STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, CONSTRUCTION ) INDUSTRY LICENSING BOARD, )

)

Petitioner, )

)

vs. ) Case No. 97-4810

)

LAWRENCE C. BRIGHT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings by its duly designated Administrative Law Judge, William J. Kendrick, held a formal hearing in the above-styled case on December 22, 1997, in Miami, Florida.

APPEARANCES

For Petitioner: Dorota Trzeciecka, Esquire

Department of Business and Professional Regulation

401 Northwest Second Avenue, Suite N-607 Miami, Florida 33128

For Respondent: D. S. "Dar" Airan, Esquire

Airan and Associates, P.A.

275 Southwest 13th Street Miami, Florida 33130

STATEMENT OF THE ISSUES

At issue in this proceeding is whether Respondent committed the offenses set forth in the Administrative Complaint and, if so, what penalty should be imposed.

PRELIMINARY STATEMENT

By a four-count Administrative Complaint, Petitioner charged Respondent was guilty of violating the provisions of Section 489,129(l)(h)1, 489.129(l)(j), 489.129(l)(n), and 489.129(l)(r),

Florida Statutes, when liens were recorded against the property of a customer for supplies or services even though the customer had previously supplied the contractor with funds to pay for the supplies or services; and, when Respondent failed to satisfy the terms of a civil judgment obtained against the business organization he had qualified.

Respondent filed an election of rights, as well as an answer to the Administrative Complaint, whereby he contested the material facts alleged in the Administrative Complaint and requested a formal hearing. Consequently, in October 1997 the matter was referred to the Division of Administrative Hearings for the assignment of an administrative law judge to conduct a formal hearing pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

At hearing, Petitioner called Raul Hernandez, the son of the customer, and Theodore Gay, as witnesses. Petitioner's Exhibits

1 through 15 have been received into evidence.1 Respondent, Lawrence C. Bright, testified on his own behalf, but offered no exhibits.

The transcript of the hearing was filed on January 6, 1998, and the parties were accorded twenty days from that date to file

proposed recommended orders. 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. Petitioner elected to file such a proposal, and it has been duly considered in the preparation of this recommended order.

FINDINGS OF FACT

1. Petitioner, Department of Business and Professional Regulation, Construction Industry Licensing Board (Department), is a state government licensing and regulatory agency charged with the duty and responsibility to prosecute administrative complaints pursuant to the laws of the State of Florida, in particular Section 20.165, Florida Statutes, and Chapters 120, 455, and 489, Florida Statutes, and the rules promulgated pursuant thereto.

2. At all times material hereto, Respondent, Lawrence C. Bright, was licensed by the Department as a certified general contractor, having been issued license number CG C032808, and was the qualifying agency for Briden Enterprises, Inc. (Briden).2

3. In May 1995, Raul Hernandez, Sr., suffered storm damage to his residence at 341 Northwest 63rd Court, Miami, Florida. Consequently, Mr. Hernandez filed a claim with his insurance carrier, Bankers Insurance (Bankers).

4. Briden, on behalf of Bankers, inspected the property and by letter of June 13, 1995, provided Bankers with a written

   estimate to repair the damage. The scope of the work included the replacement of two roofs, a solar-panel, and awnings, together with other miscellaneous work. The cost was stated to be $13,264.20.

5. Following the inspection, Mr. Hernandez employed Briden to undertake the needed repairs, as detailed in the written estimate. The insurance carrier was notified of its employment, and Bankers forwarded to Briden a check in the sum of $18,988, which named Briden and Mr. Hernandez as joint payees.3

6. On or about June 20, 1995, Briden's representative brought the check to Mr. Hernandez's residence. Mr. Hernandez endorsed the check and delivered it to the representative. In exchange, Mr. Hernandez received a check drawn on a Briden account for $9,494, and payable to "Raul Hernandez and Briden Enterprises, Inc."4 The stated purpose of this check, as noted on its face, was "For 50% Retainer"; however, no further explanation appears of record.

7. Briden employed Roberts Roofing, Inc. (Roberts Roofing), to do the roof repair work. That work was satisfactorily completed in or about October 1995. As for the other repairs, Briden did not undertake them, nor did it return any of the money it had received from Mr. Hernandez.

8. On or about November 28, 1995, Roberts Roofing filed a claim of lien in the public records of Dade County, Florida. The claim of lien charged that, pursuant to an agreement with Briden,

   Roberts Roofing had installed a new roof on Mr. Hernandez's residence for $7,200, and that $2,523.50 remained unpaid.

9. Following unsuccessful demands on Briden to make the agreed repairs and pay Roberts Roofing, and later demands to return the money owing to him, Mr. Hernandez filed a complaint in

   February 1996 against Briden in the Circuit Court, Dade County, Florida. That complaint sought judgment based on the following allegations:

   1. On or about June 20, 1995, Defendant represented to Plaintiff that Defendant could provide construction services to repair Plaintiff's residence.

      
      

   2. Defendant fraudulently represented to Plaintiff the amounts and type of work which would be performed on the project, the costs associated therewith and requested payment pursuant to said misrepresentations.

* * *

1. Plaintiff relied on Defendant's misrepresentations by making payment to Defendant for the construction services in the amount of $18,988.00. From the payment received by Defendant, Plaintiff acknowledges that Defendant paid $4,678.00 to a third party to accomplish the repair of the roof at Plaintiff's residence. The full cost for the roofing services was $7,200.00. As a result of Defendant's failure to pay the full amount, the third party has filed a lien against Plaintiff's property for $2,522.00.

   
   

2. Defendant has failed to provide the represented construction services, and, as a result, Plaintiff has sustained damages in an amount of $14,310.00 and has had title to his residence liened.

   
   

3. On May 16, 1996, a final default judgment was entered for Mr. Hernandez and against Briden. That judgment provided that Mr. Hernandez recover from Briden damages of $14,311.50 and costs of $189.00. Neither Briden nor Respondent paid the judgment, and it remains unsatisfied to date.

4. Having failed to receive payment, Roberts Roofing filed

   a complaint on July 11, 1996, against Mr. Hernandez to foreclose its lien.

5. While that suit was pending, Mr. Hernandez filed a claim under the Construction Industries Recovery Fund. Sections 489.140, et seq., Florida Statutes. That claim was approved in February 1997, and Mr. Hernandez was paid $14,311.50.5

6. Following recovery from the fund, Mr. Hernandez paid Roberts Roofing the unpaid balance it claimed, and Roberts Roofing released its lien.

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Sections 120.569, 120.57(1), and 120.60(5), Florida Statutes (1997).

8. Where, as here, the Department proposes to take punitive action against a licensee, it must establish grounds for disciplinary action by clear and convincing evidence. Section 120.57(1)(h), Florida Statutes (1997), and Department of Banking and Finance v. Osborne Stern and Co., 670 So. 2d 932 (Fla. 1996). "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." Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983). Moreover, the disciplinary action taken may be based only upon the offenses specifically alleged in the administrative

   complaint. See Kinney v. Department of State, 501 So. 2d 129 (Fla. 5th DCA 1987); Sternberg v. Department of Professional Regulation, Board of Medical Examiners, 465 So. 2d 1324 (Fla. 1st DCA 1985); and Hunter v. Department of Professional Regulation,

   458 So. 2d 844 (Fla. 2d DCA 1984). Finally, in determining whether Respondent violated the provisions of section 489.129(1) as alleged in the Administrative Complaint, one "must in bear mind that it is, in effect, a penal statute. . . . This being true, the statute must be strictly construed and no conduct is to be regarded as included within it that is not reasonably proscribed by it." Lester v. Department of Professional Occupational Regulation, 348 So. 2d 923, 925 (Fla. 1st DCA 1977).

9. Respondent's liability in this case is premised on the responsibilities he assumed as the qualifying agent for Briden. As the qualifying agent for Briden from May 5, 1992, until May 2, 1996, Respondent was "responsible for supervision of all operations of the business organization; for all field work at all sites; and for financial matters, both for the organization in general and for each specific job." Section 489.1195(1)(a), Florida Statutes. Moreover, following his resignation, Respondent remained "responsible, even after . . . [the] . . . change in status, for matters for which he was responsible" as the qualifier for Briden. Section 489.1195(3)(d), Florida Statutes.6

10. Pertinent to this case, Section 489.129, Florida

    Statutes (Supp. 1996), provides:

    
    

    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 for financial harm directly related to a violation of a provision of this part, 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 office, or business organization for which the contractor is a primary qualifying agent, a financially responsible officer, or a secondary qualifying agent responsible under

       s. 489.1195 is found guilty of any of the

       following acts:

       
       

       * * *

       
       

       (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;

       
       

       * * *

       
       

       (j) Failing in any material respect to comply with the provisions of this part or violating a rule or lawful order of the board.

       
       

       * * *

       
       

       (n) Committing incompetency or misconduct

       in the practice of contracting.

       
       

       * * *

       
       

       (r) Failing to satisfy within a reasonable time, the terms of a civil judgment obtained against the licensee, or the business organization qualified by the licensee, relating to the practice of the licensee's profession.

       
       

11. Here, the proof demonstrates with the requisite degree of certainty, that while Briden had received adequate funds from the customer to pay for the re-roofing, it failed to pay its subcontractor the full cost for its work. That failure resulted in a valid lien being recorded against the customer's property, which was not removed within 75 days of recording. Consequently, Respondent, as the qualifier of Briden, was shown to have violated the provisions of Subsection 489.129(1)(h), Florida Statutes, as alleged in Count I of the Administrative Complaint.

12. With regard to the charges that Respondent violated subsections 489.129(1)(j) and (n), the proof demonstrates that Respondent, contrary to the requirements placed on him as the qualifier of Briden, failed to supervise all operations of Briden, including work at the Hernandez site, and failed to supervise financial matters, for both Briden in general and the Hernandez job. Consequently, Respondent has been shown to have violated the provisions of Subsections 489.129(1)(j) and (n), Florida Statutes, as alleged in Counts II and III of the Administrative Complaint; however, since the violations are premised on the same facts, they should be considered one

    violation when penalties are considered.

    
    

13. Finally, the proof clearly demonstrates that a civil judgment was obtained against the business organization qualified by Respondent, and that the judgment related to the practice of contracting. Given the time that has elapsed since the entry of the judgment, and Respondent's failure to satisfy the judgment in whole or in part, it must be concluded that Respondent has been shown to have violated the provisions of Subsection 489.129(1)(r), Florida Statutes, as alleged in Count IV of the Administrative Complaint. See Rule 61G4-17.001(23), Florida Administrative Code. See also Lewis v. Department of Business and Professional Regulation, Construction Industry Board,

    23 Fla. L. Weekly D 184 (Fla. 2d DCA 1998).

    
    

14. Having reached the foregoing conclusions, it remains to resolve the appropriate penalty that should be imposed.

    Pertinent to this issue, Rule 61G4-17.001, Florida Administrative Code, provides, absent aggravating or mitigating circumstances, the following disciplinary guidelines for a violation of the provisions of Chapter 489 alleged in the Administrative Complaint:

    (8)489.129(1)(h): Mismanagement or misconduct causing financial harm to the customer. First violation, $750 to $1,500 fine and/or probation; repeat violation,

    $1,500 to $5,000 fine and/or probation, suspension or revocation.

    
    

    * * *

    
    

    (10)489.129(1)(j): Failing in any material

    respect to comply with the provisions of Part I of Chapter 489.

    
    

    * * *

    
    

    2. Where violation is other than described in (1), $5,000.00. Repeat violation under any circumstances, $500 to $1,500 fine and/or probation, suspension, or revocation.

    
    

    * * *

    
    

    (14) Misconduct or incompetency in the practice of contracting as set forth in Section 489.129(1)(n), Florida Statutes, shall include, but is not limited to:

    
    

    * * *

    
    

    (b) Violation of any provision of

    Chapter 61G4, Florida Administrative Code, or Chapter 489, Part I, F.S.

    
    

    * * *

    
    

    (d) The following guidelines shall apply to cases involving misconduct or incompetency in the practice of contracting, absent aggravating or mitigating circumstances:

    
    

    * * *

    
    

    2. Violation of any provision of Chapter 61G4, Florida Administrative Code, or Chapter 489, Part I, F.S. First violation,

    $500 to $1,000 fine; repeat violations,

    $1,000 to $5,000 fine and/or probation, suspension, or revocation. . . .

    
    

    * * *

    
    

    (18) Failure to satisfy a civil judgment obtained against the licensee or the business organization qualified by the licensee within a reasonable time. First violation, $500 to

    $1,000 fine and/or proof of satisfaction of civil judgment; repeat violation, $1,000 to

    $5,000 fine and/or proof of satisfaction of civil judgment, probation, suspension, or revocation.

15. The version of Rule 61G4-17.001(10) in effect at the time of the violations in this case did not include a penalty that would encompass a violation of Subsection 489.1195(1)(a), Florida Statutes. The rule did provide, however, that the absence of a reference to a violation would be viewed as an oversight, and the penalty for the offense most closely resembling the omitted violation would apply. Here, the violation most closely resembling a violation of subsection 489.1195(1)(a) would be a violation of Subsection 489.129(1)(n), Florida Statutes. Given such circumstances, the violation of subsection 489.1195(1)(a) will only support one penalty.

16. According to Rule 61G4-17.002, Florida Administrative Code, the circumstances which may be considered in mitigation or aggravation of the penalty 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 contravene federal bankruptcy law.)

    2. Actual job-site violations of building codes, or conditions exhibiting gross negligence, incompetence, or misconduct by the licensee, which have not been corrected as of the time the penalty is being assessed.

    3. The severity of the offense.

    4. The danger to the public.

    5. The number of repetitions of offenses.

    6. The number of complaints filed against the licensee.

    7. The length of time the licensee has practiced.

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

    9. The deterrent effect of the penalty imposed.

    10. The effect of the penalty upon the licensee's livelihood.

    11. Any efforts at rehabilitation.

    12. Any other mitigating or aggravating circumstances.

17. Petitioner's proposed recommended order suggests, as a penalty for the violations found, the imposition of a $3,500 fine; a two year term of probation, subject to the conditions of Rule 61G4-12.008(5), Florida Administrative Code; and the assessment of the reasonable costs of investigation and prosecution.7 These proposals are consistent with the provisions of Section 489.129(1), Florida Statutes, the penalty guidelines

established by Rule 61G4-17.001, Florida Administrative Code, and

the mitigation or aggravation factors established by Rule 61G4- 17.002, Florida Administrative Code, and are accepted as appropriate under the circumstances of this case.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that a Final Order be entered finding Respondent guilty of the violations alleged in Counts I, II, III, and IV of the Administrative Complaint, and imposing as a penalty for such violations a $3,500 administrative fine; a two year term of probation, subject to the conditions of Rule 61G4-12.008(5), Florida Administrative Code; and the payment of the reasonable costs of investigation and prosecution.8

DONE AND ENTERED this 3rd day of February, 1998, in Tallahassee, Leon County, Florida.

WILLIAM J. KENDRICK

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this erd day of February, 1998.

ENDNOTES

1/ At hearing, Petitioner's Exhibit 4, a copy of a certification of Respondent's licensure information was marked for identification, with an original certification to be filed with the Division of Administrative Hearings. An original certification was filed January 29, 1998, and was appended to the document marked Petitioner's Exhibit 4 at hearing. Petitioner's Exhibit 4 was then received in evidence.

At hearing, ruling was deferred on the admission of Petitioner's Exhibits 3, 8, and 9. Upon consideration, Exhibit 3 is received for the purpose of demonstrating that a foreclosure action was filed, and Exhibit 8 is received to demonstrate notice to the owner of a claim of lien. Otherwise, Exhibits 3 and 8, as well as Exhibit 9, are received subject to the provisions of Sections 120.569(2)(e) and 120.57(1)(c), Florida Statutes.

Petitioner's Exhibits 6, 7, 14, and 15 were admitted without

objection. The remaining exhibits, Petitioner's Exhibits 1, 2, 5,

10, 11, 12, and 13, were received in evidence subject to the provisions of Sections 120.569(2)(e) and 120.57(1)(c), Florida Statutes, and any additional limitations noted of record.

2/ Respondent was the qualifying agent for Briden Enterprises, Inc., from May 5, 1992, until May 2, 1996. (Petitioner's

Exhibit 4.)

3/ According to Petitioner's Exhibit 6, the cost of the work Briden was to perform totalled $13,264.20. Subtracting this amount from the amount tendered by Bankers ($18,988) leaves a balance of $5,723.80. What loss, if any, these funds were intended to address does not appear of record.

4/ There is no explanation of record for this unusual transaction. Notably, there is no explanation as to why Briden retained, as part of the proceeds from the Banker's check, the

$5,723.80 that was unassociated with any repair work Briden was to perform. Moreover, the check delivered to Mr. Hernandez by Briden was without value, absent endorsement by Briden, and unless adequate funds were on deposit to honor the check.

5/ As a result of that payment, Respondent's license was suspended until repayment of the money paid by the fund. Section 489.143(6), Florida Statutes.

6/ In an apparent attempt to divorce himself from the failures of Briden on the project at issue, Respondent averred that he was hired by Briden, on a fixed salary, to be the qualifying agent for the company and to supervise construction. (Tr., pages 62 and

63.) According to Respondent, he exercised no control over the finances of the company. (Tr., page 66.) That arrangement was, however, contrary to the statutory duties and obligations he assumed as Briden's qualifier; and his acquiescence in being excluded from control of the company's finances is no defense to the charges.

As for the other problems associated with the project, Respondent simply avers that he had no knowledge of the project until after Mr. Hernandez had filed a complaint with the Department, which complaint was filed on or about August 23, 1996. (Petitioner's Exhibits 12 and 15.) To explain his lack of knowledge, Respondent responded to the following question with the following vague observations:

Q. What happened that made it so that you could not keep control of the jobs like this one?

A. Well, after Hurricane Andrew, there was so much work that came in, a lot of the jobs

-- they would sign a job. If it was not involved in a direct permitted job of Briden Enterprises, a lot of the times I -- they would not tell me even about the job.

If an estimator went out and signed a job and brought it in to one of the owners of the company, I had no knowledge of it. The job would get completed and I never saw it.

(Tr., page 63.)

Confusion that may have been associated with the aftermath of Hurricane Andrew, which struck South Florida in August 1992, is not a relevant consideration to the lack of supervision on this project, which was undertaken in June 1995. The circumstances under which Respondent would or would not be informed of a project do not excuse his failings in this case. Had he supervised the business of the company, including its finances, as required by law, irregularities such as those which occurred on this project, and apparently on other projects as well, should not have occurred.

7/ Petitioner's proposed recommended order also suggests that Respondent be ordered to "make restitution to the Construction Industries Recovery Fund in the amount of $14,311.50." The imposition of such a penalty is, however, beyond the agency's authority. In so concluding, it is observed that Subsection 489.129(1), Florida Statutes, circumscribes the agency's authority to impose penalties. The only authority to require restitution is

to "a consumer for financial harm directly related a violation of a provision of this part." Here, the "consumer" was Mr.

Hernandez, not the Department. Consequently, the agency has no authority to mandate, as a penalty in this case, restitution to the Construction Industries Recovery Fund. Department of Environmental Protection v. Puckett Oil Co., 577 So. 2d 988, 992 (Fla. 1st DCA 1991) ("[A]n agency possess no inherent power to impose sanctions, and . . . any such power must be expressly delegated by statute."); and Willner v. Department of Professional Regulation, 563 So. 2d 805, 806 (Fla. 1st DCA 1990), review denied

576 So. 2d 295 (Fla. 1991) ("[A] penalty . . . can only be upheld if the legislative authority relied upon by the agency is sufficiently specific to indicate a clear legislative intent that the agency have authority to exact the penalty prescribed.") The legislature has, however, addressed recovery by the Construction Industries Recovery Fund under the provisions of Subsections 489.143(2) and (6), Florida Statutes.

8/ Rule 61G4-12.018, Florida Administrative Code, requires the Department of Business and Professional Regulation to "submit to the Board an itemized listing of all costs related to investigation and prosecution of an administrative complaint when said complaint is brought before the Board for final agency action." Fundamental fairness requires that the Board provide Respondent an opportunity to dispute and challenge the accuracy and/or reasonableness of the itemization of investigative and prosecutorial costs before the Board determines the amount of costs Respondent will be required to pay.

COPIES FURNISHED:

Dorota Trzeciecka, Esquire Department of Business and

Professional Regulation

401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128

D. S. "Dar" Airan, Esquire Airan and Associates, P.A.

275 Southwest 13th Street Miami, Florida 33130

Mr. Lawrence C. Bright 7170 Harding Street

Hollywood, Florida 33024

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: 97-004810

Orders for Case No: 97-004810