STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Petitioner, ) CASE NOS. 96-4580

) 96-4581

vs. ) 96-4582

)

LOUIS ROTH, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on January 28, 1997, in Miami, Florida, before Claude B. Arrington, a duly designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: John O. Williams, Esquire

Boyd, Lindsey and Williams 1407 Piedmont Drive, East Tallahassee, Florida 32317

For Respondent: Robert McNeely, Esquire

McFarlain, Wiley, Cassedy and Jones, P.A.

215 South Monroe Street, No. 600 Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

Whether the Respondent, a licensed general contractor, committed the offenses alleged in the three administrative complaints and the penalties, if any, that should be imposed.

PRELIMINARY STATEMENT

Petitioner filed three separate administrative complaints against the Respondent, a licensed general contractor. Each administrative complaint pertained to a contract for construction in the aftermath of Hurricane Andrew. Respondent timely requested a formal hearing for each case. Thereafter, the matters were referred to the Division of Administrative Hearings, where they were consolidated.

The administrative complaint in DOAH Case 96-4580 pertained to work performed by Respondent or his company for Anthony Rodriguez. Based on factual allegations involving that matter, Petitioner charged Respondent with violating the provisions of Section 489.129(1)(d),(k),(n), and (p), Florida Statutes.

The administrative complaint in DOAH Case 96-4581 pertained to work performed by Respondent or his company for William R. Ellis. Based on factual allegations involving that matter, Petitioner charged Respondent with incompetence or misconduct in the practice of contracting. Such a charge would, if proven, be a violation of Section 489.129(1)(n), Florida Statutes.

The administrative complaint in DOAH Case 96-4582 pertained to work performed by Respondent or his company for Carl F. Kuchenbacker. Based on factual allegations involving that matter, Petitioner charged Respondent with violating the provisions of Section 489.129(1)(h)1,(k),(n), and (p), Florida Statutes.

At the formal hearing, Petitioner presented the testimony of Anthony Rodriguez, William R. Ellis, Carl F. Kuchenbacker, Antonio Varona, and Jose Mitrani. Mr. Varona was, at the times pertinent to this proceeding, a Dade County building official. Mr. Mitrani is a contractor who was permitted to express expert opinions within the scope of his expertise. Petitioner presented 16 exhibits, each of which was accepted into evidence. Respondent presented testified on his own behalf and presented the additional testimony of Jay Marron, his former business associate. Respondent presented one exhibit, which was accepted into evidence.

A transcript of the proceedings has been filed. At the request of the parties, the time for filing post-hearing submissions was set for more than ten days following the filing of the transcript. Consequently, the parties waived the requirement that a recommended order be rendered within thirty days after the transcript is filed. Rule 60Q-2.031, Florida Administrative Code. The Petitioner and Respondent filed

proposed recommended orders, which have been duly considered by the undersigned in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the state agency charged with regulating the practice of contracting pursuant to Section 20.165, Florida Statutes, and Chapters 455 and 489, Florida Statutes.

2. At all times pertinent to this proceeding, Respondent has been licensed as a general contractor by the Petitioner. Respondent was issued license number CG C010162 in 1975 and has held that licensure ever since.

3. The first complaint against Respondent’s licensure, like the three complaints at issue in this proceeding, arose from a post-Hurricane Andrew contract. That complaint was resolved by stipulation of the parties. Respondent did not admit to wrongdoing in his stipulation. Respondent was financially unable to comply with the terms of the settlement. Consequently, his license was suspended at the time of the formal hearing. There was no explanation as to why this complaint, which occurred at approximately the same time as the three contracts at issue in this proceeding, was prosecuted separately.

4. At all times pertinent to this proceeding, Respondent was the qualifier for Allstate Construction Management, Inc. (Allstate), a Florida corporation.

   THE RODRIGUEZ CONTRACT (DOAH CASE 96-4580)

   
   

5. On March 17, 1993, Allstate entered into a contract with Anthony Rodriguez to build a garage at 15525 SW 209th Avenue, Miami, Florida. The contract price was $16,250.00, which included “plans, permit and cleanup.”

6. Allstate was paid the sum of $4,062.50 on March 17, 1993. Allstate obtained the Dade County building permit for the project on March 26, 1993. Allstate was paid the sum of

   $5,593.75 on April 5, 1993, after the concrete blocks were installed. On April 8, 1993, Allstate requested a tie beam/reinforcing inspection from the Dade County building department. In response to that request, Antonio Varona inspected the project on April 12, 1993. The inspector noted that the project was not ready for inspection because no truss plans were available. Respondent testified, credibly, that he had to construct the roof conventionally because of the difficulty in obtaining pre-fabricated trusses; however, that testimony does not explain why there were no truss plans available for inspection. Appropriately engineered truss plans are required for a roof to pass inspection.

7. Despite the failure of the project to pass inspection, Mr. Rodriguez accepted the roof and paid Allstate $4,968.75 on May 21, 1993.

8. As of May 21, 1993, there remained a final payment of

   
   

   $1,625 on the contract. After May 21, 1993, Respondent and Allstate left the Rodriguez job. There was a dispute in the evidence as to whether Mr. Rodriguez fired Allstate or whether Allstate abandoned the project. This dispute is resolved by finding that the evidence was insufficient to establish by clear and convincing evidence that Allstate abandoned the Rodriguez project.

9. When Allstate left the Rodriguez job, there were sufficient funds remaining unpaid to complete the project.

10. Because he had obtained the initial building permit, it was incumbent upon Respondent to either obtain a final inspection of the project or notify the building department that his company had been terminated by the owner. Respondent did neither.

    THE ELLIS CONTRACT (DOAH CASE 96-4581)

    
    

11. At the times pertinent to this proceeding, William R. Ellis owned the Arleen House, which is an apartment building located at 2191 N.E. 168th Street, North Miami Beach, Florida. This building suffered damages from Hurricane Andrew. On September 11, 1992, Respondent and Mr. Ellis inspected the building and Respondent prepared an estimate as to the items that had been damaged by the hurricane and other non-hurricane related repairs that should be made. The mansard roof for this

    building had been damaged by Hurricane Andrew to the extent that it contained gaping holes.

12. Shortly after that inspection, Mr. Ellis met with his insurance adjuster who gave him a check in the amount of $13,000 to repair the roof. It was necessary to dry in the roof and repair the mansard as soon as possible to avoid additional damage to the building from rains.

13. While there was a dispute as to the extent of the services Allstate was to provide Mr. Ellis, the record is clear that Respondent, on behalf of Allstate, agreed to undertake the roof repair for the sum of $13,000.

14. Respondent told Mr. Ellis that his company had a roofing crew ready to begin work on the roof repairs as soon as Mr. Ellis paid the sum of $13,000. Between September 11 and September 15, 1992, Mr. Ellis gave Allstate a check in the amount of $13,000 with the understanding that the check he had received from the insurance company had to clear before his bank would honor the check he was giving to Allstate. Immediately thereafter1 Allstate sent a roofing crew to the project for the purpose of temporarily covering exposed areas.

15. Despite having been told by Mr. Ellis that the check he was giving Allstate would not be good until after the check for the insurance proceeds had cleared, Allstate did not wait to deposit Mr. Ellis’ check. Respondent was promptly notified that

    the check Mr. Ellis had given him would not be honored by Mr. Ellis’ bank. Respondent immediately thereafter withdrew the roofing crew from the project. The roofing crew had made only minor repairs at the time they were withdrawn from the project. Respondent knew, or should have known, that the building was vulnerable to further damage from rain.

16. On September 15, 1992, Mr. Ellis gave Respondent a second check in the amount of $13,000. This check cleared the banking process on September 18, 1992.

17. Mr. Ellis made repeated efforts to have Allstate send a crew to repair the roof. After it withdrew the crew that had been sent to the property when Allstate received the first check, Allstate did not take action to protect the property by repairing the exposed areas of the roof.

18. Towards the end of September 1992, a heavy rainstorm caused additional damages to Mr. Ellis’ building.

19. Allstate did not send a crew to the project again until October 6, 1992.

20. Mr. Ellis hired this crew away from Allstate. He testified he did so because the crew complained about Allstate not paying for the materials they were using to repair the roof and because the workmen were threatening to file liens against the property. Mr. Ellis paid this crew the sum of $3,400 to temporarily repair the roof. He then entered into a contract

    with another contractor to complete the roofing repairs for the sum of $17,500. Mr. Ellis demanded the return of the $13,000 he paid to Allstate, but, as of the time of the formal hearing, he had not been repaid.

    THE KUCHENBACKER CONTRACT (DOAH CASE 96-4582)

    
    

21. On November 6, 1992, Allstate entered into a contract with Carl F. Kuchenbacker to repair his residence at 18500 SW 88th Road, Miami, Florida. Mr. Kuchenbacker’s residence had been damaged by Hurricane Andrew.

22. The initial contract price was $33,375.00. Respondent secured the building permit and Allstate began work on the project. During the course of the work, additional work was added to the contract, which raised the total contract price to

    $38,015.00.

    
    

23. In late February or early March, 1993, Allstate abandoned the project without just cause and without notice to the owner. At the time it abandoned the project, Allstate had been paid the sum of $26,620.00.

24. Allstate failed to pay all of the subcontractors and materialmen who had performed work or provided material for the Kuchenbacker job. As a result of that failure, valid liens were recorded against Mr. Kuchenbacker’s property. The following liens were recorded: Rite-Way Plumbing and Plastery, Inc. in the amount of $3,520.00; Commercial Lighting and Maintenance, Inc.,

    in the amount of $1,835.00; and Scott Bornstein Plumbing, Inc., in the amount of $798.00. Allstate had received sufficient funds from the owner to pay these liens, but neither Respondent nor Allstate paid these liens.

25. Mr. Kuchenbacker and Petitioner’s expert witness testified that the value of the work performed by Allstate before it abandoned the job was $21,000.00. Mr. Kuchenbacker also testified as to the items that remained undone and as to the percentage of the work that had been completed. From that testimony and from the testimony as to the estimated costs of completing the job, it is found that the sum of $11,395.00, which was the difference between the total contract price and the total amount that was paid to Allstate, was sufficient to complete the project and pay off the liens on the property.

26. Respondent did not call for a final inspection of the property and he did not advise the Dade County Building Department that he was abandoning the project.

27. Allstate abandoned the Kuchenbacker project because it went out of business.

    CONCLUSIONS OF LAW

    
    

28. The Division of Administrative Hearings has jurisdiction of the parties to and the subject of this proceeding. Section 120.57(1), Florida Statutes.

29. Petitioner has the burden of proving by clear and

    convincing evidence the allegations against Respondent. See 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). Evans Packing, supra, 550 So.2d 112, 116, fn. 5, provides the following pertinent 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).

    
    

30. Section 489.129, Florida Statutes, regulates the practice of contracting 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 $5,000 per violation, require continuing education, or assess costs associated 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 Sec. 489.1195 is found guilty of any of the following acts:

       * * *

       (d) Knowingly violating the applicable building codes or laws of the state or of any municipalities or counties thereof.

       * * *

       (h) 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 75 days after the date of such liens;

       * * *

       (k) Abandoning a construction project in which the contractor is engaged or under contract as a contractor. A project may be presumed abandoned after 90 days if the contractor terminates the project without just cause or without proper notification to the owner, including the reason for termination, or fails to perform work without just cause for 90 consecutive days.

       * * *

       (n) Committing incompetency or misconduct in the practice of contracting.

       * * *

       (p) Proceeding on any job without obtaining applicable local building department permits and inspections.

       
       

31. Respondent does not dispute that he, as the qualifier of Allstate, is responsible for the actions of the corporation.

32. The administrative complaint in DOAH Case 96-4580,

    pertaining to the contract with Anthony Rodriguez, contained four separate counts. Count I of DOAH Case 96-4580 alleges that Respondent violated Section 489.129(1)(p), Florida Statutes, by proceeding on the Rodriguez job without obtaining applicable building permits or inspections. Petitioner established that violation by proving by clear and convincing evidence that Allstate left the Rodriguez job without obtaining required inspections.

33. Count II of DOAH Case 96-4580 alleges that Respondent violated Section 489.129(1)(d), Florida Statutes, by failing to maintain approved truss plans at the construction site. Petitioner established this violation by clear and convincing evidence. The evidence established that Allstate constructed the Rodriguez roof without prefabricated trusses and it did not have drawings available for inspection. While this evidence creates an inference that Allstate did not use engineered plans for this roof, it does not establish that fact clearly and convincingly. Consequently, it is concluded that Petitioner did not establish that Allstate constructed the roof without properly engineered plans.

34. Count III of DOAH Case 96-4580 alleges that Respondent violated Section 489.129(1)(k), Florida Statutes, by abandoning the Rodriguez job. Petitioner failed to establish that violation.

35. Count IV of DOAH Case 96-4580 alleges that Respondent violated Section 489.129(1)(n), Florida Statutes. Petitioner established by clear and convincing evidence that Allstate was guilty of misconduct by proving that Allstate left the Rodriguez job without notifying the Dade County Building Department.

36. The administrative complaint in DOAH Case 96-4581 pertaining to the contract with William R. Ellis, contained one count and charged Respondent with incompetence or misconduct in the practice of contracting. Such a charge, if proven, is a violation of Section 489.129(1)(n), Florida Statutes. Petitioner established this alleged violation by clear and convincing evidence. Petitioner proved that Allstate had the duty to move expeditiously to protect the Ellis property after it received the down payment for the roofing job and that it failed to discharge that duty. While some might suggest Allstate was justified in withdrawing the crew from the project when the first check was not honored, a conclusion not here drawn, there was no justification for failing to protect the roof between September 18, 1992, the date the second check cleared, and October 6, 1992, the date the crew went to the project for the second time. The facts that there was a

    shortage of materials and labor during this hectic time does not excuse this failure. If Allstate was in a position where it could not perform, it should not have entered into the contract

    and it should not have accepted the down payment for the job. Petitioner established that the owner suffered substantial damages as a result of Allstate’s failure to timely protect the roof it contracted to repair.

37. The administrative complaint in DOAH Case 96-4582 pertaining to the contract with Carl F. Kuchenbacker contained four counts. Count I of DOAH Case 96-4582 alleges that Respondent violated Section 489.129(1)(h)1, Florida Statutes, by failing to pay subcontractors and material men who subsequently recorded valid liens against the property. Petitioner proved this violation by clear and convincing evidence.

38. Count II of DOAH Case 96-4582 alleges that Respondent violated Section 489.129(1)(k), Florida Statutes, by abandoning the project. Petitioner proved this violation by clear and convincing evidence.

39. Count III of DOAH Case 96-4582 alleges that Respondent violated Section 489.129(1)(p), Florida Statutes, by failing to obtain a final inspection for the property before he abandoned the project. Petitioner established this violation by clear and convincing evidence.

40. Count IV of DOAH Case 96-4582 alleges that Respondent violated Section 489.129(1)(n), Florida Statutes, by engaging in misconduct in the practice of contracting. The failure to obtain the final inspection, the financial mismanagement that

    resulted in liens against the property, and the abandonment of the project constitute misconduct in violation of Section 489.129(1)(n), Florida Statutes, as alleged in Count IV of DOAH Case 96-4582. No separate penalty is being recommended for this violation because the same facts establish the violations found in Counts I, II, and III.

41. Rule 61G4-17.001, Florida Administrative Code, provides discipline guidelines that are pertinent to this proceeding. Rule 61G4-17.002, Florida Administrative Code, provides for mitigating and aggravating circumstances. Rule 61G4-17.003, Florida Administrative Code, provide for penalties involving repeat violators. The undersigned has applied the guidelines contained in Rule 61G4-17.001, Florida Administrative Code. There are not sufficient aggravating or mitigating circumstances to require deviation from those guidelines. As reflected in the findings of fact, Respondent has been previously disciplined by Petitioner. In applying the guidelines to the facts of these cases, the undersigned has not considered Respondent to be a repeat violator because the earlier disciplinary action also involved jobs undertaken during the aftermath of Hurricane Andrew. Petitioner has discretion as to the speed with which disciplinary actions are prosecuted, and there was no showing as to why the earlier case was not prosecuted simultaneously with these three cases. In

determining the penalty to be applied within the range of penalties contained in the guidelines, the undersigned has considered the length of time the Respondent has been licensed, the exigent circumstances that existed in Dade County during the aftermath of Hurricane Andrew, and the impact of Allstate’s

actions on its customers.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that that Petitioner enter a final order that adopts the findings of fact and conclusions of law contained herein. It is further recommended that Petitioner impose fines totaling $5,000 against Respondent’s licensure as

follows:

For the violation established by Count I of DOAH Case 96-4580, an administrative fine in the amount of $500.

For the violation established by Count II of DOAH Case 96-4580, an administrative fine in the amount of $500.

For the violation established by Count IV of DOAH Case 96-4580, an administrative fine in the amount of $250.

For the violation established by DOAH Case 96-4581, an administrative fine in the amount of $500.

For the violation established by Count I of DOAH Case 96-4582, an administrative fine in the amount of $750.

For the violation established by Count II of DOAH Case 96-4582, an administrative fine in the amount of $2,000.

For the violation established by Count III of DOAH Case 96-4582, an administrative fine in the amount of $500.

IT IS FURTHER RECOMMENDED THAT in addition to the fines recommended for the violations found in DOAH Case 96-4581, Respondent’s licensure be suspended for two years.

IT IS FURTHER RECOMMENDED THAT in addition to the fines recommended for the violations found DOAH Case 96-4582, Respondent’s licensure be suspended for two years, to run concurrently with the suspension recommended for DOAH Case 96- 4581.

DONE AND ENTERED this 23rd day of May, 1997, in Tallahassee, Leon County, Florida.

Hearings

Hearings

CLAUDE B. ARRINGTON

Administrative Law Judge Division of Administrative

The DeSoto Building 1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative

this 23rd day of May, 1997

ENDNOTE

1/ Respondent testified that he thought he had not actually received this first check from Mr. Ellis when he sent the roofing crew to the project for the first time. Mr. Ellis testified that Respondent did not send a crew to the project until after he had the check in hand. Whether he received the check before or after he sent the crew to the project has no bearing on the recommendations contained herein.

COPIES FURNISHED:

John O. Williams, Esquire

Boyd, Lindsey, Williams and Branch, P.A. 1407 Piedmont Drive East

Post Office Box 14267 Tallahassee, Florida 32317

Robert McNeely

215 South Monroe Street, No. 600 Tallahassee, Florida 32301

Mr. Louis Roth

3201 North Surf Road, No. 202

Hollywood, Florida 33019

Rodney Hurst, Executive Director Department of Business and

Professional Regulation Construction Industry Licensing Board 7960 Arlington Expressway, Suite 300

Jacksonville, Florida 32211-7467

Lynda L. Goodgame, General Counsel Department of Business and

Professional Regulation 1940 North Monroe Street Northwood Centre Tallahassee, Florida 32399

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of 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: 96-004580

Orders for Case No: 96-004580