STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

)

Petitioner, )

)

vs. ) CASE NO. 96-0669

)

RICHARD ALAN MERRILL, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held before the Division of Administrative Hearings and its duly designated Hearing Officer, Daniel M. Kilbride, on April 10, 1996, in Sanford, Florida.

APPEARANCES

For Petitioner: Paul F. Kirsch, Esquire

Senior Construction Attorney

G. W. Harrell, Esquire Lead Construction Attorney Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792 For Respondent: No appearance

STATEMENT OF THE ISSUE

Whether disciplinary action should be taken against Respondent's license to practice contracting, License Number CB C043621, based on the violations of Section 489.129(1), Florida Statutes, as charged in the Administrative Complaint filed against Respondent on July 15, 1995.

PRELIMINARY STATEMENT

Petitioner filed a seven count Administrative Complaint on July 12, 1995, alleging that the Respondent had violated the laws regulating his professional activities as a Certified Building Contractor in the State of Florida.

Respondent disputed the allegations contained in the Administrative Complaint and elected a formal administrative hearing. The case was transferred to the Division of Administrative Hearings (DOAH) to conduct a hearing pursuant to Section 120.57, Florida Statutes. The parties were notified of a hearing date and the hearing followed.

At the formal hearing diligent search and inquiry was made to locate Respondent but he did not appear in person or through counsel. Petitioner dismissed Count IV of the Administrative Complaint.

Petitioner presented the testimony of three witnesses: Kathryn Ann Rose and Jeffery Lynn Rose, the consumers for whom work was to be performed and David E. Beitz, P.E., Building Official of Seminole County, who Petitioner offered as an expert witness. The Department's exhibits numbered 1 through 8 were admitted into evidence. Respondent presented no evidence. A transcript of the proceeding was prepared and filed on May 10, 1996. Petitioner filed its proposed findings of fact and conclusions of law on June 7, 1996.

FINDINGS OF FACT

Based on the evidence and the testimony of witnesses presented and the entire record in this proceeding, the following facts are found:

1. At all times pertinent to this proceeding, Respondent was a Certified Building Contractor, having been issued license number CB C043621, by the Florida Construction Industry Licensing Board.

   
   

2. At all times pertinent to this proceeding, Respondent was licensed as an individual.

   
   

3. At no time pertinent to this proceeding was Respondent the licensed qualifying agent for Merrill Homes.

   
   

4. On or about June 17, 1992, Kathy Rose and Respondent, d/b/a Merrill Homes, executed a Letter of Intent to build a house for the Roses in the Heathrow Woods subdivision in Seminole County, Florida.

   
   

5. At the time the Letter of Intent was signed, Kathy Rose gave Respondent a check for $2,500.00 as a partial deposit.

   
   

6. Subsection D of the Letter of Intent provided that "[s]hould the Buyers not proceed with construction of the residence, the Builder will refund the Buyers' deposit less any expenses incurred on the Buyers' behalf by the builder."

   
   

7. On or about June 25, 1992, Respondent stopped by the Rose residence and picked up a second check for $2,500.00 made out to Merrill Homes by Jeff Rose as the second half of the Rose's $5,000.00 deposit.

   
   

8. On or about August 10, 1992, Respondent, d/b/a Merrill Homes, and Jeff and Kathy Rose executed a contract to build a house in the Heathrow Woods subdivision as described in the Letter of Intent.

   
   

9. The contract executed between Respondent and the Roses did not list Respondent's state contractor's license number.

   
   

10. Respondent provided the Roses with a set of drawings of the proposed house, but did not provide the Roses with any other goods or services.

    
    

11. Performance by Respondent under the contract was contingent upon the sale of the Roses' existing house.

12. From the time the contract was signed until about October or November 1993, the Roses were unable to sell their existing house. Therefore, no work as performed by Respondent under the contract except for the production of the drawings of the house.

    
    

13. In October or November 1993, Heathrow Realty contacted the Roses and informed them that someone was interested in the lot that they had placed a down payment on in Heathrow Woods Subdivision.

    
    

14. Since their existing house had not sold in over a year, the Roses decided to release their option on the lot in Heathrow Woods and to cancel the contract with Respondent under the terms of the Letter of Intent.

    
    

15. Kathy Rose contacted Respondent in November 1993 and informed him that they had released the lot. They requested that their deposit be returned from Respondent under the terms of the Letter of Intent.

    
    

16. Respondent informed Kathy Rose that he would have their deposit refunded sometime after the first of December 1993.

    
    

17. Having heard nothing from Respondent, the Roses had their attorney send a letter, dated December 30, 1993, to Respondent demanding a refund of their deposit.

    
    

18. In January 1994, Kathy Rose once again contacted Respondent via telephone. At that time, Respondent informed Ms. Rose that their refund would only be $500.00, the balance of their deposit having been used for the house plans Respondent had provided. Respondent also informed Ms. Rose that he would mail an accounting to her.

    
    

19. Respondent has not provided the Roses with an accounting, refunded all or any part of their deposit, or had any contact with them whatsoever since January, 1994.

    
    

20. Examination of the plans, supplied to the Roses by Respondent, indicated that they were not really house plans per se, but rather hand-drawn sketches of a floor plan.

    
    

21. The plans have no value with respect to their use in building the house depicted and could not be used to obtain a building permit in Seminole County.

    
    

22. The plans Respondent supplied the Roses are valued somewhere between one and two hundred dollars.

    
    

23. As a Certified Building Contractor, Respondent knew the actual value of the plans he supplied to the Roses. Respondent knowingly attempted to deceive the Roses by making false statements as to the value of the plans in order to deprive the Roses of a substantial portion of their down payment that they were entitled to have refunded to them.

    
    

    CONCLUSIONS OF LAW

    
    

24. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding, pursuant to Sections 120.57(1), Florida Statutes.

25. Pursuant to Section 489.129, Florida Statutes (Supp. 1992), the Florida construction Industry Licensing Board is empowered to revoke, suspend or otherwise discipline the license of a contractor who is found guilty or any of the grounds enumerated in Section 489.129(1), Florida Statutes.

    
    

26. Petitioner has the burden of proving by clear and convincing evidence the allegations against Respondent. Ferris v. Turlington, 510 So.2d 292 (Fla 1987); Evans Packing Co. v. Department of Agriculture and Consumer Services, 550 So.2d 112 (Fla 1st DCA 1989).

    
    

27. Evans Packing, supra, 550 So.2d 112, 116, fn. 5, provides the following guidelines to the clear and convincing evidence standard:

    
    

    That standard has been described as follows:

    [C]lear and convincing evidence requires that the evidence must be found to be credible; the facts to which the witnesses testify must

    be distinctly remembered; the evidence must be precise and explicit and the witnesses must be lacking in confusion as to the facts in issue. The evidence must be of such weight that it produces in the mind of the trier of fact the firm belief of (sic) conviction, without hesitancy, as to the truth of the allegations sought to be established. Slomowitz v. Walker, 429 So.2d 797, 800 (Fla. 4th DCA 1983).

    
    

28. In addition, the disciplinary action may only be based upon the offenses specifically alleged in the Administrative Complaint. See, Sternberg

    v. Department of Professional Regulation, Board of Medical Examiners, 465 So.2d 1324, 1325 (Fla. 1st DCA 1985); Kinney v. Department of State, 501 So.2d 129,

    133 (Fla. 5th DCA 1987); Hunter v. Department of Professional Regulation, 458 So.2d 842, 844 (Fla. 2d DCA 1984).

    
    

29. Section 489.129(1), Florida Statutes, authorizes the Petitioner to discipline contractors in the State of Florida and provides, in pertinent part, as follows:

    
    

    1. The Board may take any of the following actions against any certificate holder or registrant: place on probation or reprimand the licensee, revoke, suspend, or deny the issuance or renewal of the certificate or registration, require financial restitution to a consumer, impose an administrative fine not to exceed $5000 per violation, require continuing education, or assess costs associ- ated with investigation and prosecution, if the contractor, financially responsible officer, or business organization for which the contractor is a primary qualifying agent

       or is a secondary qualifying agent responsible under s.489.1195 is found guilty of any of

       the following acts:

       * * *

       (c) violating chapter 455.

       * * *

       (g) acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certifi- cate holder or registrant as set forth on the issued certificate or registration, or in accordance with the personnel of the certifi- cate holder or registrant as set forth in the application for the certificate or registra- tion, or as later changed as provided in this part.

       * * *

       (j)failing in any material respect to comply with the provisions of this part.

       * * *

       1. committing fraud or deceit in the practice of contracting.

       2. being found guilty of incompetency or mis- conduct in the practice of contracting.

       
       

30. Respondent violated Section 489.129(1)(c), Florida Statutes by violating Section 455.227(1)(a), which prohibits a licensee from making misleading, deceptive, untrue, or fraudulent representations in the practice of the licensee's profession. As a Certified Building Contractor, Respondent's representations to the Roses regarding the actual value of the plans he provided them are misleading, deceptive, untrue, and fraudulent. Respondent was well aware of the value of the plans but misrepresented their value to the Roses with the intent to defraud them of their own down payment or a substantial portion thereof. Respondent has offered no evidence to the contrary.

    
    

31. Respondent violated Section 489.129(1)(g), Florida Statutes by acting in the capacity of a contractor in a name other than the one set forth on his issued certificate. At all times pertinent to this proceeding, Respondent was licensed as an individual and therefore could practice only under his own name. Respondent engaged in the practice of contracting by executing a building contract with the Roses under the name of Merrill Homes. Respondent has not applied for certification or registration under that fictitious name as required by Section 489.119(2), Florida Statutes.

    
    

32. Respondent violated Section 489.129 (1)(j), Florida Statutes by failing to comply with a provision of Chapter 489. Respondent failed to include his license number on the Letter of Intent and the building contract that he executed with the Roses. This is required under Section 489.119(5)(b), Florida Statutes

    
    

33. Respondent violated Section 489.129 (1)(m), Florida Statutes by committing fraud or deceit in the practice of contracting. Respondent made statements to the Roses regarding the value of work performed by or through him that he knew were patently misleading, untrue, deceptive, and fraudulent. As a building contractor, Respondent had full knowledge that the actual value of the plans he caused to be produced for the Roses was only worth one to two hundred dollars. However, in a effort to take advantage of the Roses' lack of knowledge of the practice of contracting and to unjustly retain a substantial portion of the Roses' down payment, Respondent represented to the Roses that the plans were worth $4,500.00. Respondent has offered no evidence to the contrary.

    
    

34. Respondent violated Section 489.129(1)(n), Florida Statutes by being found guilty of incompetency or misconduct in the practice of contracting.

    Respondent is guilty of misconduct in the practice of contracting by making misleading, untrue, deceptive, and fraudulent representations to the Roses in an effort to defraud them of a substantial portion of their own payment.

    Furthermore, Respondent has failed to provide the Roses a refund of their down payment and an accounting of work Respondent performed for the Roses. They are entitled to an accounting and a refund under the terms of the Letter of Intent executed between Kathy Rose and Respondent.

    
    

35. Rule 61G4-17.001, Florida Administrative Code, provides in part, the following guidelines that are pertinent to this proceeding:

    
    

    The Following guidelines should be used in disciplinary cases, absent aggravating or mitigating circumstances and subject to the other provisions of this Chapter:

    * * *

    1. 489.129(1)(c): Violating any part of Chapter 455. Penalty within ranges prescribed by Section 455.227, unless other- wise prescribed herein.

       1. 455.227(1)(a): Fraud, deceit, misleading, or untrue representations. First violation,

    $1,000 to $3,000 fine and/or probation, suspen- sion, or revocation; repeat violation, revoca- tion and $5,000 fine.

    * * *

    (7) 489.129(1)(g): Failure to qualify a firm, and/or acting under a name not on license. First violation, $100 fine; repeat violation

    $750 to $1,500 fine.

    (10) 489.129(1)(j): Failing in any material respect to comply with the provisions of Part I of Chapter 489.

    * * *

    (e) 489.119: License number not appearing in advertisement. First violation, $100 fine; repeat violation, reprimand and $250 to $1,000 fine.

    * * *

    1. 489.119(1)(m): Committing fraud or deceit in the practice of contracting.

       * * *

       (b) Causing monetary or other harm to licensee's customer or physical harm to any person. First violation, $500 to $2,000 fine and/or probation, suspension or revocation; repeat violation, $2,000 to $5,000 fine and/or probation, suspension, or revocation.

    2. Misconduct or incompetency in the prac- tice of contracting as set forth in Section 489.129(1)(n), Florida Statutes, shall be defined as:

    * * *

    (b) Violation of any provision of Chapter 61G4, Florida Administrative Code. First

    violation, $500 to $1,000 fine; repeat violations, $1,000 to $5,000 fine and/or probation, suspension, or revocation.

    
    

36. Rule 61G4-17.002, Florida Administrative Code, provides that:

    
    

    Circumstances which may be considered for the purposes of mitigation or aggravation of penalty shall include, but are not limited

    to the following:

    1. Monetary or other damage to the licensee's customer, in any way associated with the violation, which damage the licensee has not relieved, as of the time the penalty is to be assessed. (This provision shall not be given effect to the extent it would con- travene federal bankruptcy law.)

* * *

(8) The actual damage, physical or otherwise, to the licensee's customer.

* * *

1. Any efforts at rehabilitation.

2. Any other mitigating or aggravating circumstances.

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, as follows:

1. Dismissing Counts II and IV of the Administrative Complaint.

   
   

2. Finding Respondent guilty of violating Sections 489.129(1)(c), (g), (j),

   (m) and (n), Florida Statutes ( Supp. 1992).

   
   

3. Suspending Respondent's license as a Certified Building Contractor for a period of three months, and imposing an administrative fine in the amount of

$1,500,and requiring, as a condition of reinstatement, restitution to Jeff and Cathy Rose in the amount of $4,800, and such other reasonable and necessary conditions as the Board may require.

DONE and ENTERED this 13th day of June, 1996, in Tallahassee, Florida.

DANIEL M. KILBRIDE, 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 13th day of June, 1996.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-0669

To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

Accepted in substance: paragraphs 1-19, 21-24. Rejected as subsumed : paragraph 20.

Respondent's Proposed Findings of Fact.

Respondent did not submit proposed findings of fact.

COPIES FURNISHED:

Paul F. Kirsch, Esquire Senior Construction Attorney

G. W. Harrell, Esquire Lead Construction Attorney Department of Business and

Professional Regulation 1940 North Monroe Street

Tallahassee, Florida 32399-0792

Richard Alan Merrill 813 Largo Court

Apopka, Florida 32703

Richard Hickok Executive Director

Department of Business and Professional Regulation

Construction Industry Licensing Board 7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

Lynda L. Goodgame, Esquire Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 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.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

The DeSoto Building, 1230 Apalachee Parkway Tallahassee, FL. 32399-1550

(904)488-9675 SunCom: 278-9675

June 18, 1996

Richard Hickok Executive Director

Department of Business and Professional Regulation

Construction Industry Licensing Board 7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

Re: Department of Business and Professional Regulation vs. Richard Alan Merrill; Case No. 96-0669

Dear Mr. Hickok:

Enclosed are corrected pages (11 and 12) of the Recommended Order in the above referenced case issued by the undersigned on une 13, 1996. Please insert these corrected pages in your copy of the Recommended Order.

I apologize for any inconvenience this might have caused.

Very truly yours,

DMK:wd Enclosures

cc: Paul F. Kirsch, Esquire

G. W. Harrell, Esquire Richard Alan Merrill

Lynda L. Goodgame, Esquire

DANIEL M. KILBRIDE

Hearing Officer

Attachment

violation, $500 to $1,000 fine; repeat violations, $1,000 to $5,000 fine and/or probation, suspension, or revocation.

1. Rule 61G4-17.002, Florida Administrative Code, provides that:

   
   

   Circumstances which may be considered for the purposes of mitigation or aggravation of penalty shall include, but are not limited

   to the following:

   1. Monetary or other damage to the licensee's customer, in any way associated with the violation, which damage the licensee has not relieved, as of the time the penalty is to be assessed. (This provision shall not be given effect to the extent it would con- travene federal bankruptcy law.)

      * * *

      (8) The actual damage, physical or otherwise, to the licensee's customer.

      * * *

      1. Any efforts at rehabilitation.

      2. Any other mitigating or aggravating circumstances.

      
      

2. Petitioner failed to carry its burden of proof as to Count II of the Administrative Complaint.

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, as follows:

1. Dismissing Counts II and IV of the Administrative Complaint.

   
   

2. Finding Respondent guilty of violating Sections 489.129(1)(c), (g), (j),

   (m) and (n), Florida Statutes ( Supp. 1992).

   
   

3. Suspending Respondent's license as a Certified Building Contractor for a period of three months, and imposing an administrative fine in the amount of

$1,500,and requiring, as a condition of reinstatement, restitution to Jeff and Cathy Rose in the amount of $4,800, and such other reasonable and necessary conditions as the Board may require.

DONE and ENTERED this 13th day of June, 1996, in Tallahassee, Florida.

DANIEL M. KILBRIDE, 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 13th day of June, 1996.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-0669

To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

Accepted in substance: paragraphs 1-19, 21-24. Rejected as subsumed : paragraph 20.

Respondent's Proposed Findings of Fact.

Respondent did not submit proposed findings of fact.

Docket for Case No: 96-000669

Orders for Case No: 96-000669