DEPARTMENT OF PROFESSIONAL ) REGULATION, CONSTRUCTION INDUSTRY ) LICENSING BOARD, )
vs. ) CASE NO. 90-4260
RAYMOND R. SUAREZ, )
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Veronica E. Donnelly, held a formal hearing in the above-styled case on November 27, 1990, in Tampa, Florida.
For Petitioner: Robert B. Jurand, Esquire
Whether the Respondent committed the following acts on the five contracting jobs set forth in the Amended Administrative Complaint:
The Department of Professional Regulation (the Department) filed an Amended Administrative Complaint before the Construction Industry Licensing Board (the Board) alleging that the Respondent, Raymond R. Suarez, had violated state law in his capacity as a licensed contractor. The Department seeks to have disciplinary sanctions imposed on the license of Respondent Raymond R. Suarez.
In an Election of Rights Form signed by Respondent's attorney, the allegations of fact in the complaint were disputed and a formal administrative hearing was requested. The case was then transferred to the Division of Administrative Hearings and a final hearing was scheduled.
Prior to hearing, the attorney for Respondent filed a Motion to Withdraw as Counsel which was signed and consented to by the Respondent. The motion was granted, and the case proceeded to hearing on November 27, 1990.
The Respondent did not appear at hearing. During the hearing, the Department presented ten witnesses and filed seven exhibits, which were admitted into evidence.
A transcript of the hearing was filed with the Division of Administrative Hearings on December 3, 1990. A Motion to Extension of Time in which to file proposed recommended orders was timely filed by the Department posthearing. The motion was granted, and the proposed recommended order was filed on January 4, 1991. Rulings on the proposed findings of fact submitted by the Department are in the Appendix of this Recommended Order.
At all times material to these proceedings, the Respondent, Raymond Robert Suarez, was licensed as a certified general contractor in Florida, and held license number CG C0011988. The Respondent was the qualifying contractor for Suarez Brothers Construction Company. He was not registered with the Florida Construction Industry Licensing Board as the qualifying agent for Suarez Brothers of Pinellas, Inc.
There were two shareholders in Suarez Brothers Construction Company: Frank B. Suarez and Raleigh Suarez. Corporate responsibilities were as follows:
Frank B. Suarez, President Abdelia Arguelies, Vice President
Raleigh Suarez, Secretary/Treasurer
Raymond R. Suarez, Responsible Managing Employee and Qualifying Contractor
The corporation was based in Hillsborough County, Florida.
On or before February 24, 1987, a corporation was created known as Suarez Brothers of Pineilas, Inc. Craig O. Tennant became president and Joseph Scott Suarez became vice president. The corporation engaged in the construction business and built single-family residences in Pinellas County, Florida. The business was in the county adjoining Hillsborough County, where Suarez Brothers Construction had built homes for ten years and had gained a good reputation throughout the Tampa Bay area, including Pinellas County.
The name of the new corporation with its base of operations in Pinellas County, was deceptively similar to that of Suarez Brothers Construction Company.
The close resemblance of the name was intentionally misleading, as Suarez Brothers of Pinellas, Inc. attempted to benefit from the reputation for quality construction gained by Suarez Brothers Construction in which the father of Joseph Scott Suarez, Frank B. Suarez, was president and his brother, Raymond
R. Suarez, was qualifying contractor. This is evidenced by the construction contract used by Suarez Brothers of Pinellas, Inc., written representations to building departments of a legal connection between the two companies, and the use of the name of the same qualifying contractor on applications for building permits.
In the construction contract used by Suarez Brothers of Pinellas, Inc., it was represented that the company had been a Florida builder since 1949. The people actually engaged in building since 1949 were the father Frank B. Suarez, and the uncle, Raleigh Suarez. These two people were not members of the new company.
On four of the five projects for which Suarez Brothers of Pinellas, Inc. had written contracts, the name Suarez Brothers Construction was given to the building departments as the contractor of record instead of the actual corporate name.
Raymond R. Suarez was named as the contractor, and his contractor's license number was used on the applications for building permits for the five Suarez Brothers of Pinellas, Inc. contracts which are the subject of the complaint in this proceeding.
There was no evidence presented at hearing to demonstrate that Raymond
R. Suarez knowingly permitted his name and contractor's license number to be used by either the president or vice-president of Suarez Brothers of Pinellas, Inc. to obtain the building permits for the construction of the residence for Robert D. and Norma L. Ganoe (Case #0110319) or the construction of the residence for Reinhold and Monty Brooks (Case #0106921).
On or about June 25, 1987, Suarez Brothers of Pinellas, Inc. contracted with James B. Hughes, Jr. to build a home for $190,000.00 at the following location: 9985 Lake Seminole Drive West, Largo, Florida.
The building permit issued for the construction on September 29, 1987, was signed by Raymond Suarez, and his contractor's license number was given as the qualifying contractor for Suarez Brothers Construction of Pinellas on the Hughes project.
On February 4, 1988, the contractor on the project was changed to Robert R. O'Andrea.
Between September 29, 1987 and February 4, 1988, various subcontractors and materialmen hired by Suarez Brothers of Pinellas, Inc. to provide services or supplies on this job were not paid. Joseph Scott Suarez had been given the funds to timely pay the subcontractors and materialmen by James
B. Hughes, Jr. and Wonzel M. Hughes, his wife.
Joseph Scott Suarez misappropriated the funds entrusted to him as an officer of Suarez Brothers of Pinellas, Inc. by Mr. and Mrs. Hughes for his own use. As a result, $24,763.63 worth of subcontractors and materialmen's
perfected liens were placed against the real property for services and supplies obtained during the time period Raymond R. Suarez was the qualifying contractor of record.
Raymond R. Suarez did not have the liens removed from the property within thirty days after the date of such liens, nor has he attempted to have the liens removed at a later date.
The Respondent, as qualifying contractor, knew or should have known that the liens were in existence and had been perfected.
On or about August 10, 1987, Suarez Brothers of Pinellas, Inc. contracted with Richard and Linda Vozne to construct a home for $121,041.00 at the following location: 316 Seventh Avenue North, Tierra Verde, Florida.
The permit for construction was issued by the Pinellas County Department of Building Inspection on December 12, 1987. Raymond Suarez signed the permit as contractor, and his contractor's license number was given as the qualifying contractor for Suarez Brothers Construction.
On July 15, 1988, the contractor for the project was changed to Linda
J. Vozne, one of the owners of the property.
Between December 12, 1987 and July 14, 1988, claims of lien were filed and perfected against the Vozne project in the amount of $16,047.18 for supplies and services ordered while Raymond Suarez was contractor of record.
Suarez Brothers of Pinellas, Inc. had received $10,000.00 front money to begin construction when the construction loan entered into by Richard and Linda Vozne with Barnett Bank of Pinellas County closed on November 13, 1987. One hundred three thousand dollars ($103,000.00) of the loan disbursements were made to the construction company by the bank before the owners removed it from the project.
The funds disbursed to Suarez Brothers of Pinellas, Inc. were not used to pay the subcontractors who had performed work and provided supplies on the project, as required by the construction contract. They were misappropriated to another use not related to the Vozne construction project.
Raymond R. Suarez did not have the liens removed from the property by payment within thirty days after the date of such liens, nor has he attempted to have them removed at a later date.
The Respondent, as qualifying contractor, knew or should have known that the liens were in existence and had been perfected.
On or about October 28, 1987, Suarez Brothers of Pinellas, Inc. contracted with Keith A. Phillips to build a home for $134,621.00 at the following location: 5944 Bayview Circle South, Gulfport, Florida.
The application for a building permit from the City of Gulfport was dated December 22, 1987, and was signed by Raymond R. Suarez. The contractor was designated as "Suarez Brothers" and the Respondent's license number was given as the qualifying contractor on the Phillips project.
In September 1988, Suarez Brothers of Pinellas, Inc. was terminated as the project contractor by Keith Phillips and Cynthia S. Phillips, his wife, although no changes were made in the public records of Gulfport.
Between October 28, 1987 and September 1988, the company did not complete construction in a timely manner. Pursuant to contract, the project was to be completed within 182 days. No additional periods of time were granted by the owners to the contractor and none were requested.
During the period of time Raymond R. Suarez was the qualifying contractor on the Phillips project, eleven thousand one hundred fifty-three dollars and twelve cents ($11,153.12) worth of subcontractor and materialmen liens were perfected as they were not paid by the construction company.
The funds to pay for the materials and labor which resulted in the claims of lien had been paid to Suarez Brothers of Pinellas, Inc. by the bank making regular disbursements under the construction loan procured by Mr. and Mrs. Phillips for that purpose. Suarez Brothers of Pinellas, Inc. did not use these funds for their intended purpose and misappropriated them to another use not related to the Phillips construction project.
The supplies or services for which the liens were perfected had been ordered by Suarez Brothers of Pinel1as, Inc. for this customer's job.
Raymond R. Suarez did not have the liens removed from the property by payment within thirty days after the date of such liens, nor has he attempted to have the liens removed at a later date.
The Respondent, as qualifying contractor, knew or should have known that the liens were in existence and had been perfected.
Since the alleged incidents of misconduct by Raymond R. Suarez, he has not renewed his contractor's license which remained valid until June 1989.
The Hearing Officer was not made aware of any aggravating or mitigating circumstances relating to the charges in the Amended Administrative Complaint at final hearing.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter alleged in the Amended Administrative Complaint and the parties to this proceeding pursuant to Section 120.57(1), Florida Statutes.
The Amended Administrative Complaint in this proceeding relates to the alleged violations of law for which Respondent Raymond R. Suarez can be held legally responsible as the qualifying contractor. Numerous violations have been alleged in the charging document filed by the Department of Professional Regulation on five different projects undertaken by Suarez Brothers of Pinellas, Inc.
As there was no evidence presented at hearing to demonstrate that Raymond R. Suarez knowingly permitted his name and contractor's license number to be used by either Craig O. Tennant or Joseph Scott Suarez on the Ganoe and Brooks project, he cannot be disciplined for the misconduct that occurred on these construction jobs. In Montgomery v. Chamberlain, 543 So.2d 234 (Fla. 2d DCA 1989), the court determined that a qualifying contractor is legally
responsible for the proper construction of a house completed by an unlicensed construction company when the licensed contractor authorized the use of his license to obtain the necessary permits. Without proof that Respondent Raymond
R. Suarez authorized the officers of Suarez Brothers of Pinellas, Inc. to pull the permits on these two early company projects under his contractor's license, all of the allegations relating to the Ganoe and Brooks projects are fatally flawed. As a result, the misconduct alleged on these two projects will not be considered in aggregate with the alleged misconduct on the remaining projects.
Paragraph four of the Amended Administrative Complaint alleges that the described conduct, considered in aggregate, reflects gross negligence, incompetence, and/or misconduct by Respondent, in violation of Chapter 489.129(1)(m) and (j) and 489.105(4) and 489.119. These allegations are rejected by the Hearing Officer based upon the appellate court ruling in O'Connor v. Department of Professional Regulation, 566 So.2d 549 (Fla. 2d DCA 1990). The case, which was decided after the filing of the Amended Administrative Complaint in this proceeding, holds that the gross negligence which authorizes discipline of a qualifying contractor must result from the licensee's own acts. The gross negligence of others cannot be imputed to him. Because the allegations in paragraph four attempt to hold Raymond R. Suarez responsible for the gross negligence of others, he is not guilty as charged as a matter of law.
Paragraph five of the Amended Administrative Complaint alleges that Respondent's failure to make sure subcontractors and materialmen were paid with the funds provided for that purpose by owners on the Hughes, Vozne and Phillips projects was a violation of Sections 489.129(1)(h), (j) and (m); 489.119; and 489.105(4), Florida Statutes.
Section 489.129, Florida Statutes [1987], provides as follows, in pertinent part:
The board may revoke, suspend or deny the issuance or renewal of the certificate or registration of a contractor and impose an administrative fine not to exceed $5,000.00, place a contractor on probation, or reprimand or censure a contractor if the contractor, or the business entity or any geneial partner, officer, director, trustee, or member of a business entity for which the contractor is a qualifying agent, is found guilty of any of the following acts:
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Financial mismanagement or misconduct in the practice of contracting that causes financial harm to a customer. Financial mismanagement or misconduct occurs when:
Valid liens have been recorded against the property of a contractor's customer for supplies or services ordered by the contractor for the customer's job; the contractor has received funds from the customer to pay for the supplies or services; and the contractor
has not had the liens removed from the property, by payment or by bond, within 30 days after the date of such liens.
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(j) Failure in any material respects to comply with this act.
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(m) Upon proof that the licensee is guilty of fraud or deceit or of gross negligence, incompetency, or misconduct in tie practice of contracting.
The evidence adduced in hearing reveals that financial mismanagement or misconduct occurred on all three projects upon which Respondent Raymond Suarez permitted his name to appear on the public records as contractor. The customers, in aggregate, were required to pay twice for approximately $52,000.00 worth of supplies or service ordered by Suarez Brothers of Pinellas, Inc. on these jobs. Accordingly, Raymond R. Suarez is found guilty of the alleged violation of Section 489.129(1)(h), Florida Statutes, as set forth in paragraph five. The remaining alleged statutory violations are cumulative. They are rejected in favor of the most specific charge proved in paragraph five.
Paragraph six alleges that Respondent failed to properly supervise contracting activities he was responsible for as qualifying agent. No competent substantial evidence was presented on the three projects regarding improper construction. If the charge alludes to the financial mismanagement, that violation was addressed in paragraph five. Accordingly, the Respondent is not guilty of the alleged violation charged in paragraph six.
Paragraph seven charges Respondent with abandonment of contracting work, in violation of Section 489.129(1)(k). Because Raymond R. Suarez was never engaged or under contract as contractor, and such a relationship with the owners is specifically required by Section 489.129(1)(k), Florida Statutes, he is not guilty of the alleged violation.
Paragraph eight alleges that Respondent was involved in aiding and abetting an unlicensed contractor, in violation of Section 489.129(1)(h), Florida Statutes. All of the facts presented at hearing show that Raymond R. Suarez allowed Suarez Brothers of Pinellas, Inc., an unlicensed construction company, to obtain necessary permits for construction through the use of his signature and contractor's license number on the three projects. Therefore, the Respondent is guilty of the factual violation even though the wrong statute number was cited in paragraph eight. Respondent is guilty of having violated Section 489.129(1)(e), Florida Statutes, based upon the facts alleged in paragraph eight.
Paragraph nine alleges that Respondent's conduct considered in aggregate, reflects Respondent doing business under a name not on his license, and which he did not qualify, as required by Section 489.129(1)(g), Florida Statutes. The evidence reflects that Raymond Suarez represented to the Pinellas County Department of Building Inspection that he was the contractor for "Suarez Brothers Const. of Pinellas" on the Hughes project. On the other two projects, which were later in time, he correctly represented he was the contractor for Suarez Brothers Construction. However, the designation on the permits as "Suarez Brothers" was calculated to deceive the building departments as the contracts for the projects were with Suarez Brothers of Pinellas, Inc. and not
Suarez Brothers Construction Company. Accordingly, the Respondent is guilty of the charges alleged in paragraph nine.
Under the disciplinary guidelines in effect during the time period the proven violations occurred, the following penalty ranges were in effect, pursuant to Rule 21E-17.001, Florida Administrative Code:
The following guidelines shall be used in penalty cases, absent aggravating or mitigating circumstances and subject to the other provisions of this Chapter:
(1) 489.129(1)(g), 489.119: Failure to
qualify a firm, and/or acting under a name not on license. First violation, letter of guidance; repeat violation, $250 to $750 fine.
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(10) 489.129(1)(h): Diversion of funds. First violation, $750 to $1,500 fine; repeat violation, revocation.
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(13) 489.129(1)(e): Aiding or abetting evasion of Chapter 489. First violation,
$500 to $1,500 fine; repeat violation, $500 to $3,000 fine and one year suspension.
The charging document treats the violations of law committed by Respondent as a series of separate, unrelated incidents of misconduct for which only one offense was charged in each paragraph. Due to the requirement in the Amended Administrative Complaint that the acts are to be considered "in aggregate" for disciplinary purposes, the Respondent can be found guilty of only one violation each of Sections 489.129(1)(m), (e) and (g), Florida Statutes, for purposes of the disciplinary guidelines in Chapter 21E-17, Florida Administrative Code. In fact, he has committed the violations threefold. If the Hearing Officer had not been required to consider the misconduct "in aggregate", Rule 21E-17.005, Florida Administrative Code, would have been applied to the facts. This rule requires:
When several of the above violations shall occur in one or several cases being consolidated together, the penalties normally shall be cumulative and consecutive.
Rule 21E-17.006, Florida Administrative Code, provides:
If a formal hearing is held, any aggravated or mitigating factors must be submitted to the hearing officer at the formal hearing, so that same may be challenged by the opposing party and evaluated by the hearing officer.
At the final hearing the Board will not hear aggravating or mitigating evidence not presented to the hearing officer.
No aggravating or mitigating factors were submitted, so there will be no reduction or enhancement of the normal penalty ranges under the guidelines.
DONE and ENTERED this 14th day of January, 1991, in Tallahassee, Leon County, Florida.
VERONICA E. DONNELLY
Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1991.
APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-4260
Robert B. Jurand, Esquire
Raymond R. Suarez 904 Terra Mar Drive Tampa, Florida 33613
Kenneth E. Easley, Esquire General Counsel
Mr. and Mrs. Reinhold Brooks 6117 - 94th Avenue North Pinellas Park, Florida
Mr. and Mrs. Keith Phillips 5944 Bayview Circle Gulfport, Florida
Mr. and Mrs. Richard Vozne 316-7th Avenue North Tierra Verde, Florida
Mr. and Mrs. Robert Ganoe 10503 - 100th Street North Largo, Florida
Mrs. and Mrs. James B. Hughes, Jr. 9985 Lake Seminole Drive West Largo, Florida
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. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency 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.
