STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 82-1996

)

DAVID L. MORMANN, )

)

Respondent. )

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

)

Petitioner, )

)

vs. ) CASE NO. 83-604

)

JOHN S. BRENGLE, JR., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, R. L. Caleen, Jr., a hearing officer with the Division of Administrative Hearings, conducted a formal hearing in this case on June 21, 1983, in Tampa, Florida.

APPEARANCES

For Petitioner: Stephanie A. Daniel, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondents: Harvey Paul Muslin, Esquire

1905 West Kennedy Boulevard Tampa, Florida 33609

ISSUES

1. Whether petitioner Department of Professional Regulation, Florida Construction Industry Licensing Board, ("Department") should revoke, suspend, or otherwise discipline respondent David L. Mormann's registered residential contractor's license on charges that he (1) was the subject of disciplinary action by a local board; (2) willfully or deliberately disregarded and violated local building codes or laws; (3) failed to comply in a material respect with

   the provisions of Chapter 489, Florida Statutes; and (4) acted in the capacity of a contractor under a name other than on his license.

   
   

2. Whether the Department should revoke, suspend, or otherwise discipline respondent John S. Brengle's registered general contractor's license on charges that he (1) knowingly combined or conspired with an unregistered or uncertified person by allowing such person to use his registration with the intent to evade the provisions of Chapter 489, Florida Statutes; (2) acted under a name other than on his registration, with the intent to evade the provisions of Chapter 489, Florida Statutes; (3) failed to comply in a material respect with the provisions of Chapter 489, Florida Statutes; and (4) aided or abetted an unregistered or uncertified person to evade the provisions of Chapter 489, Florida Statutes.

BACKGROUND

On August 7, 1981, the Department filed an administrative complaint charging respondent David L. Mormann with multiple violations of Chapter 489, Florida Statutes (1979), the Construction Industry Licensing Law. Respondent Mormann disputed the charges and requested a hearing. On July 21, 1982, almost one year later, the Department forwarded this case to the Division of Administrative Hearings for assignment of a hearing officer to conduct the requested hearing. On the Department's motion, the administrative complaint was subsequently amended by adding additional charges.

On January 27, 1983, the Department filed an administrative complaint charging respondent John S. Brengle, Jr. with multiple violations of Chapter

489. He disputed the charges and requested a hearing. On March 1, 1983, the Department forwarded this case to the Division of Administrative Hearings for assignment of a hearing officer. On the Department's motion, the complaint was subsequently amended to correct a typographical error. Both cases were then consolidated for final hearing.

At hearing, the Department presented the testimony of Don Charles Hulling, Donald N. Barnum, Terry Goins, John S. Brengle, Jr., Nelson Perez, David E. Anderson, and David L. Mormann. Petitioner's Exhibit Nos. 1-18 and respondent's Exhibit No. 1 were received into evidence. 1/ In addition, petitioner's Exhibit Nos. 19 and 20, both late filed exhibits, were received into evidence.

The parties filed proposed findings of fact and conclusions of law by September 20, 1983.

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

FINDINGS OF FACT

Revocation of Respondent Mormann's Local License

1. At all times material hereto, respondent Mormann was licensed as a registered residential contractor, having been issued license no. RRA031419 and RR0031419 by the State of Florida. At all times pertinent to the charges, neither respondent Mormann nor respondent Brengle qualified a business known as "Dave Mormann and Associates" with the Florida Construction Industry Licensing Board. (P-1)

2. At all times material hereto, respondent Brengle was licensed as a registered general contractor, having been issued license no. RG0002370 by the State of Florida. (P-2)

   
   

3. On October 17, 1979, Nelson A. Perez Electric Co. obtained a final judgment for $1,841.96 (including court costs) against Erection and Maintenance Co., Inc., in the County Court of Hillsborough County, Florida. Respondent Mormann was the qualifying agent for Erection and Maintenance Co., Inc. The judgment arose out of respondent Mormann's construction activities and his failure to pay for labor and materials. (Testimony of Perez, P-1, P-7)

   
   

4. On October 22, 1979, Nelson A. Perez Electric Co. obtained a second judgment for $1,742 (including court costs) against respondent Mormann in the County Court of Hillsborough County, Florida. This judgment also arose out of respondent's construction activities and his failure to pay for labor and materials. (Testimony of Perez, P-8)

   
   

5. These two judgments were not (and have never been) satisfied by respondent. On October 7, 1981, respondent Mormann and his attorney met with Mr. Perez and agreed on a payment schedule for satisfying the judgments. On that date, respondent Mormann paid Mr. Perez $500 and, under the terms of the payment plan, was required to pay him $374.10 monthly, until the judgments were satisfied. Respondent Mormann made one payment on November 7, 1981, and then stopped making payments. (Testimony of Perez)

   
   

6. Under the provisions of Section 45-78, City of Tampa Code, default by a contractor in payment for labor or materials resulting in a judgment being obtained or filed against the contractor, with the judgment remaining unsatisfied for a period of 60 days or more, is a basis for revocation or suspension of a contractor's local license, or certificate of competency. (P- 10, P-11)

   
   

7. On October 7, 1980, Reggie Fernandez, the Acting Chief Building Inspector for the City of Tampa Department of Housing, Inspection and Community Services, Inspectional Services Division, issued a Citation, by certified mail, charging respondent Mormann with violating Section 45-78(i), City of Tampa Code, for his default in payment for labor and materials which resulted in a judgment remaining unsatisfied for 60 days or more. The Citation further advised that the Discipline Committee for the City of Tampa Unified Construction Trades Board was being notified of the charge, that respondent Mormann had ten days to file an answer with the Discipline Committee of the Construction Trades Board showing cause why his license should not be suspended or revoked, and that, upon failing to timely answer the complaint, the charges could be deemed admitted and his license would be automatically suspended, pending any hearing that the Discipline Committee, in its discretion, might order. Respondent Mormann received the Citation on October 10, 1980. (P-11)

   
   

8. Respondent, however, failed to file an answer or any other response to the Citation. (Testimony of Anderson, P-12)

   
   

9. On October 21, 1980, the Discipline Committee considered the charges filed against respondent Mormann, who did not appear, and voted to recommend that the Unified Construction Trades Board revoke his local contractor's license for failure to show cause why his license should not be revoked for violation of Section 45-78, City of Tampa Code. (P-12)

10. At its November 5, 1980, meeting, the City of Tampa Unified Construction Trades Board adopted the Discipline Committee's recommendation and revoked respondent Mormann's local license. (P-13)

    
    

11. Respondent did not receive advance written notice of the meetings held by the Discipline Committee or the Construction Trades Board relating to the charges against him. (Testimony of Mormann, Anderson)

    
    

12. On October 21, 1981, almost a year later, respondent Mormann wrote Mr. Fernandez, the official who issued the Citation, acknowledging that his license had been suspended because of the two Nelson Perez Electric Company judgments. He attached a copy of the payout agreement which he had negotiated with Mr. Perez and explained that, because of health problems during the year, he had been unable to do anything about this matter and asked what procedures to follow to regain his local license. (P-14)

    
    

13. At its January 12, 1982, meeting, the Unified Construction Trades Board reviewed the payment agreement attached to respondent Mormann's letter but refused to reinstate his local license until the judgments were fully satisfied. (P-15)

    
    

    Construction of D. J.'s Oyster Bar II

    
    

14. On August 3, 1981, respondents Mormann and Brengle executed a document titled "Joint Venture Agreement" for the purpose of contracting to remodel the Jack-in-the-Box restaurant and converting it to D. J.'s Oyster Bar II, at 2920 East Busch Boulevard, Tampa, Florida. Under this agreement, the joint venture was named "Dave Mormann and Associates." Dave Mormann was to provide financing, construction equipment, and tradesmen for carpentry, masonry, and labor; respondent Brengle was to provide expertise and job management, trucks and equipment, insulation and sound-proofing, and subcontract management.

    Respondent Mormann was to carry out fiscal responsibilities and, where designated, act as job-site superintendent while respondent Brengle was to oversee construction and "inspect at each required building inspection." (Testimony of Mormann, Brengle; R-1)

    
    

15. A month later, on September 2, 1981, respondent Mormann, under the name of Dave Mormann and Associates, contracted with Don Hulling and D. J.'s Oyster Bar II, Inc., as owners, to remodel the Jack-in-the-Box restaurant and convert it to D. J.'s Oyster Bar II, a commercial structure. The contract price was $45,700. (Testimony of Hulling; P-3)

    
    

16. Respondent Mormann, who negotiated the construction contract, lead owner Hulling to believe that he (respondent Mormann), and another person would be the contractors responsible for the project. He assured the owner, however, that he (respondent Mormann), would be the on-site job foreman. (Testimony of Hulling)

    
    

17. Respondent Mormann was licensed by the Florida Construction Industry Licensing Board only as a registered residential contractor. He could thus engage only in residential contracting and could do so only in the local jurisdiction whose licensing requirements he had met. 489.117(2), Fla.Stat. (1979). At the time that respondent Mormann executed and performed the contract to convert the Jack-in-the-Box restaurant to D. J.'s Oyster Bar II, his local contractor's license or certificate of competency, had been revoked.

18. On or about October 15, 1981, respondent Brengle, a registered general contractor holding a valid local license, applied for and obtained building permit no. B-59458 authorizing conversion of the Jack-in-the-Box restaurant to

    D. J.'s Oyster Bar II. The permit identified Brengle and Sons, Inc., a company qualified by respondent Brengle with the Florida Construction Industry Licensing Board, as the contractor of record. (P-17)

    
    

19. Owner Hulling, who seldom visited the construction site during the day, observed respondent Brengle working on the site once while the insulation was being installed, and once or twice before and after the insulation was installed. However, respondent Mormann is the person whom he dealt with concerning the construction project. He paid respondent Mormann $62,940.64 for work performed pursuant to the construction agreement. Itemized invoices were submitted to the owner under the name of "Dave Mormann, General Contractor." Owner Hulling also paid respondent Mormann $3,559.32 for additional work performed at D.J.'s Oyster Bar II after the completion of the project. Neither owner Hulling, nor the financing institution, paid respondent Brengle directly for any work that he performed on the property. (Testimony of Hulling; P-4, P- 5)

    
    

20. Respondent Brengle furnished and installed the insulation at D. J.'s Oyster Bar II. (Testimony of Brengle)

    
    

21. It was respondent Mormann who paid respondent Brengle for his services. He paid respondent Brengle a total of $950--$250 on November 20, 1981, $200 on December 10, 1981, and $500 on February 8, 1982. (Testimony of Brengle)

    
    

22. Respondent Mormann selected and hired Terry Goins Plumbing Company, the plumbing subcontractor for the construction project. He led Terry Goins, the plumbing company owner, to believe that he (respondent Mormann) was the contractor in charge of the project. Respondent Mormann provided project specifications to Goins, supervised his work, and paid him for his services. 2/ Mr. Goins was at the construction site 22 to 25 working days--one-third of the period the project was under construction. He never saw respondent Brengle on the project site. (P-20)

    
    

23. Respondent Brengle testified that he was on-site two or three times a week and that he, rather than respondent Mormann, actually supervised the construction project. This testimony is inconsistent with respondent Mormann's initial assurances to owner Hulling (to the effect that he, respondent Mormann, would be responsible for supervising the project); is contrary to the testimony of Mr. Goins; and--considering respondent Brengle's interest in the outcome of this case--is rejected as unworthy of belief.

    
    

24. In fact, it was respondent Mormann who directed and supervised the construction project, and it was he who was responsible for its completion. He negotiated the construction contract, selected and hired at least one subcontractor, supervised the work in progress, reported to the owner on the project's status, executed all contractor's affidavits (which incorrectly identified him as a general contractor), applied for and accepted construction draws, and paid subcontractors for labor and materials furnished. (Testimony of Goins, Hulling; P-5a-c)

    
    

25. The remodeling and conversion of the Jack-in-the-Box restaurant, begun in late October, 1981, was completed, to the owner's satisfaction, by January 17, 1983. (Testimony of Hulling)

26. Subsequent to the completion of the project, respondent Mormann filed for bankruptcy under the federal bankruptcy laws.

    
    

    CONCLUSIONS OF LAW

    
    

27. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. 120.57(1), Fla.Stat. (1981).

    
    

28. License revocation proceedings, such as this, are penal in nature.

    The prosecuting agency must prove its charges by clear and convincing evidence-- by evidence as substantial as the consequences. See, Reid v. Florida Real Estate Commission, 188 So.2d 846 (Fla. 2d DCA 1966); Walker v. State, 322 So.2d 612 (Fla. 2d DCA 1975); Bowling v. Dept. of Insurance, 394 So.2d 165, 172 (Fla.

    1st DCA 1981)

    
    

29. The Construction Industry Licensing Board is empowered to suspend, revoke or otherwise discipline the certificate or registration of a contractor if he is found guilty of violating the following provisions of Section 489.129(1), Florida Statutes (1979):

    
    

    1. Willful or deliberate disregard and violation of the applicable building codes or laws of the State of Florida or of any municipalities or counties thereof;

    2. Aiding or abetting any uncertified or unregistered person to evade the pro- visions of Chapter 489, Florida Statutes;

    3. Knowingly combining or conspiring with an unregistered or uncertified person by allowing one's certificate or registration to be used by such person with intent to evade the provisions of Chapter 489, Florida Statutes;

    4. Acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certificate holder or registrant;

       * * *

       1. Disciplinary action by any municipality or county, which action shall be reviewed

          by the State Board before the State Hoard takes any disciplinary action of his own; and

       2. Failure in any material respect to comply with the provisions of this act.

       
       

30. Measured by these standards, the charges against respondents are determined as follows:

1. As to Respondent Mormann

   
   

   1. Willfull or Deliberate Violation of a City Code

      
      

      Respondent Mormann violated Section 459.129(1)(d), Florida Statutes, in that he willfully violated Section 45-78(i), City Code of Tampa, which prohibits a contractor from permitting a judgment against him for labor or materials to remain unsatisfied for 60 days or more. "Willful" means something "done

      deliberately." Webster's New Collegiate Dictionary (1981), p. 1331. "Deliberately" is defined as "characterized by or resulting from careful and thorough consideration, characterized by awareness of the consequences." Id. p.

      297. The evidence supports an inference that respondent Mormann's failure to satisfy these judgments, now almost four years old, was willful and deliberate. No evidence was presented to show when he filed for bankruptcy.

      
      

      2. Disciplinary Action by the Tampa Unified Construction Trades Board

      
      

      Respondent Mormann violated Section 489.129(1)(i) in that the City of Tampa Unified Construction Trades Board revoked his local license or certificate of competency as a contractor for violation of Section 45-78(i), City Code of Tampa. In revoking his license, the Construction Trades Board abided by the pertinent substantive and procedural provisions of Chapter 45, supra.

      Respondent Mormann was on notice of the charges, of the consequences if he failed to answer the charges, and of the Board's revocation of his license--an action which he did not appeal.

      
      

      3. Violation of Sections 489.129(1)(j) and 489.119(2)(3) by Failing to Qualify the Legal Entity Under Which

      He Engaged in Contracting

      
      

      Respondent Mormann violated Section 489.129(1)(j)(failure to comply with a provision of Chapter 489) by failing to qualify a legal entity, Dave Mormann and Associates, prior to contracting under that name. This is a violation of Section 489.119(2) and (3), which requires contractors to qualify, with the State Construction Industry Licensing Board, the legal entity under which they intend to engage in contracting. Dave Mormann and Associates, a joint venture, "was a legal entity" within the meaning of Section 489.119(2): qualification was required.

      
      

      1. Engaging in the Business of Contracting Under a Name Other Than on His Registration

         
         

         Respondent Mormann violated Section 489.129(1)(g) by engaging in the business of contracting under a name, Dave Mormann and Associates, which was not on his registration.

         
         

      2. Engaging in the Business of Contracting Without First Complying With Local Licensing Requirements and Contracting Beyond the Scope of His Registration

      
      

      Section 489.117(2) allows a registrant, such as respondent, to engage in contracting only in the jurisdiction where he has complied with local licensing requirements. Any contracting is limited to that authorized by his registration. Section 489.127 prohibits any person from engaging in the business of contracting without first being duly registered or certified.

      
      

      Respondent Mormann violated these provisions and, by so doing, violated Section 489.129(1)(j). A registered residential contractor cannot lawfully act as a contractor without a valid local license: respondent Mormann's local license had been revoked. Moreover, even if it was in effect, he could not lawfully construct or remodel a commercial building. See, 489.105(3)(c), Fla.Stat. (1979). Although respondent Brengle, as a registered general contractor, was authorized to engage in commercial contracting, the evidence establishes that respondent Mormann, rather than respondent Brengle, engaged in

      contracting and acted in the capacity of a contractor. See, 489.105(3), Fla.Stat. (1979). It was respondent Mormann who supervised, directed, and controlled the construction project. See, 489.105(3), Fla.Stat. (1979).

      
      

2. As to Respondent Brengle

   
   

   1. Aiding or Abetting Respondent Mormann in Evading the Provisions of Chapter 489, Florida Statutes

      
      

      Respondent Brengle violated Section 489.129(1)(e) by aiding and abetting respondent Mormann in violating Sections 489.117(2) and 489.127(1)(f).

      Specifically, respondent Brengle used his registered general contractor's license to obtain a building permit for a commercial project in which respondent Mormann would, unlawfully, act as contractor in violation of Chapter 489, Florida Statutes.

      
      

   2. Conspiring With Respondent Mormann With Intent to Evade the Licensing Provisions of Chapter 489, Florida Statutes

      
      

      Respondent Mormann violated Section 489.129(1)(f) by knowingly conspiring with respondent Mormann to obtain a building permit for the purpose of enabling respondent Mormann to unlawfully engage in commercial contracting.

      
      

   3. Failure to Qualify Dave Mormann and Associates Prior to Engaging in the Business of Contracting

      
      

      The evidence is, however, insufficient to prove that respondent Brengle violated Section 489.129(1)(j) by failing to qualify Dave Mormann and Associates prior to his engaging in the business of contracting. Section 489.105(5) defines "contracting" as "engaging in business as a contractor." Here, it was respondent Mormann, not respondent Brengle, who acted as contractor for the D. J.'s Oyster Bar II project. Since respondent Brengle did not act as a contractor under the name of Dave Mormann and Associates, he had no duty to qualify it with the Construction Industry Licensing Board.

      
      

   4. Acting in the Capacity of a Contractor Under a Name Other Than on His License

      
      

      Similarly, the evidence fails to prove respondent Brengle violated Section 489.129(1)(g) by acting as a contractor under a name other than on his registration. As already established, respondent Brengle did not act as contractor for the D. J.'s Oyster Bar II construction project.

      
      

   5. Respondent Mormann Contends That His Filing of a Petition for Bankruptcy Operates to Stay the Department from Taking Discipline Action Against His Contractor's License

This contention is rejected. Chapter 489, Florida Statutes was enacted under the state's police power. See, 489.101, Fla.Stat. (1981). Title 11, Section 362(b)(4) of the United States Code provides that the filing of a bankruptcy petition does not stay the commencement or continuation of a governmental proceeding to enforce a police or regulatory power.

1. Penalty. The evidence demonstrates that the respondents, without excuse, intentionally devised and carried out a scheme to engage in contracting

   in violation of the Construction Industry Licensing Law. Suspension of their state licenses or registrations for a period of two years should impress on them the seriousness of their offenses and deter others from engaging in like misconduct.

   
   

2. The parties' proposed recommended orders, containing findings of fact, have been considered in preparing this recommended order. To the extent the parties' proposed findings of fact were consistent with the weight of the credible evidence adduced at hearing, they have been adopted and are reflected in this recommended order. To the extent the findings were not consistent with the weight of credible evidence, they have been either rejected or, when possible, modified to conform to the evidence. Additionally, proposed findings which are subordinate, cumulative, immaterial, or unnecessary, have not been adopted.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That respondents' registered contractor's licenses be suspended for a period of two years for multiple violations of Chapter 489,Florida Statutes.

DONE and ENTERED this 3rd day of October, 1983, in Tallahassee, 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 24th day of October, 1983.

ENDNOTES

1/ Petitioner's Exhibits will be referred to as "P- ," respondent's as "R- ." 2/ Mr. Goins, however, has not yet been paid in full for his services.

COPIES FURNISHED:

Stephanie A. Daniel, Esquire Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Harvey Paul Muslin, Esquire 1905 West Kennedy Boulevard Tampa, Florida 33609

Fred M. Roche, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

James Linnan, Executive Director Construction Industry Licensing Board

Post Office Box 2 Jacksonville, Florida 32202

Docket for Case No: 82-001996

Orders for Case No: 82-001996