STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 90-1682

)

THOMAS J. FREESE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written Notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Daniel Manry, held a formal hearing in the above-styled case on June 27, 1990, in Fort Pierce, Florida.

APPEARANCES

FOR PETITIONER: Robert B. Jurand, Esquire

Senior Attorney

Department of Professional Regulation

1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0750

FOR RESPONDENT: James A. Freese, Esquire

3727 S. E. Ocean Boulevard Stuart, Florida 34996

STATEMENT OF THE ISSUES

The issue for determination at the formal hearing was whether Respondent allowed an uncertified and unregistered person to engage in prohibited contracting in violation of Subsections 489.129(1)(e), (f), and (m), Florida Statutes. 1/

PRELIMINARY STATEMENT

An Administrative Complaint was filed by Petitioner against Respondent on October 19, 1989. The Respondent filed a Response to Administrative Complaint on December 1, 1989. The matter was referred to the Division of Administrative Hearings for appointment of a Hearing Officer on March 16, 1990, and assigned to the undersigned on March 22, 1990. A formal hearing was scheduled for June 27, 1990, pursuant to a Notice of Hearing issued on April 6, 1990. Petitioner filed a Motion to Amend Administrative Complaint and an Amended Administrative Complaint on June 20, 1990. The motion was granted over objection at the formal hearing.

At the formal hearing, five joint exhibits were admitted in evidence.

Petitioner presented testimony from three witnesses and offered two exhibits, which were admitted in evidence without objection. Respondent testified in his own behalf and offered one exhibit which was admitted in evidence without objection.

A transcript of the proceeding was requested by Petitioner. Petitioner timely filed its proposed findings of facts and conclusions of law on June 31, 1990. Respondent did not file proposed findings of facts and conclusions of law.

FINDINGS OF FACT

1. Petitioner is the state agency charged, in conjunction with the Construction Industry Licensing Board, with the responsibility for prosecuting the Administrative Complaint in this proceeding pursuant to chapters 455 and 489, and the rules promulgated thereunder.

   
   

2. In September, 1980, license number CG C015802 was issued to Respondent, Thomas J. Freese, as the qualifying agent for Tracy Industries, 728 St. Lucie Crest, Stuart, Florida 33494 ("Tracy"). Respondent was the licensed qualifying agent for Tracy Industries at all times material to this proceeding.

   
   

3. At no time material to this proceeding was Robert Sherno licensed by Petitioner as a contractor. On or about May 30, 1988, Mr. Sherno contracted with William F. Meinking to construct a home for Mr. Meinking. The contract price was not to exceed $64,000.00.

   
   

4. A building permit was issued for the construction of Mr. Meinking's home on June 8, 1988. The permit was obtained by Mr. Sherno as agent for Respondent. A notice of commencement was filed by Mr. Meinking on June 20, 1988, listing Respondent as the contractor, and listing Mr. Sherno as the person designated by the owner for service of notice and other documents.

   
   

5. Respondent authorized Mr. Sherno to obtain the building permit by letter to the local building department dated June 21, 1988 ("authorization letter"). The authorization letter was requested by Robert Nelson who was Tracy's president. Mr. Nelson was personally acquainted with Mr. Sherno and dealt directly but separately with Mr. Sherno and Respondent. Mr. Sherno paid

   $200.00 to Mr. Nelson at the time of the authorization letter.

   
   

6. Mr. Nelson told Respondent that the permit was for the construction of Mr. Meinking's home. Respondent initially questioned the need for a contractor to pull the permit when the owner could build his own house under an owner's permit. Respondent was told that Mr. Meinking and Mr. Sherno were going to develop a number of homes in the area Not only would the number of homes not qualify for an owner's permit, but it was anticipated by Mr. Nelson that the development plan proposed by Mr. Sherno and Mr. Meinking had excellent profit potential for all concerned. Based on that information from Mr. Nelson, Respondent signed the authorization letter. Respondent knew Mr. Sherno and knew that Mr. Sherno was not a licensed contractor.

   
   

7. Neither Respondent nor any qualified person supervised the construction of Mr. Meinking's home. One person employed by Tracy in an administrative or clerical capacity visited the construction site occasionally. Respondent inquired of Mr. Nelson from time to time at the offices of Tracy as to the

   status of construction. Respondent drove by the construction site from time to time, but did not personally supervise construction in any capacity. Respondent did not inspect the progress of construction, provide insurance, discuss the progress of construction with Mr. Meinking, Mr. Sherno, or anyone at Tracy.

   Respondent assumed that construction was proceeding according to schedule and in a satisfactory manner as long as there were no complaints.

   
   

8. Mr. Meinking paid Mr. Sherno the entire $64,000.00 pursuant to the terms of the contract. During the latter stages of construction in the first or second week of November, Mr. Meinking began receiving calls from subcontractors stating that they had not been paid. Mr. Meinking terminated his contractual relationship with Mr. Sherno on or about November 17, 1988. Mr. Meinking paid approximately $16,500.00 to eight subcontractors and an additional $10,000.00 to

   $12,000.00 to finish construction of his home.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding pursuant to Section 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.

   
   

10. The burden of proof is on Petitioner to prove the allegations in the Administrative Complaint by clear and convincing evidence. Where an agency seeks disciplinary action against a professional license, the evidence must be clear and convincing. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987).

    
    

11. Section 489.129(1) provides in relevant part that:

    
    

    The Board may. . . impose an administrative fine not to exceed $5,000.. if the contractor. is found guilty of any of

    the following acts:

    * * *

    1. Performing any act which assists a person or entity in engaging in the prohibited uncertified and unregistered practice of contracting, if the certificate holder or registrant knows or has reasonable grounds to know that the person or entity was uncertified and unregistered.

    2. Knowingly combining or conspiring with an uncertified or unregistered person by allowing his certificate or registration to be used by the uncertified or unregistered person with intent to evade the provisions of this part....

       * * *

       (m) Being found guilty of fraud or deceit or of gross negligence, incompetency, or misconduct in the practice of contracting.

       
       

12. Respondent violated Section 489.129(1)(e), Florida Statutes. Respondent allowed Mr. Sherno to engage in the prohibited uncertified and unregistered practice of contracting when Respondent knew that Mr. Sherno was

    uncertified and unregistered. Even if Respondent did not have actual knowledge that Mr. Sherno was not certified or registered, Respondent had reasonable grounds to know that Mr. Sherno was not certified or registered as a contractor. It is axiomatic that there would have been no need for Respondent to sign the authorization letter if Mr. Sherno was authorized to obtain the building permit by virtue of his own certification or registration.

    
    

13. Respondent violated Section 489.129(1)(f), Florida Statutes. Respondent made it possible for Mr. Sherno to perform unlicensed work, and Respondent intended that such unlicensed work be performed. Cf. Blume v. Department of Professional Regulation, Construction Industry Licensing Board,

    489 So.2d 880, 882 (Fla. 2d DCA 1986). Respondent agreed to make it possible for Mr. Sherno to perform the unlicensed work only after Respondent learned of the size of the proposed development and the potential profitability for all concerned. Subsequently, Respondent inquired of the status of Mr. Meinking's home and saw it under construction when he drove by the construction site on several occasions.

    
    

14. Respondent violated Section 489.129(1)(m). Respondent was guilty of gross negligence and misconduct in the practice of contracting. Respondent made it possible for an unlicensed person to perform unlicensed work, intended that such unlicensed work be performed, and failed to supervise construction.

    
    

15. The violations committed by Respondent arose from a single act which was Respondent's first offense. Florida Administrative Code Rule 21E-17.001 in relevant part authorizes the respective fines for the following first offenses of Subsection 489.129(1), Florida Statutes: (a) $500-$1500 for violation of Subsection 489.129(1)(e) ; (b) $1,000-$3,000 for violating Subsection 489.129(1)(f); and (c) $500-$1,500 for violating Subsection 489.129(1)(m) when there is monetary harm to the contractor's customer.

    
    

16. Aggravating circumstances are defined in Florida Administrative Code Rule 21E-17.002(1) to include monetary damage to the contractor's customer. That aspect of aggravating circumstances is already taken into account by the greater fine that is imposed for violating Subsection 489.129(1)(m). 2/ Rule 21E-17.005 authorizes cumulative and consecutive penalties where more than one violation occurs in one case.

    
    

17. Petitioner produced no evidence of any aggravating circumstances other than those already contemplated in the higher fine imposed by Florida Administrative Code Rule 21- 17E.001(19)(b) for a violation of Subsection 489.129(1)(m), Florida Statutes. Respondent did not go out and seek to violate Florida law. Respondent was sought out by Mr. Sherno and asked to sign the authorization letter through the President of Tracy. Mr. Meinking had culpable knowledge of the fact that Mr. Sherno was using the license of a third party. Respondent would not have violated Florida law if it had not been for the affirmative acts of Mr. Sherno and Mr. Nelson, and the complicity of Mr. Meinking.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent be found guilty of violating Subsections

489.129(1)(e), (f), and (m), Florida Statutes. It is further recommended that

Respondent be fined $2,000.00 which represents the aggregate amount of the minimum fine for each violation.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 27th day of August, 1990.

DANIEL MANRY

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 27th day of August, 1990.

ENDNOTES

1/ All references to chapters, statutes, and sections are to Florida Statutes (1989) unless indicated otherwise.

2/ Compare Fla. Admin. Code Rule 21E-17.001(19)(a)(which imposes a fine of

$250-$75O when there is no monetary damage to the contractor's customer) with Rule 21E-17.001(19)(b)(which imposes a fine of $500-$1500 when there is monetary damage to the contractor's customer).

COPIES FURNISHED:

Fred Seely Executive Director

Department of Professional Regulation Construction Industry Licensing

Post Office Box 2 Jacksonville, Florida 32202

Kenneth D. Easley General Counsel

Department of Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Robert B. Jurand, Esquire Senior Attorney

Department of Professional Regulation 1940 North Monroe Street, Suite 60

Tallahassee, Florida 32399-0750

James A. Freese, Esquire 3727 S. D. Ocean Boulevard

Stuart, Florida Case NO. 90-1682

APPENDIX

Petitioner submitted proposed findings of fact. It is noted below which proposed findings of fact were accepted and the paragraph number(s) in the Recommended Order where they were accepted, if any. Those proposed findings of fact which were rejected and the reason for their rejection are also noted below. No notation is made for unnumbered paragraphs.

The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

1 Accepted in finding 1 2-3 Accepted in finding 2 4-5 Accepted in finding 3

1. Accepted in finding 4

2. Accepted in finding 8

8-9 Accepted in findings 5,6

Respondent submitted no proposed findings of fact.

Docket for Case No: 90-001682

Orders for Case No: 90-001682