STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, CONSTRUCTION )

INDUSTRY LICENSING BOARD )

)

Petitioner, )

)

vs. ) CASE NO. 90-7583

)

JAMES E. TODD, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, final hearing in the above-styled case was held in Orlando, Florida, on April 17, 1991, before Robert E. Meale, Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

The parties were represented at the hearing as follows: For Petitioner: Attorney William S. Cummins

Department of Professional Regulation

1940 North Monroe St., Suite 60

Tallahassee, FL 32399

For Respondent: James E. Todd, pro se

1621 Truman Rd.

Orlando, FL 32807 STATEMENT OF THE ISSUE

The issue in this case is whether Respondent is guilty of violating various disciplinary provisions governing plumbing contractors and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

By Administrative Complaint dated September 5, 1990, Petitioner alleges that Respondent contracted to do plumbing work, failed to pay a supplier, and allowed a mechanic's lien in the amount of $2117.77 to be filed against the property of the owner. Petitioner alleges that Respondent thereby violated Section 489.129(1)(h), Florida Statutes, which prohibits mismanagement or misconduct in the practice of contracting that causes financial harm to the customer, and Section 489.129(1)(m), Florida Statutes, which prohibits fraud, deceit, gross negligence, incompetency, or misconduct in the practice of contracting.

By Election of Rights dated October 30, 1990, Respondent requested a formal hearing.

At the hearing, Petitioner called five witnesses and offered into evidence

15 exhibits, which were all admitted. Respondent called one witness, himself, and offered no exhibits.

The transcript was filed May 1, 1991. Each party filed a proposed recommended order. Treatment of the proposed findings is detailed in the appendix.

FINDINGS OF FACT

1. At all material times, Respondent has been a registered plumbing contractor, holding license number RF 0049725. He was first licensed in October, 1985, and has practiced plumbing contracting continuously since that time. Respondent has not previously been disciplined.

   
   

2. In early 1989, Respondent entered into a subcontract with A-1 Properties to provide various plumbing labor and materials in connection with a residential construction job on which A-1 Properties served as general contractor. The total price of the subcontract was $5100.

   
   

3. In general, Respondent performed his work in a timely and competent manner. A minor problem arose involving gas lines that Respondent installed in the kitchen. When a representative of the gas company inspected them during construction, he objected to certain fittings. After giving Respondent a few days to change the fittings, the owner authorized the gas company to make the changes when Respondent failed to do so.

   
   

4. The record does not disclose what, if anything, the gas company charged the owner for the work. However, the work was not extensive, and the owner withheld from Respondent only $165 to cover the anticipated invoice from the gas company.

   
   

5. In the course of performing the plumbing work, Respondent purchased, at a cost of $2117.77, materials from Shamrock Plumbing. The dates of the invoices reflecting these purchases and the amounts of the invoices are: August 2, 1989-

   - $1066.57; August 12, 1989--$37.77; August 25, 1989--$814.86; and August 25, 1989--$198.57. Respondent never paid Shamrock Plumbing for these materials.

   
   

6. The owner and A-1 Properties timely paid Respondent for all of his work. As a result of change orders, the price for the job increased by $1355.45 to a total of $6455.45. In August, as Respondent's work drew to a close, the owner and A-1 Properties paid Respondent $2337 as follows: August 25, 1989--

   $700; August 29, 1989--$500; and August 30, 1989--$1137. These payments total

   $2337.

   
   

7. In making the final payment to Respondent, the representative of A-1 Properties was aware that Shamrock Plumbing had sent to a Notice to Owner for the plumbing materials that Respondent had purchased. Except possibly for the

   $165, item, Respondent and the general contractor were in agreement, when the final payments were made in August, that Respondent had been paid substantially in full and that he would pay Shamrock Plumbing.

8. When Respondent failed to pay Shamrock Plumbing, it recorded a Claim of Lien on September 28, 1989, against the real property and initiated an action to foreclose the lien.

   
   

9. The owner was required to retain the services of an attorney to defend the foreclosure action, pay Shamrock: Plumbing's legal costs, and obtain a release of lien. In so doing, the owner expended a total of $3984.19, as follows: his attorney--$456; Shamrock Plumbing's attorney--$1410.42; Shamrock Plumbing's invoice--$2117.77. The owner paid his attorney by checks dated January 16 and July 31, 1990. The check to pay Shamrock Plumbing and its attorney was dated February 26, 1990. On March 12, 1990, Shamrock Plumbing executed a Release of Lien, which was recorded on April 10, 1990.

   
   

10. Respondent has not since reimbursed the owner for his expenditure of

    $3984.19 because Respondent lacks the money. He applied the August, 1989, payments received for the present job to satisfy obligations arising out of other jobs. Respondent testified that his money problems began when he was not paid for work he performed on other jobs, but they were unrelated to the job involved in this case.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter. Section 120.57(1), Florida Statutes. (All references to Sections are to Florida Statutes. All references to Rules are to the Florida Administrative Code.)

    
    

12. The Construction Industry Licensing Board (the Board) is responsible for regulating the practice of plumbing contracting. Section 489.129.

    
    

13. For a violation of any provision of Section 489.129(1), the Board may revoke, suspend, require financial restitution, impose an administrative fine not to exceed $5000, place a contractor on probation, require continuing education, assess the costs of the investigation and prosecution, or reprimand or censure a contractor.

    
    

14. Section 489.129(1)(h) prohibits

    
    

    Committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer. Financial mismanagement or misconduct occurs when:

    1. 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.

15. Section 489.129(1)(m) prohibits

    
    

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

    
    

16. Petitioner must prove the material allegations against Respondent by clear and convincing evidence. Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987)

    
    

17. Petitioner has proved that Respondent committed mismanagement or misconduct in the practice of contracting that causes financial harm to a customer, in violation of Section 489.129(1)(h). Respondent failed to pay Shamrock Plumbing in the 30 days following the recording of the Claim of Lien on September 28, 1989. Even after the owner-paid Shamrock Plumbing four months later, Respondent has failed to reimburse the owner.

    
    

18. It is unnecessary to consider whether Respondent also violated Section 489.129(1)(m) because the same facts are alleged as the basis for this violation. Section 489.129(1)(h) is applicable because it prohibits precisely what Respondent did in this case.

    
    

19. Rule 21E-17.001 provides that the normal penalty range for a contractor's first violation of Section 489.129(1)(h), which is described in the rule as a "diversion of funds," is a fine of $750-$1500. Among the aggravating circumstances in this case is the monetary damage to the owner and the failure of Respondent to reimburse the owner "at the time the penalty is to be assessed." Rule 21E-17.002(1). Among the mitigating circumstances are that Respondent has practiced six years without prior discipline, Rule 21E-17.002(6) and (7), and the effect of a penalty on Respondent's livelihood. Rule 21E- 17.002(10).

    
    

20. In its proposed recommended order, Petitioner seeks a penalty of two years' probation, restitution to the owner, and the imposition of a $1500 administrative fine with a one-year suspension if Respondent fails to pay the fine within 30 days from the date of the final order.

    
    

21. The recommended penalty assumes that, at the time of the assessment of the penalty by the Board, Respondent has still failed to make restitution or even arrangements for restitution to the owner.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that the Construction Industry Licensing Board enter a final order finding Respondent guilty of violating Section 489.129(1)(h), assessing Respondent for the costs of the investigation and prosecution up to a maximum of

$1000; placing Respondent on probation for two years; requiring Respondent to pay the owner $3984.19, plus interest at the legal rate, in restitution; and, if at the end of the two-year probation Respondent has failed to pay the owner in full, imposing an administrative fine of $1500 and suspending Respondent's license

for one year.

ENTERED this 20 day of May, 1991, in Tallahassee, Florida.

ROBERT E. MEALE

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 20 day of May, 1991.

APPENDIX

Treatment Accorded Proposed Findings of Petitioner

1-8 (first sentence): adopted or adopted in substance.

8 (remainder) : rejected as irrelevant.

9-12 (first sentence): adopted or adopted in substance.

12 (second sentence): adopted that Respondent accepted the final payments. Rejected as unnecessary that Respondent did-not protest the $165 retainage. 13: rejected as unnecessary.

14: first clause rejected as unnecessary. Second clause adopted. 15: rejected as unnecessary.

16-17 and 22: rejected as subordinate. 18-20: adopted or adopted in substance. 21: rejected as unnecessary.

23-24: adopted or adopted in substance.

Treatment Accorded Proposed Findings of Respondent first page: adopted or adopted in substance.

second page, first incomplete paragraph: rejected as irrelevant, unnecessary, and not finding of fact.

second page, first complete paragraph: rejected as unnecessary and irrelevant. second page, second complete paragraph: rejected as unnecessary.

COPIES FURNISHED:

Jack McCray, General Counsel Department of Professional Regulation 1940 North Monroe Street

Tallahassee, FL 32399-0792

Daniel O'Brien, Executive Director Construction Industry Licensing Board Post Office Box 2

Jacksonville, FL 32202

Attorney William S. Cummins Department of Professional Regulation 1940 North Monroe St., Suite 60

Tallahassee, FL 32399

James E. Todd, pro se 1621 Truman Rd.

Orlando, FL 32807

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties-have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least ten 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.

Docket for Case No: 90-007583

Orders for Case No: 90-007583