STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

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

)

Petitioner, )

)

vs. ) CASE NO. 84-3202

) 84-1298

ARJAN D. CHANDWANI, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a public hearing in these consolidated cases on January 28, 1985 in Miami, Florida. The parties were afforded leave to submit proposed memoranda through March 27, 1985. Petitioner has submitted a proposed Recommended Order which was considered by me in preparation of this Recommended Order. 1/

APPEARANCES

For Petitioner: W. Douglas Beason, Esquire

Department of professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Arjan D. Chandwani, pro se

2560 Azalea Avenue

Miramar, Florida 33004

ISSUE

The issue presented for decision herein is whether or not Respondent's certified general contractor's license should be revoked, suspended, or otherwise disciplined based on conduct set forth in two Administrative Complaints filed herein dated March 14 and July 19, 1984.

BACKGROUND

On March 14, 1984, Petitioner filed a three-count Administrative Complaint alleging:

1. Respondent abandoned a construction project in which he was engaged or under contract as a contractor in violation of subsection 489.129(1)(k) , Florida Statutes;

2. Respondent diverted funds or property received for the prosecution or completion of a specified construction project or operation in violation of subsection 489.129(1)(h), Florida Statutes; and

   
   

3. Respondent violated the provisions of subsection 489.129(1)(d), Florida Statutes, by failing to comply with the provision of Section 2- 11.1(k)(2), Code of Metropolitan Dade County.

On July 19, 1984, Petitioner filed another three-count Administrative Complaint alleging:

1. Respondent violated Section 489.129(1)(j), Florida Statutes, by failing to subcontract certain plumbing installation to a licensed plumber in violation of subsection 489.113(3), Florida Statutes;

   
   

2. Respondent violated subsection 489.129(1)(d) Florida Statutes, by failing to obtain a building permit prior to the building installation as required by Section 301(d), South Florida Building Code, as adopted by the Broward County Code; and

   
   

3. Respondent violated the provisions of subsection 489.129(4)(d), Florida Statutes, by failing to obtain a building permit for the construction of a foundation, slab, block walls and tie-beam columns as required by Section 301(d), South Florida Building Code, as adopted by the Broward County Code.

By motion dated January 3, 1985, Petitioner requested and, by Order dated January 7, 1985, the subject cases were consolidated. In DOAH Case Number 84- 1298, Petitioner presented the testimony of the following witnesses: Albert Kairy, Roy L. Hendricks and Leslie A. Gamble. Petitioner's Exhibits number 1 through 10 were received into evidence. Respondent presented no testimony and proffered no exhibits. 2/

In DOAH Case Number 84-3202, Petitioner presented the testimony of the following witnesses: Marolie Borden, William Lafferty and Salvatore Jenco. Petitioner's Exhibits 1 through 8 were received into evidence. Respondent's Exhibit No. 1 was received into evidence.

FINDINGS OF FACT

1. Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I hereby make the following relevant factual findings.

   
   

2. At all times material hereto, Respondent was a certified general contractor in Florida and has been issued license number CGC 015834. 3/ (Petitioner's Exhibit 1)

   
   

3. Petitioner is an agency of the State of Florida responsible for enforcing the provisions of Chapter 489, Florida Statutes, relating to the imposition of licensure standards and standards for the practice of contracting.

   
   

4. During times material hereto, Respondent was a full-time employee of the Metropolitan Dade County Aviation Authority. At no time during his employment with the authority did Respondent advise the Dade County Aviation Authority that he was performing work outside the scope of his employment while on County time. When confronted with the results of an investigation undertaken

   by the Dade County Attorney's Office in June of 1983 with regard to his (Respondent's) possible violation of the Code of Metropolitan Dade County, Respondent resigned from his position with the County. (Tr. pages 101-102)

   
   

   DOAH CASE NO. 84-1298

   
   

5. During late February, 1983, Albert Kairy contracted with an unlicensed contractor for the closure of a carport at his residence located in North Miami, Florida. After observing Respondent's classified advertisement in a local flier, Kairy contacted Respondent with regard to preparing necessary blueprints for the enclosure. Kairy contracted with Respondent to prepare both the blueprints and to supervise the activities of the unlicensed contractor. The contract amount was $400. On February 25, 1983, Kairy received an owner/builder permit for the carport enclosure from the City of North Miami. (Tr. pages 7-10,

   93) Subsequently, problems began to develop with work performed by the unlicensed contractor and Respondent persuaded Kairy to dismiss that individual and to retain him as the contractor.

   
   

6. On March 7, 1983, Respondent entered into a contract with Kairy to construct a room addition to the residence. (Petitioner's Exhibit 2) The project was to be completed pursuant to plans and specifications approved by the City of North Miami. The contract called for a bedroom addition; an additional bathroom and a utility room. The contract included extending the carport wall approximately 101 feet. The contract price was $14,500 which included an advance of $2,500.

   
   

7. On March 12, 1983, Respondent entered into a second construction contract with Kairy. (Petitioner's Exhibit 3, Tr. 19) The contract price was

   $15,000. Except for the increase in the contract price, Kairy was led to believe that the terms and conditions of the second contract were substantially similar to the contract previously executed by the parties on March 7, 1983.

   However, Respondent reduced the extension of the carport wall to 10 feet and Respondent did not inform Kairy of this reduction. (Tr. page 48) The contract called for draw payments as follows:

   
   

   1. $4,000 as a downpayment/advance;

   2. $3,000 upon completion of slab and block walls;

   3. $1,500 upon completion of piping and tie-columns;

   4. $2,500 upon completion of partition and drywall;

   5. $3,000 upon completion of the roof, and

   6. $1,000 upon completion of the job. (Petitioner's Exhibit 3)

8. Respondent subsequently applied for a permit from the City of North Miami. The City of North Miami denied Respondent's application because Respondent failed to comply with the Dade County licensing requirements. (Tr. pages 21-22) Although Respondent acted in the capacity of a general contractor, he (Respondent) requested that Kairy obtain a owner/builder permit. Upon applying for the owner/builder permit, the City cancelled the original permit for the carport enclosure. (Tr. page 94) Kairy obtained the owner/builder permit pursuant to Respondent's assurances the permit would be properly transferred to Respondent's contracting license. The City provided Kairy with a "hold harmless letter" for Respondent to execute. (Petitioner's Exhibit 4)

   Upon presentation of that letter by Kairy to Respondent, Respondent refused to execute the "hold harmless letter." (Tr. pages 22-24)

9. Subsequently, Kairy and Respondent executed an addendum to the construction contract. The addendum involved changing the enclosures roof structure from shingle to barrel tile. This change involved a price difference of $1,950 and increased the total contract price to $16,950. (Petitioner's Exhibit 5, Tr. pages 31-32) The addendum was executed after completion of the tie-beam and tie- column portion of the construction project.

   
   

10. Pursuant to the terms and conditions of the March 12, 1983 construction contract, Kairy provided Respondent with the following amounts:

    
    

    1. $4,000 as an advance/downpayment on

       March 21, 1983; ($2,500 under the March 7 contract plus an additional $1,500);

    2. $3,000 upon completion of the slab and block work;

    3. $400 for preparation of the original set of plans;

    4. $500 toward tinted windows;

    5. $1,500 upon completion of the tie-beam and tie- column;

    6. $1,500 as an advance on the barrel tile roof; and

    7. $1,500 as an advance upon the completion of the roofs.

    
    

    (Petitioner's Exhibit 6)

    
    

11. Kairy paid Respondent a total of $12,400 on the total contract price of $16,950 or approximately 73 percent of the contract price. Kairy timely remitted to Respondent installment payments for the slab and block work, tie- beam and tie-columns and advanced Respondent $3,000 towards completion of the roof.

    
    

12. During April, 1983, Respondent commenced construction for enclosing the roof structure. Respondent ceased all construction activity upon being informed (by Kairy) that he would no longer pay Respondent in cash. (Tr. page

    44) Respondent refused to accept payment in any form other than cash and offered no explanation, reason or excuse to Kairy for the cessation of work on this project.

    
    

13. Kairy offered several reasons for his refusal to pay contract installments in cash. First, Respondent refused to execute the hold harmless letter provided by the City of North Miami and Respondent failed to properly supervise the construction activities by, among other things, disappearing from the project for a period of approximately three weeks. Finally, Respondent requested additional advances on the contract while the project was not progressing as scheduled. (Tr. pages 28, 44-46) Respondent did not return to the construction site after Kairy refused cash payments.

    
    

14. On July 20, 1983, Respondent's roofing subcontractor filed a claim of lien against Kairy's property in the amount of $1,210. (Petitioner's Exhibit 8) Respondent has failed to satisfy the claim of lien and Kairy is in the process of satisfying that claim. (.Tr. page 54) Respondent also failed to pay an electrical subcontractor for services provided in the amount of $965. (Petitioner's Exhibit 7) Again, Kairy is currently in the process of satisfying that debt and Respondent refuses to honor that obligation. (Tr. 57) Kairy reimbursed the plumbing subcontractor in the amount of $675 after Respondent's personal check was returned due to insufficient funds. (Tr. page 62 and Petitioner's Exhibit 9)

15. On April 1, 1983, the City of North Miami Building Department inspected the foundation and slab. On April 18, 1983, the Building Department inspected the tie-beam and columns. On May 6, 1983, the City of North Miami Building Department performed a tin-cap inspection on the enclosure roof. The City of North Miami Building Department estimated the actual construction completed when Respondent left the project and determined that it was approximately 70 percent complete. Completed construction included the slab, foundation, walls and tie-beam. Little interior construction work had been performed and drywall and partition walls were only partially complete.

    
    

16. Kairy has either expended or will be required to expend the following sums in connection with the contract with Respondent:

    
    

    1. $12,400 - the amount paid directly to Respondent;

    2. $1,210 - the amount of the roofer's lien;

    3. $965 representing the amount owed to the electrician; and

    4. $675 representing the amount Kairy paid the plumbing subcontractor for a total of $15,250. 4/

    
    

17. Although Respondent completed approximately 70 percent of the actual construction, Kairy will correspondingly be required to expend approximately 90 percent of the contract price over and above monies paid to Respondent to complete this project.

    
    

    DOAH CASE NO. 84-3202

    
    

18. On May 12, 1983, the City of Miramar issued William Borden an owner/builder permit for the construction of a four-bedroom, three-bath home to be located in Miramar, Florida. (Petitioner's Exhibit 8) Between May and October, 1983, the Bordens performed the site preparation necessary for pouring the building's foundation and slab. After observing Respondent's classified advertisement in a local flier, the Bordens contacted Respondent with regard to the construction of their home. (Tr. page 16)

    
    

19. On November 11, 1983, Respondent contracted with the Bordens to provide certain contracting services relative to the construction of their home. The Bordens contracted Respondent to pour the foundation and slab, perform the block work, frame and pour the tie-beam and tie-columns. (Petitioner's Exhibit 3, Tr. pages 18-20) The Bordens were to complete all of remaining construction of their home) The contract price was approximately $16,810.

    
    

20. On October 17, 1983, the City of Miramar issued William Borden an owner/builder permit. (Petitioner's Exhibit 7) William Borden was to install the rough plumbing prior to Respondent pouring the foundation and slab. (Tr.

    33) Due to certain time constraints, Respondent offered to install the rough plumbing. On October 25, 1983, Respondent received $475 from the Bordens toward installation of the rough plumbing. Respondent failed to subcontract the installation of the rough plumbing and failed to obtain the necessary building permit. On November 8, 1983, the Bordens provided Respondent an additional $470 representing final payment for installation of the rough plumbing.

    (Petitioner's Exhibit 4)

    
    

21. On November 1, 1983, Mr. Bill Lafferty, chief building and mechanical inspector for the City of Miramar, performed an inspection of the rough plumbing work performed for the Bordens by Respondent. Lafferty determined that Respondent had failed to install the rough plumbing in accordance with

    provisions of the South Florida Building Code as adopted by the Broward County Code. As a consequence, Lafferty required Respondent to remove and reinstall the rough plumbing in accordance with applicable building code provisions. On November 7, 1983, Lafferty reinspected and approved the rough plumbing as reinstalled by Respondent. (Tr. pages 51-55)

    
    

22. Respondent reinstalled rough plumbing at the Borden residence during the first week of November, 1983. Respondent did not obtain a building permit prior to reinstalling the rough plumbing. On November 16, 1983, the City of Miramar levied against Respondent a fee totalling $163.45. Part of that levy included $63.45 for renewal of the building permit and reinspection fee, and the remaining $100 represented a fine against Respondent for failing to properly obtain a building permit. (Tr. pages 58, 64 and Petitioner's Exhibit 7)

    
    

23. On November 10, 1983, Salvatore Jenco, structural building inspector for the City of Miramar Building Department, inspected and approved the footing slab for the Borden residence. Subsequently, Respondent poured the concrete slab and foundation. Respondent did not obtain the requisite building permit prior to proceeding with construction. Respondent could not properly proceed with construction pursuant to William Borden's owner/builder permit. On November 11, 1983, inspector Jenco reinspected the concrete slab and foundation as poured by Respondent. As a result of that inspection, Jenco ordered all construction activities to be stopped at the Borden project. Specifically, Respondent materially deviated from the architect's plans and specifications by failing to pour a monolithic (continuous) slab and foundation for the Borden residence. As result of that deviation, the structural integrity of the building was compromised. (Tr. pages 71-73)

    
    

24. Construction activity at the Borden residence was halted approximately three weeks while the Borden's architect developed a new set of blueprints. After the City approved the revised blueprints, Respondent began laying blocks and framing the tie-beam. Subsequently, Respondent requested Sunshine Concrete Company to commence pouring the tie-beam. The concrete company requested payment in cash due to the fact that Respondent had previously tendered a check to Sunshine Concrete Company which was returned due to insufficient funds. When informed of the concrete company's demands, the Respondent ordered the company to cease pouring the tie-beam. Upon being informed the tie-beam required a continuous pour, Respondent left the construction site and the Bordens were required to directly reimburse the concrete company. Respondent abandoned the project and has not returned to the construction site. Respondent owes the Bordens approximately $4,696 in reimbursed expenses. (Tr. pages 40-42)

    
    

    Respondent's Defense

    
    

25. In DOAH Case No. 84-1298, Respondent did not offer any testimony to refute or otherwise rebut the allegations set forth in the Administrative Complaint. Respondent refused to be placed under oath when he made statements as to his position in Case No. 84-3202.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

27. The parties were duly noticed pursuant to the notice provisions of Chapter 120, Florida Statutes.

28. The authority of the Petitioner is derived from Chapter 489, Florida Statutes.

    
    

29. Respondent, a certified general contractor, is subject to the disciplinary guides of Chapter 489, Florida Statutes. Section 489.129 authorizes the Construction Industry Licensing Board to revoke, suspend or otherwise discipline a contractor found guilty of one of the following acts:

(d) Willful or deliberate disregard in violation of the applicable building codes or law of the State or any municipalities or counties thereof;

(h) Diversion of funds or property received for prosecution or completion of a specified construction project or operation when, as a result of the diversion, the contractor is or will be unable to fulfill the terms of his obligation or contract;

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

2. Abandonment of a construction project in which the contractor is engaged or under contract as a contractor. A project is to be considered abandoned after ninety days if the contractor terminates said project without justification to the prospect of owner and without just cause.

1. Competent and substantial evidence has been presented to demonstrate that Respondent abandoned the Kairy construction project without notification and without just cause. Pursuant to Section 489.105(3), Florida Statutes, Respondent was under a duty to complete construction of the Kairy project. Respondent assumed responsibility by entering into the relevant contracts as the certified general contractor. Respondent ceased construction activity on the Kairy project for a period of longer than ninety days since he never returned to continue construction. Kairy never received notice of Respondent's intention to abandon the project. Upon being informed that Kairy would no longer make contract advances in cash, Respondent simply ceased all construction activities. Such cessation is not tantamount to an abandonment with just cause.

   
   

2. Competent and substantial evidence was offered herein to establish that Respondent diverted funds intended for the construction and completion of the Kairy project. Evidence clearly established that Mr. Kairy was required to expend an additional amount totalling approximately 90 percent of the contract price. When coupled with the approximately 73 percent of the contract price which had been given to Respondent, it is clearly established that the Respondent diverted funds received and intended for the construction and completion of the subject project.

   
   

   DOAH Case No. 84-3202

   
   

3. Competent and substantial evidence was offered herein to establish that Respondent failed to contract with a licensed plumbing contractor to install the rough plumbing at the Borden project in violation of Section 489.113(3), Florida Statutes, and thereby violated Section 489.129(1)(j), Florida Statutes.

4. Competent and substantial evidence was offered herein to establish that the Respondent failed to obtain a building permit and a plumbing permit in violation of Sections 301.1(a) and (d), Florida Statutes, and thereby violated Section 489.105(3), Florida Statutes.

   
   

5. Respondent failed to obtain a building permit prior to forming and pouring the structured slab and foundation for the Borden residence. Respondent, a certified general contractor, was responsible for ensuring compliance with local building codes and ordinances. Respondent, by proceeding with construction without first obtaining the requisite permits, failed to comply with the requirements of Chapter 489, Florida Statutes.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent's certified general contractor's license be suspended for a period of two (2) years. Additionally, Respondent shall pay to the Construction Industry Licensing Board an administrative fine in the amount of $2,500. However, if Respondent provides the Construction Industry Licensing Board with sufficient evidence indicating settlement and satisfaction of the existing disputes between Mr. Albert Kairy and Mr. and Mrs. William Borden, the suspension shall be reduced to one (1) year after which time it is recommended that his license be reinstated.

RECOMMENDED this 8th day of May, 1985, in Tallahassee, Florida.

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

FILED with the Clerk of the Division of Administrative Hearings this 9th day of May, 1985.

ENDNOTES

1/ The petitioner has submitted posthearing proposed findings of fact pursuant to Section 120.57(1)(b)4, Florida Statutes. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order, except where such proposed findings of fact have been rejected as subordinate, cumulative, immaterial or unnecessary. The parties waived the requirement that a Recommended Order be issued herein within thirty days following the close of the hearing.

2/ There was no evidence to substantiate Count II and it was, therefore, dismissed.

3/ The facts fail to disclose and there was no evidence to show that Respondent was licensed as a plumber.

4/ These amounts were obtained from contractors who submitted bids to the project as agreed by Respondent.

COPIES FURNISHED:

W. Douglas Beason, Esquire

Department of Professional Regulation

130 N. Monroe St. Tallahassee, Fl. 32301

Arjan D. Chandwani 2560 Azalea Avenue

Miramar, Fl. 33004

Fred Roche Secretary

Department of Professional Regulation

130 N. Monroe St. Tallahassee, Fl. 32301

Docket for Case No: 84-001298

Orders for Case No: 84-001298