STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA CONSTRUCTION ) INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 82-1342

)

STEVEN E. SHIELDS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for formal hearing before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings, on March 8, 1983, in Orlando, Florida.

APPEARANCES

For Petitioner: Douglas A. Shropshire, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Charles E. Hoequist, Esquire

301 North Ferncreek Orlando, Florida 32803

Pursuant to its Administrative Complaint, the Petitioner charges the Respondent with various violations of Section 489.129(e), (f), (g), (h) and (j), Florida Statutes (1979); and, concomitantly, Section 489.119(2) and (3), Florida Statutes (1979). Specifically, it is alleged that the Respondent, doing business as T. J. Associates, entered into a contract with Raymond E. and Florence Martin to remodel their residence in Winter Park, Florida, for a contract price of $26,615.00. It is alleged that on May 20, 1980, Respondent, d/b/a T. J. Associates, entered into three separate addenda to the above contract for additional remodeling work for the sums of $1,030.00, $5,177.00 and

$4,045.00, respectively. On July 11, 1980, it is alleged that the Respondent, d/b/a T. J. Associates, entered into two more addenda with the owners of the property for additional remodeling for sums of $1,070.00 and $6,860.00. The Petitioner alleged that the Respondent obtained a City of Winter Park building permit to perform this construction and never properly qualified T. J. Associates as a contractor for purposes of Chapter 489, Florida Statutes (1979). He is thus charged with violating Section 489.129(1)(e) and (f), Florida Statutes (1979), by allegedly aiding and abetting an unlicensed person to evade the provisions of the contracting license law and by knowingly combining or conspiring with an unlicensed person by allowing his registration to be used by an unlicensed person with intent to evade the provisions of the contracting license law.

Additionally, with regard to Count II, it is alleged that the Respondent abandoned the contract after receiving $35,990.00 of the contract sum and after having completed approximately 12 percent of the construction. Finally, it is charged that certain materialmen, named in Count III of the complaint, remain unpaid for various amounts and that therefore the Respondent violated Section 489.129(1)(h), Florida Statutes (1979), by diverting funds received for the construction project with the result that he was unable to fulfill the terms of his obligation.

At the hearing, the Petitioner presented six exhibits which were received into evidence, the seventh exhibit being received into evidence as a late exhibit by agreement of the parties. The Petitioner presented five witnesses and the Respondent one witness, the Respondent himself, who testified after waiving his Fifth Amendment privilege.

The issue to be resolved in this proceeding concerns whether the Respondent is guilty of the violations charged in the Administrative Complaint, and, if so, the assessment of an appropriate penalty. At the conclusion of the proceeding, the parties requested a transcript of the proceeding and an extended schedule for filing proposed findings of fact and conclusions of law, as well as an additional period of time for submission of late exhibits, concomitantly agreeing to waive the 30-day requirement for filing of a Recommended Order.

FINDINGS OF FACT

1. The Respondent is licensed as a general contractor in the State of Florida and registered with the Florida Construction Industry Licensing Board. That agency is the agency charged with regulating the practice of contracting in the State of Florida and with monitoring the compliance of licensees with the various provisions of Chapter 489, Florida Statutes, and pertinent rules relating to licensure standards and practice standards of contractors.

   
   

2. On April 23, 1980, one Terry Burch and Jim Goodman were operating a construction business under the fictitious name of "T. J. Associates." Neither Terry Burch or Jim Goodman, nor the entity known as T. J. Associates, was qualified or licensed with the Florida Construction Industry Licensing Board at that time, nor at times subsequent thereto which are pertinent to this proceeding. On April 23, 1980, T. J. Associates entered into a written contract with homeowners Florence Martin and her husband to remodel their home at 120 Broadview Avenue, Winter Park, Florida. The original contract was for

   $26,615.00 with various addenda to that contract, such that the total net contract price, with modifications, ultimately reached $40,597.00. Both the contract and the modification agreements were signed by the Martins and Terry Burch of T. J. Associates. The Respondent, Steven Shields, was not a party to any of these agreements.

   
   

3. Mr. Burch and Mr. Goodman of T. J. Associates, obtained the Martin contract entirely through their own efforts and after obtaining the signed contract, approached the Respondent, Steven Shields, to ask him to draft blueprints for the job, also proposing that the three of them enter into some sort of partnership or other business arrangement. During the meeting at which this business was discussed, it was revealed to the Respondent that T. J. Associates was unlicensed with the Florida Construction Industry Licensing Board and the three men agreed that they would obtain proper application documents from the Board's office in Orlando for filing so as to properly qualify the company. In the meantime, the Respondent agreed to obtain from the City of

   Winter Park Building Department, the necessary building permits and did so. The Respondent was ultimately paid $600.00 by T. J. Associates for labor he performed on the subject project and for obtaining a building permit in his own name.

   
   

4. The Respondent ultimately decided not to enter into a business relationship with T. J. Associates, Burch and Goodman. He did, however, work on the "Martin project" as a sort of job supervisor or foreman, performing some labor on the job and going to the job site on possibly two or three occasions during the course of the construction effort of T. J. Associates. The Respondent initially intended to use his contractor's license to properly qualify T. J. Associates with the Board and obtain the papers to do so, but after he did not enter the formal business relationship with T. J. Associates, neglected to do so, nor did T. J. Associates make any further effort to qualify itself as a contracting entity with the Florida Construction Industry Licensing Board. The Respondent did obtain the building permit for T. J. Associates for the Martin job on May 13, 1980, and obtained it under his individual name and contractor license number.

   
   

5. T. J. Associates worked on the Martin job from May 6, 1980, to July 16, 1980. On July 16, 1980, after a dispute regarding the quality of the paint work and other matters, T. J. Associates and the Respondent stopped all work. At the time of the stoppage, the work was 90 percent complete. At the time the work was stopped, no more money was due to T. J. Associates for work already performed. The Martins, at that point, had paid T. J. Associates $35,900.00. The Martins had however, upon advice of their attorney, withheld sufficient funds at the point of cessation of work by T. J. Associates, to enable them to pay for the completion of the job by other labor and materialmen.

   
   

6. Three subcontractors had been hired or contracted with by T. J. Associates for work which was performed by them on the Martin job. Those three subcontractors, Mr. Anthony Costa, Mr. Clyde Ray and Mr. Michael Ellis, had performed work for which they were owed, respectively, $531.00, $550.00 and

   $130.00. None of those three subcontractors have, as yet, been paid for these amounts. They repeatedly attempted to obtain payment from T. J. Associates, but were given no satisfaction in that regard. The Respondent never entered into any agreement or hiring arrangement with the three subcontractors involved, nor did the Respondent ever have possession or control of any funds paid from the Martins to T. J. Associates from which the subcontractors should have been paid. The Respondent only received the above- mentioned $600.00 from T. J. Associates for his services.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes (1981).

   
   

8. The Respondent is a licensed contractor pursuant to Section 489.113(1), Florida Statutes (1979).

   
   

9. It is a prerequisite to engaging in contracting that a contractor be licensed with the Board. Business entities may engage in contracting only after being "qualified" with the Florida Construction Industry Licensing Board by a natural person who holds a contractor's license. Section 489.19, Florida Statutes (1979). By obtaining, executing and performing the Martin house remodeling contract, T. J. Associates was engaged in "contracting," as that term

   is defined at Section 489.105(3) and (5), Florida Statutes (1979). T. J. Associates should have been licensed and qualified with the Florida Construction Industry Licensing Board at times pertinent hereto, but was not.

   
   

10. The Respondent applied for and obtained the subject building permit in his own individual name as contractor. By doing that, the Respondent made himself the official contractor of record for the job, which was actually contracted for in the name of T. J. Associates. T. J. Associates and the Martins were the sole parties to the original contract as well as all addenda agreements. The Respondent never executed any contractual arrangement with regard to the Martin job. Section 489.129(1)(g), provides that the Board may revoke, suspend, or deny the issuance or renewal of a certificate or registration of a contractor or impose a fine or other penalty enumerated in Section (1) thereof for the following acts:

    
    

    (g) Acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certifi- cate holder or registrant as set forth on the issued certificate or registration, or in accordance with the personnel of the certifi- cate holder or registrant as set forth in the application for the certificate or registra- tion, or as later changed as provided in this act.

    
    

    Thus, although it is true that the Respondent obtained the building permit in his individual name and made himself contractor of record for the job for purposes of obtaining the building permit which permitted the work to be done, it must be found, however, that T. J. Associates did the actual contracting with the homeowners and that the Respondent had no contractual privity with those homeowners (nor with T. J. Associates for that matter). Therefore the Respondent could not be found guilty of contracting in an unlicensed name because he simply did not do the contracting himself, but was merely contractor of record for purposes of obtaining the building permit permitting the construction to start. Likewise, the Respondent cannot be found guilty of failing to qualify the business entity through which he was contracting since he himself was not contracting in this instance. Thus, no violation of Section 489.129(1)(g) has been made out by the Petitioner and those charges involving failing to qualify T. J. Associates and contracting in other than the Respondent's licensed individual name, should be dismissed.

    
    

11. Section 489.129(1)(e) provides pertinently as follows:

    
    

    (e) Aiding or abetting any uncertified or unregistered person to evade any pro- vision of this act.

    
    

12. Section 489.129(1)(f) provides that the penalties which may be imposed pursuant to Subsection (1) apply to a licensee who:

    
    

    (f) 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 provisions of this act. When a certificate holder or

    registrant allows his certificate or regi- stration to be used by one or more companies without having any active participation in the operations, management, or control of said companies, such act constitutes prima facie evidence of an intent to evade the pro- visions of this act.

    
    

13. The Respondent has been charged with both conspiracy and "aiding and abetting" for purposes of the above two subparagraphs. The Findings of Fact above establish that the Respondent had a meeting with Burch and Goodman of T.

    J. Associates regarding the Martin job, at which meeting they informed him that they had a contract for the job and wished him to do the blueprints and obtain the building permit. They also made him aware that they were not licensed with the Florida Construction Industry Licensing Board, but they expressed a willingness, and he established that it was his intent, that the appropriate application documents be filed with the Board in order to properly qualify T. J. Associates before commencing the job. Thus, at the time of this meeting, which is the only time the evidence establishes that the three of them discussed or entered into any scheme, design, or agreement regarding the manner in which they would conduct the "Martin project," there was established to be no intent on the part of the Respondent to aid T. J. Associates in evading the law cited herein. Therefore, at the only time the evidence reveals the three parties communicated regarding the manner in which the job would be conducted, there is no evidence that the Respondent combined or conspired with the uncertified, unregistered "person" (T. J. Associates) to allow his certificate to be used with intent to evade the provisions of Chapter 489. Indeed, the intent was to the contrary and the intent of all parties at that time was to comply with the law and file the appropriate application documents with the Board. Thus, the presumption contained in the latter part of Subparagraph (f) regarding the presumed intent to evade the act has been rebutted. Accordingly, the Respondent cannot be found guilty of the charge of conspiracy and has not violated Section 489.129(1)(f), Florida Statutes (1981)

    
    

14. The aiding and abetting charge, for purposes of Section 489.129(1)(e), Florida Statutes (1981), has been substantiated however. Although the Respondent cannot be found to have conspired with T. J. Associates, Burch and Goodman, there was an intervening time period after the meeting with those two persons and before he obtained the building permit under his name and license number during which time he became aware that indeed T. J. Associates never had filed the appropriate qualifying documents with the Board. He therefore obtained the permit and entered his name as the contractor of record for the job, knowing that the contracting party was an unlicensed, unregistered entity. In that circumstance, his obtaining the permit on their behalf without their appropriate qualification constituted his furnishing assistance to them in evading the provisions of Chapter 489. His knowledge of their continuing unqualified status after he became aware that they indeed had not followed through with their assurance that they would become qualified, renders him guilty of aiding and abetting an uncertified or unregistered "person" to evade the provisions of Chapter 489.

    
    

15. The Respondent is charged in Count II of the Administrative Complaint with abandonment. There is no question that the above Findings of Fact demonstrate that indeed the project was abandoned when it was 90 percent complete. The Respondent was aware that it was not complete and was aware that

    T. J. Associates had left the job. Since the Respondent admitted obtaining the building permit in his individual name as licensed contractor of record for the

    job and admitted that the job had never been quite completed, then this charge has been substantiated. The Respondent was under a duty as the licensed contractor on the job, when he became aware that work had ceased, to communicate width the Martins and make appropriate arrangements for finishing the work himself, possibly by contracting with them directly and doing the work himself or obtaining an appropriate subcontractor. In any event, the Respondent should have made some attempt to see that the job was complete since he was the contractor of record for the project. No justification was offered in the evidence in this proceeding for the cessation of work, other than some nonspecific testimony regarding ill-will that had arisen between the Martins and

    T. J. Associates.

    
    

16. The Respondent is charged in Count III with diversion of funds. It is asserted by the Petitioner that the Martins had paid T. J. Associates about

$5,000.00 more than they were entitled to at the point of abandonment, when 90 percent of the work was completed. The Petitioner thus argues that T. J. Associates had more than enough money to pay outstanding bills, including the three subcontractors left unpaid as discussed in the above Findings of Fact.

The evidence will not support the charge of diversion on the part of the Respondent however. The evidence only establishes that the Respondent obtained the building permit in his own name as licensed contractor, but there is no evidence at all that any funds were ever paid to the Respondent. Contrarily, the evidence reveals clearly that they were all paid to T. J. Associates, the logical payee of the funds from the Martins, inasmuch as T. J. Associates, and not the Respondent, was the contracting party for the project. Thus, although the evidence supports the charges regarding the Respondent's responsibility for abandonment and aiding and abetting an unlicensed entity to evade the act, there is no evidence whatever to indicate that the Respondent ever received any money for the job other than the $600.00 paid him by T. J. Associates for his actual labor, for obtaining the permit, and drawing plans. Thus, the diversion charge is unsubstantiated.

RECOMMENDATION

Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence in the record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore

RECOMMENDED that the Respondent be found guilty of a violation of Section 489.129(1)(e) and (k), in that he aided and abetted an uncertified, unregistered person to evade the act and violated Subsection (k) by abandoning the project without just cause. The remaining charges in the Administrative Complaint should, however, be dismissed. In view of the violations proven, an administrative fine of $500.00 and a three (3) month suspension of his license, followed by a one (1) year period of probation is warranted.

DONE and ENTERED this 22nd day of August, 1983, in Tallahassee, Florida.

P. MICHAEL RUFF 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 22nd day of August, 1983.

COPIES FURNISHED:

Douglas A. Shropshire, Esquire Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Charles E. Hoequist, Esquire

301 North Ferncreek Orlando, Florida 32803

James Linnan, Executive Director Florida Construction Industry Licensing Board

Department of Professional Regulation

Post Office Box 2 Jacksonville, Florida 32202

Fred M. Roche, Secretary Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 82-001342

Orders for Case No: 82-001342