STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, )

)

Petitioner, )

)

vs. ) CASE NO. 88-3335

)

DANIEL S. ROTHBERG, )

)

Respondent. )

)

RECOMMENDED ORDER

Before J. Lawrence Johnston, Hearing Officer, Division of Administrative Hearings.

Elizabeth R. Alsobrook, Esquire, of Tallahassee, for Petitioner. No Appearance for Respondent.

Final hearing was held on this case in Tampa on November 23, 1988. The issue is whether the Construction Industry Licensing Board should discipline the Respondent, Daniel S. Rothberg, for alleged mismanagement, misconduct or diversion in violation of Section 489.129(1)(h) and (m), Florida Statutes (1987)

The Respondent made no appearance at the final hearing. In addition, the Respondent did not respond to requests for admissions essentially asking him to admit all of the allegations of the Administrative Complaint. In accordance with the applicable rules of procedure, those requests are deemed admitted, and the facts are conclusively established. The Petitioner's proposed findings of fact contained in its Proposed Recommended Order are accepted and incorporated.

FINDINGS OF FACT

1. At all times material to this proceeding, the Respondent has been licensed as a residential contractor in the State of Florida, holding license number CR C022406, and was the licensed contractor qualifying Rothberg Homes, Inc.

   
   

2. On or about May 21, 1986, the Respondent entered into a contract to build Mr. and Mrs. Frank Sargent a new home in Palm Harbor, Florida, for

   $95,670. The home was to be completed before November 15, 1986, so that the Sargents could qualify for a lower interest rate.

   
   

3. The Respondent relied heavily on his construction superintendent, Frank Jackson, to accomplish the work in a timely and workmanlike manner. The Respondent was responsible primarily for selling contracts and for taking care of the company finances.

4. To comply with the technical requirements of the contract, the Respondent had construction begin in July, 1986, with the clearing of the lot. But foundation footers were not dug and poured until about a month later, and construction proceeded at a slow pace (then it went on at all.) The Sargents registered numerous complaints to Jackson about the slow pace and some complaints to the Respondent about Jackson, but nothing was done to speed construction along.

   
   

5. In October, 1986, the Sargents, who were on the job site daily, began hearing complaints from suppliers and subcontractors that the Respondent was slow paying them but was told that he eventually was coming through with the payments due. By November, the Respondent was not making payments at all in some cases.

   
   

6. Also in October and November, Jackson was in the process of opening his own business (not construction-related) and was devoting less and less time to the Sargent job.

   
   

7. November 15, 1986, approached, and it became obvious that the deadline would not be met. The Sargents and the Respondent met and agreed to extend the deadline one month to December 16. On December 11th, the Sargents again reminded the Respondent of the deadline and its importance to them, but the December 16 deadline also came and went with the house only about 70 percent complete.

   
   

8. In December, Jackson quit altogether. The Sargents complained to the Respondent, who promised to replace Jackson but never did.

   
   

9. Because the Respondent had stopped paying subs and suppliers, they refused to do any more work, and the Sargents wound up having to pay some of them out of their own pockets in order for work to continue. In March 1987, some of the subs and suppliers also filed claims of liens for unpaid work which the Sargents had to clear out of their own pockets in order to close the purchase of the house. Mr. Sargent himself did some of the work, some of which would have been warranty work if the Respondent had paid his bills on time, to save some additional expense caused by the Respondent's failure to keep current on his accounts with the subs and suppliers and to avoid some of the additional hassle of trying to persuade an unpaid sub or supplier to do warranty work.

   
   

10. On March 16, 1987, the Sargents met with the Respondent to arrive at an accounting for purposes of the upcoming closing. They agreed that the Sargents should receive the last construction loan draw of about $9,500 to compensate them for payments they made that should have been made by the Respondent and that the Respondent still owed them $6,000, which the parties agreed would be the subject of a promissory note from the Respondent to the Sargents. (This does not even account for the Sargents being shortchanged when a three-foot roof overhang for which they had contracted turned out to be only a two-foot overhang.) The Respondent has paid the promissory note.

    
    

    CONCLUSIONS OF LAW

    
    

11. Section 489.129(1)(h), Florida Statutes (1987), authorizes the Construction Industry Licensing Board to revoke or suspend the license of a contractor if the contractor is found guilty of financial mismanagement or misconduct in the practice of contracting that causes financial harm to a customer. Under the statute, financial mismanagement occurs when valid liens are recorded against the customer's property after the customer has paid the

    contractor for construction under the construction contract, and the contractor does not have the lien removed within 30 days. The statute also provides that financial mismanagement occurs when the customer has to pay more for the contracted job than the original contract price, as adjusted for subsequent change orders, unless the overage is the result of circumstances beyond the control of the contractor or is caused by the customer.

    
    

12. Under Section 489.129(1)(m), Florida Statutes (1987), the Construction Industry Licensing Board also can discipline a licensee upon proof that the licensee is guilty of fraud or deceit or of gross negligence, incompetence or misconduct in the practice of contracting.

    
    

13. The evidence in this case proves that the Respondent is guilty of financial mismanagement under Section 489.129(1)(h), as well as of a violation of Section 489.129(1)(m).

    
    

14. F.A.C. Rule 21E-17.001 establishes guidelines for the imposition of penalties for violations of the provisions of Chapter 489, Florida Statutes (1987). Among other things, it provides:

    
    

    "(j) 489.129(1)(h): Diversion of funds, $750 to $1,500 fine, repeat violation, revocation.

    
    

    (s) 489.129(1)(m): Gross negligence, incompetence, and/or misconduct, fraud or deceit ... Causing monetary or other harm to license's customer ... first violation, $500 to $1,500 fine; repeat violation $1,000 to

    $5,000 fine and suspension or revocation."

    
    

15. F.A.C. Rule 21E-17.002 provides for aggravating and mitigating circumstances, including: the severity of the offense; the actual damage, physical or otherwise; and the deterrent effect of the penalty imposed.

RECOMMENDATION

Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Construction Industry Licensing Board enter a final order finding the Respondent, Daniel S. Rothberg, guilty of violating Section 489.129(1)(h) and (m), Florida Statutes (1987), and imposing an administrative fine in the amount of $1,500.

RECOMMENDED this 19th day of December, 1988, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON 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 19th day of December, 1988.

COPIES FURNISHED:

Elizabeth R. Alsobrook, Esquire Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Daniel S. Rothberg 624 Charisma Drive

Tarpon Springs, Florida 34689

Daniel S. Rothberg

196 Mayfair Circle

Palm Harbor, Florida 34684

Warren A. Wilson, III, Esquire 2101 U.S. Highway 19 North

Suite 201

Palm Harbor, Florida 33563

Fred Seely, Executive Director Department of Professional Regulation Construction Industry Licensing Board Post Office Box 2

Jacksonville, Florida 32201

Bruce D. Lamb, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Docket for Case No: 88-003335

Orders for Case No: 88-003335