STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 82-705

)

ALVIN C. SMITH, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on July 1, 1982, in Fort Myers, Florida.

APPEARANCES

For Petitioner: Xavier J. Fernandez, Esquire

Post Office Box 729

Fort Myers, Florida 33902

For Respondent: Alvin C. Smith, pro se

1103 Sunrise Boulevard

Naples, Florida 33940 ISSUE PRESENTED

Whether respondent's license as a certified general contractor should be disciplined for alleged violations of Chapter 489, Florida Statutes (1981), the Construction Industry Licensing Law.

BACKGROUND

By administrative complaint dated September 17, 1981, petitioner, Department of Professional Regulation, Construction Industry Licensing Board ("Department"), charged respondent Alvin C. Smith ("respondent") with seven violations of Chapter 489, Florida Statutes (1981), the Construction Industry Licensing Law. Respondent disputed the charges and requested a Section 120.57(1) hearing. On March 9, 1982, the Department forwarded this case to the Division of Administrative Hearings for assignment of a hearing officer to conduct the requested hearing.

At hearing, the Department called, as witnesses, Frank B. Record, Michael

C. Popesco, Reinhold Matay, and Herbert Solms; Petitioner's Exhibits 1/ No. 1-

10 were accepted into evidence. Respondent testified in his own behalf and offered one exhibit into evidence.

The transcript of hearing was filed on August 2, 1982; proposed findings of fact, conclusions of law, and memoranda were filed by September 2, 1982. The parties agreed that the 30-day period for submittal of the recommended order would begin to run on that date.

Based on the evidence presented at hearing, the following facts are determined:

FINDINGS OF FACT I.

1. Respondent is a certified general contractor holding license number CG C008351.

   
   

2. Respondent obtained Osceola County Building Permits and agreed to help property owners construct improvements or additions to four motels located in Osceola County, Florida. (Testimony of Record, Popesco, Matay, Solms, respondent.)

   
   

3. Specifically, on January 29, 1980, respondent pulled Osceola County Building Permit ("building permit") No. 364-80B to construct the Record Motel, an 11-unit motel owned by Frank B. Record. On March 17, 1981, respondent pulled building permit No. 694-81B to construct a five-unit addition to the Record Motel; on January 30, 1980, he pulled building permit No. 2613-80B to add eight units to the Lakeview Motel owned by Michael Popesco; on February 2, 1980, he pulled building permit No. 2996-81B to construct a 20-unit motel known as The Key Motel, owned by Reinhold Matay; on April 8, 1981, he pulled building permit No. 3087-81B to construct a second floor addition to The Key Motel; and on March 2, 1981, he pulled building permit No. 3038-81B to construct a 20-unit motel known as the Siesta Motel, owned by Herbert Solms. (Stipulation dated June 30, 1982.)

   
   

   II.

   
   

4. Respondent had a similar working arrangement with each motel owner, none of whom were licensed contractors. As the general contractor, he pulled the necessary building permits. He would perform the carpentry work on each project. The owners actively supervised and participated in their building projects. After consulting with respondent, they solicited, selected, and awarded bids to electrical, masonry plumbing, paving, and drywall subcontractors. They paid subcontractors directly and supervised their work daily. Respondent, however, would inspect the job sites intermittently, usually on weekends, sometimes during the week. But he did not directly and actively supervise the subcontractors; some were even unaware that he was the general contractor for the job. (Testimony of Record, Popesco, Matay, Solms; P-3, P- 10.)

   
   

5. No evidence was presented to establish that the owners, for compensation, constructed these improvements for others or for resale to others.

   
   

6. All the buildings were constructed in a satisfactory manner. The buildings passed all inspections, and the owners are entirely satisfied. (Testimony of Record, Popesco, Matay, Solms, respondent.)

   
   

7. The owners of the various motels did not act as "contractors" within the meaning of Section 489.105(3), Florida Statutes (1981).

   CONCLUSIONS OF LAW

   
   

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

   
   

9. License revocation proceedings are penal in nature. The prosecuting agency is required to prove its charges by clear and convincing evidence--by evidence as substantial as the consequences facing the licensee. See, Bowling

   v. Department of Insurance, 294 So.2d 165 (Fla. 1st DCA 1981); Walker v. State,

   322 So.2d 612 (Fla. 3d DCA 1975); Reid v. Florida Real Estate Commission, 188 So.2d 846 (Fla. 2d DCA 1966).

   
   

10. The Construction Industry Licensing Board has only those powers conferred upon it by the legislature in order to carry out the aims for which it was established. Swebilius v. Florida Construction Industry Licensing Board, 365 So.2d 1069, 1070 (Fla. 1st DCA 1979).

    
    

11. Here, the Department contends that respondent's contractor's license should be disciplined under the authority of Section 489.129, Florida Statutes (1981), which provides in part:

    
    

    1. The board may revoke, suspend, or deny the issuance or renewal of the certificate or registration of a con- tractor or impose an administrative fine not to exceed $1,000, place the contractor on probation, reprimand or censure, a contractor if the contractor is found guilty of any of the following acts:

       * * *

       1. Aiding or abetting any uncertified or unregistered person to evade any provision of this act.

       2. 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 intent to evade the pro- visions of this act. . . .

       3. Acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certificate holder or registrant as set forth on the issued certificate or registration, or in accordance with the personnel of the certificate holder or regis- trant as set forth in the application for the certificate or registration, or as later changed as provided in this act.

12. Under Chapter 489, the Florida Construction Industry Licensing Law, a person may not lawfully engage in the business of contracting without first being licensed. Sections 489.113(2) and 489.127, Florida Statutes (1981). "Contracting" means engaging in business as a contractor. Section 489.105(5), Florida Statutes (1981). "Contractor" is also assigned a specific definition by Section 489.105(3), Florida Statutes (1981):

    
    

    (3) "Contractor" means the person who is qualified for and responsible for the entire project contracted for and means, except as exempted in this act, the person who, for compen- sation, undertakes to, submits a bid to, or does himself or by other con- struct, repair, alter, remodel, add to, subtract from, or improve any building or structure, including related improvements to real estate, for others or for resale to others.

    . . . (e.s.)

    
    

13. The Department contends that the owners of the various motels evaded the provisions of Chapter 489 by engaging in the business of contracting without first obtaining contractors' licenses. Respondent is charged with seven counts of conspiring with the owners and aiding and abetting their alleged evasions of the licensing requirements of Chapter 489. If, on the other hand, the owners did not evade the licensing requirements of Chapter 489, respondent must be exonerated.

    
    

14. The Department has not substantiated its seven-count complaint. The evidence in this case is insufficient to prove that respondent, by his actions, violated Section 489.129(1)(e), (f) or (g), Florida Statutes (1981). The owners did not construct the various buildings "for compensation" or "for others or for resale to others". Id. They constructed them on their own property for their own purposes. Thus, they did not act as contractors. They were not engaged in the business of contracting within the meaning of Chapter 489, and a contractor's license was not required. It follows that respondent cannot be found guilty of aiding an unlicensed person to evade the provisions of Chapter

489. Neither is the evidence sufficient to establish that respondent acted as a contractor under other than the name which is stated on his license. Each of the seven counts in the complaint must, therefore, be dismissed.

15. The parties' proposed findings of fact have been considered. To the extent they are incorporated in this recommended order, they are adopted; otherwise, they are rejected as unsupported by the evidence or unnecessary to resolution of the issue presented.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the charges against respondent be dismissed.

DONE and RECOMMENDED this 14th day of October, 1982, in Tallahassee, Leon County, Florida.

R. L. CALEEN, JR., 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 14th day of October, 1982.

ENDNOTE

1/ Petitioner's and Respondent's Exhibits will be referred to as "P- " and "R-

", respectively.

COPIES FURNISHED:

Xavier J. Fernandez, Esquire Post Office Box 729

Fort Myers, Florida 33902

Mr. Alvin C. Smith 1103 Sunrise Boulevard

Naples, Florida 33940

J. K. Linnan, Executive Director Construction Industry Licensing Board

Post Office Box 2 Jacksonville, Florida 32201

Samuel R. Shorstein, Secretary Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

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

=================================================================

STATE OF FLORIDA

DEPARTMENT OF PROFESSIONAL REGULATION CONSTRUCTION INDUSTRY LICENSING BOARD

DEPARTMENT OF PROFESSIONAL REGULATION/CONSTRUCTION INDUSTRY LICENSING BOARD,

Petitioner,

vs. DPR CASE NO. 0012480

DOAH CASE NO. 82-705

ALVIN C. SMITH CG 008351

1103 Sunrise Road

Naples, Florida 33942

Respondent.

/

FINAL ORDER

This matter came before the Construction Industry Licensing Board on January 14, 1983, in Key West, Florida. An administrative hearing held pursuant to Section 120.57(1), Florida Statutes, resulted in the issuance of a Recommended Order (attached hereto as Exhibit A). Petitioner filed Exceptions to the Recommended Order. Following a review of the Recommended Order, Petitioner's Exceptions thereto, and the complete record in this proceeding,

It is ORDERED:

1. The Findings of Fact of the Hearing Officer are approved and adopted and incorporated herein by reference, except for his finding of fact on page 3 of his Recommended Order, that no evidence was presented to establish that the owners, for compensation, constructed improvements for others or for resale to others. The Board adopts Petitioner's Exceptions to this Finding of Fact and finds that there was no substantial and competent evidence in the record to support the above Finding of Fact. Therefore, the Board finds as an additional Finding of Fact that evidence was presented that the owners were compensated in the form of increased property value for the construction of improvements. Furthermore, the Hearing Officer should have found that the structures, which were motels and/or additions to motels, were intended by their very nature to be used by others and were not intended merely for personal use. Evidence was presented at the formal hearing that in each instance, the owner constructed a motel and/or an addition to a motel on his property. It is common knowledge that a motel is a commercial structure intended for the use of others. It is also common knowledge that the value of land whereon commercial improvements are made increases, as a result of such commercial improvements. This increase is derived from both the value of the commercial improvements placed on the property and the present value of the expectation of future profits to be derived from the use of such commercial improvements. This increase in property

   value provides compensation or consideration to the owner for the construction of the motel and/or addition which constitutes the improvement to the owner's land.

   
   

2. The Conclusions of Law of the Hearing Officer are approved and adopted and incorporated herein by reference except for his conclusion of law on pages 5 and 6 of his Recommended Order:

   
   

   "The Department has not substantiated its seven-count complaint. The evidence in this case is insufficient to prove that respondent,

   by his actions, violated Section 489.129(1)(e),

   (f) or (g), Florida Statutes, (1981). The owners did not construct the various buildings "for compensation" of "for others or for resale to others". Id. They constructed them on their own property for their own purposes. Thus, they did not act as contractors. They were not en- gaged in the business of contracting within the

   meaning of Chapter 489, and a contractor's license was not required. It follows that respondent can not be found guilty of aiding an unlicensed person to evade the provisions of Chapter 489. Neither is the evidence sufficient to establish that respondent acted as a contractor under other than the name which is stated on his license. Each

   of the seven counts in the complaint must, there- fore, be dismissed".

   
   

   The Board adopts Petitioner's Exception to this Conclusion of Law and finds as follows:

   
   

   1. The evidence in this case shows that in each instance alleged in the Administrative Complaint, the owner constructed commercial improvements to his land for compensation. The owners were compensated for constructing said commercial improvements when they received the resulting increases in property value, which as a matter of common knowledge, result from such commercial improvements. The increase in property value was derived from both the actual value of the commercial improvement placed on the property and the present value of the expectation of future profits to be derived from the use of such commercial improvements. The evidence regarding the type of commercial improvements constructed (that is motels) presented at the formal hearing demonstrates that such improvements were constructed for the use of others and not merely for the personal use of the owners.

      
      

      In each of the instances set forth in the Recommended Order, the owner therefore, acted as a contractor, as defined in Section 489.105(3), Florida Statutes (1981), for the respective construction project. The evidence shows that it was the owners, and not the Respondent, who actively supervised and participated in the construction of the motels and/or additions to motels. The owners solicited, selected and awarded bids to contractors. The owners paid the subcontractors directly and supervised their work on a daily basis. The Respondent's involvement in the construction of the respective motels and/or additions to motels was limited to inspections which were described as "intermittent".

   2. The definition of "Contractor", as provided in Section 105(3), Florida Statues (1981), set forth in the Recommended Order, is to be read with the provisions of Section 103, Florida Statutes (1981), which provides for exceptions to Chapter 489, Florida Statutes. Under the provisions set forth below, an owner-builder is only exempted from the provisions of Chapter 489, Florida Statutes, as follows:

      
      

      Section 489.103 Exemptions - This act does not apply to:

      
      

      (7) Owners of property building or improving farm outbuildings or one-family or two-family residences on such property for the occupancy or use of such owners and not offered for sale, or building or improving commercial buildings at a cost of under $25,000 on such property for the occupancy or use of such owners and not offered for sale or lease. In all actions brought under this act, proof of the sale or lease, or offering for sale or lease, of more than one such structure by the owner-builder within 1 year after completion of same is presumptive evidence that the construction was undertaken for purposes of sale or lease.

      
      

      The owners in the instant case do not fall within the exemption provided above. The evidence presented at the formal hearing clearly indicates that the commercial buildings, motels, were intended, by their very nature, for the use of others and not merely for the use of such owners. Inasmuch as the evidence presented demonstrates owners are not exempted from the provisions of Chapter 489, Florida Statutes, these owners were therefore required to be registered or certified, as provided in Section 489.113, Florida Statutes (1981), prior to engaging in the business of contracting. No evidence was presented to show registration or certification of any of the owners.

      
      

   3. Although the owners were required to be registered or certified prior to engaging in the business of contracting, they were able to evade the provisions of Chapter 489, Florida Statutes, noted above, because Respondent obtained building permits for the owners to perform the construction detailed in the Recommended Order. As a matter of law, an owner-builder cannot obtain a building permit to construct a structure unless he is exempted from the provisions of Chapter 489, Florida Statutes, pursuant to the exemptions provided in Section 489.103, Florida Statutes (1981). It has been established that the owners, in the instant case were not exempted from the provisions of Chapter 489, Florida Statutes. Therefore, since the evidence shows that the Respondent obtained seven building permits for Record, Popesco, Matay and Solms to construct motels and/or additions to motels, Petitioner has shown that Respondent violated Section 489.129(1)(e), Florida Statutes (1981), in that he aided or abetted an unregistered or uncertified person to evade the provisions of Chapter 489, Florida Statutes.

      
      

   4. The facts presented by Petitioner show that Respondent violated Section 489.129(1)(f), Florida Statutes (1979), in that he knowingly combined or conspired with an unregistered or uncertified person by allowing his license to be used by such person with the intent to evade the provisions of Chapter 489, Florida Statutes. The Respondent obtained seven permits, using his certified general contractor's license, to construct three motels and additions to four

      motels. The motels and/or additions were actually constructed by the owners thereof. The owners actively participated in the supervision of the projects, hired subcontractors and/or suppliers, and paid the subcontractors directly.

      Respondent, on the other hand, took no active part in the construction of structures noted above. The Respondent's involvement in the construction of the motels and/or additions was limited to obtaining a permit and performing "intermittent" inspections. Inasmuch as the owners acted as the contractors for the projects, the evidence is clear that Respondent violated Section 489.129(1)(f), Florida Statutes (1979), as noted above.

      
      

   5. The evidence presented at the formal hearing clearly shows that Respondent violated Section 489.129(1)(g), Florida Statutes (1981), in that he acted under a name other than on his certificate or registration. Respondent, at all times material herein, was licensed in his individual name only. Under the provisions of Section 489.119(2), Florida Statutes (1979), a contractor proposing to engage in business as a partnership, corporation, business trust, or other legal entity, must first qualify that entity with the Construction Industry Licensing Board. The evidence clearly shows that Respondent never qualified any of the owners of the instant case. Despite this fact, Respondent obtained seven permits for these owners, who then acted in the capacity of contractors in the construction of the respective motels and/or additions to motels. Therefore, Respondent acted under a name other than on his license, thereby violating Section 489.19(1)(g), Florida Statutes (1981).

   
   

3. Based on the foregoing modified Findings of Fact and Conclusions of Law, the Recommendation of the Hearing Officer is rejected as inappropriate under the circumstances. The Board rejects Petitioner's Exception to the Recommendation. Therefore, following a review of the complete record and based on the foregoing modified Findings of Fact and Conclusions of Law, it is

ORDERED and ADJUDGED that the certified general contractor's license of the Respondent be and the same is hereby suspended for a period of one (1) year and that he pay a civil penalty in the amount of 2,000.00.

DONE and ORDERED this 27th day of January 1983.

FLORIDA CONSTRUCTION INDUSTRY LICENSING BOARD

John Henry Jones, Chairman

Docket for Case No: 82-000705

Orders for Case No: 82-000705