STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) CASE NO. 90-1842

)

ROBERT P. HAYNES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on October 16, 1990, in Fort Myers, Florida.

APPEARANCES

For Petitioner: Robert B. Jurand, Esquire

1940 North Monroe Street, Suite 60

Tallahassee, FL 32399-0792

For Respondent: Thomas G. Eckherty, Esquire

12934 Kenwood Lane, S.W., #89 Fort Myers, Florida 33907

STATEMENT OF THE ISSUES

The issue is whether respondent's license as a certified general contractor should be disciplined for the reasons stated in the amended administrative complaint.

PRELIMINARY STATEMENT

In an administrative complaint filed on October 19, 1989, petitioner, Department of Professional Regulation, Construction Industry Licensing Board, charged that respondent, Robert P. Haynes, licensed as a certified general contractor, had violated certain provisions within Chapter 489, Florida Statutes (1989). More specifically, the complaint alleged that respondent, while qualified to do business as Monarch Homes of Southwest Florida, accepted a

$1,000 deposit from a customer to construct a new home in Cape Coral, Florida, but never performed any work on the project. Petitioner alleges that the foregoing conduct constituted a violation of Subsections 489.129(1)(h),(k), and (m), Florida Statutes (1989). On July 27, 1990, petitioner was given leave to file an amended complaint which made minor changes to the original complaint.

Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes (1989). The matter was referred by petitioner to the Division of Administrative Hearings on March 23,

1990, with a request that a hearing officer be assigned to conduct a formal hearing. By notice of hearing dated April 10, 1990, a final hearing was scheduled on July 25, 1990, in Fort Myers, Florida. Upon request of petitioner, the matter was rescheduled to September 12, 1990, and then again to October 16, 1990, at the same location.

At final hearing petitioner presented the testimony of Roy Torgierson.

Also, petitioner offered petitioner's exhibits 1-5. All exhibits were received in evidence. Respondent testified on his own behalf and presented the testimony of Brad Trowe.

The transcript of hearing was filed on November 15, 1990. Proposed findings of fact and conclusion of law were filed

2 by respondent and petitioner on October 29 and November 20, 1990. respectively. A ruling on each proposed finding has been made in the Appendix attached to this Recommended Order.

FINDINGS OF FACT

Based upon all of the evidence, the following findings of fact are determined:

1. At all times relevant hereto, respondent, Robert P. Haynes, held certified general contractor license number CG C023689 issued by petitioner, Departmentt of Professional Regulation, Construction Industry Licensing Board (Board). When the events herein occurred, respondent was doing business as Monarch Homes of Southwest Florida, Inc. (Monarch) located at 1221 S.W. 21st Terrace, Cape Coral, Florida. From October 1987 until January 1989 respondent was Monarch's registered qualifying agent.

   
   

2. Monarch engaged in the home building business in the Lee County area. Another entity, Monarch Realty of Lee County, Inc. (Monarch Realty), a real estate firm, sold homes for Monarch through a model center located in Cape Coral and owned by Monarch. In a typical sale, a buyer would first deal with a real estate salesman employed by Monarch Realty who filled out a portion of the paperwork for the transaction and accepted a deposit from the buyer. It is noted that the realty firm was given blank contracts by Monarch for use in the sales activities. The deposit and paperwork were then forwarded by the salesman to the sales manager who completed the contract and paperwork and then gave the deposit to the broker who deposited the money in the real estate firm's escrow account. However, the contract would be between Monarch and the buyer. Prior to acceptance of the contract by Monarch, respondent, who worked at a different office, would normally review the contract and initial the same if it was financially and technically feasible from a contractor' s perspective.

   
   

3. On November 19, 1988, Roy Torgierson visited the model center for the purpose of entering into a contract with Monarch to have a new home built on his lot at 5 15 N.E. 21st Place, Cape Coral, Florida. The contract called for a price of $67,433 subject to Torgierson obtaining a mortgage, and required Torgierson to give a deposit in the amount of $1,000. While at the model center, Torgierson dealt exclusively with Brad Trowe, a real estate salesman employed by Monarch Realty. After Torgierson executed the contract and gave Trowe a check made payable to "Monarch Homes" as a deposit on the transaction, Trowe forwarded the check and paperwork to the sales manager at the model center as he did in all other transactions. The contract was later accepted by Monarch but the signature of the individual who signed on behalf of Monarch is not

   legible. Also, Torgierson's check was deposited into Monarch Homes of Southwest Florida, Inc.'s bank account rather than the real estate firm's escrow account. There is no evidence that respondent reviewed or had knowledge of this contract or that he was aware a deposit had been made by Torgierson and deposited into Monarch's bank account.

   
   

4. Approximately two or three weeks later, Torgierson made application for financing with a local lending institution and learned that Monarch was experiencing serious financial problems. Torgierson promptly telephoned Trowe and requested a refund of his deposit. Trowe advised him that he would contact Monarch and request a refund on Torgierson's behalf. When he received no refund, Torgierson telephoned the president of Monarch, Dominick Ponti, on several occasions requesting a refund. Each time Ponti advised him not to worry and that he would receive his money. The customer eventually hired an attorney who sent a demand letter to Monarch on January 10, 1989. To date, no refund has been given to Torgierson and Monarch has long since gone out of business. It is also noted that construction on Torgierson's home was never begun by Monarch or respondent.

   
   

5. Respondent's relationship with Monarch involved a review and approval of contracts for financial and technical feasibility from a contractor's perspective. He was not a shareholder or partner of the firm and had no say in any other aspect of the firm's business. Similarly, he had no relationship with Monarch Realty. Respondent was unaware of the Torgierson- Monarch contract since it was never sent to him for review and approval, and he did not know of Torgierson's problems until the complaint herein was filed. Indeed, respondent was never contacted by Torgierson concerning the contract or a refund of his deposit. Like Torgierson, Haynes characterizes himself as a victim of Monarch, which went out of business without giving notice to its qualifying agent.

   
   

   CONCLUSIONS OF LAW

   
   

6. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes (1989).

   
   

7. Since respondent's professional license is at risk, petitioner bears the burden of proving by clear and convincing evidence that the allegations in the complaint are true. Ferris v. Turlington, 510 So.2d 292 (Fla. 1987)

   
   

8. The amended complaint alleges that respondent violated Subsection 489.129(1), Florida Statutes (1989) in three respects. First, it is alleged that respondent committed mismanagement or misconduct in the practice of contracting that caused financial harm to a customer within the meaning of Subsection 489.129(1)(h). Secondly, he is alleged to have abandoned a construction project in violation of Subsection 489.129(1)(k). Finally, he is charged with being guilty of fraud, deceit, gross negligence, incompetency, or misconduct as proscribed by Subsection 489.129(1)(m).

   
   

9. Initially, it is noted that under the rationale of Hunter v. Department of Professional Regulation, 458 So.2d 842 (Fla. 2nd DCA 1984), Haynes cannot be deemed to have abandoned the Torgierson project. This is because "there was no evidence presented to the hearing officer concerning (Haynes') abandonment of the (Torgierson) project other than evidence that (Torgierson) made a down payment, and (Monarch Homes) went out of business several weeks later, before construction began on (Torgierson's) home." Id. at 844. To distinguish this case from Hunter, petitioner contends that Monarch's acceptance of a deposit and

   giving written acknowledgement that a deposit had been received equated to a commencement of work under the contract so as to bring the statute into play. However, this argument is deemed to be specious and is hereby rejected.

   Therefore, the charge in Count II should be dismissed.

   
   

10. The remaining two charges turn on whether the illicit conduct of Monarch can be imputed to Haynes, who was the qualifying agent for the firm. While it is true that the acts of a licensee's agents can be imputed to-the licensee under certain circumstances, in order to establish a violation of subsection 489.129(1)(m), it must be shown by clear and convincing evidence that the licensee (vis a vis the agent) was guilty of fraud, deceit, or one of the other proscribed activities. O'Connor v. Department of Professional Regulation, Construction Industry Licensing Board, 566 So.2d 549, 553 (Fla. 2d DCA 1990).

In this case, while it was shown that the agent (Monarch) clearly acted in a fraudulent manner, such a showing as to respondent was not made. Accordingly, the charge in Count III must be dismissed. Finally, it is alleged that respondent committed mismanagement or misconduct in the practice of contracting in violation of subsection 489.129(1)(h). Since there was no showing that any of the conditions described in paragraphs 1. - 3. of the statute were present, and work on the project was never undertaken, it is concluded that this count must also fail. Therefore, the administrative complaint, as amended, should be dismissed, with prejudice.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the amended administrative complaint be dismissed, with

prejudice.

DONE and ENTERED this 21st day of November, 1990, in Tallahassee, Florida.

DONALD R. ALEXANDER

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 21st day of November, 1990.

APPENDIX

Petitioner:

1-3. Partially adopted in finding of fact 1. 4-5. Partially adopted in finding of fact 3.

6. Rejected as being unnecessary.

7-8. Partially adopted in finding of fact 4.

9. Rejected as being unnecessary.

Respondent:

11-12. Partially adopted in finding of fact 4.

1. Partially adopted in finding of fact 3.

2. Partially adopted in finding of fact 4.

Note - Where proposed findings of fact have been partially used, the remainder has been rejected as being irrelevant, unnecessary, subordinate, cumulative, or not supported by the evidence.

COPIES FURNISHED:

Robert B. Jurand, Esquire

1940 North Monroe Street, Suite 60

Tallahassee, FL 32399-0792

Thomas G. Eckherty, Esquire 12934 Kenwood Lane, S.W., #89 Fort Myers, FL 33907

Kenneth D. Easley, Esquire

1940 N. Monroe Street, Suite 60

Tallahassee, FL 32399-0792

Fred Seely Executive Director Post Office Box 2

Jacksonville, FL 32202

NOTICE OF RIGHT TO FILE EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. You should consult with the agency that will issue the final order in this case concerning their rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 90-001842

Orders for Case No: 90-001842