STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
STATE OF FLORIDA, DEPARTMENT ) OF PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )
) DOAH CASE NO. 84-4436
Petitioner, ) DPR CASE NOs. 0027463 vs. ) 0025794
) 0030449
JAMES C. NICKS, )
)
Respondent. )
)
RECOMMENDED ORDER
Notice was provided and on May 13, 1985, a formal Section 120.57(1), Florida Statutes hearing was held in Jacksonville, Florida. The Hearing Officer was Charles C. Adams. This recommended order is being entered following the receipt and review of a proposed recommended order by Respondent's counsel. In some instances these proposals have been utilized in preparing the recommended order. Otherwise the proposals are rejected based upon a lack of relevance, materiality or for reason that the testimony attributed to a witness is not credible. Some proposals are also rejected in that they are found to be cumulative or subordinate to facts found in the recommended order.
APPEARANCES
For Petitioner: W. Douglas Beason, Esquire
130 North Monroe Street Tallahassee, Florida 32301
For Respondent: Granville C. Burgess, Esquire
303 Centre Street, Suite 200, Fernandina Beach, Florida 32034
ISSUES
The issues in this case are related to alleged misconduct on the part of the Respondent in business transactions pertaining to his licensure as a general contractor in Florida. These contentions are set forth in several administrative complaints which are more particularly described in the conclusions of law.
FINDINGS OF FACT
Respondent, James C. Nicks, is a registered general contractor in the State of Florida, holding registration number RG0010630. At all times relevant to this inquiry Respondent operated under the name of Jimmy's Construction Company, Inc. That corporation is one in which the Respondent was the sole stockholder and president. Respondent, at all times relevant to this case, was the qualifying agent for Jimmy's Construction Co., Inc.
In the course of conducting his business as a registered general contractor, Respondent through Jimmy's Construction Company, Inc., undertook residential construction for the benefit of George Oliver, Jr.; John and Irene Mortensen, and Charles and Elizabeth Sewell. Out of these circumstances, Respondent has been accused of violating various provisions of Chapter 489, Florida Statutes (1981). This statute is the regulatory provision which the Respondent must comply with to maintain his license in good standing.
When confronted with the alleged violations set forth in the various administrative complaints, Respondent made a timely request for formal hearing as envisioned by Section 120.57(1), Florida Statutes. That request was honored and the formal hearing was conducted on May 13, 1985.
On May 25, 1982, Respondent signed a contract for the benefit of Jimmy's Construction Co., Inc., agreeing to build a 12'x 12' room addition on the home of George Oliver, Jr. A copy of this contract may be seen as Respondent's exhibit number 1 admitted into evidence. The contract called for the provision of all material and labor and was in the amount of $3,212.00. In furtherance of this agreement, Oliver made a down payment to the Respondent of
$1,606.00, as president of Jimmy's Construction. A further payment of $803.00 was made to Respondent, in his capacity of president of Jimmy's Construction, at the point of dry-in related to the room addition. There remains an additional
$803.00, which has not been paid under the contract conditions, and for which payment is due at the time of the completion of the construction, per the contract.
Oliver has refused to pay the additional $803.00 in view of what he considers to be a breach of the agreement between the owner and Respondent.
This involves the understanding on the part of Oliver, that Respondent would be personally responsible for correcting a mistake related to a door which was hung in the room addition. This door was placed in such a fashion as to give an awkward opening into the room. It was the intention of the Respondent to replace the door so that it would open properly. In furtherance of this task, the Respondent dispatched a worker, who was involved in the construction project, to hang the door. Oliver refused the admittance of this person on two occasions, notwithstanding the fact that the worker, Kenneth Lamar Nicks, brother of the Respondent, had worked on the job prior to the occasion of offering to replace the door and the fact that Kenneth Lamar Nicks identified his purpose for being at the Oliver residence. That purpose was stated to be the replacement of the door. Oliver had made numerous attempts to discuss this door problem with Respondent and had not been successful in that endeavor.
Respondent has made no attempt to personally install the door, being of the persuasion that it was sufficient to send his employee to do this. In summary, no admittance was afforded Respondent's employee to replace the door and $803.00 is still owed on the contract.
On February 6, 1982, Respondent, as president of Jimmy's Construction Co., Inc., entered into a contract with John and Irene Mortensen to build a room addition to the residence of the Mortensens. The details of that contract are as set forth in Petitioner's exhibit number 2, a copy of the contract admitted into evidence. The total amount of the contract was $13,484.50. In furtherance of the agreement, fifty percent was paid by the owners in the beginning of the contract, for a total of $6,741.25. Another installment related to twenty-five percent of the value of the contract was paid on May 11, 1982. This check was for $3,370.63. This payment was made following the dry-in of the room addition and at the point of delivery of the dry wall materials.
At the time that the Respondent's company undertook the construction project at the Mortensen residence, the company had eight or nine other jobs underway. Progress on the Mortensen job was not in keeping with the sixty day schedule contemplated for completion. Following the payment at the dry-in phase of the construction, progress progressively worsened. This relates to the fact that the project was behind schedule and Respondent, as the licensed contractor; was not fulfilling his promises to the Mortensens in terms of carrying out the various phases of the project. The Mortensens experienced great difficulty in their attempts at trying to contact the Respondent in an attempt to move the job forward. This relates to the period from the beginning of March, 1982 through around September 1, 1982.
The subcontractor that the Respondent had chosen to utilize for the plumbing aspects of the Mortensen job was a man named Bower. This individual, contrary to the Respondent's understanding, was not a licensed plumber, and as a consequence not entitled to do plumbing work on this job. Moreover, Joseph Moreno, the subcontractor on the Mortensen job for the electrical part of the project, allegedly made overtures to Mrs. Mortensen, leading to his dismissal as the subcontractor for the electrical work on the project. Respondent had agreed to replace Moreno with another electrician.
Even though there was an obligation on the part of the Respondent, in the person of his company, to pay for the subcontracting work performed by Bower and Moreno, Jimmy's Construction Co., Inc., did not pay those individuals for their services rendered at the Mortensen residence.
Respondent came to the Mortensen job site on July 2, 1982. After that time neither the Respondent nor employees of his company attended the responsibilities incumbent upon them to complete the Mortensen job. When Respondent and his company stopped participating in the job, approximately twenty-five percent of the job remained to be completed. Among other items, the drywall had not been installed.
Respondent asserts in testimony given at the final hearing, that he and his company were relieved of the obligation to conclude the Mortensen project in view of the election, on the part of the Mortensens, to employ a substitute general contractor. That contention is not acknowledged by John Mortensen in his testimony at final hearing. To the contrary, Mortensen states that in spite of numerous opportunities which the Mortensens afforded the Respondent and his company to conclude the job, even beyond the contract period, Respondent and his company did not avail themselves of that opportunity, forcing the Mortensens to hire another general contractor.
In fact, the Mortensens never relieved the Respondent and his company of their obligation to conclude the contract. Nonetheless, having been unable to convince the Respondent and his company to return to the job site and finish the undertaking, to include employing legal counsel to assist in persuading the Respondent and his company to live up to contractual obligations, a decision was reached by the Mortensens to hire a substitute general contractor. This person was Ron Combs. The arrangement the Mortensens made with Combs after Respondent and his company abandoned the job, was to submit bills for materials to the Mortensens and to provide labor in the job at the cost of $13.00 an hour. A copy of this agreement may be found as Petitioner's exhibit number 6 admitted into evidence. This arrangement with Combs dates from the beginning of September, 1982. Proof of payment for services rendered by Combs may be found in Petitioner's composite exhibit number 7, admitted into evidence.
The balance of the plumbing work was done by a Lowell Thomas. The charges for the plumbing work done by Thomas corresponds to the original contract with the Respondent and his company, with the exception that the cost was increased from $1,200.00 to $1,500.00 attributable to a different quality of fixtures used.
On July 22, 1982, the Mortensens learned of a claim of lien to be placed against their property by Riverside Brick Distributors, Inc. This claim was in the amount of $897.33 which Jimmy's Construction Company, Inc., was responsible for under the terms of the contract between Jimmy's Construction Co., Inc., and the Mortensens. The Mortensens, as a consequence of the non- payment by Jimmy's Construction Co., Inc., have had to make a separate arrangement with Riverside Brick Distributors, Inc., to personally satisfy this lien claim. Moreover, in total expenses to complete the job as contemplated by the contract between Jimmy's Construction Co., Inc., and the Mortensens, those owners have expended amounts greater than the contract quotation agreed upon by the contracting parties.
Respondent, in discussion with John Mortensen on the question of completing the project, indicated problems which he had in finishing the Mortensen job and meeting other obligations related to his contracting business. He also indicated to Mortensen that funds from the Mortensen project had been used on other projects that Respondent was involved with.
On October 27, 1981, Respondent, as president of Jimmy's Construction Co., Inc., entered into a contract with Charles and Elizabeth Sewell for the addition of a room on their residence; the pouring of a slab on the outside of the residence; the demolition of a carport; the construction of a garage and the provision of a driveway. A copy of this agreement may be found as Petitioner's exhibit number 10 admitted into evidence. That agreement was modified to some extent by the deletion of certain costs. As a consequence, the down-payment was reduced to $7,972.50. This payment was made by the Sewells to Jimmy's Construction Co., Inc., on November 2, 1981. An additional amount of $4,191.75 was paid on February 19, 1982, at the point of dry-in on the construction. That payment corresponded to the project being seventy-five percent completed.
The project at the Sewells was slow to progress. An oral agreement had been made between Jimmy's Construction Co. Inc., in the person of the Respondent, and the Sewells, to the effect that the project would be concluded no later than the second week in December, 1981. By July, 1982, the project was still under way.
Due to the financial circumstance of the Respondent and his company, the plumber, who had been used as a subcontractor in the job, would only agree to complete his portion of the work if the Sewells paid him directly. The arrangement was for payment on a check made out to Jimmy's Construction Company and Jerry Ward Plumbing. Payment of $1,105.30 was made on March 19, 1982, under this arrangement. In turn, this $1,105.30 was deducted from the amount due and owing from the Sewells to Jimmy's Construction, Co., Inc. Respondent had agreed to have the check written to Jimmy's Construction Co., Inc., and Jerry Ward Plumbing. This same arrangement was made for payment of Armco Company, a manufacturer of culvert pipe. This culvert pipe was to be used in the driveway portion of the construction project. In effect, a joint check was made to Jimmy's Construction Co., Inc., and Armco. The price of the culvert pipe was deducted from the amount of money due and owing to Jimmy's Construction Co., Inc.
Following the seventy-five percent completion payment in February 1982, other payments were made jointly to Respondent and subcontractors, even though Jimmy's Construction Co., Inc., was not due money at the points of those payments. Some of that money would not have been due until the conclusion of the project; however, Sewell agreed to advance these payments to Jimmy's Construction Co., Inc. and the subcontractors on the basis of a theory of offset against the remaining monies due Jimmy's Construction Co., Inc. at the time of completion of the project. This arrangement was reached to accommodate Respondent in that he indicated that he was unable to pay those subcontractors and his statement that if the Sewells wanted the project completed it would be up to them to pay the subcontractors.
Problems were experienced with some of the sub- contractors in terms of their abilities. Moreover, some of the subcontractors had difficulty concluding their work in view of the unavailability of materials on the job site.
The Sewells had difficulty reaching Respondent to discuss the job. Respondent was last at the job site in July 1982. At that point the job was approximately seventy-five percent completed, as it had been in February, 1982. Respondent had been to the job site approximately two or three times between December 1981 and July 1982.
Joseph Moreno was the electrical subcontractor in the Sewell project. Moreno asked the Sewells for money for work done on their residence related to the contract between the Sewells and Jimmy's Construction Co., Inc. Respondent told Mr. Sewell that this claim of payment would be taken care of by Respondent. This was not done and eventually Respondent told Mr. Sewell to pay Moreno directly and deduct that payment amount from the money due and owing to Jimmy's Construction Co., Inc. Some of the work that Moreno had done in the project preceded the payment made to Jimmy's Construction Co., Inc. in February, 1982 at the point of dry-in. Moreno was paid by the Sewells the money he claimed and a deduction was made from the remaining contract money due and owing Jimmy's Construction Co., Inc.
The Sewells were unable to get the Respondent and his company to conclude the project. The work that has been done in furtherance of the contract, beyond the seventy-five percent done while Respondent and his company were involved in the job, was accomplished through arrangements between the Sewells and the various subcontractors. This was necessary because Respondent and his company abandoned the Sewell project before completing the obligations contemplated by the contractual agreement.
The driveway, spoken to in the contract, had not been completed when Respondent and his company quit the project. Respondent claims that the driveway was not completed because the contract did not call for building the driveway to the street proper. His interpretation was that the contract called for building a driveway to the city right-of-way line. The contract is not written in that fashion. The contract clearly makes Jimmy's Construction Co. Inc., responsible for building the driveway to the street proper. In view of what the Respondent considered to be a dispute over the contract in terms of the length of driveway installation, which Jimmy's Construction Co., Inc. was responsible for, Respondent, in his testimony at hearing acknowledges leaving the job before completion. He stated that he felt like he had done what he "was supposed to do" and that given his impression that there was sufficient monies left in the contract to pay for whatever had to be done to complete the job, the
owner, in effect, can be expected to conclude the project in his own right. Respondent states that when the dispute arose he just "backed off". Respondent in the dispute about the placement of the driveway, had discovered that it was going to cost more money in view of the installation of the culvert pipe. This led to the interpretation of the contract that he would have no responsibility for the placement of the driveway beyond the right-of-way line. To install it further than the right-of-way line he requested that the Sewells pay additional money.
When Respondent and his company abandoned the Sewell project, in addition to the driveway, there remained a number of other items to be concluded in the project.
Durham Building Materials, Inc. supplied materials in the project for all stages of the project, which necessarily included materials provided after the initial down payment had been made to Jimmy's Construction Co., Inc.
Jimmy's Construction Co., Inc. was responsible for the payment of these materials. That payment was not made in its entirety and the materialmen placed a lien against the Sewell residence, which was only satisfied following the Sewells payment of the lien claims. When the lien notice was received Mr.
Sewell contacted Respondent who told Mr. Sewell that the matter had been taken care of, when in fact, it had not.
John Walding Landscape Company also did work on the project. Although Mr. Walding testified that he understood that the Sewells were responsible for paying him his $400.00 claim, which has yet to be paid, the contract contemplates that this work done by Walding's company was work that should have been paid for by Jimmy's Construction Co., Inc. per the contract terms between Respondent's company and the Sewells.
The construction spoken to in the contract between Jimmy's Construction Co., Inc. and the Sewells has yet to be concluded. The work is being done as money becomes available to the Sewells.
Respondent was last requested to return to the construction site and finish the job by contact in July 1982. Respondent's further explanation to Mr. Sewell of why he has failed to conclude the project was that he did not have money to do so. He stated that he was waiting for money to come in from another unrelated job which would allow him to finish the Sewell project. Respondent had requested the Sewells to pay him the last contract draw in their contract, to accommodate the conclusion of the project or, in lieu of that, to pay other persons who were providing services in the project to achieve that end. Mr. Sewell continued to pay suppliers and subcontractors directly until he reached the point where the amount that he had paid in furtherance of the construction of this project exceeded the agreed upon contract amount between the Sewells and Jimmy's Construction Co., Inc.
The Sewells have experienced problems with the project, in that water comes through the walls and into the house damaging the sheetrock and carpet. This problem existed while the Respondent was still involved with the work at the project.
No final inspection has been made on the project. Finally, Respondent left the Sewell project not knowing if everyone to whom Jimmy's Construction Co., Inc. was obligated to pay money for the Sewell project had been paid what they were owed.
CONCLUSIONS OF LAW
The Division of Administrative hearing has jurisdiction over the subject matter and the parties to this action pursuant to Section 120.57, Florida Statutes.
In connection with construction work done by Jimmy's Construction Co., Inc. for whom the Respondent was the qualifying agent, an accusation is made against Respondent to the effect that work on the residence of George Oliver was abandoned. If the allegation is true, this constitutes a violation of Section 489.129(1)(k), Florida Statutes (1981). It is further alleged that Respondent, in the Oliver project, diverted funds received for prosecution or completion of that project in violation of Section 489.129(1)(h), Florida Statutes (1981). Finally, it is alleged that in the Oliver job Respondent violated Section 489.129(1)(m), Florida Statutes (1981), in that continuing evidence is presented which shows that the Respondent is guilty of fraud or deceit or of gross negligence, incompetency, or misconduct in his profession as a contractor. The proof in this cause does not establish a violation of these provisions. Respondent undertook the job and would have concluded the job through an employee of Jimmy's Construction Co., Inc., had he not been prohibited by the owner, Oliver, from concluding the task. Likewise, there is no indication of any diversion of any funds received for the prosecution and completion of this project. Instead, money remains to be paid to Jimmy's Construction Co., Inc., money that the company is entitled to. Finally, there is no showing of fraud, deceit, gross negligence, incompetency or misconduct on the part of the Petitioner in connection with the Oliver project.
Respondent, again, as qualifying agent for Jimmy's Construction Co., Inc., is accused of violating regulatory provisions of Chapter 489, Florida Statues (1981), reference work done by Jimmy's Construction Co. Inc., for the benefit of John and Irene Mortensen. Respondent is accused of abandoning the construction project as contemplated by Section 489.129(1)(k), Florida Statutes (1981). The proof in this case, as spoken to in the findings of fact, is substantial, clear and convincing, that the Respondent knowingly abandoned the construction project without the benefit of an agreement between Respondent and the Mortensens which would have allowed his withdrawal. At the time of the abandonment of the project, work remained to be done. Furthermore, Respondent acknowledges that, as alleged, he violated Section 489.129(1)(h), Florida Statutes (1981), in that he diverted funds received for completion of this Mortensen project to other projects, and this resulted in a hindrance to his ability to fulfill the terms of the contract.
In acting for Jimmy's Construction Co., Inc. as the qualifying agent, Respondent was involved in a construction project between Jimmy's Construction Co., Inc., and Charles and Elizabeth Sewell. As with the Mortensen matter, Respondent knowingly abandoned this construction project before its conclusion without agreement of the owners and did so in violation of Section 489.129(1)(k), Florida Statutes (1981), as alleged. Unlike the Mortensen matter, there is no admission on the part of the Respondent that he diverted funds received for completion of this project, which diversion resulted in the inability to fulfill the terms of the contract, in violation of Section 489.129(1)(h), Florida Statutes (1981), as alleged. In the absence of such an admission, the proof offered does not demonstrate a violation of this provision as it pertains to the Sewell project.
In the context of his actions related to the Mortensen and Sewell projects, Respondent is accused of violating Section 489.129(1)(m), Florida
Statutes (1981), in that proof and continuing evidence exists that Respondent is guilty of fraud or deceit, or of gross negligence, incompetency, or misconduct in his practice of contracting. The proof presented and reported in the findings of fact, related to the Mortensen and Sewell projects, demonstrates fraud and deceit and misconduct by the Respondent in the practice of contracting as alleged. There is no showing of gross negligence or incompetency.
The violations found subject the Respondent to the penalties announced at Section 489.129(1), Florida Statutes (1981).
Upon consideration of the facts found and the conclusions of law reached, it is,
That a final order be entered in accordance with the conclusions of law, absolving the Respondent of accusations pertaining to the Oliver project and finding the Respondent guilty of the alleged violations in the Mortensen and Sewell projects, excepting the claim of diversion of funds related to the Sewell project, and for such violations, suspending the registered general contractor's license held by the Respondent for a period of one year.
DONE AND ENTERED this 10th day of July, 1985, at Tallahassee, Florida.
CHARLES C. ADAMS
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 10th day of July, 1985.
COPIES FURNISHED:
Granville C. Burgess, Esquire Post Office Box P
Fernandina Beach, Florida 32034
W. Douglas Beason, Esquire
Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
Fred Roche, Secretary
Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
Salvatore A. Carpino, Esquire General Counsel
Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
James Linnan, Executive Director Construction Industry Licensing Post Office Box 2
Jacksonville, Florida 32202
| Issue Date | Proceedings |
|---|---|
| Jul. 09, 1985 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 21, 1985 | Agency Final Order | |
| Jul. 09, 1985 | Recommended Order | Respondent diverted funds associated with unrelated building projects to complete work in the subject projects. Recommended one year suspension. |
