized and effectively dealt with his dual obligations to pursue the project underway and to prevent the company from commencing other projects. The Respondent's actions also included seeking legal advice and notification of the Board of the problems which he was experiencing. Basically, the only action a licensee can take if management is not responsive to his guidance is resignation. Resignation prematurely may jeopardize work under way, which may constitute abandonment. The Respondent's actions in light of the circumstances struck an appropriate balance between restraining Merit's activities and pursuing work under way. They do not constitute a violation of Section 468.112(2)(e), Florida Statutes.

    
    

22. The Administrative Complaint also alleges that the Respondent violated Section 468.112(2)(h), Florida Statutes, by abandoning construction projects. With regard to the Shulman and McRae contracts, the Respondent's refusal to obtain construction permits was appropriate. The Respondent cannot be criticized for his failure to complete these projects which he did not commence. The Respondent's only recourse with regard to the Shulman and McRae contracts was resignation prior to their execution; however, to have resigned three (3) weeks after commencing the city project would have constituted an abandonment of that project unless there were some proof at that time that Merit could not perform on the city job. Under Respondent's leadership the city job progressed until Merit was unable to pay for the structural steel at the time of its delivery. After this occurred, the Respondent resigned, having done as much as he could to follow through on the work he had begun. After his resignation Merit hired yet another licensee, who subsequently became liable for these projects. No violation of Section 468.112(2)(h) is proven.

    
    

23. Given the circumstances in this case, the Respondent attempted insofar as possible to meet the obligations placed upon him as a licensed contractor qualifying a business. Given the relatively short period of time between commencement of the first project, the date of execution of the second and third contracts, and the Respondent's resignation, the Respondent cannot be held liable for the actions of Tenaro in mismanaging the company financially at a time when the Respondent was actively pursuing work on the first project.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that no action be taken against the Respondent, John

R. Meyer.

DONE and ORDERED this 19th day of December, 1979, in Tallahassee, Leon County, Florida.

STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of December, 1979.

COPIES FURNISHED:

Michael E. Egan, Esquire

217 South Adams Street Post Office Box 1386 Tallahassee, Florida 32302

Ronald A. Cyril, Esquire 2070 Ringling Boulevard

Sarasota, Florida 33577

================================================================= AGENCY FINAL ORDER

================================================================= BEFORE THE CONSTRUCTION INDUSTRY LICENSING BOARD

FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD,

Petitioner,

vs. CASE NO.: 79-1355

JOHN J. MEYER, CB C012853

Respondent.

/

FINAL ORDER OF

FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD

This matter came for final action by the Florida Construction Industry Licensing Board on May 16, 1980, in Tampa, Florida. Upon consideration of the Objection to Final Order and Motion for Rehearing filed by Respondent, the Board

voted to set aside the Final Order entered March 28, 1980 due to the fact that through an inadvertent error, neither Respondent nor his attorney received notice of the January 25, 1980 meeting at which final action gas taken.

Respondent and his attorney were duly notified of the May 16, 1980, meeting and Respondent's attorney presented oral argument to the Board.

The Florida Construction Industry Licensing Board, having reviewed a complete transcript of the administrative hearing, as well as the Findings of Fact, Conclusions of Law and Recommended Order of the Hearing Officer, and having heard oral argument by counsel for Respondent, hereby adopts the exceptions to the Recommended Order, as filed by Petitioner, dated January 8, 1980, as follows:

Exceptions 1, 3, 4, 5 and 6 are therefore Incorporated by reference in this final order; all findings of fact and conclusions of law not inconsistent with the above, contained in the Recommended Order are hereby adopted by the Board and incorporated by reference in this Final Order. IT IS THEREFORE

ORDERED AND ADJUDGED that Respondent John R. Meyer be and is hereby officially reprimanded. It is further ordered that Respondent is fined $250.00.

DONE AND ORDERED this 16th day of May, 1980.

FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD

JOHN HENRY JONES PRESIDENT

cc. Mr. Michael Egan Mr. Ronald Cyril

Mr. Stephen F. Dean Mr. Charles Tunnicliff Mr. E. B. Ashley

Docket for Case No: 79-001355

Orders for Case No: 79-001355