STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Petitioner, )

)

vs. ) Case No. 96-6075

)

GARY D. GLUSMAN, )

)

Respondent, )

)

RECOMMENDED ORDER

A final hearing was conducted in this case on March 26, 1997, before Judge Michael M. Parrish, an

Administrative Law Judge of the Division of Administrative Hearings, by means of video teleconference, with the parties, witnesses, and counsel in Miami, Florida, and the Judge in Tallahassee, Florida.

APPEARANCES

For Petitioner: Raymond L. Robinson, Esquire

Bruce M. Pasternack, Esquire 1501 Venera Avenue, Suite 300 Coral Gables, Florida 33146

For Respondent: Gisela Nanson Torres, Esquire

Mitchell D. Klein, P.A.

1120 E. Hallandale Beach Boulevard Hallandale, Florida 33009

STATEMENT OF THE ISSUE

This is a license discipline case in which the Petitioner seeks to take disciplinary action against the Respondent on the

basis of alleged violations of Subsections 489.129(1)(g), (h)1, (h)3, (n), and (p), Florida Statutes (1993).

PRELIMINARY STATEMENT

At the final hearing in this case, the Petitioner presented the testimony of two witnesses and offered nine exhibits, all of which were received in evidence.1 Thereafter, the Respondent testified further on his own behalf and offered six exhibits, all of which were received in evidence.

At the conclusion of the hearing the parties requested, and were granted, twenty days from the date of the hearing within which to file their respective proposed recommended orders.

Thereafter, the Petitioner decided to order a transcript of the hearing and both parties moved for an extension of time for the filing of proposed recommended orders. The motion was granted and the parties were allowed until May 16, 1997, within which to file their respective proposed recommended orders. Thereafter, the transcript of the hearing was filed with the Division of Administrative Hearings, and all parties filed timely proposed recommended orders.2

On May 21, 1997, the Petitioner filed a Motion For Leave To File A Corrected Proposed Recommended Order. Grounds for the motion were that, as a result of clerical errors, the Petitioner’s original proposed recommended order was missing one section and had another section duplicated. On May 27, 1997, the Petitioner filed Petitioner’s First Revised Proposed Recommended

Order. There was no objection to the May 21 motion. By order issued on June 27, 1997, the motion was granted, and the revised proposal was substituted for the original proposal. The proposals of all parties have been carefully considered during the preparation of this Recommended Order.

FINDINGS OF FACT

1. At all times pertinent to this proceeding, the Respondent was a certified building contractor, having been first issued license number CB C012666 in his individual name by the Florida Construction Industry Licensing Board in 1978. License number CB C012666 was subsequently issued to the Respondent as the qualifying agent for GMG Investment Company. The Respondent has renewed the license on a regular basis and continues to be licensed as the qualifying agent for GMG Investment Company. The most recent renewal was for the 1996-98 renewal period.

2. Hurricane Andrew caused severe damage to the Miami home of Mr. Robert Richardson. The damage was so extensive that it was necessary to demolish the house and rebuild it.

   Mr. Richardson had homeowner’s insurance that covered most, if not all, of the cost of rebuilding his home.

3. The Respondent, acting in his capacity as qualifying agent for GMG Investment Company,3 made a proposal on behalf of GMG Investment Company to rebuild Mr. Richardson’s home.

   Mr. Richardson accepted the proposal, and on November 11, 1992, Mr. Richardson entered into a contract with GMG Investment

   Company for the latter to rebuild his home for a contract price of $97,310.00.

4. The master building permit was issued to GMG Investment Company on December 10, 1992.

5. During the course of the work on Mr. Richardson’s home, the Respondent contracted with numerous subcontractors to provide labor and materials for the completion of the project. Two of the subcontractors filed liens against Mr. Richardson’s property.

6. On September 22, 1993, Optima Flooring, Inc., recorded a lien in the amount of $8,919.42 against Mr. Richardson’s property. The lien related to floor covering materials Optima Flooring, Inc., had delivered and installed at Mr. Richardson’s home. The Respondent had not paid Optima Flooring, Inc., because he was not satisfied with some of the work it had done. After some discussions with Mr. Richardson, the Respondent ultimately agreed that he would resolve the dispute with Optima Flooring, Inc., by no later than February 4, 1994. The Respondent did not resolve the dispute with Optima Flooring, Inc., by the agreed- upon date, and on February 16, 1994, Mr. Richardson paid

   $9,225.42 in order to satisfy the Optima Flooring, Inc., lien. The amount paid by Mr. Richardson included interest, attorney fees, and costs.

7. On October 27, 1993, Florida Builder Appliances, Inc., recorded a lien in the amount of $2,930.90 against

   Mr. Richardson’s property. The lien related to appliances

   Florida Builder Appliances, Inc., had delivered for incorporation into Mr. Richardson’s home.4 The Claim of Lien recorded by Florida Builder Appliances, Inc., shows on its face that it was filed more than ninety days after the last day on which Florida Builder Appliances, Inc., provided services or materials to the subject property. On February 11, 1994, Florida Builder Appliances, Inc., filed a Notice of Lis Pendens against Mr.

   Richardson’s Property. Florida Builder Appliances, Inc., also filed a civil action in County Court in Dade County, Florida, to foreclose its lien. On March 3, 1997, counsel for GMG Investment Company filed a motion to dismiss the civil action filed by Florida Builder Appliances, Inc. On April 20, 1994, Florida Builder Appliances, Inc., served a Notice Of Dismissal With Prejudice, by means of which it dismissed its civil action and vacated the Notice of Lis Pendens it had earlier filed.

8. In the meantime, without advising the Respondent that he was doing so, on February 18, 1994, Mr. Richardson paid $3,661.00 in order to satisfy the Florida Builder Appliances, Inc., lien. The amount paid by Mr. Richardson included interest, attorney fees, and costs.

9. Shortly after Hurricane Andrew, the prices for construction materials in the Dade County area sharply increased. As a result of those increases, the Respondent eventually realized that it was not going to be possible to complete

   Mr. Richardson’s home for the amount agreed to in the contract.

   This unfortunate result was due to the Respondent’s inability to anticipate how much construction costs would increase in the aftermath of Hurricane Andrew. It was not due to incompetence or misconduct. All of the funds paid by Mr. Richardson were used by GMG Investment Company for the construction of Mr. Richardson’s home. None of those funds were used for any other purpose.

10. The Respondent has not been the subject of any prior license discipline proceedings.

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this case. Section 120.57(1), Florida Statutes.

12. In a license discipline proceeding of this nature the Petitioner bears the burden of proving its charges by clear and convincing evidence. See Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987). The nature of clear and convincing evidence has been described as follows in Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983):

    We therefore hold that clear 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 testimony 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 a firm belief or conviction, without hesitancy, as to the truth of the allegations sought to be established.

    See also Smith v. Department of Health and Rehabilitative Services,

    
    

    522 So. 2d 956 (Fla. 1st DCA 1988), which, at page 958, quotes with approval the above-quoted language from Slomowitz. The Smith case also includes the following at page 958:

    "Clear and convincing evidence" is an intermediate standard of proof, more than the "preponderance of the evidence" standard used in most civil cases, and less than the "beyond a reasonable doubt" standard used in criminal cases. See State v. Graham, 240 So. 2d 486 (Fla. 2d DCA 1970).

13. Section 489.129(1), Florida Statutes (1993), reads as follows, in pertinent part:

    1. The board may take any of the following actions against any certificateholder 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 s. 489.1195 is found guilty of any of the following acts:

       * * *

       
       

       1. Acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certificateholder or registrant as set forth on the issued certificate or registration, or in accordance with the personnel of the certificateholder or registrant as set forth in the application for the certificate or registration, or as later changed as provided in this part.

       2. 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; 2. The contractor has abandoned a customer's job and the percentage of completion is less than the percentage of the total contract price paid to the contractor as of the time of abandonment, unless the contractor is entitled to retain such funds under the terms of the contract or refunds the excess funds within 30 days after the date the job is abandoned; or 3. The contractor's job has been completed, and it is shown that the customer has had to pay more for the contracted job than the original contract price, as adjusted for subsequent change orders, unless such increase in cost was the result of circumstances beyond the control of the contractor, was the result of circumstances caused by the customer, or was otherwise permitted by the terms of the contract between the contractor and the customer.

       
       

       * * *

       
       

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

       
       

       * * *

       
       

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

       
       

14. Turning now to the specific violations alleged in the Administrative Complaint, Count I of the Administrative Complaint alleges that the Respondent violated Section 489.129(1)(h)3, Florida Statutes (1993), by “committing mismanagement or

    misconduct in the practice of contracting that causes financial harm to a customer.” In this regard, it is further alleged that the customer had to pay more for the contracted job than the original contract price. The applicable statutory language includes the following:

    Financial mismanagement or misconduct occurs when: . . . 3. The contractor's job has been completed, and it is shown that the customer has had to pay more for the contracted job than the original contract price, as adjusted for subsequent change orders, unless such increase in cost was the result of circumstances beyond the control of the contractor. . . . (emphasis supplied)

15. The increase in the cost of the construction of

    
    

    Mr. Richardson’s home was the result of circumstances beyond the control of the contractor. The Respondent had no control over the increases in the price of construction materials in the aftermath of Hurricane Andrew and could not reasonably have been expected to predict the extent of such increases. Accordingly, there was no mismanagement or misconduct within the meaning of Section 489.129(1)(h)3, Florida Statutes (1993), and Count I of the Administrative Complaint should be dismissed.

16. Count II of the Administrative Complaint alleges that the Respondent violated Section 489.129(1)(h)1, Florida Statutes (1993), by “committing mismanagement or misconduct in the practice of contracting that causes financial harm to a customer.” In this regard it is further alleged that valid liens were recorded against the customer’s property for supplies or

    services ordered by the contractor for the customer’s job, which liens were not timely removed from the property. The applicable statutory language includes the following:

    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. . . .

17. With regard to the lien filed by Florida Builder Appliances, Inc., there is no violation because that lien was not a valid lien. With regard to the lien filed by Optima Flooring, Inc., there is no clear and convincing evidence that the lien was valid.5 In the absence of clear and convincing evidence of such validity, the evidence is insufficient to establish the violation alleged in Count II. Accordingly, Count II of the Administrative Complaint should be dismissed.

18. Count III of the Administrative Complaint alleges that the Respondent violated Section 489.129(1)(p), Florida Statutes (1993), by “proceeding on any job without obtaining applicable local building department permits and inspection.” There is no clear and convincing evidence that the Respondent failed to obtain the applicable permits and inspections.6 Accordingly, Count III of the Administrative Complaint should be dismissed.

19. Count IV of the Administrative Complaint alleges that the Respondent violated Section 489.129(1)(g), Florida Statutes (1993), by “acting in the capacity of a contractor under any certificate or registration issued hereunder except in the name of the certificateholder or registrant as set forth on the issued certificate or registration.” The crux of the Petitioner’s argument in this regard is that the Respondent entered into a contract with Mr. Richardson in the name of “GMG Building Contractors,” rather than in the name of GMG Investment Company, the company for which the Respondent was the certified qualifying agent.

20. The evidence in this case establishes that the Respondent entered into the contract with Mr. Richardson in the name of GMG Investment Company, the company for which he is the qualifying agent. Accordingly, the evidence fails to establish the violation charged in Count IV of the Administrative Complaint, and Count IV should be dismissed.

21. Count V of the Administrative Complaint alleges that the Respondent violated Section 489.129(1)(n), Florida Statutes (1993), by “committing incompetency or misconduct in the practice of contracting.” There is no clear and convincing evidence in the record of this case that the Respondent committed incompetency or misconduct in the practice of contracting. Accordingly, Count V of the Administrative Complaint should be dismissed.

RECOMMENDATION

On the basis of all of the foregoing it is RECOMMENDED that a final order be issued in this case dismissing all charges against the Respondent.

DONE AND ENTERED this 28th day of August, 1997, in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

Administrative Law Judge

Division of Administrative Hearings 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 Hearings this 28th day of August, 1997.

ENDNOTES

1/ Petitioner’s exhibit number 8 (which consisted of copies of the building permit and inspection history of the subject property) was rejected in the form in which it was offered at the hearing because the documents were not certified copies. The Petitioner was given leave to file certified copies by no later than April 9, 1997. Certified copies of the documents comprising Petitioner’s exhibit number 8 were filed on April 8, 1997.

2/ The Respondent’s proposed recommended order was titled “Final Ruling as to Administrative Complaint Against Gary Glusman.”

3/ The Petitioner argues that the Respondent entered into a contract with Mr. Richardson on behalf of a company named “GMG Building Contractors.” The Respondent explained at hearing that the words “building contractors” at the top of the proposal form and at the top of Addendum “A” are a description of the type of business activity GMG Investment Company engages in. Those words are not the name of another company. The correct name of GMG Investment Company appears on the proposal document (immediately beneath the Respondent’s signature on that document) on Addendum

“A” (at the foot of the document) and on Addendum “B” (in the text of the document and immediately above the Respondent’s signature).

4/ On November 4, 1993, Florida Builders Appliances recorded a second lien in the same amount against Mr. Richardson’s property. This second lien appears to be an unintentional duplication of the lien filed on October 27. It does not appear to be an additional lien for an additional sum of $2,930.90.

5/ The Respondent contended that Optima Flooring, Inc., had not done a proper job of installing some of the flooring and disputed their entitlement to be paid until they had finished the job correctly. There was no evidence submitted by or on behalf of Optima Flooring, Inc., regarding their entitlement to be paid at the time they filed their lien.

6/ There is no persuasive evidence in this case as to what permits and inspections were required. The only evidence as to what permits were obtained and what inspections were made is contained in the Petitioner’s late-filed exhibit number 8, which consists of certified copies of the permit and inspection history of the subject property. That exhibit was offered without benefit of a sponsoring witness and without benefit of any witness to explain the significance of the notations on the documents that comprise Petitioner’s exhibit 8. The documents in that exhibit, standing alone, are insufficient to constitute clear and convincing evidence of the violations charged in Count III.

COPIES FURNISHED:

Raymond L. Robinson, Esquire Bruce M. Pasternack, Esquire 1501 Venera Avenue, Suite 300 Coral Gables, Florida 33146

Gisela Nanson Torres, Esquire Mitchell D. Klein, P.A.

1120 E. Hallandale Beach Boulevard Hallandale, Florida 33009

Rodney Hurst, Executive Director 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

Tallahassee, Florida 32399-0792

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: 96-006075

Orders for Case No: 96-006075