STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STATE OF FLORIDA, DEPARTMENT OF ) LEGAL AFFAIRS, )

)

Petitioner, )

)

v. ) CASE NO. 80-2069

) GOLD KEY POOLS, INC., ARNOLD F. ) MORRIS and JOHN PEREZ, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William E. Williams, held a public hearing in this cause on May 10, 1983, in Tampa, Florida.

APPEARANCES

For Petitioner: Nikki Ann Clark, Esquire

Assistant Attorney General Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301

For Respondent: Daniel Newman, Esquire

205 South Dale Mabry Tampa, Florida 33609

By its Complaint, Petitioner, the Department of Legal Affairs ("Petitioner"), has charged Respondents, Gold Key Pools, Inc., Arnold F. Morris, and John Perez with violations of Section 501.204(1), Florida Statutes, and Rules 2-9.02(2) and 2-9.02(5), Florida Administrative Code, by their allegedly having misrepresented the age, model, grade, style, or standard of goods; and having misrepresented the nature, characteristics, standard ingredients, uses, benefits, quantities, or qualities of goods. Petitioner has further alleged that Respondents have engaged in unfair or deceptive acts or practices in violation of Section 501.204(1), Florida Statutes, and Chapter 2-15.03(1), Florida Administrative Code. ". . . by aborting or failing to honor without justification the construction contracts offered to members of the consuming public incidental to the sale and installation of swimming pools." Finally, Petitioner has alleged that Respondents, their agents or employees have engaged in unfair or deceptive acts or practices in violation of Section 501.204(1), Florida Statutes, and Rule 2-15.03(2), Florida Administrative Code, ". . . by making misrepresentations in the procurement of construction contracts likely to influence, persuade, or induce." Petitioner seeks an order requiring Respondents to cease and desist from the aforesaid acts and practices, finding probable cause for Petitioner to seek damages for consumers injured by the

alleged violations, and an award of attorney's fees and costs as provided by Section 501.2105, Florida Statutes.

At the final hearing Petitioner called Donald Planasch, Jimmy Simmon, Kay Rickert, James P. March, II, Terry Rose, Charles B. Young, and Arnold F. Morris as its witnesses. Petitioner offered Petitioner's Exhibits A, B, C, F, R, S, T, J, L, W, Q, and P, which were received into evidence. Respondents called Ivan Pennington, Michael Elliot, Robert Emerson, Paul Aquino, Robert Bearnidge, Richard Allen Jacobs, John Manuel Perez, and Arnold F. Morris as its witnesses. Respondents offered Respondents' Exhibits 1 and 2, which were received into evidence.

Both Petitioner and Respondents have submitted proposed findings of fact for consideration by the Hearing Officer. To the extent that those proposed findings of fact are not included in this Recommended Order, they have been specifically rejected as being either irrelevant to the issues involved in this cause, or as not having been supported by evidence of record.

FINDINGS OF FACT

1. Petitioner, the Department of Legal Affairs ("Petitioner"), is the enforcing authority of Florida's Deceptive and Unfair Trade Practices Act.

   
   

2. Beginning in 1974, and until its involuntary dissolution in approximately May, 1980, Respondent, Gold Key Pools, Inc., was engaged in the business of manufacturing, selling, and installing fiberglass swimming pools to the consuming public. To induce the public to enter into written contracts for the purchase of these pools, Respondent, Gold Key Pools, Inc., disseminated promotional brochures and "fact sheets" which contained representations as to the quality, nature, durability, and characteristics of its pools.

   Specifically, the following representations in promoting the swimming pools were made:

   
   

   1. That the pools were constructed with fiberglass and inert materials that never deteriorate;

      
      

   2. That the pools are resistant to cracking, leaking, and erosion, as well

      as fading mildew, rotting, rust, shattering, breaking or tearing apart;

      
      

   3. That the color in the pools is permanently molded and resists fading and never requires painting;

      
      

   4. That each pool was factory made to perfection from a perfect mold;

      
      

   5. That the pools are stain-resistant and virtually maintenance free;

      
      

   6. That the pools' high quality, one piece construction contained no seams, guaranteeing that the pools would never leak;

   7. That no need would ever exist to replaster or repair cracks or holes in the pools;

      
      

   8. That the non-porous surface of the swimming pools would stay bright and beautiful; and

      
      

   9. No professional maintenance service would ever be needed on the pool

      
      

3. During the course of its active conduct of business, Gold Key Pools, Inc., manufactured and installed approximately 3,000 pools in the State of Florida. Sometime in 1975, it came to the attention of officials of Gold Key Pools, Inc., that problems existed concerning the jel coat which had been applied over the fiberglass shell of the pool. Problems associated with the jel coat manifested themselves by the development of "blisters" on the pools' surface, and the actual cracking of the jel coat surface itself in some instances. Problems associated with the jel coat did not affect the structural integrity of the fiberglass pool shell. However, in response to these problems, Gold Key Pools, Inc., inserted a provision in its 25-year warranty providing that the jel coat portion of the pools was not warranted.

   
   

4. However, as far as can be determined from this record, the following specific warranty is contained in Gold Key Pools, Inc.'s standard form contract:

   
   

   During the course of its active conduct of business, Gold Key Pools, Inc., manufactured and installed approximately 3,000 pools in the State of Florida. Sometime in 1975, it came to the attention of officials of Gold Key Pools, Inc., that problems existed con- cerning the jel coat which had been applied over the fiberglass shell of the pool.

   Problems associated with the jel coat manifested themselves by the development of "blisters" on the pools' surface, and the actual cracking of the jel coat surface

   itself in some instances. Problems associated with the jel coat did not affect the structural integrity of the fiberglass pool shell.

   However, in response to these problems, Gold Key Pools, Inc., inserted a provision in its 25-year warranty providing that the jel coat portion of the pools was not warranted.

   
   

5. However, as far as can be determined from this record, the following specific warranty is contained in Gold Key Pools, Inc.'s standard form contract:

   
   

   The contractor warrants that all material used in completing the installation con- tracted herein will be new and that all work will be done in a workmanlike manner; that if any substantial defect occurs in workmanship, it will be remedied without cost to the owner if written notice is given the contractor within one year after

   pool completion, provided pool and equip- ment have been maintained in accordance with the recommendations of the contractor; and further provided that such defect is not the result of an act of God or the

   sub-soil or strata of the ground or the water table or circumstances beyond the control of the contractor. . . .

   
   

   In addition, Gold Key Pools, Inc., also made the following warranty on its pools:

   
   

   Gold Key Pools, Inc. warrants that all Gold Key Pools, Inc. fiberglass pool shells shall perform in a satisfactory manner with normal usage and proper care and will not rip, rust, or tear apart under normal conditions for a period of 25 years from the date of installation.

   
   

   This warranty shall apply only when the pool is installed by an authorized Gold Key Dealer, in accordance with our installation instructions, or by the homeowner with our supervision

   as per installation procedures.

   
   

   Within 1 year of original purchase, the factory or an authorized factory service center will repair or replace for the original purchaser any part of the fiberglass pool shell which is defective, at no costs to the original purchaser.

   
   

   After one year, but within 25 years of date of purchase the factory or an authorized service center will repair for the original purchaser any part of the pool shell which is defective,

   but the cost of Labor will be borne by the original purchaser. . . .

   
   

6. On or about October 12, 1977, Gold Key Pools, Inc., entered into a contract for the installation of a pool and pool decking with Donald F. Planasch. Within three months after the pool was installed, the purchaser began to experience problems including cracking of the decking and hairline cracks in the pool, with consequent water loss. Gold Key attempted repairs on eight to ten occasions, but was unsuccessful. Gold Key stopped responding to complaints from the purchase in early May of 1979.

   
   

7. On or about July 29, 1978, Gold Key entered into a contract with Edward Simmon for the installation of a pool and deck. Almost immediately after installation of the pool, the purchaser began to experience problems which included cracking of the pool shell. Gold Key attempted repairs on two or three

   occasions, each of which was unsuccessful. The purchaser subsequently effected repairs to the pool with another contractor.

   
   

8. In August of 1977, Gold Key entered into a contract to install a pool and concreted decking with Mr. and Mrs. Stanley Rickert. Soon after the pool and decking were installed, the Rickerts began to experience the cracking in the concrete decking area immediately surrounding the pool. Gold Key was notified of the problem, but never effectively repaired the deck.

   
   

9. On or about April 20, 1979, Gold Key entered into a contract with James March to install a pool on his property. Within six to eight months from the installation of the pool, cracks and holes developed in the surface of the pool. Gold Key was notified of these defects, but no repairs were ever attempted by Gold Key.

   
   

10. On August 23, 1979, Gold Key entered into a contract with Terry Rose for the installation of a pool and decking. Shortly after installation, the purchaser experienced problems with the development of holes in the surface of the pool, some of which were almost one-inch deep, and cracks in the decking. Although Gold Key was advised of these problems, no repairs were made to them.

    
    

11. On or about July 9, 1975, Gold Key entered into a contract for the installation of a pool on the property of Charles Young. Within one year of the installation of the pool, the purchaser experienced cracks in the surface of the pool, with consequent leakage of water from the pool. Despite having received notification, Gold Key never sent anyone to examine the problems with the pool.

    
    

12. At all times material hereto, Respondent, Arnold F. Morris, was a shareholder, president and director of Gold Key Pools, Inc. Respondent, John Perez, was the secretary of the corporation from 1975 until his resignation in 1980. Respondent Perez was never a shareholder of Gold Key, and had no responsibility over sales, marketing, or the preparation of contracts related to sales of pools. No evidence of record in this proceeding establishes that any pool purchaser ever spoke to either Respondents Morris or Perez prior to the purchase of their pools.

    
    

13. Sometime in 1979, Gold Key Pools, Inc., experienced a serious fire, which destroyed its manufacturing capacity. From the standpoint of manufacturing, Gold Key Pools, Inc., essentially went out of business shortly thereafter. However, Gold Key Pools did maintain a service force of employees to service pools which it had already sold for sometime after the fire. In approximately May, 1980, Gold Key Pools, Inc., ceased doing business at all. At the time it ceased doing business, Gold Key Pools, Inc., for all intents and purposes had no assets.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the subject matter of, and the parties to, this proceeding. Section 120.57(1), Florida Statutes.

    
    

15. By making representations and warranties described in the Findings of Fact, and by failing to honor those representations and warranties, and by failing to make repairs which it was obligated to make in accordance with the representations and warranties, there is reasonable cause to believe that Respondent, Gold Key Pools, Inc., has violated the provisions of Section 501.204(1), Florida Statutes, and Rules 2-9.02(2) and (5), and 2-15.03(2),

Florida Administrative Code. It is further concluded that there is no such cause to believe that any such violations were committed by either Respondents Arnold F. Morris or John Perez.

Accordingly, it is RECOMMENDED:

That a Final Order be entered by the State of Florida, Department of Legal Affairs, finding that probable cause has been established for Petitioner to seek damages for consumers injured by the violations hereinabove set forth.

DONE AND ENTERED this 26th day of September, 1984, at Tallahassee, Florida.

WILLIAM E. WILLIAMS

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 26th day of September, 1984.

COPIES FURNISHED:

Nikki Ann Clark, Esquire Assistant General Counsel Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301

Daniel Newman, Esquire

205 South Dale Mabry Tampa, Florida 33609

Honorable Jim Smith Attorney General The Capitol

Tallahassee, Florida 32301

Docket for Case No: 80-002069

Orders for Case No: 80-002069