STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 84-1339

)

COLIN SPRUCE, )

)

Respondent. )

)

RECOMMENDED ORDER

Consistent with Notice of Hearing issued by Hearing Officer Linda Rigot on January 19, 1984, a hearing was held in this case before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings in Melbourne, Florida, on March 27, 1984. The issue for consideration here was whether Respondent's license as a certified residential contractor should be disciplined because of the misconduct alleged in the Administrative Complaint.

APPEARANCES

For Petitioner: Stephanie A. Daniel, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Was not present and was not

represented by counsel. BACKGROUND INFORMATION

On March 23, 1983, Petitioner (CILB) through the Secretary of the Department of Professional Regulation (DPR) filed an Administrative Complaint against Respondent alleging that Respondent abandoned a construction project on which he was engaged as a contractor (Count One); diverted funds received for a project without paying suppliers, employees, and subcontractors (Count Two); was found guilty of a crime relating to the practice of contracting (Count Three) and failed to qualify a corporation through which he engaged in contracting and contracted in a name other than as set forth in his certificate (Count Four).

Thereafter, on April 23, 1983, Respondent signed an Election of Rights form on which he disputed the allegations in the Administrative Complaint and requested a formal hearing.

A hearing was scheduled for July 12, 1983, and again for September 29, 1983, in Melbourne, but was postponed both times, once at the request of Respondent and the second time at the request of Petitioner. No additional requests for continuance were received. The final notice of hearing sent to Respondent was not returned undelivered and the commencement of the hearing was

postponed for fifteen minutes beyond the scheduled starting time in case Respondent had been delayed in traffic. Respondent did not appear either personally or through counsel throughout the hearing.

At the hearing, Petitioner presented the testimony of Kenneth M. Berger, a subcontractor; James D. Roland, the individual who contracted with Respondent for his services; Kenneth E. Grinstead, a Melbourne City Development official; Betty Farlow, custodian of the records of Landmark Bank with whom Respondent did business; Ann Xolker, a bookkeeper at Scotty's, a materialman for Respondent; Curtis Terry, another subcontractor; Lois Campbell, custodian of records for City Gas Co., another subcontractor; Arne A. Stream, an estimator/salesman for City Gas Co., who dealt with Respondent; Charles W. Jackson, another subcontractor; and David R. Jones and Carl R. Cramer, former employees of Respondent. Petitioner also offered Petitioner's Exhibits 1 through 12.

FINDINGS OF FACT

1. Respondent, Colin Spruce, was issued a certified residential contractor's license, No. CR-COI5679, in an active status, in June, 1930, as an individual. This license was renewed, as an individual, for the 1981-83 licensing period, which expired on June 30, 1983. This license has not been renewed and is in a delinquent status. Respondent at no time qualified Angle Enterprises, Inc., to engage in contracting in Florida.

   
   

2. James D. Roland and his wife own nine low-income family apartment buildings in Melbourne. On November 2, 1981, the Rolands signed a contract with Respondent to rehabilitate these apartments with funds provided on loan from the federal government. Respondent signed the contract on November 3, 1981, and began work on November 9, 1981. He fully completed one of the nine buildings and partially completed one other. He also did some work on the roofs of all.

   
   

3. On or about January 13, 1982, Respondent called Mr. Roland's home and left word he would be out of town for several days. He never returned to work on the project. The work was 35 percent complete when Respondent abandoned the project. Later, Mr. Roland completed the project himself at an overrun of approximately $2,500 above the contract price. Aside from one minor modification which cost an additional $261, there were no changes to the plans and specifications when Roland took over. It was only later that Roland got word that the subcontractors had not been paid. He paid off those who filed liens against his property.

   
   

4. During the course of his work on the Rolands' property, Respondent, in his own name or as Angle Enterprises, Inc., entered into agreements with several subcontractors, including Scotty's, Berger Roofing, Melbourne Insulation, City Gas Co., and Jackson Electric, all of which provided either materials or services, or both, for this project. Scotty's provided materials valued at

   $16,513.24, but was paid only $6,751.46, leaving an unpaid balance of $9,761.78 for which the company filed a lien against the Rolands' property. This sum, left unpaid by Respondent, was subsequently paid by Mr. Roland.

   
   

5. Berger Roofing, Inc., furnished labor and materials for the porch roofs on each of the project's buildings during late November and early December, 1981, and was due $750 from Respondent for this job. Respondent did not ever pay, and Berger also filed a lien against the property. This lien was also satisfied through payment by Mr. Roland.

6. Melbourne Insulation furnished labor and materials to the project through contract with Respondent for approximately $2,000 of which only one-half was paid by Respondent. The balance has not been paid, though no lien was filed here because of an oversight by claimant's lawyer.

   
   

7. City Gas Company is still owed $1,524.75 of the $4,784.33 it billed Respondent for labor and materials (heaters) it provided for the project for a contract it had with Respondent dated December 1, 1981. No lien was filed for the unpaid amount here, either.

   
   

8. Jackson Electric performed electrical work on the project which included removing plates, switches, and fixtures from one of the buildings in November, 1981, based on an agreement with Respondent. The contractor was about to start work on a second building in the project, but due to the fact that Respondent was a slow payer on previous jobs done for him, the additional work was not started and Jackson was never paid for the work done.

   
   

9. Respondent also failed to pay the wages he owed to several of his employees, including David Jones and Carl Cramer. Jones worked for Angle Enterprises, the company owned by Respondent and under which he did business from November, 1981, to January, 1982, in a job on Roland's buildings which involved stripping the roofs off the buildings and painting. He was not paid for his final week of work, which ended on January 15, 1982. He is owed for 32 hours work at $5.75 per hour. He considered himself a close personal friend of Respondent who gave no advance notice that he would not pay his employees.

   
   

10. Cramer and a third employee (Mr. Kibben) also were not paid their earned wages by Respondent. He was working at the time in question as a carpenter/foreman for Respondent. On the last morning of work, Friday, January 15, 1982, Respondent told him that the accountant would come by and pay him and the other men that afternoon. Respondent then left and was not seen again, nor was the accountant or the wages. Cramer was due 32 hours pay at $7 per hour.

    
    

11. During the time he was working on this project, Respondent submitted four draw requests and was paid on three. These draws were submitted to Mr. Grinstead at the Community Development Office for approval and were approved when Grinstead checked to see that the approximate work was done. Mr. Grinstead was at the project site almost every day. The last time he saw Respondent there was on or about January 15, 1982. As of that date, the work was not completed, but Respondent did not go back. Mr. Grinstead approved three draws. These were:

    
    

    1. December 10, 1981, for $13,000 payable to Roland, Respondent, and Scotty's;

    2. December 21, 1981, for 54,000, payable to Respondent; and

    3. January 8, 1982, for $13,000 payable to Roland, Respondent, and Scotty's.

       
       

       A fourth draw request on December 12, 1981, for $2,400 was denied by Y. Grinstead because sufficient additional work was not done to justify it. All three approved checks were cashed. As to the check for $13,000 dated January 8, 1982, Roland signed it and Respondent took it to Scotty's, where he convinced the credit manager to endorse it in exchange for his, Respondent's (Angle

       Enterprises'), check dated January 11, 1982, in the amount of $7,446.61. Thereafter, the same day, Respondent signed a stop-payment order at his bank on which that check was drawn, listing as his reason for that action a corporate reorganization. Payment was stopped, and Scotty's was not paid by Respondent.

       
       

12. On the basis of Respondent's conduct regarding the check, an information charging him with altering a worthless check and grand theft (second degree) was filed in the Circuit Court in Brevard County, Florida, on June 1, 1982. Thereafter, on November 30, 1982, Respondent entered a plea of guilty to both offenses and was placed on probation for five years. Conditions of probation included full restitution of the $13,000 and a prohibition from engaging in construction or repair services without permission of the court.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of the hearing.

    
    

14. In Count One of the Administrative Complaint, Respondent is alleged to have abandoned a construction project in which he was engaged as a contractor, in violation of Section 489.129(1)

    
    

15. Florida Statutes (1981), which permits the Petitioner to discipline a contractor's license if it is known he is guilty of:

    
    

    (k) 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 90 days if the contractor terminates said project without notification to the prospective owner and without just cause.

    
    

16. Here the evidence shows that Respondent did in fact stop work on the project without notification to the owner or his employees, and his call to Mr. Roland, indicating he would be out of town for several days, does nothing to contradict this conclusion. He misled his employees and his customer, and there was no evidence to indicate any legitimate reason for his abandonment of the project. Consequently, this allegation has been proven.

    
    

17. In Count Two, Respondent is alleged to have diverted funds he received for prosecution of a specified construction project and is, therefore, unable to fulfill the terms of his contract, in violation of Subsection (1)(h) of the previously mentioned statute. The prohibition here is against:

    
    

    (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 fill the terms of his obligation or contract.

    
    

18. In regard to this allegation, the evidence showed that Respondent received $30,000 in draw payments under this contract and that he abandoned the

    contract, leaving subcontractors and employees unpaid. There is little doubt his misconduct would have rendered his subcontractors and employees unwilling to perform for him even had he been around to ask. Consequently, it can fairly be said his misconduct rendered him unable to fulfill the terms of his contract.

    
    

19. In Count Three, it is alleged that Respondent's conviction of a crime which directly relates to the practice of contracting is a violation of Section 489.129(1)(b), Florida Statutes (1981). It is, and it has clearly been established here. Respondent convinced a materialman to whom he owed a substantial sum to affix his signature to a check on which the materialman was a payee and accept in place thereof Respondent's own check, which was thereafter unjustifiably stopped. Respondent thereafter secured the entire proceeds of the original check for himself. It would be hard to conceive of a set of circumstances which more clearly related to the practice of contracting.

    
    

20. Finally, in Count Four, Respondent is alleged to have acted in the capacity of a contractor in a name other than that on his license and to have failed to qualify a corporation through which he carried on the business of contracting. As to the first allegation, though Respondent contracted with the Rolands under his own name, the evidence shows that his on-the-site employees considered themselves working for Angle Enterprises; the subcontract with Berger Roofing was with Angle Enterprises, Inc.; the account with Scotty's showed him doing business as Angle Enterprises, Inc.; and the check issued to Scotty's and subsequently stopped was on an Angle Enterprises account. This is clearly sufficient evidence to establish he acted as a contractor in a name other than on his license, since Respondent's only license was in his own name as an individual. Consequently, there is a clear violation of Section 489.129(1)(g), Florida Statutes.

    
    

21. As to the second allegation, his failure to qualify Angle Enterprises is shown by the fact that, as stated above, there is no license on file for Angle Enterprises, nor is there any record that Respondent ever qualified it as is required by Section 489.129(2) and (3), Florida Statutes (1981). His violation of that provision is also a violation of Section 489.129(1)(j) , Florida Statutes (1981).

RECOMMENDATION

Based on the foregoing, it is, therefore:

RECOMMENDED:

That Respondent's certified residential contractor's license be revoked. RECOMMENDED in Tallahassee this 5th day of April, 1984.

ARNOLD H. POLLOCK

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 5th day of April, 1984.

COPIES FURNISHED:

Stephanie A. Daniel, Esquire Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Colin Spruce

1001 SW Conover Avenue Palm Bay, Florida 32907

James Linnan, Executive Director Construction Industry Licensing Board 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: 84-001339

Orders for Case No: 84-001339